excerpts sappress service with sap crm

Marcus Kirchler, Dirk Manhart, Jrg Unger

Service with SAP CRM

Bonn Boston

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Contents at a Glance

1 Introduction to CRM ................................................... 19

2 Service with SAP CRM Overview of Functions ........ 65

3 Service with SAP CRM Processes and Customizing .. 121

4 Critical Success Factors for CRM Projects .................. 277

5 Example from the Automotive Industry ..................... 329

6 Summary ..................................................................... 357

A Operating a CRM System with ITIL ............................ 363

B References ................................................................... 371

C Authors ........................................................................ 373

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7Contents

Introduction .................................................................................. 13

1 Introduction to CRM ................................................... 19

1.1 Key Concepts and Control Mechanisms in Customer Relationship Management ............................................ 191.1.1 Customer Focus .................................................. 201.1.2 Customer Satisfaction ......................................... 211.1.3 Customer Retention ........................................... 211.1.4 Customer Lifecycle ............................................. 221.1.5 Control Mechanisms in CRM .............................. 24

1.2 Service Management as Part of CRM ............................. 251.2.1 Service and Service Management ........................ 271.2.2 Service Portfolio as a Differentiation Factor ......... 281.2.3 Challenges in Service Management ..................... 29

1.3 Software Support for CRM ............................................ 311.3.1 The Future Significance of CRM Solutions ........... 321.3.2 Benefits to Companies of Integrated CRM

Systems .............................................................. 321.4 Customer Relationship Management with SAP CRM ..... 35

1.4.1 SAP CRM Roadmap ............................................ 351.4.2 Overview of SAP CRM ........................................ 37

1.5 Service Management with SAP CRM ............................. 421.5.1 Service Sales and Marketing ............................... 441.5.2 Service Contract Management ............................ 451.5.3 Installed Base Management ................................ 471.5.4 Customer Service and Support ............................ 481.5.5 Field Service Management .................................. 491.5.6 Depot Repair ...................................................... 501.5.7 Warranty and Claim Management ...................... 511.5.8 Service Parts Management .................................. 52

1.6 Service with SAP CRM or SAP ERP CS a Comparison .. 531.6.1 Service Operations ............................................. 541.6.2 Service Sales ....................................................... 571.6.3 Other Functions and Processes ........................... 57

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8ContentsContents

1.6.4 Conclusion ......................................................... 611.7 Architecture of SAP CRM Systems ................................. 611.8 Summary ...................................................................... 64

2 Service with SAP CRM Overview of Functions ......... 65

2.1 User Interface ............................................................... 652.1.1 UI Configuration Tool ......................................... 652.1.2 Component Enhancement .................................. 66

2.2 Master Data and Basic Functions .................................. 662.2.1 Master Data ....................................................... 672.2.2 Basic Functions ................................................... 67

2.3 Service Order Management .......................................... 692.3.1 Process Flow ...................................................... 702.3.2 Service Quotations ............................................. 712.3.3 Service Orders .................................................... 72

2.4 Warranty Processing ..................................................... 782.5 Complaint Processing .................................................... 80

2.5.1 Process Flow ...................................................... 812.5.2 Special Functions ................................................ 832.5.3 Follow-Up Functions .......................................... 842.5.4 Supported Scenarios ........................................... 862.5.5 Communication Channels ................................... 87

2.6 Product Service Letters and Recalls ............................... 882.6.1 Product Updates ................................................. 892.6.2 Recalls ................................................................ 90

2.7 Service Contracts .......................................................... 922.7.1 Process Flow ...................................................... 932.7.2 Functions in SAP CRM ........................................ 942.7.3 Functions Available Through Integration With

Other SAP Components ...................................... 962.8 Service Resource Planning ............................................. 97

2.8.1 Process Flow ...................................................... 982.8.2 Functions ........................................................... 99

2.9 Mobile Service .............................................................. 1042.9.1 Organizational Support ....................................... 1052.9.2 Service Order Processing .................................... 1062.9.3 Service Support Functions .................................. 108

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9ContentsContents

2.10 SAP Business Communication Management .................. 1092.10.1 Overview and Functionality .............................. 1092.10.2 Interaction Center ............................................ 1112.10.3 Softphone ........................................................ 1122.10.4 User Administration ......................................... 1152.10.5 Routing Management ....................................... 1162.10.6 Organizational Tools ......................................... 1162.10.7 System Administration ..................................... 1172.10.8 Monitoring and Analysis ................................... 118

2.11 Summary ...................................................................... 120

3 Service with SAP CRM Processes and Customizing .. 121

3.1 Basis Customizing ......................................................... 1213.1.1 Organizational Plan .......................................... 1213.1.2 User Role ......................................................... 1273.1.3 Customer ......................................................... 1353.1.4 Product ............................................................ 139

3.2 Service Order Management .......................................... 1473.2.1 Process Display ................................................ 1473.2.2 Customizing in the System ................................ 151

3.3 Service and Repairs Processing (In-House) .................... 1833.3.1 Process Display ................................................ 1833.3.2 Customizing in the System ................................ 188

3.4 Service and Repairs Processing (Field Service) ............... 1903.4.1 Process Display ................................................ 1903.4.2 Customizing in the System ................................ 194

3.5 Reactive Complaints Management ................................ 1953.5.1 Process Display ................................................ 1963.5.2 Customizing in the System ................................ 1993.5.3 Intelligent Solution Database ........................... 218

3.6 Proactive Complaints Management ............................... 2213.6.1 Process Display ................................................ 2213.6.2 Customizing in the System ................................ 223

3.7 Service Case Management ............................................ 2263.7.1 Process Display ................................................ 2263.7.2 Customizing in the System ................................ 228

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ContentsContents

3.8 Service Resource Planning ............................................. 2353.8.1 Process Display ................................................... 2363.8.2 Customizing in the System .................................. 238

3.9 Service Contract Management ...................................... 2473.9.1 Process Display ................................................... 2483.9.2 Customizing in the System .................................. 250

3.10 Warranty Management ................................................. 2583.10.1 Process Display ................................................... 2593.10.2 Customizing in the System .................................. 261

3.11 Summary ...................................................................... 276

4 Critical Success Factors for CRM Projects ................... 277

4.1 General Success Factors ................................................ 2784.2 Critical Success Factor Procedure Model .................... 2794.3 Critical Success Factor Change Management .............. 284

4.3.1 Introduction to Change Management ................. 2854.3.2 Reasons for Change Management ....................... 2894.3.3 Ideal Change Management Procedure Model ..... 292

4.4 Critical Success Factor Data Quality ............................ 2994.4.1 Duplicate Handling in the Standard SAP System ... 3034.4.2 Integrating Address Management Software

into SAP Systems ................................................ 3054.4.3 Data Quality Activities in the CRM Project ......... 313

4.5 Critical Success Factor Test Strategy ............................ 3204.5.1 Test Model ......................................................... 3214.5.2 Test Phases ......................................................... 3234.5.3 Test Preparation ................................................. 3244.5.4 Test Implementation ........................................... 325

4.6 Summary ...................................................................... 327

5 Example from the Automotive Industry ...................... 329

5.1 Fundamentals of the Automotive Industry .................... 3295.2 Customer Interaction Center ......................................... 332

5.2.1 Overview ............................................................ 3325.2.2 Functional Areas ................................................. 332

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ContentsContents

5.3 Complaints Management .............................................. 3365.3.1 Customer Case/Task in Complaints

Management ...................................................... 3365.3.2 Creating a Case/Task ........................................... 3375.3.3 Processing a Case/Task ....................................... 3435.3.4 Closing a Case/Task ............................................ 3445.3.5 Proactive Complaints Management .................... 347

5.4 Recall Management ...................................................... 3485.4.1 Preparing for a Recall .......................................... 3505.4.2 Conducting a Recall ............................................ 3515.4.3 Recall Reports .................................................... 355

5.5 Summary ...................................................................... 356

6 Summary ...................................................................... 357

Appendices ........................................................................ 361

A Operating a CRM System with ITIL ......................................... 363B References ............................................................................. 371C Authors .................................................................................. 373

Index ............................................................................................. 375

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This chapter explains the basic business concepts underpinning CRM in the service area and provides initial insight into the func-tions of SAP CRM.

