SAP White Paper

INTEGRATED SERVICE
LIFE-CYCLE MANAGEMENT
© Copyright 2006 SAP AG. All rights reserved.
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CONTENTS
Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
The Challenge of Service Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Undervaluation of the Product Life Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Increasing the Level of Service Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Integrated Service Life-Cycle Management and mySAP CRM . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Enterprise Services Architecture and SAP NetWeaver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

3

EXECUTIVE SUMMARY
To aid companies in maximizing existing service profits and
creating new sources of revenue, tools that handle the com-
prehensive management of the service life cycle can deploy,
measure, and analyze business practices for service delivery,
as well as create more flexible, customer-driven business pro-
cesses in ways that niche solutions cannot. Extending and
synchronizing the flow of automation across divisional and
corporate boundaries transforms an organization’s ability to
manage the customer from lead through product sale and
finally to product retirement. Service life-cycle management
comprises nine core elements: service sales and marketing,
service contract management, customer service and support,
installed-base management, warranty and claims management,
field service, depot repair, service parts management, and
financial management. These functionalities provide true
service life-cycle management, which not only reduces costs
and increases revenue, but also increases customer retention,
a critical competitive differentiator in today’s fast-changing
marketplace.
Companies can realize greater benefits by using the nine core
functionalities of service life-cycle management, especially if
they base this management process on a common platform
for transacting service operations across business units and
delivering knowledge at the point of service. Through a unified
platform, executives and staff can make fact-based decisions
that drive growth and operational efficiency.
Consider a two-pronged approach that creates an ecosystem to
satisfy the burgeoning desire of organizations to benefit from
service life-cycle management. First, organizations have contact
with a business unit that is focused on driving service as a core
competency. Second, and most important, organizations lever-
age their constituencies, customers, and business partners.
4
THE CHALLENGE OF SERVICE
MANAGEMENT
Service is an afterthought, if not a downright nuisance, to many
organizations. It is no surprise, then, that investment in service-
operations automation frequently lags. But to the customers
purchasing your goods and services, service quality determines
their loyalty. Companies are now realizing that service, both in
the pre- and postsale environment, is full of opportunities for
increasing revenue and profits and improving customer
retention.
Yet even companies that successfully implement customer
relationship management (CRM) understand that it is a never-
ending challenge. Once an organization automates and
optimizes the core processes, questions arise: How can these
processes be extended? How can the organization better use its
data? These vital questions are one reason integrated service
life-cycle management has become a focal point for business.
Enter integrated service life-cycle management as a competitive
differentiator that drives sustainable growth and success. Iden-
tifying and implementing new approaches to service not only
distinguishes a company from its competitors, but also enables
it to attract and retain customers, thus generating additional
revenue. When you consider those companies that stand out
as excellent providers of service and then ask yourself how likely
you are to return your business to those companies, you have
already taken a giant leap toward identifying the need to reform
your organization, with clear differentiation for your customers.
Let’s look at air conditioners as a way to understand the
importance of service life-cycle management. The air
conditioners on the lower end of a manufacturer’s brand line
are made in roughly the same place overseas. When a customer
starts comparing cooling units, he or she quickly determines
that they all offer the same basic components. The shape or
the front control panel may be different, but under the hood
they are nearly identical. What’s left? Service and price, which
drive the purchase decision.
Once the customer leaves the air conditioner store, many com-
panies think that their service responsibility is all but complete.
This is their first mistake. Fast forward to the middle of summer:
The temperature is hitting 95 degrees, and the air conditioner
breaks down. The unit needs to be fixed or replaced immediately,
because the customer’s sick grandmother lives in the house. That
customer’s first call is to the manufacturer, and no matter how
great the components are, the service has instantly become more
important. If this customer has a bad service experience today,
it is going to color his or her ideas about the company forever.
Even if the customer bought six cooling units from the same
company over the course of a lifetime, the perception will be
that the quality of the product is slipping.
process that shares data from service about the product with the
development team, the company loses an opportunity to leapfrog
the competition.
Businesses that emphasize the value of service life-cycle manage-
ment often discover that existing IT infrastructure is not well
suited to support the task. Point solutions only realize a fraction
of the potential value of service. While tactical automation can
cut costs by 5% to 15% within specific operations, overall strategic
automation improves margins by 25% and leads to a 60% gain in
share, according to AMR Research. In short, strategic automation
increases revenue.
Percentage of Revenue 2004

