The Wizard of OKS – R12 Oracle Service Contracts Advanced Features

Mohan Dutt
Hyperion Solutions Corporation

Abstract
Oracle E-Business Suite Release 12 includes several new features for the Service Contracts
module. Enhancements in areas of service contract authoring, contract renewals, online
inquiry, install base integration, billing and revenue recognition are discussed among the
R12 features introduced. A review of the migration steps when upgrading from Release
11.5.9 or a previous release to Release 12 service contracts module is also discussed.
Learn about the advanced features that covers the entire contract life cycle
management process. Become ‘The Wizard of OKS’ when you successfully implement
R12 service contracts advanced features on your instance!

Service Contract Authoring Enhancements

Release 12 service contract authoring enhancements include publishing contract for

customer review, support for standard coverage definition across contracts, introduction
of Oracle E-Tax for service contracts, multi-org access control and enhanced sales credit
derivation. Each of these service contract authoring advanced features are discussed in
detail in the sections that follow.

Publish Contract for Customer Review

In Release 12, contract administrators now have the option to publish the contract to the
Online Customer Acceptance portal for review. This is the same portal that is used for
Online Renewals, so customer can review both new and renewal contracts that are
awaiting customer acceptance. A new workflow manages the contract negotiation
process as the contract goes through the negotiation lifecycle. Notifications are
provided to alert contract administrators and customers when open actions are pending
on contracts. A new field called ‘Negotiation Status’ indicates if the contract is
published online for customer review, or customer has requested assistance or if the
customer has accepted the contract quote or if the customer has rejected the contract
quote. The ability to publish any entered status contract for customer review and
acceptance expedites contract review cycles and streamlines the contract negotiation
lifecycle.

Standard Coverage

With Release 12, service providers who standardize their offerings can define standard
coverage that can be referenced by services sold in contracts. Updates to the standard
coverage are automatically applied to all contracts that include that service coverage,
making changes in coverage immediately accessible to all downstream processes that
need to check entitlements. This approach reduces data volume and improves
performance of renewal and contract copy processes. Coverage can still be tailored to
suit the specific needs of customers by pressing the ‘Customize’ button when adding the

OAUG Collaborate 2007 Conference © 2007 Mohan Dutt

1
service to a contract. Service Contracts now also provides the ability to copy coverage
templates to ease the process of setting up new offerings.

Oracle E-Tax Introduction

Oracle E-Business Tax is a new product that uniformly delivers tax services to all Oracle E-
Business Suite business flows. In Release 12, Service Contracts is enhanced to support
integration with the E-Business Tax product. The authoring form is changed with the ‘Tax
Status’ field is replaced with ‘Exemption Control’. The ‘Tax Code’ is replaced by ‘Tax
Classification Code’ and ‘Tax Inclusive’ checkbox is no longer displayed in authoring
form. Transaction Type is now a mandatory field when tax method associated with the
contract is ‘LATIN’. ‘Exemption Control’, ‘Exemption Number’ and ‘Exemption Reason’
fields are disabled when tax method is ‘LATIN’ with a new QA Check process introduced
that ensures null values for these fields.

Multi-Org Access Control (MOAC)

Multi-Org Access Control enables companies that have implemented or implementing

shared services operating model to efficiently process business transactions by allowing
them to access, process and report on data for an unlimited number of operating units
within a single applications responsibility. Users are no longer required to switch
applications responsibilities when processing transactions for multiple operating units.
Data security is maintained using security profiles that determine the data access
privileges associated to responsibilities granted to a user.

Oracle Service Contracts leverages the Multi-Org Access Control model to allow users to
author contracts and contract templates in multiple operating units without switching
responsibilities. When Multi-Org Access Control is implemented, users can only access
contracts authored in operating units that map to the security profile assigned to their
responsibility. The data security is enforced in all forms in which contracts can be queried,
viewed and accessed. As an exception, entitlement searches return search results across
all operating units; however, users are restricted from opening contracts that they do not
have access to. Many reports now also include operating unit as an optional parameter.
All concurrent programs are restricted to process only contracts authored in operating
units that map to the security profile assigned associated with the responsibility from
which the concurrent program is initiated.

Enhanced Sales Credit Derivation

The renewal process has been enhanced to derive both revenue and non revenue sales
credits. OKS: Enable Sales Credit profile option has been enhanced to include additional
options. The values available are Derive for revenue type, Derive for Revenue Type and
Retain Other, Drop All where user will have to manually enter sales credits and Retain All.