Introduction to CRM1

This chapter begins by providing a general introduction to the concepts and control mechanisms of customer relationship management. It then focuses specifically on the role of service management as part of cus-tomer relationship management (CRM). After familiarizing you with these basic business principles, this chapter turns its attention to the ways in which CRM is supported by software solutions and, in particular, by SAP CRM 2007. The range of options available is illustrated by a brief introduction to the functions of this software and a comparison with the Customer Service (CS) component in SAP ERP. Chapter 1 closes by taking a look at the system architecture of SAP CRM.

Key Concepts and Control Mechanisms in 1.1Customer Relationship Management

To help you understand the CRM approach, we will begin by explain-ing the objectives behind CRM and a number of concepts that are fre-quently discussed in relation to this concept. These include customer focus, customer satisfaction, and customer retention. We will then provide an overview of the customer lifecycle, which plays a particularly impor-tant role in relation to a companys service processes. In this section, we also explain the basic mechanisms that a company can use to control and improve customer relationship management within the individual functional areas of the CRM approach, namely operational, strategic, and analytical CRM.

Key concepts and control mechanisms in CRM

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1 Introduction to CRM

Customer Focus1.1.1

The implementation of CRM leads to a significant paradigm shift in a companys focus. The transition from a sellers market to a buyers mar-ket described in the introduction underlines the necessity of this para-digm shift, which moves a companys focus from the product to the cus-tomer and to the customers current and potential future needs (Holland 2004). A customer focus at all employee levels is often accompanied by a transformation of the corporate philosophy. In the automotive indus-try, for example, presumed customer requirements were only taken into account when designing vehicles in the past. Now, however, a new focus on customer-related activities goes above and beyond product features, to include, for example, customer-focused services.

As part of strategic decision-making processes, the analytical function of the companys IT solutions are used to provide decision makers with the information they need to make decisions based on the data stored in the system. This data includes, in particular, information that is avail-able in a data warehouse and can be evaluated using data mining analysis techniques.

The operational level of CRM encompasses both the supporting function of CRM information technology and the customer focus of the organiza-tional processes and structural organization (Raab, Werner 2008). A com-pany that places its customers center-stage must also strive to enhance the expertise of its customer-facing employees so that these can fulfill their tasks to the best of their abilities.

One way to do this is to give these employees greater decision-making powers. In this way, process efficiency is no longer based on procedures for dealing with and reaching agreement with levels that are higher up in the hierarchy. Instead, it is ensured by giving individual employees the ability to make customer-focused decisions at their own level (Link 2001). In addition to this decision-making authority, it is also essen-tial to provide these employees with all of the information required to reach their decisions. Employees can access this information by looking through a complete history of interaction with a customer or using an analytical CRM system.

A paradigm shift in companies

The strategic level

The operational level

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Key Concepts and Control Mechanisms in Customer Relationship Management 1.1

Customer1.1.2 Satisfaction

A high level of customer satisfaction, which means a high level of cus-tomer loyalty, brings strategic benefits by raising the barriers to market entry for any potential competitors. Customer satisfaction is the direct result of customers subjective perceptions of the shortfall between their expectations and the degree to which these expectations are met by the companys provision of services. A company must therefore strive to ensure that their customers experience of the companys ser-vices exceeds their expectations and leaves the customer with a positive impression. If we apply the CRM approach to this concept, the objectives in relation to customer satisfaction become, first, to pinpoint customer expectations and the underlying level of customer requirements, and, second, to determine the level of customer satisfaction in relation to the services provided.

Customer1.1.3 Retention

We can distinguish between two fundamental types of customer reten-tion, namely, customer attachment and customer binding. In this context, attachment refers to a voluntary attachment of customers to a brand or company that is not bound by practical constraints. Binding, meanwhile, means that circumstances bind the customer to a company in a way that is no longer voluntary. Customer binding may be based on contrac-tual, economic, or technical or functional constraints. Examples include long-term cooperation agreements, contractually agreed sales quantities, or a current lack of alternatives. In the case of customer attachment, the connection is predominantly a psychological one, and is based on cus-tomer satisfaction, personal relationships, habits, or even tradition.

The benefits of customer retention are largely economic, and are par-ticularly evident in long-term customer relationships. We can identify three key benefits to a company of a high level of customer retention (Homburg, Krohner 2003):

Sales-related benefitsEE These result from a potential increase in the volume of sales to a customer. Companies who maintain long-term relationships with

Three key benefits

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their customers can become ever better at meeting customer-specific requirements and, in this way, reduce the likelihood of customer defection, as well as make their own range of services more attractive than the competition. In addition to acquiring knowledge of the cus-tomer as part of the customer relationship, long-term business rela-tionships also allow companies to achieve greater success in terms of cross-selling.

Cost-related benefitsEE These result from a reduction in transaction costs and coordination costs as the customer relationship develops. The alternative costs of acquiring new customers are also reduced.

Stability-related benefitsEE These benefits are achieved if negative market influences on the com-pany can be offset by long-term customer relationships.

Customer Lifecyc1.1.4 le

One focal point for the CRM approach is a holistic view of the customer lifecycle. This enables a clear vision of the phases during which a com-pany must apply certain CRM instruments to their relationship with a customer (see Figure 1.1). The customer lifecycle also demonstrates the economic potential that can be achieved through long-term customer retention (Mller 2004). Customer retention starts in the initiation phase with the first contact between the company and the customer. The objec-tive of using a CRM system must be to support the relationship with the customer through information analysis and control to enable long-term, profitable customer retention.

Throughout the customer lifecycle, the relationship with the customer progresses through various phases in terms of the intensity of the cus-tomers loyalty. Each of these risk phases involves a threat to the company of losing the customer.

However, the overall benefit to the company of customer retention increases the longer the customer can be retained. Within this lifecycle, CRM therefore plays a decisive role in helping companies overcome these periods of risk and prevent a potential loss of the customers loyalty.

Overcoming periods of risk

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Key Concepts and Control Mechanisms in Customer Relationship Management 1.1

Intensity of Relationship (e.g. Customer Value)

Potential Customer

Time

Utilize Customer PotentialsDevelopCustomerPotentials

Existing Customer

Former Customer

DegenerationPhase

AbstinencePhase

Revitali-zation-Phase

Sociali-zationPhase

InitiationPhase

RiskPhase

GrowthPhase

RiskPhase

MaturityPhase

RiskPhase

Cancell-ationPhase

Regaining Customers, Termination of

Customer Relationships

Customer Retention: Retention and Penetration

CustomerAcquisition

Customer LifecycleFigure1.1 Management (from Stadelmann et al. 2003, S. 35)

It also provides a basis for the efforts of a company to retain customer loyalty at a late stage in a relationship with a customer. This is particu-larly useful because, when we weigh up the costs and benefits, maintain-ing an ongoing relationship with the customer is much more efficient than trying to win the customer back at a later stage or trying to acquire new customers to maintain business volumes. An extension of the cus-tomer relationship, which is often very beneficial for companies, is only possible if the effective benefits of a continued business relationship can be clearly demonstrated to the customer even at a late stage in the rela-tionship. The services a company can offer its customers therefore take on a special significance.