And the manufacturer is losing not just one customer, but an 2002

opportunity to stay ahead of the marketplace. Are the customers

beginning to use the air conditioner in a different way? Does the 29%
24%
product need to be redesigned to compensate for changing
behaviors? Without a service operation that accounts for the life 71%
76%
cycle of the product during service, there is no way to tell.

Now let’s examine the same air conditioner service call as made Products Service Products Service
to an organization with integrated service life-cycle management.
Figure 1: Service Increasing as a Percentage of Revenue
The customer calls because of a breakdown, and, from internal
databases, the support representative pulls the exact configuration
of the unit that was shipped. The manufacturer calls out a tech- The challenge is for companies to incorporate the data from all
nician, who arrives with the correct parts to fix the unit. Data these separate service events into the rest of the business. Doing
about how the air conditioner is used and which parts failed are so requires a dedicated technology strategy beyond enterprise
gathered in this process and passed on to the product designers. resource planning. It starts with building an integrated service
As more breakdowns occur, the designers analyze the data and management strategy, which adds value at every stage of the
discover that customers had previously used the unit for six hours product and customer life cycle.
at a time, but now they are using it for eight hours straight.
And customers used to cool at 56 degrees, but with higher energy The service management strategy should focus on achieving the
prices, the average cooling temperature is up to 72 degrees now. following five main benefits:
That means the units are running a bit warmer than originally • Increase revenue
expected. The compressors are failing, and the demand curve is • Create higher margins
changing. In response, the company must design, market, and • Reduce costs
service the next iteration of the product differently. The company • Increase customer satisfaction
uses all that service information to create an analytic decision that • Realize more value from service data across organization
drives processes in other parts of the business. Without a business

5
UNDERVALUATION OF THE PRODUCT LIFE CYCLE
The service life cycle is much more than a discreet event. It is the while on the phone, the company sends a technician to the
sum of a customer’s interaction with a product and the company customer’s home to figure out which model the customer
that sells it, from the presale evaluation through maintenance owns and determine what parts are needed. Maybe the tech-
and even to the purchase of a new product. The customer who nician has the right parts in the truck, or maybe he or she has
buys a product today spends between five and twenty times the to order them and return on another day.
initial sale price on subsequent services and consumables. And,
according to Gartner, most businesses in asset-intensive industries After the service call is complete, managing all the resulting data
will see revenue gains from after-market business exceed sales to is nearly impossible because the assets are spread among several
new customers by the end of 2006. different systems and platforms. To even begin an analysis requires
merging databases, looking for duplicate data, and correcting
So how does a company embrace and enable integrated service? errors (such as making sure that an L wasn’t typed instead of
an I). It’s a cumbersome, inefficient process.
To begin with, you need to understand the product and its life
cycle, as well as existing technology pain points. This diffuse, inefficient form of service management erodes
a company’s competitive advantage. Companies without a ser-
Life Cycle Span Example Analytic
vice model are prone to see their products introduced to the
Short 0-2 years Digital audio players Service data is critical to
managing future design world of commodity suppliers; meanwhile, the industry leader
iterations. is generating premium margins. Manufacturers that continue
Moderate 2-7 years Automobiles or Integrated service increases to ignore customer satisfaction face consolidation, according
durable goods loyalty and creates steady to an article by Industry Trend Magazine’s John Magic. He adds,
revenue.
“Integrated CRM [service] solutions can stop this trend.” In an
Long 7 or more years Complex manufac- Integrated service generates effort to stave off reduced margins, slow-growth companies are
tured goods long-term revenues.
reexamining service models and operational design.

