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Intelligent ERP Update: SAP S/4HANA Cloud 1905 release for service

“People will forget what you said. They will forget what you did. But they will never forget how you made them feel.” -Maya Angelou

Once you acquire a customer, one of the biggest contributors to customer satisfaction is service. Even while you ensure that your customer’s operations run without a hiccup you need to still do it at as low cost as possible – not just for you but also for your customers. In order to do this, your whole company needs to come together to make this happen without any siloes and completely aligned like a dance.

To do this, with our SAP S/4HANA 1905 release, we bring the ability to run your service back office end to end processes. With this, your different lines of businesses can come together to ensure that your customers keep their operations running smoothly at low margin.

To enable our customers reduce service delivery and support cost with service management independently, we extend our solution beyond APIs to enable our customers to create service contracts, orders and confirmations directly in SAP S/4HANA Cloud.

Service Contracts:

The journey already starts right from the time you acquire the customer and the customer signs the contract for service.

For the routine tasks, you can manage service agreements in an integrated repository and provide a holistic view of customer entitlements with our service contracts. We help you to reduce your costs through higher degree of automation all the way to pricing, billing, controlling, and financial bookings.

 

With Service Contract Management, we provide ability to create and manage service contracts for specified objects. You can create, change, cancel under conditions, set up the billing plan with tailored pricing for your customer. You can carry out your service operations based on the contract setup using the service contract determination to automatically transfer information from service contract to service order.

With price agreements in service contracts you can offer customers lower prices for services and service parts based on material price or discounts. When the system copies data from service contract items to service order items (resource-related) after service contract determination, prices from price agreements are applied to the service order items.

For long-term service contracts, prices of individual items are always determined once and then usually remain fixed throughout the entire contract duration. These prices are determined as part of the agreement you have made with your customers. To increase flexibility, you can adapt prices either based on pricing date rule or directly manually at billing request.

You can streamline your billing activities by setting up dates to billing independent of the provisioning of the service completely automated. With 1905, we also bring to you higher degree of automation with automatic periodic billing and automatic renewals.

With our event based revenue recognition, you can now recognize revenue for service contracts with price adaptation items. We enable you adjust revenue for credit memos from service contracts. Additionally, you can also recognize revenue for service contracts with auto renewals.

In case you do not want to use the event based revenue recognition, you can use new revenue recognition key for service contracts to deactivate it.

Service Order Management

Once you are in service execution, you want it to be streamlined to provide the service at the quickest. In order to do this, we would like to ensure that you can run service order management completely independently in SAP S/4HANA Cloud or seamlessly integrate to your external third party systems to seamlessly bring in the data.

With 1905, We bring to you the possibility to create or change service orders that capture your short-term agreements with your customers for the one-off services directly in SAP S/4HANA Cloud. These can then be tracked against your service contract if you would like to.

Once your technician has provided his services, he can confirm what is done so that there is complete transparency on progress to trigger follow-on processes, such as the billing process. You can do both fixed price or resource related services where the pricing would then be based on resources used for providing the service.

Resource-related service orders are billed to your customer based on the consumption of time and materials, whereas you have agreed a fixed price with your customer for fixed price service orders. Both types of service orders use service confirmations to record the actual consumption of time and materials. Cost-relevant service confirmations capture the actual costs when your customer is billed a fixed price as defined in the service order, irrespective of the confirmed quantity of items consumed. When the service confirmation type is non cost-relevant, your customer is billed the confirmed quantity of items consumed.

You can use overtime categories to define planned overtime for service technicians. Overtime is defined at item level for service products. Your customer is charged either a higher fixed or percentage-based rate depending on the pricing defined for the overtime category.

Additionally, even as we deliver service management for non-stock items, if you need spare parts we enable you to purchase non-stock spare parts with the automatic purchase requisition creation against service order line items.  Once the spare part is procured, we update the confirmations with the procurement cost from the supplier invoice, if the supplier invoice is posted after confirmation. The  supplier invoice cost is updated against a confirmation that is already posted but not released for billing. You can choose to bill the customer on cost-plus (based on purchase order or supplier invoice price) or sales pricing condition basis for time and material services.

Finally, you can specify a functional location or a piece of equipment. With our integration to Asset Central, you can seamless utilize the functional location or equipment throughout your organization.

Analytics

With 1905, you can extensively monitor your service activities.

You can do analysis on service contracts or service orders through our new analysis apps.  You can display different lists of service contracts including KPIs with different sorting criteria, see aggregate views or save and share custom views.

You can you can monitor and display issues that impede the fulfillment of service transactions with Service Transaction Fulfillment app. The cockpit highlights issues and provides supporting information. It also enables you to collaborate with internal and external contacts.

Last but not the least, you can get an overview of all your Service Management KPIs. With this app, you as a customer service manager can obtain a graphical overview of key service process data and gain insights into the current service situation. You can display detail information that helps you examine and analyze data across various dimensions.

 

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