Service is a key factor that enables companies to effectively extend the customer lifecycle and to increase the profitability of their customer rela-tionships. Therefore, customer relationship management must also seek to enable a quality of service that delivers added value to the customer based on the continued business relationship. Within a companys CRM

Extending the customer relationship

Service as a key factor

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process, it is of key importance to the service area that the CRM IT solu-tions allow the company to achieve the desired level of service quality.

Control Mechanism1.1.5 s in CRM

The overall CRM process in a company can be divided into various func-tional areas, listed below:

Analytical1. CRM

Strategic CRM2.

Operational CRM3.

The complex relationships between these functional areas and their con-trol mechanisms in customer relationship management are shown in Figure 1.2.

Act

ions

Data

Analytical CRM: Helps to enter customer data and to integrate the data into a 360-degree view of the customer

Reporting and Analysis Methods: Support the transparency and analy-sis of customer relationships

Relationship Planning: Supports the coordination of ac-tions and leads employees to focus on universal goals

Relationship Optimization in operational CRM: Knowledge gained from analy-ses can help to initiate personal-ized actions

Know

ledge

Kno

wle

dge

Goals

Functional Areas and Control MechanismsFigure1.2 in CRM

1 Based on the current situation, the details of which can be deduced from the existing data by means of analysis (analytical CRM). 2 Knowl-edge can be gained that can be used for the strategic planning (strategic CRM) of goals. These goals, together with the findings of the analysis, produce 3 specific actions and measures, for example, for optimizing cus-

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Service Management as Part of CRM 1.2

tomer relationships (operational CRM). The effects of these actions have an impact on the data basis, which, if the company takes a 360-degree view of the customer, will ideally result in renewed optimization of the corporate strategy in relation to customer relationships. In this way, these control mechanisms enable ongoing improvement of customer relationship management in a company.

To ensure that these complex interactions of information and control mechanisms can be implemented in companies in practice, a compre-hensive and flexible system is essential to provide support for CRM pro-cesses. This system must provide a sufficiently broad view of all cus-tomer-relevant information, enable strategic and timely implementation of measures, and allow the effects of these measures to be monitored directly.

Service Management as Part of CRM1.2

Customer satisfaction is considered to be a decisive factor in determin-ing customer loyalty to a company. An active influence is exerted on customer satisfaction during each phase of contact. An analysis of the customer lifecycle clearly shows that various measures allow a company to come into direct contact with a customer in the after-sales phase. In this context, the sales area is particularly effective in exercising a positive influence on customer satisfaction.

Up to this point, we have looked at the management of customer rela-tionships from a generic perspective. Taking a 360-degree view of a customer and taking account of the entire customer lifecycle are two approaches that are particularly effective ways for companies to create a sound basis for embedding the service area within customer relationship management (see Figure 1.3).

The services and service management offered must always be economi-cally efficient and must not be at odds with the profitability criteria for the provision of services.

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Fields of Competence Affected by CRMin an Enterprise

Stake-holders

Compe-tition

ExternalSystem

Internal System

Vision/Mission

Strategic Planning

Strategic Goals

Marketing Sales

Structural Organization

Technology

Process Organization

After-Sales/Service

Service as Part of Customer Relationship ManagementFigure1.3

At this point, it should be pointed out once again that a service does not represent an end in itself. Rather, it must help the company achieve the following goals:

Quantitative goalsEE

Revenue targetEE

Profitability targetEE

Qualitative goalsEE

Increased customer satisfactionEE

Increased customer loyaltyEE

These generally applicable goal criteria overlap with some of the goal cri-teria for customer relationship management as a whole. In many phases of a customer relationship where sales transactions are placed center-stage, the term service can be applied to additional services relating to the

Target criteria for the service area

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product itself. Here, however, the focus is on the services that become relevant after the product is sold, that is, at the after-sales stage, even if services that go above and beyond the mere provision of a product may also be offered at the pre-sales and sales stages (see Figure 1.4).

Focus on Service

Service Offerings

SalesPre-Sales After-Sales

Service

Focus on After-Sales ServiceFigure1.4

Examples of the services that a company may offer its customers before or during the sale of a product include sending information material and flyers, product samples, and a hotline to handle customer inquiries. Services offered after the sale of a product relate in particular to the fol-lowing areas:

Complaint handlingEE

Maintenance and installationEE

Provision of product add-onsEE

User helpdesksEE

Service centersEE

Field service employeesEE

Service and Service Management1.2.1

The concept of service was a hot topic at the end of the 1980s and the start of the 1990s in the context of the service wave. Back then, initial considerations regarding the introduction of service concepts provided an important starting point for recognizing the necessity of providing customers with services. Services were already being identified as an important distinguishing feature of companies, and nothing has changed

Services before, during, and after the sale of a product

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in this regard since then. For example, Samuel J. Palmisano, CEO of IBM, described the service area as the most important area in his company in 2003.

In 2006, services earned companies in the mechanical engineering indus-try approximately 43.3 billion euros. More than one-third of all services relate to after-sales service offerings. The most profitable after-sales areas in this context are service parts, which account for about 18% of com-panies EBIT (earnings before interest and taxes), consulting and value-added services (around 16%), and repair and maintenance (about 12%) (Mercer Management Consulting 2006).

Service Portfolio as a Differentiation Factor1.2.2

The services provided by a company have various benefits, both for cus-tomers and for the company itself. The benefits to the customer are based on the following factors:

Breadth and depth of services offered compared with customer EE

ex pec tations

Accessibility of servicesEE

Service pricesEE

Degree of performance of servicesEE

Short waiting timesEE

CompletenessEE

The service portfolio can be divided into three areas, namely, Must have, Need to have, and Nice to have (see Figure 1.5). It is impossible to make generalizations about which specific services will fall into which of these areas at any given time because this depends on various developments:

Technological developmentsEE

Standardization developmentsEE

Consolidation of services in the market due to the adaptation of all EE

competitors

Consumer habitsEE

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Cus

tom

er S

atis

fact

ion

Differentiation Range

Service Offerings

Must have: rudimentary services

Need to have: services geared toward competition

Nice to have: services differentiating from the competition

Differentiation RangeFigure1.5 of Customer Satisfaction

The Must have area includes service offerings that customers expect at all events and therefore must be offered. These include legally binding warranties or the availability of replacement parts for repair.

The Need to have area includes all services that are offered by competitors and can therefore be regarded as a necessity. Customers often assume that the same services will be offered by direct competitors, and the only factor that impacts on their satisfaction in many cases is the non-existence of these expected services.

The Nice to have area is of particular significance in relation to differentia-tion. Companies can exercise a positive effect on customer satisfaction by offering services in this area. If they succeed, they will create a unique selling point that will set them apart from the competition.

Challenges in Service Management1.2.3

Up to this point, we have described how services can increase customer satisfaction and improve customer retention by serving as a differentia-tion factor that gives companies a competitive edge. However, in this role as a key differentiation factor, both the services themselves and how they are perceived by customers are particularly sensitive to mar-ket dynamics and increasing customer requirements. Competitors will

Must have

Need to have

Nice to have

Competition in the service area

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also take advantage of any opportunities to gain an edge in the market through the provision of services. This means that companies are con-stantly competing for customers by continuously improving the scope and quality of their services. If a company is to survive in the market and hold on to its customers, it must continually improve its services and adapt to market conditions.

As shown in Figure 1.6, the opportunities for differentiation decrease over time as competitors adapt to the higher service level and customer expectations continue to rise.