Different products have differing life cycles, as indicated in the

examples in the chart.

To make things more complicated, customers are increasingly

buying customized products. For example, a customer doesn’t
buy a generic 25.2-cubic-inch refrigerator but may instead
outfit a particular model with a high-end filtration system
and a nonstandard ice maker. That customer calls the service
center and says, “I’m having a problem with my ice system.”
The customer service representative responds, “OK, tell me
which model you own.” What the customer says next is usually
this: “The one that produces ice.” After spending a good long

6
INCREASING THE LEVEL OF SERVICE MATURITY
No one can flip a switch and turn on integrated service life-
cycle management like a light bulb. So how do you make the
transition from a point-based solution to an integrated life-
cycle management service?
Embracing service management means first understanding
your organization’s level of service maturity. There are four
stages of service maturity:
Stage One: Baseline Service
A business must first determine what its customers’ critical needs
are for just using the product. Home satellite dishes, for example,
were initially being returned to retail outlets at an unusually high
rate – and the product was not faulty. The culprit, it turned out,
was lack of customer education. A business must have the ability
to handle and respond to inbound inquires as quickly as possible.
Baseline service provides exactly that: a basic level of service
to handle a customer. This stage is less about emphasis on
operational efficiency and more about educating an organiza-
tion to understand its customers.
The technical applications requirements for baseline service
include the following:
• Electronic product and catalog management
• Technical document management
• Call center
• Customer case management
• Warranty process management
Stage Two: Visibility and Operational Efficiency
Visibility and operational efficiency refer to the ability to
share critical service information among different business
units and then put that information to good use. When an air
conditioner breaks, for example, the data from the service call
ought to be shared with the supply chain, manufacturing, and
marketing. As this process is streamlined, the business becomes
more efficient and sees increased revenue. Businesses can
then reduce the cost of operations – specifically in inventory,
personnel, and infrastructure – without reducing service levels.
Brother International, a division of the $4 billion home and
office equipment manufacturer, is a perfect example of a com-
pany that is operationally efficient. It reduced service time for
end users by 40%, and dealers saw an even greater reduction of
50% by practicing operational efficiency.
Operational efficiency focuses on key processes, such as field
service, while at the same time, utilizes analytics on parts per-
formance by suppliers as related to particular customer
segments.
The technical applications requirements for operational
efficiency include the following:
• Self-service
• Knowledge management
• Field service, dispatch, and scheduling
• Repair-order management
• Inventory and parts planning
Stage Three: Customer Support Excellence
Once a business achieves operational efficiency, it can offer
models of support tailored to individual customers. Because
the business has already achieved efficiency, implementing
customization does not require any significant redesign of the
existing business processes. Businesses can now increase the
level of support given to a customer in a way that actually
makes the organization even more efficient. The company is in
a position to begin growing its market share. Siemens Medical
Solutions typifies a company focused on support excellence.
The medical products arm of the German electronics giant
introduced service plans that matched the business values and
needs of its customers and increased its own market penetration
in the process.
Installed-base management is critical from the beginning of
the service process. However, at stage 3 the installed-base data
can be leveraged for even greater value. Having a solution that
7
provides the integration of automated processes, analytics,

High
and sales and marketing capabilities will drive new models for Customer Support
Grow Share Structured to Grow
Excellence
support excellence. Goal: Increased Market Share Goal: Year-Over-Year Growth
Increase the level of support Develop solutions that grow the
given to a customer in a way market opportunity and change
that makes the customer more the concept of what is service
The technical applications requirements for support excellence efficient

Economic Value
include the following:
Increase Revenue
• Logistics
• Vendor-managed inventory For Profit Decision