When the profile option OKS: Enable Sales Credits is set to either of the ‘Derive’ options,
renewal process has to derive the salesperson to be used both as a vendor contact and
sales credit recipient. Two profile options determine how the salesperson is derived,
namely OKS: Use Territories to Default Sales Person (Y/N) and OKS: Sales person. If OKS:
Use Territories to Default Sales Person (Y/N) is set to Yes, sales person will be derived from
Territory Setup; If set to No, then Service contracts looks to the value entered in OKS: Sales
person to derive the vendor contact/sales person.

OAUG Collaborate 2007 Conference © 2007 Mohan Dutt

2
Service Contract Renewal Enhancements

Release 12 contract renewal enhancements include introduction of Renewal

Negotiation Lifecycle Management, introduction of administrator workbench,
improvement to the online service contracts renewal portal, an auto-reminder
notification to customers for accepting renewal quotes and improved communication
templates. Building flexible approval rules using Oracle Approvals Management (AME)
for the renewal workflow has been also introduced. Each of these service contract
renewal advanced features are discussed in detail in the sections that follow.

Renewal Negotiation Lifecycle Management

In R12, all renewal contracts will be part of the renewal negotiation workflow. The
renewal workflow will manage each of the stages of the negotiation cycle. With the
new workflow, the system will enable the flow of a renewal contract through each of
these stages. The negotiation status at the contract header level will allow administrators
to monitor a contract during negotiation. Workflow notifications will alert users of actions
that they need to take. New approvals options will enable administrators to support
various approval scenarios – from manual to fully automated approvals.

There are 5 stages in the renewal negotiation lifecycle. The first stage is to determine
renewal process which can be either manual, online or evergreen. The process will first try
to qualify the contract as evergreen based on process or threshold values If the contract
does not qualify as evergreen, the process will check whether it can be qualified for
online renewals. If both evergreen and online renewal checks fail, the contract will be
renewed with the renewal process derived from traversing the contract, party, org and
global hierarchy.

The second stage is notifying the customer that a renewal contract has been created
and is awaiting approval. There are three options on how to present the quote to the
customer - print a hard copy of the quote and mail or fax it to the customer, email the
quote to the customer using the email quote feature in the administrator workbench or
publish the quote online for online customer acceptance. The process uses the template
set layout to determine the format of the quote and cover letters generated.

The third stage is customer acceptance during which the contract is in the customer’s
queue for acceptance. Customer reviews renewal contract and accepts or declines.

The fourth stage is contract approval where once a contract is submitted for approval,
workflow uses Oracle Approvals Management (AME) to derive the contract approver
and routes the contract to that approver.

The fifth stage is when the contract has been approved, the contract is signed. Contract
Status changes to ‘Active’ or ‘Signed’ and negotiation status changes to ‘Complete’.

Renewal Type attribute has been renamed in R12. The new attribute: Renewal Process,
can be set at the global, org, party or contract level and has four values – Manual,
Online, Evergreen and Do Not Renew. Notify salesrep maps to manual, electronic
renewal maps to online, submit for approval maps to evergreen, along with the approval

OAUG Collaborate 2007 Conference © 2007 Mohan Dutt

3
required attribute, active contract maps to evergreen without approval; Do not renew
has not changed. A new setup attribute, approval flag, has been added to the global
contract defaults to handle various types of internal approval scenarios. This is a required
field if renewal process is defined.

For all three types of contract renewals, workflow will send alerts and notifications to
internal and external users. The customer will get several notifications during the process.
The customer will get a quote letter when the contract is renewed. Once the quote is
accepted, the customer will also get an acceptance confirmation email. When the
contract is approved after internal approval, the customer will receive an activation
confirmation email.

Administrator Workbench

A new Service Contracts administration workbench offers advanced search capabilities

and display options to better track renewal opportunities. The workbench provides the
following information in bins that can be personalized by the administrator to improve
productivity. The notifications bin provides a list of open notifications that require
attention from the administrator. My In-Process Contracts is a configurable bin that
provides a list of views on open service contracts assigned to the administrator such as all
in-process contracts, renewals, online quotes, pending quotes, reminder sent, follow-up
actions, pending sales person assistance and pending internal approval.

The actions that can be performed from the administration workbench are view follow-
up actions on contracts, open contract in authoring for editing, run quality check to
validate contract information, submit contract for internal review, publish contract online
to customers, manage reminders and notifications and also initiate communication with
customers via email.