Cus

tom

er S

atis

fact

ion

Diminution ofdifferentiation rangein terms of time

old

new

Decreasing opportunities fordifferentiation- Cause:

a) Adaption of service offerings by thecompetition

b) Increasing customer expectations

Challenges derived- Identify new differentiation features- Optimize existing differentiation features

(quality, responsiveness)- Instruments:a) Technologyb) Process Optimizationc) Service Offerings

Market Dynamics Decreasing Opportunities for DifferentiationFigure1.6

A company must be able to respond to this change by identifying new differentiation features and incorporating these into their service portfo-lio, or by improving the quality of their existing differentiation features to gain a fresh competitive edge.

Three main instruments can be used for this purpose:

Technology and systemsEE

Service processesEE

Service employeesEE

However, none of these can be examined in isolation. To establish a cer-tain level of quality in terms of service processes and to improve this on an ongoing basis, you first require technologies and systems that enable a very high level of process quality. In addition, service employees not only require adequate education, training, and motivation to carry out

Interplay between the three

instruments

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Software Support for CRM 1.3

their duties, but also rely on process quality and on optimized technolo-gies and system design.

In this context, the choice of supporting technology and systems is criti-cal to the company because it has a direct effect on the other instruments of processes and employees. One thing a company must be able to do to withstand the competition for customers in the service area is to select the right technology and systems that can create the conditions neces-sary for establishing an excellent quality of services compared with the competition and retaining this leading edge. In the following sections, we demonstrate how CRM systems and their service functions can help a company to do just that.

Software Support for CRM1.3

In the market for systems that support business processes, the develop-ment of CRM solutions has become very dynamic only recently, com-pared with generic enterprise resource planning (ERP) or supply chain man-agement (SCM). Systems referred to as sales force automation (SFA) systems or, in Europe, as computer aided selling (CAS) systems, became established in the early days as a primary support for sales. These were primarily intended to help sales employees complete the following key tasks:

Manage customer contactsEE

Organize sales activitiesEE

Classify sales opportunitiesEE

Analyze developments in salesEE

Collect information about customers and productsEE

However, as part of this dynamic development, customer requirements arose that could not be met by these early systems, for example, the need to access all previous outcomes of contact with a customer any time that communication with this customer is required. More complex, integrated systems were needed to enable the newer CRM strategies. To practice successful and far-reaching customer relationship manage-ment, systems are now required that enable a process-oriented view of the customer. This can only be realized if large volumes of data can be

Critical role of technology and systems

Dynamic development

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structured and processed and if the systems can be tightly integrated with the systems used in other areas of the company, such as logistics and finance.

The Future Significance of CRM Solutions1.3.1

In many cases, the level of development that allows processes to be sys-tematically mapped in integrated IT systems, which is already complete, or at least at an advanced stage in the area of ERP and SCM solutions, is yet to come for customer relationship management. Many companies have, by now, acknowledged the importance of CRM to their future survival and, taking a medium-term view, are aware of the necessary investment in IT solutions that will fulfill the companys requirements in terms of implementing and supporting CRM processes. In many cases, one of the key tasks for IT in a company is to offer business departments a modern, highly integrated IT solution for CRM.

This trend is well documented, for example, by a study by the Economist Intelligence Unit (2005). This revealed that customer relationships and customer service was by far the number 1 business area (62%) where IT is to play a decisive role in the medium term. This was followed by sales and marketing (34%) and new product and service development (31%).

Benefits to Companies of Integrated CRM Systems1.3.2

Customer relationship management is a complex, holistic approach that strives to enhance a companys profitability by improving its relation-ships with its customers. Individual, preliminary objectives and methods can be identified, which together allow this overall goal to be achieved.

The implementation of an integrated CRM solution requires an invest-ment by a company that must yield a range of additional benefits that go above and beyond the companys basic requirements in terms of a CRM strategy and CRM processes. In this way, companies can benefit from the overall added value of a modern CRM system, in addition to its basic operational functions.

Customer data provides a starting point for any CRM activity. If a signifi-cant improvement is to be made in customer relationship management,

360-degree view of the customer

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Software Support for CRM 1.3

it is not sufficient to manage only some of this customer data. Rather, a complete, holistic view of all available customer data and the rela-tionships between this data, in other words, a 360-degree customer view, serves as an essential starting point. This can incorporate the following features:

Transparency of all customers and customer requirementsEE

A unified picture of complex customer and object structures in a cen-EE

tral, universal model (and therefore system)

A complete history of interactions with the customer across all busi-EE

ness departments

Documentation and retention of important customer knowledge EE

from customer-facing processes (for example, price agreements or call reports)

Assessment of the success of customer care measures (for example, EE

acquisition, campaigns, contact intensities, lead times for customer complaints)

A feedback system, whereby knowledge about a customer gleaned EE

from past interactions with that customer is fed into current or future interactions (for example, reasons for rejecting past offers are taken into account when determining future interaction)

The complexity reflected by this type of 360-degree view of the customer can only be mapped by IT using the latest CRM software solutions. The design of the solutions is therefore of particular importance in determin-ing whether a company is in a position to use this type of holistic view of its customers to achieve its CRM objectives.

Increasing customer loyalty is another goal for CRM. Customer loyalty is another important factor in the overall profitability of the lifecycle of a customer relationship (see Section 1.1.4 Customer Lifecycle). The follow-ing tools are particularly effective in enhancing customer loyalty:

Personalized contact and personalized services based on a complete EE

interaction and information basis

Unified, strategic communication EE (one face to the customer) across all departments

Increasing customer loyalty

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A constant presence and constant availability (EE 24/7) to customers using all communication channels

In relation to these measures for increasing customer loyalty, it also becomes clear that these can only achieve a corresponding process qual-ity if an integrated CRM system allows the company to integrate all rel-evant information, technologies and functional areas so that information is exchanged and all subprocesses are linked in virtual real-time.

This type of system support for processes also allows companies to lever-age additional potential to increase sales or reduce costs:

Faster, more streamlined customer-facing processes thanks to EE

greater efficiency, for example, by establishing customer self-service processes

Performance differentiation (prices, discounts, advertising mate-EE

rial, and so on) or a cost-efficient enhancement of customer care (for example, call centers)

Increased sales through cross- or up-sellingEE

Reduced costs through the use of new contact channelsEE

Reduced costs through the transfer of functions from the company EE

itself to customers, partners, or vendors

Reduced costs in outbound campaigns thanks to suitable target EE

groups

Reduced costs in the supply chain due to a clearer focus of investment EE

in the most profitable customers

Strategic analysis and development of potential by linking customer EE

and market data (lead management and opportunity management)

Increased EE customer lifetime values thanks to greater customer loyalty

Integration of partners into the process chain, for example, as part of EE

sales promotions campaigns (channel integration)

In addition to the benefits for the company itself, account must also be taken of the fact that customers should benefit from the companys use of a CRM solution. This is essential to the establishment of sustainable, stable, and mutually beneficial business relationships.

Importance of an integrated CRM

system

Additional potential for

increased sales

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Customer Relationship Management with SAP CRM 1.4

Customer Relationship 1.4Management with SAP CRM

Section 1.4.2 Overview of SAP CRM, provides an overview of the func-tions provided by an SAP CRM system. First, however, we provide a short introduction to SAPs CRM Roadmap to briefly explain the recent development of the various releases.

SAP CRM Roadm1.4.1 ap

Figure 1.7 shows the current situation with regard to the individual releases of the SAP CRM system.

The SAP CRM 2005 system was released in 2005. SAP CRM 2005, together with its predecessor, SAP CRM 4.0, currently represents by far the greatest number of SAP CRM live installations.