• Demand visibility Baseline Service Protect Share

Operational
Efficiency
• Order promising and availability Goal: Reduced Response Time Goal: Reduced Cost to Serve
• Installed-base information management Handle inbound information in a
timely manner
Reduce costs specifically in inven-
tory, personnel, and infrastructure,
Low

without reducing service level

Stage Four: Structured Growth External Reward Internal

In the final phase of service maturity, a business moves from

simply selling a product to providing a service-enhanced product.
A manufacturer no longer just sells server hardware, for example,
but becomes a consultant on how to implement the hardware
within each customer’s system. The structured business develops
solutions that grow the market opportunity and change the
concept of service within and outside of the organization.
The technical applications requirements for structured growth
include the following:
• Remote diagnostics
• Complex pricing and contract management
• Product development and defect management
• Customer intelligence and analysis
Figure 2: The Stages of Structured-Growth Service Maturity (AMR Research)
Fraport typifies a company moving into structured-growth
maturity. Fraport manages some of the world’s largest airports
and monitors equipment using a third-party application.
The application creates messages for each performance inter-
ruption, and those messages are fed into the mySAP™ Customer
Relationship Management (mySAP CRM) solution to create
service orders. mySAP CRM then takes the order, finds the
problem code, determines its priority and category, locates
the equipment, and creates a short text message. In essence,
the equipment itself informs Fraport in real time that service
is required before the customer ever needs to make a call.

Remember the old commercial about passing the buck that goes
like this: “Well, it was the IT guys; no, it was the telephony guys;
no, it was the server guys.” At EMC, a company that has achieved
structured-growth service maturity, if a customer’s server goes
down, it gets fixed no matter what the cause. EMC understands
how its storage devices work with Cisco routers, Nortel products,
and all the other peripheral products. EMC takes ownership of its
products. And EMC customers are more loyal as a result.
By understanding the levels of service maturity and how they
lead to service life-cycle management, a business will begin
increasing its own level of service maturity. But it is important
to recognize that the technical applications requirements alone
do not add up to integrated service management. The same
goes for data points; the business must be able to make the data
available, monitor the data, and ultimately adapt business
processes on the basis of customer feedback.

