Oracle Service Contracts Functionality and Setup

2

Characteristics

Product – Oracle eBusiness Suite

Version – Release 11.5.10.2

Stream – Oracle CRM

Module/s – Oracle Service Contracts

Functionality – Setup and functionality

Standards – Basic / Advanced

Agenda

• Overview

• Business Processes

• Interaction with Other Oracle Modules

• Detailed Process Flow

• Contracts Setups

Definition of a Business Contract

• A contract is a legally binding agreement between parties, consisting of an offer and acceptance for the performance and/or delivery of goods and services in return for some form of consideration.

Contract Basic Elements

The basic elements of a contract generally include:• Parties• Goods and services• Terms and conditions• Contract Billing

Oracle CRM Suite

Business IntelligenceBusiness Intelligence

E-Business Platform

Common Application Architecture and Schema

Call Center

CRM FoundationCRMFoundation

Interaction

Channels

BusinessApps

E-BusinessPlatform

AnalyticalApps

E-BusinessFoundation

Web MobileWAP E-Mail

Marketing Sales ServiceContracts

Oracle Contracts for Service

Oracle Contracts for Service enables you to createand manage Warranties, Extended Warranties and Service Agreements providing visibility to contractEntitlements and acting upon contractual commitmentswithin the contract.

Contracts for Service

• Enables a business to design service offerings tailored to customer need

• Types of Service Contracts:– Warranties– Extended Warranties– Service Level Agreements– Subscription Contracts

• Enables a business to track usage of products and services with product and service counters

• Provides flexible bill settlement at predefined intervals or at contract termination

• Automates the service and support process by defining, managing, and executing entitlements

Warranties and Extended Warranties

Warranties• Are not orderable and are

managed automatically

• Are not priced

• Are associated with serviceable items in Bills of Material (BOM)

• Have warranty inheritance rules

Extended Warranties• Can be ordered as either

immediate service or delayed service

• Are priced using unit-based or percent-based pricing

• Are not part of BOM

• Have no inheritance

Contract Definition

• Authoring a service contract begins with using an existing contract as a starting template or creating a contract from scratch to include:– Customer information such as bill-to and ship-to

addresses– Contract duration and contract pricing information– Billing information such as frequency and billing dates– Services to be provided and coverage times

Automatic Billing

• Customers billed automatically for purchased services• Invoices created in Oracle Receivables• Billing done in advance or arrears

Administration Functions

• Right-click a selected contract (or anywhere on right side) and access several contract administration functions from a pop-up menu: • New

• Open

• Create New Version

• Copy

• Renew

• Extend

• Terminate

Administration Functions

Opens new authoring window

Opens existing contract

Creates new contract version

Opens Copy window to copy a

contract

New

Open

Create New Version

Copy

Administration Functions

Opens Renew Contract window

Opens Extend Contract window

Opens Terminate Contracts window

Renew

Extend

Terminate

Create New Contract Window

After selecting New from the Navigator, select one ofthe following:• Create a New Contract Manually• Create a Contract from a Template

Actions Menu Functions

• In the Service Contracts Authoring window, you can access the following functions from the Actions menu:

• Save as Template

• Copy from Contract/Template

• Counter Setup

• Counter Capture

• Check QA

• Submit for Approval

• Delete Contract

• Sales Credits

Actions Menu

Opens Save as Template window

Opens Copy window

Opens Setup Counters window for usage

Opens Capture Counter Reading window

Opens Quality Assurance Results window

Submits contract for approval

Save as Template

Copy from

Contract/Template

Counter Setup

Counter Capture

Check QA

Submit for Approval

Actions Menu

Deletes contract (Status: Entered)

Opens Sales Credit window

Delete Contract

Sales Credits

Oracle Contracts for Service Authoring

Overview

• Oracle Contracts for Service (OKS) enables you to author a contract from scratch, copy an existing contract, or use a template

• Use coverage templates to define when a customer is covered for service.