2005 2006 2007 2008 2009

SAP CRM Product Release Roadmap

SAP CRM2005

SAP CRM2006s/1

SAP CRM2006s/2

SAP CRM2007

SAP CRM 7.0

RAMP-UP

RAMP-UP

RAMP-UP RAMP-UPPHASEDINTRODUCTION

UNRESTRICTED SHIPMENT

UNRESTRICTEDSHIPMENT

UNRESTRICTED SHIPMENT

SAP CRM RoadmapFigure1.7

The subsequently developed 2006s/1 and 2006s/2 systems were pre-paratory releases, which a limited number of customers used to jointly develop Release 2007 with SAP. Starting in early 2008, SAP CRM 2007 was available to a broad range of customers as part of a ramp-up phase.

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Since the middle of 2008, customers have been able to use this release without any restrictions, and the introduction of release 7.0 is planned for 2008/2009.

Overall, the development from Release 2005 to Release 2007 can be regarded as the greatest progress made in the recent history of SAP CRM systems. The most obvious change is undoubtedly the new user interface (UI) , which is based on web standards and is easily personalized by the user and more user-friendly than any previous SAP CRM system. With this new UI , it is very easy to integrate external Web services, such as news feeds, and so on. Many functions are integrated into the interface as web client popups.

With the new-look interface (see Figure 1.8) and the high level of usability, SAP has made a decisive leap forward in the area of CRM systems. Back in the days of Release 2005, the main argument in favor of using SAP CRM was its high level of integration with the SAP ERP system. With Release 2007, however, the SAP CRM system can now also hold its own in the market in terms of both usability and functional scope. Meanwhile, this integration has also been enhanced. (For more details, refer to Section 1.7 Architecture of SAP CRM Systems.) As a result, the need for users from the marketing and sales areas to weigh integration against usability will soon be a thing of the past because the new CRM release offers both.

The New Look of SAP CRM 2007Figure1.8

Developmental leap

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Overview of SAP CRM1.4.2

The SAP Customer Relationship Management (CRM) solution offers an end-to-end range of functions to cover the entire lifecycle of customer rela-tionship management, as well as instruments for analysis and planning.

Customer relationship management can be roughly divided into the fol-lowing phases:

Engagement1. This phase involves identifying possible customers and acquiring them for an initial sale.

Transaction2. This phase involves establishing business agreements and processing sales.

Fulfillment3. This phase involves delivering the promised services to customers and billing for services rendered.

Service4. This phase involves offering and delivering additional, product-based after-sales services.

Various functions are also available across all four phases, which allow the phases to be planned (analysis and planning) and help the business departments and management make decisions affecting customer rela-tionship management.

This book focuses on the service area, which we introduce in Section 1.5 Service Management with SAP CRM, and discuss in more detail in subsequent sections. First, however, we will briefly introduce the first three CRM phases and the more important functions assigned to these in the SAP CRM system. This introduction is by no means exhaustive, and we will limit ourselves to just some of the functions provided as part of the very extensive functional scope. We will then move on with a more detailed and comprehensive discussion of the topic of this book, that is, service.

Phases of CRM

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Engagement

The engagement area largely covers the following functions: marketing, lead management, customer segmentation, quantity assignment, product proposals, and communication.

The Marketing Planner is a particularly useful tool for marketing. This maps and hierarchically structures a companys marketing activities in the form of corresponding plans, organized, for example, by customer categories, countries, or products. It supports the exchange of data both within the CRM system and between the CRM system and external appli-cations such as Microsoft Outlook or Project. Marketing campaigns can also be planned in SAP NetWeaver Business Intelligence (BI), if it is used, which means that corresponding key figures are generated there also.

Lead management allows you to identify and classify sales opportunities with a view to tracking down market opportunities and sales oppor-tunities. The SAP CRM system allows you to manage all relevant data, manage the development of the sales opportunity into a customer, and transform a lead into a customer in the system directly, together with all of the assigned information.

Another key function in this area is the Segment Builder, which supports customer segmentation. This allows activities and campaigns to be aimed directly at customers that are likely to respond positively to these, based on specific characteristics, such as product preferences in the past. As a result, campaigns can be designed in a more strategic and cost-effective manner.

Quantity assignment allows for the distribution of a possibly limited prod-uct capacity among various customers. For example, a company can allocate the largest available quantities of a product that is to be newly launched in the market to the customer that generated the greatest rev-enue in the past because this customer is also more likely than others to want to buy large quantities of this product.

An extensive product proposals function is also provided, which uses product association rules to generate product proposals from the data stored about a customers past transaction behavior. These proposals are particularly likely to lead to a sale to the customer in question. This sup-

Marketing

Lead management

Segment Builder

Quantity assignment

Product proposals

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ports the conventional tools used to boost revenue with customer cross-selling and up- and down-selling.

Finally, the functions provided for communication are also worthy of a mention. In the past, a major shift took place in marketing from generic mass communication to increasingly individual and personalized com-munication with customers. This personalization or individualization of customer communication would be impossible without a CRM sys-tem that can offer the relevant capabilities, because these processes fre-quently require a high degree of automation, a large data volume, and a correspondingly high level of data quality if the time and effort involved are to be kept within reasonable limits. SAP CRM provides the user with support in relation to all relevant communication channels.

Transaction

In this area of customer relationship management, tools are provided to support the organization of sales, for example, tools to manage sales territories or sales activities. In addition, this CRM phase maps the sales activity cycle, which includes the planning and management of business partners and sales opportunities, order acquisition, and the analysis of sales key figures.

The organizational elements of this functionality (territory management and activity management) support the modeling of organizational structures and corresponding functions, such as reporting, and the management of specific sales activities, such as the scheduling of sales negotiations and the allocation of sales resources. For example, all customer-specific activities, such as on-site sales negotiations and telephone inquiries, are recorded. As a result, the latest status of interaction in a customer rela-tionship is transparent to all sales employees. This makes it easier for a sales employee to work temporarily on a customer account that is nor-mally the responsibility of another sales employee, for example.

If used in conjunction with SAP NetWeaver Business Intelligence, these sales activities can also be analytically evaluated. This creates transpar-ency regarding which sales activities were particularly efficient and which did not succeed in meeting the target set. This allows the company to

Communication

Territory and activity management

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optimize its sales activities over time and to develop greater efficiency of sales.

Business Partner and Opportunity Management enables the management of information about business partners and about sales opportunities. Whereas the business partner cockpit provides a comprehensive view of business partners and all data relating to them, Opportunity Management records sales opportunities and helps sales employees convert these opportunities into real sales. For example, it allows sales opportunities to be compared on the basis of their expected likelihood of success or their expected volume, which allows sales efforts to be focused on the most promising and profitable sales opportunities.

Order Acquisition represents the next phase, in which a sales opportunity has been turned into an actual sale, and sales documents such as requests for quotation, quotations, and orders are created, which can be managed as part the order acquisition process. Functions that may be familiar to you from the Sales and Distribution (SD) SAP ERP model are also inte-grated into order acquisition to enable efficient order processing. These include the preparation of organizational data, partner determination in the relevant partner roles, product determination and selection, pricing, availability check, and date management.

In the order document flow, the individual sales documents can be con-verted into other sales documents in accordance with the predefined sequence (for example, a quotation is converted into an order) to reduce unnecessary additional effort, such as duplicate entry of document data. Extensive copy functions are available for this purpose if similar sales transactions are to be initiated.

The transaction area also includes functions for managing contracts and business agreements, which define specific pricing and conditions between two business partners, and which can then be copied into the relevant orders between the partners.