8

This illustrates why point solutions only add cost and increase the
struggle of delivering integrated service management. A business
aiming for the highest level of service maturity needs a solution
that interacts with the rest of the organizational ecosystem. This is
where a unified solution comes into play. Truly integrated service
life-cycle management requires a seamless IT platform that can
share information with every business unit that is touched by
customer service.
INTEGRATED SERVICE
LIFE-CYCLE MANAGEMENT
AND mySAP CRM
An organization’s level of businesses-process automation in
service directly correlates with its ability to grow. For 75% of
businesses, Gartner found that the biggest impediment to
optimizing service delivery is the lack of an integrated service
framework that spans the necessary departments. Gartner
also states that companies that develop a service management
strategy by integrating product life-cycle management, supply
chain management, and CRM will see a 35% increase in market
share over the industry average. And they will see a 50% gain in
customer satisfaction compared with those enterprises that do
not offer an integrated service management strategy.
Leading companies are heeding this advice and changing how
they invest in information technology to support their service
business and develop a competitive advantage. SAP sees two
consistent trends occurring:
• Leading companies are looking at the interdependency
between service business processes and the organization as
a whole when designing and choosing IT platforms for service
operations.
• Leading companies are moving from the traditional point-
solution investment to one focused on an integrated service
life-cycle management platform.
mySAP CRM can provide that integrated platform. There are
nine core components of mySAP CRM that facilitate integrated
service life-cycle management. These components touch on
both CRM and supply chain operations:
• Service sales and marketing
• Service contract management
• Customer service and support
• Installed-base management
• Warranty and claims management
• Field service
• Depot repair
• Service parts management
• Financial management
9
Service Sales and Marketing
Every customer becomes a service lead as soon as the customer
becomes a product lead with mySAP CRM, because mySAP CRM
runs on one customer master. The system collects and analyzes
data throughout the service life cycle to determine the propensity
of a customer to need and buy new service products, as well as
what products are available to be sold into the installed base.
The high-performance chemicals equipment maker Waters
Corporation fed its installed-base data into mySAP CRM and
drove its service revenue from zero to more than $2 million in
a single year.
Service Contract Management
Thanks to closed-loop transaction functionality, service represen-
tatives can manage requests from initial order creation through
final order confirmation with mySAP CRM. This comprehensive,
end-to-end process management is fully integrated with custom-
er entitlements, warranties, and material and billing processes.
Epson Korea realized savings of nearly $1 million by switching to
an in-house servicing team using mySAP CRM. Through im-
proved product contract, warranty, and knowledge information
made available to agents, partners, and customers via the Web,
service claims are down 70%.
Customer Service and Support
Customer service is vital to retention and loyalty. With mySAP
CRM, service agents have the tools to resolve customer issues
rapidly and effectively. Information on case management, service
history, contracts and entitlements, service level, installed base,
and warranties is easily accessible – even in the field. Brother
International reduced its cost to serve with mySAP CRM and its
inherent knowledge management processes. At the same time,
Brother drove service data into the product development process
to engage the customer on a real-time basis.
Installed-Base Management
Mature, integrated service management means tracking not
only the products that customers are using, but also the third-
party products they may have installed that interact with the
10
original products. mySAP CRM tailors installed-base assets
through a hierarchical design, with configurations for each cus-
tomer, location, and product type. Organizations can manage
engineering and safety changes with this functionality as well.
Synopsys, an electronic design automation software and service
provider, has achieved global visibility into all customer product
issues by using mySAP CRM.
Warranty and Claims Management
Rapid processing of warranty claims strengthens the customer
relationship and heightens loyalty. Organizations can manage
the entire warranty and claims process – from return materials
authorization (RMA) to receipt and inspection – within mySAP
CRM. The solution enables coordination with third-party logistics
providers to ensure timeliness and avoid unnecessary goodwill
allowances. One major semiconductor manufacturer allows
interaction center agents and clients to collaborate using the
same interface for self-service and internal service, so the same
checks are available to both parties for the warranty and returns
process through mySAP CRM.
Field Service
Using the resource-planning functions of mySAP CRM, organiza-
tions can manage and plan service employee activities with a high
degree of granularity. They dispatch service assignments to the
most appropriate employee and exchange data about absences and
