mm1005 mm external services management

7/22/2019 MM1005 MM External Services Management

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India SAP CoE, Slide 1

MM1005

MM External Services Management

Basics Ver -1.0




External Services Management

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PrepareMeIn this s ect ion , we wi l l cover 3 topics w hich are,

1. Pu rp ose

2. Use

3. Chal lengesWhat is External Service Management?




External Services Management…?

External services are certain services/maintenance tasks like

defective lights fixing, painting, plumbing, etc which companymay occasionally require to be carried out through externalcontractors.




Use

• Facilitate procurement of occasional services such as „plumbing‟,„painting‟, „electrical maintenance‟ , etc.

• Helps to tighten the Company‟s focus on Core business by outsourcingservice.

• Reduces the burdan of managing manpower and other resourcesrequired to perform services.

• Helps in taking advantage of the competitive market by having multiple

service providers in the market.

• Have a better bargain power and negotiation by having Long termcontracts with service providers.




Challenges

• Tracking of Services provided by the Service Provider• Evaluating the performance of the Service Provider• Data Entry and Maintaining records• Identifying correct Services providers


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External Procurement Service

MM External Services Management (MM SRV) is a program within theMaterials Management (MM) module. It supports the complete cycle of bidinvitation, award of contract, and acceptance of services.

The MM External Services Management documentation• Affords a general introduction to the procurement of externally performed

services

• Indicates the Organization levels, master data and documents of theapplication.

• Describes the available functionality and how it works

• Explains the procedure for creating documents in the system.



External Services- Flow

Goods Receipt

InvoiceVerification

Service Master Vendor Service

Condition

Service Acceptance

Service Entry

Requirement

Vendor SelectionRFQ

Quotation

Purchase order



Service External Flow

Determination of requirements

Maintenance order

Purchase order

processing

Invoice verification

Acceptance of se rvices performed

Entry of services performed

Entry of quotation

Vendor selection

Creation of service

specifications

Source

determination

Invoice Purchase order

? ? = =

Inquiry

Bid invitation



Service Master

Service Master

• Service Master serves as a master data within External Service Management and datastored in the Service Master can be called while creating service specifications.

• Service Master contains the short and long description of services that need to beprocured are stored.

• Along with description Service Master contains• Unique Service Number• Service Category• Base Unit of Measure• Material Group

• Price can be defined in the Service Master through Service conditions



Vendor Master

Vendor Master

• Vendor Master contains information about theVendor who supplies goods and services. Theseinformation's are necessary for processing

Purchasing documents like the PurchaseRequisition, Purchase Order.

• Vendor Master contains information's like theVendor details, Accounting details andPurchasing details like the terms of payment,Currency, etc.

• Each Vendor Master will have a unique VendorNumber which can be Internal or Externallygenerated.

• Mostly a Vendor Master belongs to one Purchase

Organization, which can be extended to manyother Purchase Organization.

• In Vendor Master, Purchasing details can also bemaintained at Plant level by using Vendor Sub-range.



Standard Service Catalog

The Standard Service Catalog (SSC) represents one way of storing servicedescriptions as master data without redundancy.Frequently used parts of service descriptions are stored in standard servicecatalogs in the form of individual text modules. The complete description of acertain service is compiled from different text modules.

A Standard Service Catalog contains:• Service Type Number• Edition Number• Text Module Number• Text Module



Model Service Specification

• Model Service Specifications is set of service specifications that can be used asa model or template for the creation of other sets of service specifications in

procurement transactions.• Model Service Specification contains collection of services, the associateddescriptions, pricing and quantity data.



Service Condition

Service Service Vendor Service Vendor

Plant

•Master Conditions helps in storing Terms of Payment like Price, discount,

surcharge, etc.•Master Conditions can be maintained at:

• Service Level Transaction Code: ML45• Service – Vendor Level Transaction Code: ML39• Service – Vendor – Plant Level Transaction Code: ML33

• Prices stored in the Master conditions are proposed in service specifications.



Framework Purchase Order

• Framework Orders are PO‟s which are valid for a longer period and Invoice canbe directly posted against such PO.

• Framework PO has value limit and are valid for specified period of time.• Framework Orders can be used to procure recurring services. Example:

Cleaning work, routine services… • Creation and acceptance of Service Entry sheet is not required for FrameworkPurchase orders.