Fulfillment

Once the sales transaction is confirmed and the order created, this order must be fulfilled by the provision of the corresponding service. SAP CRM helps companies do this with functions for checking availability, billing

Business partner and opportunity

management

Order acquisition

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(including credit management and payment processing), and shipping and transportation.

First, an Availability Check (also known as the Available-to-Promise [ATP] check) allows you to schedule the order quantity based on the defined dates and planned capacities. This function can also be used as a simu-lation, for example, to agree on delivery dates with the customer in advance. If the desired delivery date cannot be met with backward scheduling, forward scheduling is used to give alternative target dates. The aspects of shipping and transportation can be integrated into the date calculation, and can take account of other customer preferences, such as partial or full deliveries.

For Billing and Payment Management, SAP CRM supports a very wide range of payment methods, from conventional billing to billing based on agreed payment terms, and electronic payment forms, which are pri-marily used in business-to-customer (B2C) scenarios involving a large number of mostly unknown business partners. Payment processing also includes credit management, which allows customers to be granted cer-tain lines of credit or customer classification to be used to influence the sales transaction so that, if customers exceed defined credit lines, warn-ings are displayed (depending on the customer classification) or sales documents (such as orders or deliveries) are locked and can only be released by employees with sufficient authorization.

All processes through which a product passes from finishing to goods issue are mapped in shipping. These include the creation of deliveries with the corresponding delivery documents (delivery notes and so on) and, where relevant, the necessary foreign trade documents, as well as picking, packing, and goods issue. If an SAP CRM system is also used, these functions are enhanced with an extensively automated shipping process, which also enables deadline monitoring and the integration of storage capacities, for example. When the goods issue is posted at the end of the shipping process, the product leaves the company. At this point, the necessary stock postings, including all value changes, are made in the companys accounting system.

An extensive range of functions is provided in relation to transportation. These allow you to group the various deliveries together in shipments,

Availability check

Billing and payment management

Shipping

Transportation

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select the best transportation service provider and routes, and create the necessary shipment documents. Also included are functions to calculate the transportation and shipment costs, taking account of the product and packing information in the delivery documents (for example, weight and size).

The next phase of customer relationship management, namely, service, is discussed in Section 1.5 Service Management with SAP CRM, in more detail than the previous phases described here. First, however, we take a look at the global aspects of customer relationship management, that is, Analysis and Planning.

To monitor order processing and services, and to provide starting points for possible improvements, SAP CRM includes a range of reports and analyses that can indicate process quality and efficiency in this area. In this context, a range of key figures can be generated (for example, for delivery reliability or the occurrence of returns). Thanks to the consider-able flexibility of these potential reports, each company can define its own key figures for its own analyses and reports.

Service Manageme1.5 nt with SAP CRM

As illustrated in the SAP CRM Roadmap in Section 1.4.1 SAP CRM Road-map, the enhanced functions in SAP CRM Release 2007 make it perfectly equipped to cover the service area. We examine these functions in detail with specific reference to the system in Chapter 2, Service with SAP CRM Overview of Functions, before explaining the options these provide in terms of process design in Chapter 3, Service with SAP CRM Processes and Customizing. In the next section, we start by providing an initial overview of the service areas in a company that are supported in terms of the structuring and fulfillment of tasks in SAP CRM Release 2007.

Figure 1.9 provides an overview of how the topic of service fits into the overall context of customer relationship management. Here, service is shown on the same level as the other two major process categories in CRM. Like sales and marketing, service is connected to the customer through various communication channels, such as the Internet or call centers.

Global functions: analysis and

planning

Putting service into an overall CRM context

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Service Management with SAP CRM 1.5

As shown in Figure 1.10, the functional service areas in a company can be divided into the following three categories, which make up a service management cycle:

CollaborateEE

AnalyzeEE

OptimizeEE

These three categories, in turn, are composed of a total of eight different service segments, which are described in detail in the sections below. We also describe how these service areas are implemented in SAP CRM 2007.

Customer

Mobile

MARKETING SERVICE

Sales

Powered bySAP NetWeaver

ANALYTICS

End-to-end,Industry-specific

Processes

Internet Call Center

PartnerChannel

ServiceFigure1.9 as Part of the Portfolio of the SAP CRM Solution

The following sections provide an initial overview of the business requirements for service in the various areas of the service management cycle, and explain how these requirements are addressed in SAP CRM Release 2007.

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CUSTOMER

ServiceParts

Management

Warranty& Claim

Management

DepotRepair

FieldService

Management

CustomerService & Support

InstalledBase

Management

ServiceContract

Management

ServiceSales &

Marketing

Collaborate

Optimize A

naly

zeService Management CycleFigure1.10

Service Sales and Marketin1.5.1 g

Services also need to be advertised in the market using marketing and turned into revenue through sales. SAP CRM 2007 supports these busi-ness functions for service management in a similar way as the higher-level areas of sales and marketing.

The following aspects are mapped as part of the sales and marketing of a companys services:

Service marketing and campaign managementEE

Service lead and opportunity managementEE

Service quotation managementEE

Service solution sales: order, contract, and bundling of products and EE

services

We can essentially distinguish between three different types of service based on their characteristics and objectives. Each of these three ser-vice types have different goals and use different tools supported by SAP CRM.

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Reactive services represent the companys reactions to customer expec-tations, for example, the provision of information about a product in response to a customer inquiry. The objectives of reactive services are to maintain and enhance customer satisfaction (see Section 1.1.2 Customer Satisfaction). SAP CRM provides relevant tools in the form of account and contact management, a customer database, and the integration of customer-related service processes.

Active services address the quality of the customer relationship, and serve to sustain this relationship, improve customer loyalty, and enhance the customer relationship in terms of profitability and lifecycle (see Section 1.1.4 Customer Lifecycle). As part of these proactive services, the cus-tomer is offered additional services, such as maintenance offers, dis-counts on additional products, and so on. These requirements are cov-ered by SAP CRM with relationship marketing, campaign management, and process integration.

Selective services seek to enhance the profitability of a customer. Relevant analyses are used to determine the customer segment for which it can be assumed that the company can increase its profits by implementing selective services. SAP CRM supports selective services with customer value analysis, advanced analysis tools, and optimization of the service portfolio.

Service Contract Management1.5.2

It may prove beneficial to both a company and its customers to establish service contracts because a long-term service relationship offers advan-tages to both. Service contracts usually specify the following service properties, among others:

Response times for the serviceEE

Availability times of a product or serviceEE

Availability and costs of service partsEE

Service and maintenance intervalsEE

Reactive service

Active service

Selective service

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The advantages of these kinds of service agreements for companies incude:

The establishment of a service business with its own sustainable busi-EE

ness model as an independent profit center within the company

Increased customer loyalty based on long-term service contractsEE

Enabling individual approaches to meeting customer requirements in EE

terms of service

Precise tailoring of services to suit customers (in the sense of service EE

packages)

Definition of conditions for warranty to improve risk managementEE

Optimized contract profitabilityEE

Benefits to the customer can also be identified, in particular, in the case of products that require a high level of maintenance:

Stable, uninterrupted use of the product thanks to regular maintenanceEE

Maximized product availability thanks to minimized maintenance EE

and repair phases

High level of service availability due to guaranteed response times in EE

a service case

Forecasted service costsEE

SAP CRM 2007 supports service contract management with the follow-ing functions:

Creation of service agreementsEE

Creation of service contract quotationsEE

Management of service contract lifecyclesEE

Service level managementEE

Management of quantity and value contractsEE

Definition of the form of the contract based on level of usageEE

Management of proactive maintenance measuresEE

Benefits for companies

Benefits for customers

SAP CRM functionality

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Installed Base Managemen1.5.3 t

In SAP CRM 2007, installed base management not only refers to the management of data that is directly related to the customer, but also incorporates the management of the products currently used by the cus-tomer, including all service-related information about these products. Transparency regarding the product configuration currently used by a customer is essential, in particular in the case of technology-intensive products that are shipped in several different configurations or with dif-ferent components over the course of their lifecycle. Past service mea-sures involving a change to the configuration or the replacement of com-ponents can also be mapped.