assignments, with the information flowing to Microsoft Outlook
as well. The field service applications enable service employees to
create complaints, display overviews of master data, receive the
latest repair bulletins, shift installed-base components from one
location to another, and manage van stock. The international
drinking-water supplier Vitens improved its workforce perform-
ance by 30% through the adoption of mySAP CRM.
Depot Repair
Automating the entire in-house repair process is another advan-
tage with mySAP CRM. From the creation of the RMA to billing
and return shipping to the customer, mySAP CRM offers inte-
gration between CRM and logistics and financial management.
And thanks to the repair knowledge base in mySAP CRM, service
technicians are saved from reinventing the wheel for every repair.
The Italian coffee company Lavazza runs its entire growing service
operation on mySAP CRM, including its critical repair operation.
Service Parts Management
Service staff need instant visibility to information about the
whereabouts and availability of service parts at all locations
throughout the entire service parts supply chain. Leveraging this
information means an improved first-pass fill rate or parts service
level. Additionally, service parts planning and forecasting increases
the number of times that your staff can fill service parts orders
the first time from the initial stocking location on which the
demand is placed. This will help you reduce inventory investment
and identify and eliminate obsolete parts while still maintaining
or improving parts service levels. SAP’s service parts planning
capabilities identify what, how many, and where service parts
should be stocked, so that the service organization has the right
part, at the right place, at the right time.
Financial Management
Recent regulations such as Sarbanes-Oxley require that
organizations certify the accuracy of their financial reporting.
The SAP solution accurately captures and records all costs and
revenues associated with service and repair operations. Execu-
tives can analyze service profitability and recognize service
revenue accurately at the proper time. Field service and plant
maintenance managers can drill into details to identify and
correct undesirable cost overruns and spending trends.
Many businesses have call centers, field service, quality manage-
ment, and even returns and reverse logistics capability, but few
integrate these capabilities with the rest of the business. With
the solution provided by mySAP CRM, companies integrate and
automate these core components for service delivery in a way
that leverages all aspects of their organization. The solution
puts everybody on one version of the truth and delivers the
knowledge of the organization to the moment of truth –
the point of service. Through mySAP CRM, many different
people inside an organization are empowered to make fact-
based decisions that ultimately grow customer loyalty and
that grows the business.
“mySAP CRM was a strategic choice,” says Jan Boll, Philips
CE’s chief information officer. “This type of integration breeds
the checks and balances of a transparent environment required
for strengthening customer relationships. It is a more integrated
and scalable environment. Everything that is done in the custo-
mer relationship always affects another part of the relationship
or business.”
mySAP CRM is an integrated platform with all the tools for
strategic service management. The combination of the SAP
NetWeaver® platform and mySAP CRM can empower businesses
to differentiate and reach beyond support excellence. This is
where SAP truly sets itself apart, providing cross-applications
such as pricing optimization from Vendavo or integrating with
tools such as those from SmartSignal for machine-driven service
order creation.
While SAP offers a suite of products to manage and grow a
service operation, its partners are critical to driving value into
mySAP CRM for service life-cycle management. SAP’s partners
include system integrators, independent software vendors, and
even customers such as Ford Motor Company in the area of
service parts management.
11
ENTERPRISE SERVICES ARCHITECTURE AND SAP NetWeaver
Solving the problem of end-to-end integrated service manage-
ment means adapting processes to span all the systems and
departments in a company, including establishing the ability
to collaborate with partners and customers on demand. To
address such challenges, companies need to establish a new
construct for IT.
Enterprise services architecture (ESA) is SAP’s blueprint for
building IT systems that drive flexibility, using services as the
fundamental building block. SAP NetWeaver is a platform,
based on open standards, for creating and integrating enterprise
systems. Together, ESA and SAP NetWeaver work to extend the
reach of mySAP CRM in all directions.
SAP NetWeaver serves as a foundation for the solutions in the
mySAP Business Suite family of business solutions, such as
mySAP CRM. SAP NetWeaver supports an open technology
framework that ensures flexibility and interoperability by
taking advantage of industry standards such as HTML, XML,
and wireless application protocol. Its unified architecture can
be tailored to the unique requirements of specific industries
and companies, reducing the need for customized integration.
Full process and data integration throughout the entire mySAP
Business Suite family of business solutions improves efficiency
and reduces maintenance efforts, lowering the total cost of
ownership.