Improvements to Online Renewal Portal

Several usability improvements are included in Release 12 to improve the customer

experience during online acceptance. Low value, high volume contracts can be
automatically presented to customers through a web-based user interface for online
acceptance. Sales reps can also choose to publish newly authored contracts or renewal
contracts under negotiation to customers for online acceptance. Customers can upload
a payment document, such as the image of a PO or check. The portal can also capture
cancellation reasons accompanied by customer comments and customer interactions
such as ‘Request Assistance’ messages and. Self-service customer account and
password maintenance is also supported.

Enhanced Auto-Reminder Process

With the R12 enhancements, Auto-reminder process can be used for both manual and
online contracts. Contract Administrators also have the ability to disable or enable
reminders for contracts that they do not wish to send reminders to customers. For online
Contracts, the process will select all contracts for which quote has been published online
For manual contracts, contract status will be used to send reminders. The user has to
initiate the process by sending the first reminder. The auto-reminder process will flag the
contract with a reminder sent flag. Subsequent reminders will be send automatically by
the process based on the dates specified in the template set layout. Using the ‘Service

OAUG Collaborate 2007 Conference © 2007 Mohan Dutt

4
Contracts Auto-reminder Program’ request form, the contract status can be selected on
this request. The auto-reminder process will look at this status along with date parameters
to qualify contracts for which reminders have to be sent.

Enhanced Communication Templates

Service Contracts integrates with XML Publisher to support user-defined layout templates
for customer communication documents. Contract Administrators can now define
whether a set of document templates is used for new contracts or renewal contracts.
Users also have the option to specify whether document templates should be used for
administrator-managed contracts or for online acceptance contracts. New seeded
Document Types are available when defining communication templates. These are:
Acceptance Confirmation, Activation Confirmation and Cancellation Letter. User
defined Document Types are also supported.

Flexible Approval Rules

In Release 12, the standard contract approval workflow integrates with Oracle Approvals
Management to drive the approval process. Standard Approvals Management features
such as rules based approval routing and definition of approval groups are supported.

Search and Inquiry Enhancements

Release 12 service contracts search and inquiry feature introduces a new HTML search
features for contracts as well as viewing service contracts detail using drill-down from a
HTML interface. Each of these service contract search and inquiry advanced features
are discussed in detail in the sections that follow.

HTML Contract Search

Contract Search consists of new HTML Search pages to support search by contract,
service line or covered level attributes and allows to display search results as contracts,
service lines or covered levels. In addition to viewing search results at different levels,
users also have the option to view details of a contract, service line or covered level in
HTML. The results set, which displays most commonly viewed attributes of a contract, can
be easily personalized by adding result attributes from a wide range of hidden attributes
provided out of the box. Further, all the rows in the search results can be easily exported
with one click action to an excel spreadsheet for the purposes of doing trend analysis.
From the search results, contract administrators or renewals analyst can select a set of
contracts and can perform some common administrative actions on contracts, like
publish or print a quote, Submit for Approval, run a QA check, enable or disable
reminders and so on. A user can perform a quick search from the administrator
workbench, or can click a link out to the simple or advanced search pages for more
complex searches. The ‘Simple Search’ & ‘Advanced Search’ pages provide contract
administrators with the option to display search results as “All Contracts”, “In Process
Contracts”, “Service Lines” or “Covered Levels”.

View Service Contract Details in HTML

In Release 12, Service Contracts offers a user-friendly, HTML-based view of contracts that
can be easily personalized to suit the needs of a specific business flow. The HTML pages

OAUG Collaborate 2007 Conference © 2007 Mohan Dutt

5
are accessible from the service contract administrator workbench, the IB mass update
workbench, the IB instance details page, the sales online customer details page and the
daily business intelligence portal for service contracts. The pages include contract
header, service line and covered product level information for subscription, service and
usage line types. Billing schedule and billing history is available at all levels. Notes and
attachments, interactions, and contract terms are also be available as shortcuts from
these pages.

Billing and Revenue Enhancements

Release 12 service contracts billing and revenue recognition enhancements include

support for partial period billing and partial period revenue recognition, deferred
revenue management, credit card encryption for payments and lock for billed counter
readings. Each of these service contract billing and revenue recognition advanced
features are discussed in detail in the sections that follow.