Figure 1.11 shows the typical lifecycle of a product configuration as part of an installed base.

Starting with order management, the agreement defines which product the customer purchases in which configuration, and possibly also how this product is installed at the customer site. The agreement also speci-fies whether the customer purchases the product or whether it is to be made available to the customer for a limited period only (rental/lease contracting and so on).

Installed Base

Procurement orProduction

Quotation &Configuration

On-SiteInstallation

ContractManagementOn-Site

RepairInhouseRepair

Scrapping/Re-Sell

Order Management

Lifecycle of the Installed BaseFigure1.11 of a Customer

Product configuration lifecycle

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The conditions governing service and maintenance and rental conditions (where relevant) are agreed later as part of contract management.

Provision can be made for on-site repairs or repairs in the service depart-ment as part of the repair cycle. In both cases, the system provides the relevant configuration data for the customer product.

In addition, agreements can also be put in place specifying that resale or disposal of the product is supported by the vendor, who can similarly select the relevant product information and therefore also the resale con-ditions and disposal measures in this case.

SAP CRM 2007 supports all of the following business requirements:

Precise and up-to-date installed base and product configuration dataEE

Management of product status information (for example, counter EE

readings)

Tracking of the product configuration across the entire maintenance EE

lifecycle (for example, the use of replacement parts)

Management of changed or updated safety regulations and instruc-EE

tions for use

Identification of up-sell sales opportunities in the customer contextEE

Management of the entire lifecycle and product history (for example, EE

in relation to the serial numbers of components)

Support for remote monitoring of product statuses and service casesEE

Customer Service and Support1.5.4

Customer service and customer support cover the following business requirements:

Receipt of service requests from the customer: Planning, process-EE

ing, and monitoring of the relevant activities performed by service employees

Access to all relevant customer information, such as customer master EE

data, customer product data, contracts, and warranties (360-degree view of the customer)


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Triggering and monitoring of any necessary follow-up actions: Which EE

follow-up actions are required and when must they be completed?

Availability of technical information to complete service tasks and, EE

where relevant, information specifying how the configuration of the customer product has been changed by the service tasks

Management of a status description of the product that is servicedEE

Documentation of service activitiesEE

SAP CRM offers both operational and analytical functions to help com-panies meet these requirements in the customer service area:

Operational functionsEE

Tools for customer self-service (online help, product information)EE

Service request managementEE

Complaints managementEE

Management of service activitiesEE

Complaints and returns managementEE

Service quotation and order managementEE

Escalation managementEE

Solution databaseEE

Analytical functionsEE

Measurement of interaction timesEE

Analysis of the proportion of problems solved at each support EE

level

Monitoring of missed deadlinesEE

Identification of problematic customer situations or accountsEE

Field Service Management1.5.5

Field service is an area that is constantly increasing in volume in service-oriented business environments. Customers value the provision of an on-site service, and companies are increasingly discovering this form of direct customer contact to be an effective differentiation factor to set them apart from their competition.


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Against this backdrop, a CRM solution must also be able to support a range of requirements relating to field services. Typical requirements in this context are as follows:

Analysis of service performance in the field service compared with EE

objectives and customer commitments

Analysis of the effectiveness of field service personnelEE

Identification of typical problem scenarios to improve qualityEE

Comparison of the companys service costs with profits from the cor-EE

responding customer contracts

Analysis of the service parts used in order to optimize the equipment EE

available to field service personnel

SAP CRM supports these requirements with the following functions:

Management of preventative and corrective maintenance measuresEE

Service order managementEE

Resource planning for field service employeesEE

Management of service order confirmationsEE

Management and re-ordering of service partsEE

Mobile access to relevant system informationEE

Depot Repair1.5.6

Depot repair refers to a scenario where repair or servicing does not take place at the customer site. Instead, the product that requires mainte-nance is returned to the company, where the repair is then carried out. Due to the differences in terms of logistics, capacities, and the mainte-nance situation, a different set of service process requirements arise in this case than in the case of field service maintenance:

Utilization planningEE Transparency of the repairs to be expected, requirements forecast for service parts, and monitoring of service commitments

Management of the repairs cycleEE Checking of the service case against the contractually guaranteed ser-vices, escalation management, emergency release of service parts,


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installation of upgrades and product changes and, if necessary, grant-ing of discounts or credit

Execution of repairsEE Checks to determine that the repair is justified, management of check lists and solution databases, management of maintenance history, development of best practices

Completion of repairsEE Documentation of the relevant measures and possibly also withdrawal and disposal of the product if the repair is not practically possible or economically viable

These processes are implemented in the following functions in the SAP CRM system:

Returns managementEE

Repair quotation and order managementEE

Monitoring of the repairs processEE

Management of repair confirmationsEE

Integration of services from other providersEE

Management of payment conditions such as discounts or creditEE

Analytical functions are also provided in addition to the purely opera-tional functions to support repairs processing:

Optimization capacity utilization based on forecast functionsEE

Identification of typical repair scenarios to improve qualityEE

Documentation of potential improvements to repair processesEE

Monitoring of the companys own on-time delivery performance and EE

the customers payment history

Repair costs analysis as a basis for making decisions to upgrade or EE

withdraw products

Warranty and Claim Management1.5.7

Like the general increase in service level, the granting of warranties or guarantees has increasingly become a factor that differentiates compa-


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nies from competitors in recent years. It is also becoming clear that the general legal requirements in most markets tend to demand that compa-nies provide increasingly comprehensive warranties.

Due to the growing market significance of the subject of warranty, the following developments must be taken into account in this area:

Warranties are being increasingly used for marketing and sales EE

purposes.

Stricter legal conditions give rise to increased requirements.EE

A higher volume of warranties justifies the use of more extensive EE

checking to determine who is liable for repairs under the terms of the warranty.

Service and warranty are being increasingly viewed as profit centers, EE

which need to be able to predict service costs with greater accuracy.

Complex products involve many suppliers, all of whom need to be EE

included in the warranty.

These developments are acknowledged in SAP CRM 2007, which pro-vides the following functions to support the service area of companies:

Management of warranty agreements for both the customer and the EE

vendor

Management of product registrations: multi-channel, web-based EE

customer self-service, advertising of service contracts, customer data entry

Support for checking of warranty claimsEE

Control of warranty claim processingEE

Service Parts Management1.5.8

Unlike production of the actual product, service parts management makes high demands of companies, which need to be incorporated into the companys corresponding processes. The essential differences between service parts management and the manufacture of finished products are listed below:


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Service with SAP CRM or SAP ERP CS a Comparison 1.6

The demand for service parts is very fluid, and the quality of forecasts EE

is poor due to unforeseen service and repair requirements.

Demand must be controlled at the component level because there is EE

no fixed relationship between the components to be provided, as is the case in production (using bills of material [BOMs], for example).

Many vendors are involved, and all of these experience the same dif-EE

ficulties with the forecasting of demand in the service parts market.

Service parts may be interchangeable; various specifications of a ser-EE

vice part may be suitable replacements for the original part.

