Friday, December 21, 2012

Oracle Service Contracts - Part-II (Categorization / Structure)

Oracle Service Contract Categorization
Service Contracts has been categorized in 3 categories:-
Warranty & Extended Warranty
As the name suggests it supports two different kinds of services:-
  •  Warranty
  •  Extended Warranty
Warranty is nothing but the service offer which is offered by the manufacturer / seller to the customer. Warranty is always free of cost and comes while a product is sold from Order Management. There is no way where we can provide warranty on the demand.
Example – Patrick went to market and purchased a mobile phone. It comes with 1 Year Warranty which supports free service of device for one year and replacement of battery if shown poor performance within 6 months.

Extended Warranty is kind of services which are charged to the customer while the product is sold. We can also sell extended warranty contracts separately after the product is sold from Order Management or Oracle Service Contract Module.
Example – While Patrick was buying the mobile phone the seller offered Extended Warranty at a cost of $90 / Year. The extended warranty provide service offer in which Patrick can get the mobile device repaired for 2 Year free of cost and one time refurbishment.
These contracts often take advantage of the ability to bill on a recurring basis either monthly, quarterly or annually and can give the customer the ability to pay for their services in advance or in arrears of the period of service. But this feature is only available if the extended warranty contract is sold from service contract module. If sold from Order Management then it has to be bill in advance for entire contract duration.
Subscription Agreements are effective way to sell your services / products. It allows users to get the services / products for a period of time that often have monetary benefits involved for customers. Generally customer ends up paying discounted amount for the services.       
There is organizations that offer initial subscription on a very low price / free trial and then on a fixed charge if customer wants to continue. It also gives flexibility to either charge customer all at one go or billing for every subscription.
In Oracle Subscription Contracts we can sell subscriptions for both tangible and intangible items. Tangible items include magazines, collateral, or any other physical item that can be shipped through Oracle Order Management. Intangible items can be collateral sent via e-mail or permission to access a web site for a set period of time.
Service Agreements (also referred as Service Contracts) are contracts those are sold to customers to repair, support / maintain product or services that a customer has or sold by the vendor / seller. All the services agreements bind within the boundaries of terms and conditions that is associated with the contract.
Service agreement give the flexibility to bill the customer on a recurring basis like Monthly, Quarterly, Half yearly or annually and gives customer the ability to pay in advance or in arrears. Service agreements can be created manually or created automatically from Order Management.  We will discuss more on that in later sections.

Oracle Service Contract Categories 
  • Service Contract supports different Line types – Each category will have specific line types supported to solve a business purpose 
  • Service Line will be used while we sell the services. For this the service item must be setup in Oracle Inventory.
  • Usage Lines are used to calculate the charges where we charge to customer based on the usage of device, like counters in photo copier, electric meter.
  • Subscription Lines are use where we provide subscription of products like magazines or services like software update.
  • Warranty Lines will be use for warranty contracts created from Order Management. We cannot create warranty lines manually.
  • Extended Warranty Lines is used where we sell extended warranty to customer. It may originate from Order Management or manually created in Service Contracts.
Oracle Service Contracts Structure
Service Contract has been categorized into 3 sections:-
  • Contract Header consists of very basis information that is required to create a contract e.g. Vendor and Customers, Contract duration, Currency, Party Roles, Pricing and Payment details etc.
  • Contract Line consists of information about the service that organization is selling / offering e.g Gold24x7 service which will provide service around the clock etc.
  • Contract Sub-Line consists of details of the actual product that will avail/get the service e.g. A TV, Laptop, and Mobiles etc.
All the section has specific purpose and information related to contracts. Let us closely understand what all different data is stored at each level.

Contd... Oracle Service Contracts - Part-III (Status Transition / Lifecycle)


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