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Service Contract Management (3MO)

Service Contract Management (3MO)

This scope item covers the creation of service contracts in SAP S/4HANA Cloud. Service contracts are outline agreements that define services offered for a period and represent long-term service agreements with customers. Service contracts are billed on a periodic billing plan. Via price adaptations for service contracts, different prices within the contract periods are possible.

Customer-specific price agreements can be defined and handled within service contracts. Service contract determination is enabled for service orders that correspond with the service contract in predefined criteria – in this case, contract and price details from determined service contract are considered.

Customers can define service level agreements and maintain service and response profiles in service contracts. 

If desired, you can renew an expiring service contract automatically for a predefined period at a predefined date. You can also manually renew service contracts and items. As part of the change process, you can change the sold-to party of a service contract and create a service contract automatically.

Furthermore, you can create and configure a configurable service contract item. Also, you can enable ad-hoc billing, a structured method of service contract billing that allows you to define billing values and billing dates manually. 

This scope item includes situation handling for service contracts. Situation handling is SAP S/4HANA functionality that lets you bring certain circumstances (situations) to the attention of a relevant group of business users. 

Key Process Steps Covered

  • Create service contract and add service contract items with periodic and/or ad-hoc billing plan
  • Maintain product list and create price agreements for service product
  • Create service contract item with configurable product
  • Adapt service contract prices
  • Release service contract and service contract items
  • Create billing request lines
  • Schedule billing document request creation
  • Manage billing document requests
  • Create invoice
  • Use the following service contract change processes:
    • Change sold-to-party in service contract (optional)
    • Renew entire service contract manually (optional)
    • Renew service contract item manually (optional)
    • Renew service contract item automatically (optional)
    • Cancel service contract or service contract item (optional)


  • Increase service revenue by offering a flexible service contract management process
  • Increase service revenue by building long-term relationships with customers for additional recurring services
  • Provide guided service contract changes to keep your customer contracts up to date
  • Support compliance with SLAs by managing contracts of varying complexity over the entire life cycle
  • Generate an external view of your business transactions

Where is Service Contract Management(3MO) being used?

This Scope item is used in the following way:

  • As a support function of Service Master Data & Agreement Management within Service Scope Item Group

Process flow of Service Contract Management (3MO)

Find below the process flow of the scope item Service Contract Management as it is defined for release s4hc-2108.


Ref: Service of SAP S4HC-2108

Best Practices related to S/4HANA

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