• You can create warranties and service contracts for serviceable products.

Coverage Template

Enterprise Roles

Contract Manager

EnterCoverage Template

EnterCoverage Template

Create Coverage

Name

•Coverage Name•Coverage Type •Effective dates•Warranty inheritance

Enter Business Processes

Enter Business Processes

•Customer Support•Field Service

Define CoverageTimes

Define CoverageTimes

Define ResolutionTimes

Define ResolutionTimes

Define Preferred Resources

Define Preferred Resources

Define Billing Types & Rates

Define Billing Types & Rates

•Preferred resources that are eligible to work on a specific task when a service request is created.

•Permissible Billings Types & rates with limits

•The days of the week and hours during the day that the customer can request service.

•The amount of time allowed by which action must be initiated for a particular process being requested.

Define Reaction Times

Define Reaction Times

•A fixed time per contract by which a normal operationshould be restored.

Enterprise Roles

Contract User

Contract Manager

Create Article information

Create Article information

SignContract

SignContract

ApproveContractApproveContract

EnterService

Contracts

EnterService

Contracts

Create Party Information

Create Party Information

•Manage approvals from company signatories

•Complete contract terms & conditions•Communicate contract terms & service level objectives.

•Article information.•Vendor information•Customer information•Ship to Address•Billing to Address

Create Pricing/ administration Create Pricing/ administration

You can create Contract from Scratch , Template or copy an existing Contract.

Authoring of Contract

•Setup Approval process•Assign Groups/access rights

Create Contract line information

Create Contract line information

Create Billing Schedule

Create Billing Schedule

•Line Type information•Sales Credits.•Coverage•Pricing and Products

Review Contract For

QA Compliance

Review Contract For

QA Compliance

Submit Contract for Approval

Submit Contract for Approval

•Invoicing Rules

Enterprise Roles

Contract User

Submit RequestSubmit RequestApproved ContractsApproved Contracts

Create InvoiceCreate Invoice

•AutoInvoice Import program - Invoice number generated and linked back to Contracts source

•Invoicing Rule

Submit Request Submit Request

Customer Invoice to Cash

Approved Contract to Invoicing

•Service Contract Main Billing (AR interface)

View Invoice information -

Contracts

View Invoice information -

Contracts

View Invoice Information-ARView Invoice

Information-AR

•Bill History will have Invoice number

•Query for Contract number in AR field

Enterprise Roles

Contract User

Contract Manager

SignContract

SignContract

ApproveContractApproveContract

Set Default Renewal in

Administration Tab

Set Default Renewal in

Administration Tab

•Manage approvals from company signatories

•Complete contract terms & conditions•Communicate contract terms & service level objectives.

Renewal of Contract --- Manual

Set Renewal dates

Set Renewal dates

Review Contract with

customer

Review Contract with

customer

Notify Sales Person about

Expiry

Notify Sales Person about

Expiry

Contract Renewed and

Active

Contract Renewed and

Active

Active

Notify

Default set to Active

Default set to Active

Customer ready for renewal

Set Renewal dates

Set Renewal dates

Approval

Sent for ApprovalSent for Approval

•Run Change Status Process

Enterprise Roles

Enterprise Roles

Contract User

AR Interface for invoicing

AR Interface for invoicing

Submit RequestSubmit Request

View Active Contract

View Active Contract

Termination of Contract

Enter Termination date/reason

Enter Termination date/reason

Select ContractLine for

Termination

Select ContractLine for

Termination

Termination could be – Header level or Line level /covered level termination

Credit amount indicated/Override if

required

Credit amount indicated/Override if

required

Terminate full contract

Termination of Contract Line

Recovery Recovery

No dues to customer

Select Covered level

Select Covered level

Termination of covered level

Run Main Billing Program

Customer due for credit

Out put

Create Contract

You can create a service contract by using one of thefollowing: • Create a new contract manually• Create a contract from a template• Create a contract by copying another contract

– Copy an entire contract or just a line– When a line is copied, all dates associated with

the line are also copied

Define Header

The contract header is defined by:• Contract number• Start and end dates• Duration• Period• Short description

The contract header shows:• Category• Order number• Status• Amount• Currency

Enter Parties

All service contracts must have two or more parties:• Enter any number of parties in a service contract.• The Contacts region enables you to enter a

contact role for a given party and the contact name.