SAP CRM 2007 includes extensive service part management functions to meet the challenges, in particular, when used in conjunction with SAP SCM. These include the following:

Supply Chain Management for service partsEE

Supply Chain Collaboration with vendors and customersEE

Functions for sales and distribution, requirements planning, repeat EE

orders, pricing, and storage of service parts

Service with SAP CR1.6 M or SAP ERP CS a Comparison

Customers can choose between two alternatives when it comes to service processes in an SAP system, namely Customer Service (CS) functions, which are already available in the SAP ERP system, or the service area of the CRM solution. This section compares both variants due to the very wide range of potential requirements companies may have in terms of an IT solution in the service area. Therefore, we will list and briefly describe various functions and processes and explain whether and to what degree these areas are covered by either SAP ERP CS or SAP CRM Service.

The analysis is conducted at a general level and represents a global evalu-ation. Since it is impossible to take individual process steps into account in this case, deviations may arise in the analysis of company-specific detailed processes.


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Service Operation1.6.1 s

Service operations represents a key functional area of the solutions com-pared here. It is concerned with all aspects of the planning and imple-mentation of service activities. These functions are offered by both SAP ERP CS and SAP CRM. We will therefore focus on the different ways in which these support this area.

Maintenance Planning

Maintenance planning means the fulfillment of contractually agreed obli-gations to carry out preventive maintenance measures. This includes effi-cient scheduling of service activities to avoid interruptions to customer processes. The timely availability of the necessary resources (personnel, material) is essential here. The objective is to achieve a high level of customer satisfaction through contract fulfillment and a low error rate. In addition, the effectiveness of the preventive maintenance measures is increased through the optimization of resource planning and time scheduling.

Both SAP ERP CS and SAP CRM Service offer maintenance plans with and without a contract reference for this purpose. However, these are not automatically generated from service items in the case of SAP ERP CS. In the SAP CRM system, all required data is defined in the con-tract (object, product, release list, and service plan data). Both variants offer flexible control options and planning delivery schedules that can be automated.

Tickets for Unplanned Services

Tickets for unplanned services are intended to ensure efficient and correct processing of incoming service requests from customers. This requires fast identification of the customer, location, and defective equipment to guarantee fast processing of the service requests, leading to increased customer satisfaction. Data gaps in the IT system are also closed. Yet another benefit is the fact that leads can be identified and forwarded to the service sales team.

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With SAP ERP CS, message-based and order-based entry options are available, whereas SAP CRM Service supports order-based only. Both alternatives allow for fast identification of customers, objects, contracts, and warranties. With SAP ERP CS, however, restrictions apply in the areas of ticket routing, lead generation, and text entry. SAP CRM Service provides enhanced maintenance functions such as a knowledge database and escalation.

Explanation of Unplanned Services

The subsequent service steps are maintenance, diagnosis, and, possi-bly, a direct solution of the problem. In other cases, the information gathered is used to dispatch a suitable technician or the required mate-rial, for example. Possible sales leads are forwarded directly. This can increase profitability and efficiency through direct problem resolution. In addition, unnecessary journeys and wait times are minimized, which produces a cost saving. Shorter response times and increased first call resolution also improve customer satisfaction.

Whereas SAP ERP CS only provides restricted options in this area based on assisted help resources, SAP CRM Services offers advanced functions based on the use of question catalogs and guides. In addition, the docu-mentation area includes extensive options (such as error classification based on service catalogs). Direct lead generation for sales is only pos-sible with SAP CRM Service.

Sales Installation Order

In many cases, the installation of systems is anchored in the sales order as an independent item. The purpose of this is to trigger a service order for the installation directly. As a result, the installation of sales objects is automatically added to the pool of service orders. This means that it is taken into account in overall planning. The advantage of this is that the sales department has a clearer overview of order progress in the imple-mentation phase.

This is a standard scenario in SAP ERP CS, which is globally implemented using service products as installation items in the sales order. SD service items can be used to configure services for the installation. SAP CRM

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Service does not support this function directly, although it can be imple-mented using customer enhancements.

Service Planning

The goal of service planning is to create the groundwork for an efficient and effective implementation of services. This requires the assignment of suitable personnel and the necessary materials and tools. This can signifi-cantly improve the efficiency of planning in terms of both personnel and material resources. In addition, an awareness of priorities and of open issues and work already begun helps increase customer satisfaction. This optimizes the response to new service requests. Tracking of transactions can also be improved, and confirmations made more effective.

Some limitations apply to this function in SAP ERP CS (planning of per-sonnel resources, taking account of qualifications, integration of exter-nal resources). However, these gaps can be closed if the Multi Resource Scheduling (MRS) component is used. SAP CRM Service, on the other hand, offers enhanced planning options (for example, the inclusion of external resources and graphical planning tools). Neither variant allows for cross-plant planning.

Execution of Services and Reports

The Service and report execution function is intended to make service activities more efficient. Relevant data is confirmed for settlement and, in some cases, updates of the technical object. Meanwhile, the return of parts not required is initiated without delay. The result is an effective, customer-based execution, which has a positive impact on customer sat-isfaction. Fast and correct confirmations also speed up the settlement and billing processes. Moreover, forwarded sales leads generate addi-tional results in the service area. All requirements are covered by both SAP ERP CS and SAP CRM Services.

Service Billing

Service billing checks and posts the service report. Sales leads and oppor-tunities entered in the report are recorded and forwarded. This results in correct updating and cost assignment based on the service agreement or

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warranty cover. Additional results are also generated by sales leads. In addition, the information recorded about the customer and equipment enables strategic improvement and retrofitting measures. Here, too, all requirements are covered by both SAP ERP CS and SAP CRM Service.

Evaluations

Completed service activities, product performance, and root cause analy-ses are evaluated. Cause analyses are forwarded to product development, and can help improve products and enhance maintainability. The analy-sis of service activities can be drawn upon when providing customers with quotations for similar services. Bottlenecks are also identified and kept to a minimum. Both SAP ERP CS and SAP CRM Service offer only limited evaluations as standard. These can only be enhanced by using SAP NetWeaver BI.

Service Sale1.6.2 s

Companies for which service represents a strategic business area take a proactive approach to the sale of services. Various channels are used to identify business opportunities (for example, sales campaigns and installed bases). These opportunities are qualified and converted into quotations in a standardized process flow, which may lead to the closing of sales contracts. Once a contract has been successfully concluded, ser-vice begins with the transfer of documents from sales to service. Service sales therefore represent an upstream process step for the actual service. All requirements in this area are covered by SAP CRM Service. SAP ERP CS also offers many relevant functions. However, it has some weak points in relation to lead generation, acquisition, and contract negotiation.

Other Functions and Processes1.6.3

Outside of the core functions of the two solutions that we have exam-ined so far, additional functions or processes are also provided to sup-port users in the service area. Below, we provide a brief discussion of these additional features of the CS component and of SAP CRM.

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Technical Objects and Installations

Technical information about products is mapped in the system in the form of objects. These objects are of central importance because the qual-ity of the object information determines the cost-effectiveness and the capabilities of service processing. Relevant information (for example, equipment, object structure, or BOMs) needs to be accessible at all times.

SAP ERP and SAP CRM use different structures to represent the objects. Both systems also use specific information content. If the two systems are connected, it is therefore usually necessary to store the technical assets in both applications. This necessitates the use of bidirectional replication.

In SAP ERP CS, technical objects are converted into combinations of equipment and functional locations, which enables the mapping of com-plex structures and the incorporation of material and object BOMs. C

excerpts sappress service with sap crm

Documents

customer service

overview of sap crm

sap crm processes

sap crm roadmap

service contract management

field service management

service parts management

crm projects