Not only do you track the percentage of these important factors, but also determine whether extensions lead to door-to-door sales opportunities and whether they become additional revenue. Sales teams need to be aware of potential opportunities to expand services as renewal approaches and provide add-ons including extensive on-site service, additional coverage, remote monitoring, inspections and other services. For service managers, IT executives and financial teams, this article can give you an overview of how you can plan and implement a service contract management program with SAP. How do you know if your distribution goals for the SAP service contract and warranty management will be achieved? Define the following key performance indicators (KPIs) that apply to service contract management and how they are generated and measured: Negotiations on contract pricing are particularly common for B2B contracts. Factors may include the volume of customer turnover, the price of covered parts, the cost of labour for technical service personnel, the customer`s location and much more. This includes service level agreements, quick response to calls for service, personal customer service, etc. Establishing an effective line of communication with the group responsible for managing service contracts in your client`s business facilitates renewal rates and helps resolve disputes ahead of contract terms. Easy-to-understand service contracts with accurate billing will help your business increase renewal rates. B2B services are more likely to implement tailored programs than consumer-focused businesses. Guarantee and service coverage can vary between business-to-consumer (B2B) and business-to-consumer (B2C) customers and not all apply to each sector: salespeople who have the right to offer negotiated prices to customers at the time of the first sale have more potential to close the sale of the warranty or extended service contract (attachment rate). Whether you are selling products, services or a combination of both, a significant source of income can be realized after the first sale. This can take the form of service contracts or extended warranty programs that add long-term value to customers and maintain their relationship with your customers. Did the contract generate revenue or loss? It is precisely when there is a loss that it is important to dig deeper to determine the cause – erroneous prices, device or component failures that have resulted in multiple on-site exchanges or service calls, etc.
Some KPIs are difficult to report in terms of contracts and contract items, unless the SAP solution is already designed with this KPI in mind. The case on the point is the position of the contract – that is, the cover – profitability: it is essential that your service contract management system automatically assigns correct and reliable costs to the contract article. To make business leaders believe that this specific KPI is not only correctly determined, but that other KPIs that rely on it are also correct. Would you renew a contract that your supplier does not comply with during the terms of your last contract? It`s not likely. Do you need help implementing or improving your service contract solution with S/4HANA? Establishing a complex mix of service contracts that meet conditions such as car warranties or IT services requires flexibility and configurable conditions for coverage requests and billing accuracy.