• Apply default ship-to and bill-to addresses or select them from the list of values.

Enter Pricing Information

• Price lists are defined in Oracle Pricing for pricing service and usage items.– Service can be in multiple lists.

• Determine when to bill customers by entering payment terms, such as 30 days.

• Track purchase order numbers.

Enter Billing Rules

• Contract Billing set ups:– Invoicing rule– Interval– First Bill Dates

• The billing schedule can be set up to show:– Billing sequence– Day of month to bill– Billing period

Enter Service

• Service items must be defined in Oracle Inventory.• Parties tab:

– Select service name

• Effectivities tab:– Establish dates– Edit coverage template

• Business processes and dates

• Reaction times

• Billing types

• Billing rates

Defining Serviceable Products

A Serviceable product must be set up as an inventory item:• Product item data is entered in Oracle Inventory• Using the Service tab:

– Check serviceable product – Select billing type (material, labor, or expenses)– If the item is usage, then select Usage

Enter Usage

• Usage items must be defined in Oracle Inventory.• Selectable billing options:

– Fixed per period– Actual per period– Actual by quantity– Negotiated price

Coterminate Buttons

The Effectivities tabbed page has Coterminate buttons that provide a quick way to set the end

dates of one or all contract lines: Coterminate Coterminate All

Defining Coverage Levels and Products

Identifies the level for which the Service provides coverage. Possible Covered Levels are:

• Customer Product• Item• Customer Site• Customer• Party• System

Enter Counters

• Counters help you track:– Number of copies on a copy machine– Number of calls a customer has made– Number of field service visits

• Set up counters by selecting Counter Setup • Edit counter values by selecting Counter Capture

Enter Events

Events are automatically generated actions that occurbased on conditions you define in the contract.• Events can be tied to counters. For example, an event could

be set up for a preventive maintenance service to be performed on a photocopier after every 10,000 copies.

• Events can also be used for notifications such as an upcoming service contract expiration.

Quality Assurance Checklist

The QA Check is an automated process that verifies

that the contract contains the required and correct

information

Service Contract Approval

• QA check launched prior to submitting for approval• Notifications through workflow are sent to the

appropriate party• Contract status changed to Active or Signed

(depending on effective date)

Running the Billing Program

• Billing program calculates invoice amount for customer

• First billing date, frequency, and bill-on-day defined in authoring form

• Billing program sends invoice to Oracle Accounts Receivables, which generates invoice

Renew Contract

• This function enables the contract administrator to continue the contractual agreement beyond the effective period: Renewed at header level.

• Another version of contract created with a new term: New term has different start and end dates

• Depending upon setup, renewals can be initiated prior to contract expiration: May generate new contract or quote.

Extend Contract

• Similar to contract renew: Does not create new contract

• Allows extension of current agreement beyond specified period: Extends only effective end date for contract and contract lines

Terminate Contract

• Terminate Contract allows a contractual agreement to be ended prior to the original end date.

• Special conditions can occur at termination, such as final bill sent, Issue of Credit Memo etc.

• A contract may be terminated at header level. Individual lines can be terminated without altering contract as a whole.