• Through Framework PO, benefits of Invoicing Plan can be availed.



Service Entry

• Service Entry Sheet is a special document designed to record the serviceactually rendered by the Vendor.

• Service Entry contains list of all planned services that have actually beenperformed.

• It can also be used to list all unplanned services that have been performedand whose precise scope and nature were unknown at the time of thePlanning phase.

• Service Entry needs to be accepted once its accuracy is checked by theresponsible person.

• Material document & accounting document gets created on posting aService Entry Sheet.

• Release Procedure can be set up at Service Entry level.



Invoice VerificationInvoice Verification

Few Transaction Code:MIRO: Invoice Entry

MIR7: Park InvoiceMIR4: Display InvoiceMR8M: Cancel InvoiceMRBR: Release Invoice

• Material document & accounting document gets created on posting aService Entry Sheet.

• The accounting document is then taken up for verification of the entries.• In case the service taxes are relevant then the same need also need to be

verified.

• Once the verification is over the invoice is posted. The Service provider iscredited, simultaneously debiting the Services a/c.




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Configuration

Maintenance

External Service Procurement



Service Master - Service Category

Service Master -1

Service Master -4

SERVICE CATALOGControl

• Number Assignment• Organizational Units

• Valuation Class

Service Master -2

Service Master -3

• Service Category helps in grouping Service

Master records based on there usage.• Service Category is the most important

criterion for structuring Service Master• It provides default value for the Valuation

class• Service Category also controls the number

range assignment for Service Master• The standard Service Category available

are:• Master Records describing internalservice

• Master records describing externallyprocured services• Master records describing third partyperformed services



Service Master - Service

Category

SPRO Materials Management External Service Management

Service Master



Source Determination & Default Value

Client

Purch Org

Controls

Source Determination

Default Values UOM Material Group Line Increment Update Condition

Define Text

Maintain



Source Determination & Default ValueSPRO Materials Management External Service Management

Source determination & Default Value

Follow-On Processing for PR• Control whether to ignore price in thePR when converted to a PO

• Control automatic creation of PO

Condition Update• Controls whether the conditions inService Master needs to be updatedby PR, RFQ or PO



Maintain Text

Service Master

Services

Service Catalog

Service Entry

Header Text

Supplement Text

Item Text




Maintain TextSPRO Materials Management External Service Management

Messages

Controls the Print Operation• New Print Out• Print for changes• Reminder Letter




Configuration

External Service Procurement

Maintenance




Service Master

Basic Data

Standard Ser Cat

Purch Data

Long Text

Service Master

Org Ser

Cat

Service

Cat

• Organization Service Category controlsthe Views in Service Master.

• Service Category controls the Numberrange, default value for Valuation Class,etc

• Basic Data contains data like MaterialGrp, Division, Valuation Class &

Authorization Group.

• Purchasing status, Validity, EAN ismaintained in Purchasing data.

• Service Master can be created throughTransaction Code: AC03.

• Transaction Code:• AC03: Service Master• AC06: Service List




Service Master

• Material Group helps to clubservices with same attributes

• Default Valuation Class can beassigned which helps inaccount determination

• Formals helps in calculatingquantities

• Purchasing Status helps inrestricting the use of ServiceMaster

• Text entered in the Long Text

gets copied in service POunder Service text





Catalogs

Object parts Causes of damage Tasks

Damage Activities Coding

Code

Code group

Catalogs for Catalogs for

Structure of a catalog: Structure of a catalog: Example: Example:

Catalog

Code group

Code

Damage screen catalog

Mechanical damage

Code 010 Corrosion

020 Broken glass 030 Faulty engine . . . . . .




Catalog Profile

Code

Code

group

Catalog

Code

group

Code

Preselection of code groups for

each catalog

Proposal of class

Assignment to:

Equipment master

Functional location master

Material Master

Notification type





Trans Code:ML01 CreateML02 ChangeML03 Display

MLS6 List Display




Model Service Specification

Model ServiceSpecification

General Data Description

Search Term Currency Matl/service grp

Default Data Purch Org

Fixed Vendor Contract

Service A

Service B

Service C




Model Service SpecificationTransaction Code• ML10 Create• ML11 Change• ML12 Display• ML15 List Display