Internal and Enterprise Business

Customers can automate business processes one at a time.
External Users Services Systems

Ana lyze

Accounts Customer
Receivable Service Enterprise
Service Systems
and Call Financial
Sales and
Collections Center Management
Marketing

Service Service
Field Parts Contract
Engineering Service Management Management
Technician
SAP
Customer NetWeaver® Third-Party
Customer Systems
Depot Repair Platform
Service and
Sales and Support
Dealer
Marketing
Pla

Field Service
n

Installed-Base
e
at
an

Warranty Management
or
d

and Claims
b
Sc

Management
la

Manu- End
he

ol

du C Legacy
facturing Customer le Systems

Figure 3: SAP NetWeaver and ESA

12
In years past, businesses have adopted many different manage-
ment techniques to achieve optimal results. Whether it was
total quality management or Six Sigma, the goal was usually the
same: to improve the business and connect with the customer.
Generally, these management techniques all follow the same
concepts of design, measure, analyze, improve, and control
your processes to derive benefit yield.
But these revolutionary management philosophies ran into a
brick wall when it came to technology. The database and inte-
gration requirements necessary to adapt different systems and
the point solutions supplied by competing vendors were costly
and time consuming. Once managers realized the enormity of
this task, they quickly scaled back their plans and opted for
something smaller.
customers can take a snapshot of their business process
before making the changes and roll back the process if it
is not working.
SAP NetWeaver leverages the SAP NetWeaver Portal component
that provides a platform from which customers deliver role-
based access to key service management data for their em-
ployees and partners. SAP NetWeaver’s application and inte-
gration platform guarantees access regardless of a user’s IT
system, and the SAP NetWeaver Mobile component extends
even more functionality to the field workforce. It facilitates
the collaboration of all key stakeholders – including OEMs,
suppliers, trading partners, dealers and asset operators, and
customers – into a comprehensive maintenance and service
value network.

ESA and SAP NetWeaver provide a solution to this problem. One of the challenges inherent to the new IT construct driven by
Think of SAP NetWeaver as a cloud that surrounds different ESA is that businesses will have to take a step back and remember
platforms and allows them to communicate with one another their original wish lists. Improvements that used to be shut down
through enterprise services. The customer and the supply at the technological discussion are now entirely possible.
chain come together through a series of Web services that
define each other, bringing a new level of functionality to
mySAP CRM through the adoption of supply chain processes.
With ESA and SAP NetWeaver, a business can easily measure
process performance and reconfigure technology on the basis
of the result. Because the process is delivered as Web service
components, the packages are highly configurable and
adaptable.

ESA and SAP NetWeaver give businesses the flexibility to change

the way a service order is managed. Not only can the data or
the field service process itself be changed much more efficiently,
but the change can also be measured for effectiveness. And as
mySAP CRM is constructed as a collection of Web services,

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CONCLUSION
When McKinsey Consulting asked a group of C-level
executives what the most important consideration is in
making IT investments, improving customer service was the
second most common answer. (The first was, predictably, to
increase sales.) When asked, “What business process is most
dependent on IT?” service-related IT occupied three of the
top five responses. Clearly, executives are focused on service
as a means of creating corporate value.
The value of integrated service life-cycle management powered
Even small businesses, such as Southern Pump & Tank,
where service performance and service growth are enabled
through mySAP CRM, are reaping the rewards. The company’s
service parts inventory dropped 28%, its first-service-trip fix rate
is up 9%, and the service-to-invoice time is down 62%.
Tangible Benefits % Impact
Revenue
• Increase postsale revenue 8–15%
• Increase market share (over industry average) 10–35%

by mySAP CRM is already being realized by such companies as Operating Cost

Lennox International, Brother International, and Siemens Medical • Improve service efficiency and productivity 10–20%
• Reduce service delivery costs 10–20%
Solutions. Lennox uses service information culled from mySAP • Reduce service parts costs 20–25%

CRM to root out supplier problems and is saving $100,000 in the Working Capital
• Reduce inventory levels 25–40%
process. Brother International moved to a model in which it is • Improve days sales outstanding, or DSOs 20–50%
truly generating product improvements directly from the custo- Source: Gartner; Patton Consultants; Accenture; Aberdeen Group; AMR;
U.S. Department of Commerce
mer, on a weekly basis. Each week, Brother takes contact-center
data in mySAP CRM, culls it, and sends it to the product develop-
ment and manufacturing groups for assessment. The result is that Figure 4: Tangible Benefits of Automated Life-Cycle Service Management
returns are down 7% over five years and call center staffing has
been reduced by 11%. Siemens Medical Solutions runs a real-time
service operation that provides the corporation with a point of And with mySAP CRM and integrated service life-cycle
competitive differentiation that drives growth both in revenue and management, businesses can finally begin reaping that value
profit. and support the executive needs.

To learn more about how mySAP CRM can help your

organization take advantage of integrated service life-cycle
management, call your SAP representative today or visit
us on the Web at www.sap.com/solutions/business-suite
/crm/featuresfunctions/service.epx.

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 www.sap.com /contactsap

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