Service Contracts Setups

AR Setups:Transaction Type SetupSetting Up Batch Transaction Sources

Inventory Setups:

Setup Warranty, Service, Usage, Subscription items

Pricing Setups:

Setup Services Price List

Oracle Service Contracts Author to Sign flow

Log on to Apps as ‘OPERATIONS’ select Service Contracts Manager Responsibility

Responsibility: Service Contracts Manager.Click on “Launch Contracts” to Open Oracle Contracts Launch pad

Contracts launchpad

Go to Tools click on New for creating a New Contract

Check Create Manual Contract, select Category as Service Agreement and Click on Create

Service Contracts Authoring form opensSelect the duration and the periodGive a name for the contract and description

Tab: Summaries Parties The vendor is automatically displayed. Enter a contact for the vendor then save your work.

Contract number is generated based on the autonumbering setup. Choose a Customer and his details.

And enter the bill to and ship to address of the customer.

Tab: Summary Pricing / BillingSelect pricelist, accounting rule, payment terms and invoicing rule which are the mandatory fields

Tab: Summary Renewals Select the type of renewal, price list, mark up, grace duration and the quote information

Tab: Summary > AdministrationSelect a Contract Group Name and the Approval Process Workflow.

Tab: Summary > Security/textSelect the Security type to give access to User/Groups

Tab: Lines > Accounts

Tab: Lines > EffectivitiesAll the fields are populated automatically.Coverage can be edited for the selected Service

Tab: Lines > Pricing/ Products > EffectivityEnter Level (covered Level) and Name

Tab: Lines > Pricing/ Products > Pricing

Tab: Lines > Pricing/ Products > BillingEnter periods, UOM Period and UOM and click ‘Schedule’ to define billing streams

Tab: Lines > CountersTo capture the counters details (for usage items)

Tab: Lines > EventsTo capture the events

Go to Actions Sales Credits to the enter sales credit

Check QA Go to Actions > Check QA to check the Quality Assurance process results

To specify the approver, go to Responsibility: System Administrator Profiles System

Note the contract Approver for the User (Author):Give ex: Author- Operations; Approver- Operations

Contract ApprovalLog on to apps as the Approver and go to contracts launch pad. Click ‘ Find’ button

Select Status ‘Open’ and Notification Type ‘Contact Approvals’ Click ‘Find’

List of Notifications appears. Click ‘Respond’ on your contract notification to approve the contract.

Click ‘Approve’ to approve the contract

After the Contract is approved, the author receives a notification to sign the contract. Click on the notification which requires signature.

Click yes to sign the contract

The notifications statuses are updated

Now the contract status becomes active.

To push the contract details to AR, we need to run three concurrent programs are run in this process

• Service Contracts Main Billing: This request is run from Service Contracts Manager (Control>Requests>Run) to interface the contract details with AR. Contract details will be populated in Auto Invoice interface tables.

• Auto Invoice Import Program: This request is run from Receivables (Control>Requests>Run) module to raise an Invoice for the contract.

• Service Contract fetch receivables Info for billing: This request is run from Service Contracts Manager (Control>Requests>Run) to fetch the Invoice details back into Contracts module.

Contracts Setups:

• Mapping Time Units of Measure• Setting Up Status and Operations• Defining Quality Assurance Checklist• Defining Access to a Category• Defining Coverage Templates• Defining Contract Groups• Setting Up Automatic or Manual Contract Numbering• Defining Service Availability• Defining Service Co termination• Setting Up Service Pricing and Billing• Setting Up Subscription Templates

Mapping Time Units of MeasureService Contracts ResponsibilitySetup Contract Units of Measure UOM

Define a UOM

Setup Contract Units of Measure Time Units of Measure Map Time units

Setting Up Status and Operations Setup Contract Status and Operations

Defining Quality Assurance Checklist Setup Contract Quality Assurance

Defining Coverage TemplatesService Contracts Manager Coverage Templates

Defining Contract GroupsService Contracts Manager Contract Groups Contract Groups

Setting Up Automatic or Manual Contract NumberingSetup Contract Autonumbering

Defining Service Cotermination Setup Contract Service Cotermination

Setting up Subscription templateService Contracts Manger subscription template

Thank You