Service Conditions

0001Rental Car C1 1 Day

Price 10 USD

0002Rental Car C1 1 DayVendor 1Price 12 USD

0003Rental Car C1 1 DayVendor 1Plant 1001Price 08 USD

Purchase Req

Vendor ?Service: 0001Price: 10

Purchase Req

Vendor: 1 Service: 0002Price: 12

Purchase Req

Vendor 1 Service: 0003Plant: 1001Price: 08




Service Condition

•Prices are maintained fora specific periods

•You can also assignPayment Terms to aService Master

•Service Conditions canalso be updated throughthe current Purchasingdocument

• Master Conditions can be maintained at:• Service Level Transaction Code: ML45• Service – Vendor Level Transaction Code: ML39• Service – Vendor – Plant Level Transaction Code: ML33

• Prices stored in the Master conditions are proposed in service specifications.




Service - PO

Purchase Order---------------------------------------------------------

--------------------------------------

-------------------

Header

• General data• Statistics• Message• Conditions

Item Sub – Item 1

GeneralDescription of

Project

• Servicedescription

• Qty• Conditions

Few Transaction Code:ME21n: Create POME22n: Change POME23n: Display POME29n: Release PO individuallyME59n: Create PO automatically

Item Category for Service PO is “D”




Service - POTransaction Codeused is ME21N




Service – PO - LimitsTransaction Code

used is ME21N




History• Created by• Created on

• Changed by• Changed on

Service Entry Sheet

Service Entry

Sheet

--------------------------------------

---------------------------------------------------------

Header

• Entry Sheet• Purchase Order• Short Text

Value• Net Value• Total Value• UnplannedPortion

Basic• Acct Asst

• PersonResponsible

• Ext No• Period

Item Detail

• Service No• Short Text• Qty• Gross Price• Cost Center




Service Entry SheetTransaction code used

is ML81N




Release of Service Entry Sheet

•To set up approval procedures for entry sheets or otherpurchasing documents. Under such a procedure, if a entry sheet or external purchasing document fulfills certain conditions (e.g. thetotal order value exceeds $10,000), it has to be approved (by thecost center manager, for instance) before it can be processed

further. This process of approving (clearing, or giving the "greenlight" to) a proposed item of expenditure is replicated in the SAPSystem by the "release procedure".

•Entry sheets can only be released complete. There is no provisionfor release on an item-by-item basis (i.e. partial approval).




Invoice Verification

Vendor Invoice

Goods Receipt

Purchase

Order

I n v o i c e

I n v o i c e

Few Transaction Code:MIRO: Invoice EntryMIR7: Park InvoiceMIR4: Display InvoiceMR8M: Cancel InvoiceMRBR: Release InvoiceMRRL: ERS (Evaluated Receipt Settlement)




Invoice Verification




Invoicing Plan

Rental

Leasing

Purchase Order

Item10 Service 1Invoice Plan

January‟ 07 1000$

February‟ 07 1000$

March‟07 1000$

April‟07 1000$

Auto Invoice Settlement




ReportsTransaction Codeused is MSRV6





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Let Me

A company (ABC Pvt ltd.) wants to hire an externalagency (XYZ services) for 2 years to do themaintenance for there machines. ABC Pvt Ltd requiresthis service once every month. Make a service contractto fulfill this requirement.

Make a service entry sheet for the above service orderand do the invoice verification for the same.Make a service master for a service and service orderfor the same.

Make a service order for a service with pre definedservice conditions.




Let Me

• What is the basic difference between a standardPurchase order and a Service order.• Is it possible to create a service order with no account

assignment category? Give reason in support of theanswer.

• What do you mean by the service entry sheet? Whatis its relevance?

• What is the equivalent activity of goods receipt in caseof service procurement?

• Why do we do Invoice verification for a serviceprocurement?• On what basis is the invoice verification done for

services?




Let Me

• What do you understand by SSC? What is itsimportance?• What is service master?• What do you understand by Invoicing plan?• How can we control if the system should takes the

PR price in the PO in case of automatic POcreation?

• From where can we control the price updating inservice master?

• On what levels can we maintain the serviceconditions?





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Addition InfoReports used in Service Management are as under:-

ML84 List of service entry sheet

ML92 Entry sheets for service

MSRV1 List of service

MSRV2 Service list for Requisition

MSRV3 Service list for Purchase Order

MSRV4 Service list for RFQ

MSRV5 Service list for Contracts

MSRV6 Service list for Entry sheet

mm1005 mm external services management

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