Intelligent ERP Update: SAP S/4HANA Cloud 1902 for Professional Services
As we kick off the year 2019 with great new innovations for our intelligent ERP in the cloud, I am continuing the tradition to explain some of the new functionality this 1902 release brings for the professional services industry.
Let us jump right into it with the Unit Based Planning and Billing process.
With this release our customers will now be able to plan and bill their projects based on units.
Previously it was possible for the periodic service contract type, the system also allows you to bill your customers for services with a certain usage volume, e.g. number of service tickets processed in a period, or number of licenses used in a period.
With the new functionality you will still be using this contract type to bill your customer but now you are able to structure your work packages already in the planning phase based on this concept and can see the impact this plan has on the profitability of your project.
Within this contract type, there are 10 materials and activity types pre-delivered by SAP: U001 – U010 to be used for usage-based billing. In the billing plan definition, the item usage “Usage-Based Billing” can be selected to schedule a usage-based billing plan.
In general, it has to be said that your costs will still be determined by the hours the consultants have worked within this work package, only the output so the amount to be billed will be calculated by the units that have been set up previously, e.g. for number of solved tickets or number of completed test cases.
If the contract type for periodic service is used for usage-based billing, the standard derives the revenue recognition key for periodic service SPPC. Subsequently no revenues will be realized directly for the posted usage item quantities on this contract type – even when they are billed. Revenues will be realized with period end closing. If you would like to see the recognized revenue directly for the posted Usage quantity, you would need to assign the revenue recognition key for Time & Expenses Contract type (SPTM) to the usage-based billing materials.
Due to the design of resource-related billing, the used material in the sales order line item is replaced by the captured service units. For a better understanding of this process, it is highly recommended to create an own sales/contract material for usage-based billing (e.g. P004 through copying material P002).
Last but not least I want to mention that we have of course considered this functionality along the end to end process, so you will also find a harmonized POC (percentage of completion) calculation for the overall project considering unit based and time-based work packages.
Next up, I want to tell you a little bit about the work location functionality in the time recording.
With this release, we deliver in the time recording, the functionality for a consultant to maintain the specific location where he or she worked while executing a task. The ‘work location’ field in the timesheet can capture the country, state and local work locations of the employees or service performers. This will of course bring more transparency to the project manager, who can track whether project tasks were executed onsite at the customer or remotely.
You just need to switch on ‘work location’ for internal employees or for service performers and maintain the valid work locations that employees/ service performers can use while entering their timesheet entries. Project managers can use the timesheet work location information from the time recording data CDS view to handle and track any location specific processes.
The third point I would like to address, is our dual staffing functionality or also suitability matching and assignment creation for project managers.
This innovation relates to the advance resource management processes, if these are set up, project managers now also benefit from the features provided in the resource manager role. Using the advanced suitability matching features provided, project managers can assign resources to unstaffed project roles directly in the work package. With the new business catalogues, you can control if and which project managers are allowed to create assignments for project roles.
Project managers can in this case also create assignments for unstaffed project roles directly in the apps for creating and planning customer and internal projects. When project managers add resources to roles, a new dialog opens that shows the suitability matching results provided by resource management.
Within the preliminary billing functionality there is an enhancement with the 1902 release. This enhancement is about the case, if the sum of the total net amounts of several credit memos is greater than the total net amount of the billing document that they refer to. Therefore, we implemented a check to prevent over-crediting.
The system now should prevent the creation of credit memos when over-crediting is detected. This of course needs to be set-up in the system, but once implemented, the check runs every time that a credit memo request is billed.
The check must be implemented as custom logic in the cloud BAdI Data Transfer for Billing Document Item (SD_BIL_DATA_TRANSFER). Key users can do this in the Custom Fields and Logic app. The check consists of three main steps:
- Find all to the process related documents
- Read the current credit memo request
- Read the referenced billing document
- Read the corresponding credit memos
- Check the currency and add up the total net amounts of the current credit memo request and the existing related credit memos
- Compare the sum of the total net amounts with the total net amount of the billing document
For details on this you can also take a look at this KBA 2722131.
Finally, I want to point your attention to the topic of integration. With 1902 we also enhanced 2 of our existing APIs with additional functionality.
The first one is the one about our sales prices, with 1902 you will be able to create and update sales prices in SAP S/4HANA Cloud via an application interface. Provisioning of OData APIs to create and update condition records for pricing that are used in Sales. The service contains entities of condition record, validity, condition supplement, and pricing scale.
The second one is the API for the project creation. This has been updated to allow our customers to read and create customer projects in SAP S/4HANA Cloud via an application interface including sales order data. Enhancements to customer project API to read and create billing line items including billing due dates during project creation
For more information on SAP S/4HANA Cloud, check out the following links:
- SAP S/4HANA Cloud release info: http://www.sap.com/s4-cloudrelease
- Sven Denecken’s SAP S/4HANA Cloud 1808 Release Blog
- Best practices for SAP S/4HANA Cloud here
- SAP S/4HANA Cloud User Community: register here
- Feature Scope Description here
- What’s New here
- Help Portal Product Page here