Customer and Context:
Oil & Gas companies spend a big amount on procurement and services procurement make up for a big chunk of that spend. As a SAP consultant, I recently worked on an Oil & Gas customer project where the customer was spending almost 70% of their procurement spend on services, so it was necessary to put a right solution to make sure services spend are compliant and tracked properly.
In addition they wanted to reduce contract cycle time, which was high due to multiple systems and inconsistent processes. It was then decided that existing SAP Contract life Management solution should be extended to include Services Contracts and these contracts should be in sync with operational procurement processes running on SAP ECC and 3rd party supplier systems.
This company asked for SAP support to help them design and build Services Contracts feature on SAP CLM
This company already had some partner consultants to support their existing material contracts but they were unable to support on Services due to system and skills limitations. My role in this project was to Architect Services Contracts process such that not only their complex requirements are met but also there is no disruption to operational procurement processes
They had multiple systems where they managed the contracts, making it imperative to invest in integrations. In addition many of their processes were still manual, including enabling request for creating a contract in a paper format and getting it physically signed via multiple authorities, so opportunities to automate and streamline processes were huge!
They had created multiple custom programs to satisfy contract upload/ download feature in ECC which was being supported by their IT team. Management of custom modifications like these added to the TCO to manage Service Contracts process. We were able to replace these custom programs via SAP CLM standard functionalities to reduce investment on IT side.
One of the biggest challenges was to migrate existing negotiated services contracts documents stored in a legacy system along with the currently operational services contracts with service lines in ECC system to SAPCLM system without disrupting services procurement processes.
SAP CLM solution as Single source of truth was also slated to remove redundant access to several systems to manage a contract both from Strategic and operational perspective.
Our Final Solution for this company consisted of the below features:
- 2 level Service Line Hierarchy for existing ECC operational contracts
- Single Screen for maintaining Services outlines and Service lines
- Support of Multiple price validity periods
- Sync with existing contracts existing within ECC
- Seamless Integration with supplier Portal to
make sure contracts compliance ( e.g, Price)
can be enforced while entering Service entry sheet
These business challenges coupled with bad design and implementation done by partners consultants made situation more challenging – for example not able to mix materials and services in a single contracts through existing custom design , No support for Services Hierarchies, inconsistent behavior of workflows to name a few. One of the major go live was postponed due to above issues.
Our SAP team was able to identify the key gaps, as highlighted above, and built them within 3 months!
Business Architecture is shown below:
Above diagram shows the master data and transactional data flow between ECC and CLM system including Service masters, Services Contracts including both Outlines and Service lines and the Sync of existing contracts in ECC.
Some of the above features were designed for the first time in SAP CLM and we worked very closely with the Product management team to orchestrate these scenarios.
Some of the work done in the project was also presented to the product management so that it could have been made available in the
One of the key features was the joint effort by the customer and the SAP team to Migrate existing 4000 + complex services contracts over the cut over weekend with a flawless Migration strategy which was perfected with lot of brainstorming.
This company successfully went live within 6 months of SAP getting engaged and thereby proving the unique expertise and customer commitment SAP brings to the table! We truly helped them run better!