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Author's profile photo Noboru OTA

New After-Sales Service with SAP for customers using SAP ECC Customer Service and SAP CRM Service

Hello SAP Community members,

[Part 2 of the series is now scheduled for 1 December, 2022. Detail on this article]

[Added additional information as responses for questions asked during the livestream — Thank you! The recording, a link to the presented material and others are available here]

My name is Noboru Ota and I am Vice President and Chief Expert, SAP S/4HANA Solution Management, and the author of the book, “Introducing SAP S/4HANA Service”. I have been working for SAP since 2002 and dedicated more than a decade as a front-line implementation consultant. After supporting many projects, go-live through the night, and producing a ton of documents, I currently focus on communicating different aspects of SAP S/4HANA Cloud to a wide range of audiences.

I put together this quick blog post to give you some insight into the SAP Community Call I co-presented with Chief Product Expert, SAP S/4HANA Service, Oliver Frick on the topic of Service in SAP S/4HANA. In his two decades at SAP SE, Oliver has worked with several teams, from Research to Development and Customer Support, from HANA based analytics to SAP CRM, before finally joined the SAP S/4HANA core development team where he is driving the product strategy and roadmap for the After-Sales Service in SAP S/4HANA.

Key Details

What: 30-minute presentation on Service in SAP S/4HANA followed by a 15-minute Q&A session. You will have the opportunity to submit your questions in the chat during the call.

When: May 18th at 10:00 CET

Where: Recording and links to material here

What you will take-away:

Many SAP customers rely on the Customer Service module of SAP ECC, and service capabilities of SAP Customer Relationship Management, for their after-sales service processes. In the after-sales service space, we observe an emerging trend, the “servitization” of everything, in which distinct sales and service processes merge together. This merge is focused on providing the outcome customers expect from using equipment rather than the sale and servicing of equipment as physical goods. Service management solutions from SAP with S/4HANA extend the existing service processes to support new processes for outcome-driven services. In this SAP Community Call, we provide a system demonstration to concretely illustrate how this is achieved.

We are considering making this call into a two-part series. With the move to SAP S/4HANA, many things are different, and many things remain the same.

This is Part I, focusing on a key differentiating feature of the new service management capability of SAP S/4HANA with SAP Business Technology Platform.

We are planning to do Part II around October – November (to be planned) to talk about aspects of continuity from SAP ECC and SAP CRM.

Be sure to follow the SAP S/4HANA Community page for updates on upcoming SAP Community Calls and related blog posts.

Looking forward to the call and taking your questions!

 

Best,
Noboru

Additional Information as Response to Questions

On data model / One Order model optimized for HANA DB. This blog post series might give you some insights. “Customer Management” is an old name to refer to what we now call S/4HANA Service. The blog is dated 2018 but it should be still good starting point to explore. Also refer to “Further Reading and updates” part at the bottom of the article for other posts from him in the series.

Please also ensure to validate the information by yourself. These blogs are not official documentation; the information provided may be obsolete or inaccurate as SAP can change these technical implementation without prior notice.

How can we explore and show new Service capabilities? You can set up fully configured S/4HANA (on premise) deployed on Cloud e.g. AWS, GCP, etc. I have written a step-by-step guide with some indication of the costs — no need for your manager’s approval; possible with 30-100 euro budget. There is a demo scenarios with which you can explore all the core capabilities of S/4HANA Service.

Our product road map is published and can be viewed via a tool called SAP Road Map Explorer. The link above takes you to the tool with pre-set filter to show core capabilities of S/4HANA Service

Additional Background for our SAP Community Call

Evolution%20of%20aftermarket%20/%20after-sales%20services

We have seen an evolutionary trend in aftermarket services. Traditionally, product and equipment manufacturers tended to treat aftermarket services as operations separated from product sales. At that time, production and selling of products was primary focus of business operations. Aftermarket services tended to be limited to provision of spare parts and break-fix service; the interaction with customers was transactional in nature. Today, we see that many manufacturers manage long-term service contracts with their customers, providing regular maintenance services and on-demand repair services. They may have a central call center function to take advantage of the scale of centralized operations. Some manufacturers have moved even further and become a solution provider, focusing on providing business outcomes rather than physical products and equipment to their customers. These manufactures transformed their business model and operations to be able to charge customers based on the outcome and usage. Collectively, we observe a new type of business model is emerging: “everything-as-a-service” (XaaS).

SAP S/4HANA together with SAP Business Technology Platform have capabilities to support all these different types of services. SAP S/4HANA helps business organizations to leverage existing products and services, and flexibly reconfigure their aftermarket offerings and business processes. With S/4HANA, you can define a bundle of physical products and services to offer to customers. You can sell a bundle and set up a service contract to manage a long-term relationship with pricing agreements and automatic regular billing to customers. Delivery of the physical goods can be managed with standard logistic capabilities within S/4HANA, leveraging capabilities for inventory, warehouse and transportation. Execution of services are fully integrated with inventory of parts, with cost breakdowns recorded for the materials and labor hours consumed by individual services. If you have a field service team, you can enable them to connect with S/4HANA on their mobile devices with the SAP Field Service Management solution. These fine-grained details of business operations can be aggregated real-time to show profitability and other business outcomes at different levels for different roles in your organization from front-line employees to executives.

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      4 Comments
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      Author's profile photo Dirk Buettgenbach
      Dirk Buettgenbach

      Hi Noboru

      very interesting, innovative blog post and session. I have a few questions to the demonstration shown.

      1. The created sales quotation in SAP CX Sales Cloud is followed by an S/4HANA Service Solution Quotation. Is there a standard integration available between SAP CX Sales Cloud und S/4HANA already?
      2. For the Subscription Items a Subscription Contract Document is created as follow up document. The Subscription Document is handled with Convergant Invoicing solution within S/4HANA and requires a separate licence, is this correct? (BRIM)
      3. The shown analytics application seems to be on SAC, is this correct? Is there a standard application on SAC for what is shown in the demo?
      4. How is the FICO matching principle enabled in S/4HANA Finance by the demo scenario shown?
        From our project experience having revenue and cost on different line items or even documents, as we see it in the solution quotation, is a major requirement but still challenging to achieve.

       

      Best regards,
      Dirk

      Author's profile photo Noboru OTA
      Noboru OTA
      Blog Post Author

      Hi Dirk,

      Thank for your comments and interest.

      Let me quickly respond to your questions where I can.

      1. The sales quotation is created in SAP CPQ in this demo. I believe we leveraged the standard API to create a solution quotation for this demo when we built it.
      2. Yes, your understanding of the subscription document and BRIM (SAP Billing and Revenue Innovation Management) is correct. BRIM requires an additional license.
      3. Yes, the analytics part was built with SAC (SAP Analytics Cloud) and SAP Data Warehouse Cloud. The application was built for this purpose and not standard (at the moment, at least).
      4. Would you mind expanding on a typical cause of the challenge? -- I am afraid I'm not familiar with the issue you refer to.

      Warm regards,

      Noboru

      Author's profile photo Dirk Buettgenbach
      Dirk Buettgenbach

      Dear Noboru,

      many thanks for your quick response

      Let me elobarte in (4).

      So we can see at 23:12 of the recording, that revenue for the subscription is driven by line item 190.
      We have learned from a more simple scenario, where there is just a two tier bundle, that cost and revenue are reported on the main line item.

      The question now is, which line items drive the cost within the bundle? And on which level of the hierarchy will revenue and cost be matched.

      I assume it is challenging to apply any matching of cost and revenue, because the solution quotation document it self is no account reference object. But the solution quotation actually generates multiple different documents, which are account reference objects itself. Such as Subscription Contract, Service Contract, Sales Order (for robots), Service Order (for Installation).

      Henrik Kiessler or Sebastian Doll from Service & Asset Management Product Management are very into this topic.

      I am open to have a short call to go into more details.

      Best regards,
      Dirk

      Author's profile photo Harald Reitz
      Harald Reitz

      Hi Dirk,

      the financial flow is outlined in the image below, short summary:

      The goods issue for the equipment sales order delivery is posted to an asset accounting interim account, instead of to costs. We can control this from a configuration option in CPQ, adding a specific bundle node in the CPQ quote structure, which is replicated to solution quote, and from there triggers different item categories from solution quote to sales order to the delivery, to a schedule line category for the delivery, pulling a different movement type 9xx (copy from 601) which posts into asset accounting, instead of costs.

      Then, the asset is activate in asset accounting, with the same value than the goods issue. From asset accounting, monthly depreciation runs post into the internal order, linked to a specific service contract item "equipment lease".

      The service contract items for maintenance, and repairs, also have a separate internal order, on to which the service confirmations and parts are posted.

      With that, the costs are all posted to the internal orders for the service contract items.

      For the revenue, we have implemented revenue accounting (RAR) logic, to split the revenue for different subscription payments (payment for min usage, payment for usage above min usage, payment for secondary equipment efficiency metric), into different accounts for equipment subscription revenue, maintenance subscription revenue, and repair subscription revenue, booked as revenue on the internal orders behind the different service contract items.

      With that, profitability, costs, revenues can be shown for the different service contract items and material numbers, broken down into equipment, maintenance, and repair costs and revenues.

      The DWC/SAC analytics model pulls all those costs and revenues together for a specific solution quote, and can show the subscription revenue by subscription material, but also the revenue and costs broken down into asset lease, repair, and maintenance.

      We can also have a call to discuss in more detail ...

      Regards,
      Harald

      Financial%20Flow

      Financial Flow