Partial Period Billing

Businesses require flexibility for defining how pricing, billing and termination amounts are
calculated for partial periods. Service Contracts now provides the following options for
partial period calculations: Default Period – Allows a business to define a default period
for pricing and billing. Valid values are Day, Month, Quarter, Half-year and Year. If
‘Month’ is specified as the default period, then month is used as the basis for calculating
partial periods for all pricing, billing and termination calculations; Period Type – This can
be Fixed (duration of 30 days for a Month, 90 days for a Quarter and 360 days for a Year),
or Actual (based on actual days in the default period); Period Start – Allows a business to
select where the partial period calculation occurs within a pricing, billing or termination
duration when service starts in the middle of a period (e.g. – Jan 15th rather than Jan
1st). ‘Service Start’ counts full periods from service start date, then partial period at the
end. ‘Calendar Month Start’ counts full periods based on full calendar months that span
the duration. The partial period can occur at beginning of duration, end of duration, or
at both beginning and end of the service duration.

Partial Period Revenue Recognition

In Release 12, Oracle Receivables provides support for partial period revenue
recognition. The partial period revenue recognition feature enables prorated revenue
recognition based on the number of days in each accounting period. Accounting rules
can also be defined to recognize revenue evenly across all full periods in a schedule
while only prorating recognition for partial periods that fall at the beginning or end of a
schedule. Service Contracts integrates with Oracle Receivables to enable partial period
revenue recognition for services billed from service contracts.

Deferred Revenue Management

Event-Based Revenue Management in Oracle Receivables allows users to define

revenue deferral reasons or contingencies and corresponding revenue recognition
events. In Release 12, revenue contingencies for customer acceptance that are applied
to goods sold in Order Management are now applied to services sold to cover those
goods. Revenue is deferred for service ordered in both Order Management and Service
Contracts. Acceptance contingencies associated with an item instance are

OAUG Collaborate 2007 Conference © 2007 Mohan Dutt

6
automatically applied to service revenue associated with the item instance when it is
covered in a Service Contract as a Covered Product. Revenue for services on other
covered levels, subscriptions and usage is not impacted by contingencies applied to
goods associated with those services.

Credit Card Encryption

In Release 12, Oracle Applications provides a centrally maintained and secure process
to capture payment information. The process for selecting credit card as a payment
method is enhanced as follows to align with this centralized approach with Credit card
attributes are now stored in a central repository. Service Contracts provides ability to
create/edit credit cards from authoring form where the credit card number can be
encrypted when stored, with controlled access. The credit card number can be masked
in all user interfaces, only the last 4 digits are visible.

Lock Billed Counter Readings

In Release 12, Install Base allows users to make corrections to counter readings. Oracle
Service Contracts now integrates with Install Base to lock counter readings that have
already billed in Service Contracts.

Install Base Integration Enhancements

Release 12 service contracts integration with install base instances have been furthered
enhanced with support for line level cancellation, viewing impacted contracts before
instance update, instance mass updates specifying impact to service, creating
streamlined instance and terminating usage when item instance terminates. Each of
these service contract install base integration advanced features are discussed in detail
in the sections that follow.

Line Level Cancellation

When a contract is renewed, customers sometimes elect not to maintain one or more
services on the contract. In Release 12, users can update the status of specific service
lines or covered levels to indicate that the customer has declined service for a portion of
the contract. Both the service line status and the covered level status are now displayed
in the authoring form. Users can change status for a service line or a covered level to any
status that maps to status type ‘Entered’ or ‘Canceled’ by invoking the change status
form from the Tools menu in the authoring form. When canceling a service line or
covered level, users are prompted to enter a cancellation reason. If a service line is
canceled, all of the associated covered levels are canceled as well. Similarly, canceling
a contract results in the cancellation of all service lines and covered levels on the
contract.

View Impacted Contracts

Install Base users can make updates such as terminations, splits, quantity updates and
change in ownership that impact Service Contracts providing service on these instances.
Currently, the impact of the changes to service contracts is not visible to the install base
users. A new HTML page, View Impacted Contracts, is now available from Install Base

OAUG Collaborate 2007 Conference © 2007 Mohan Dutt

7
that shows the service contracts impacted by an install base transaction. The user has a
choice to proceed with the desired change, or cancel and revert back.

IB Mass Updates – specify impact to service

Install Base administrators can select any number of item instances and perform a mass
change to update item instance attributes such as owner, status, installation date and so
on. Release 12 introduces several improvements to the Mass Update process in Install
Base to allow users to view or determine the impact of mass updates on associated
service contracts. For mass transfers of ownership, install base administrators are now
able to review impacted service contracts and indicate whether service covering
transferred item instances remains in effect, is terminated, is transferred to a new owner
or honors the transfer terms defined in the service coverage terms. If service on the
original contract is to be transferred, administrators can select billing terms, update bill to
and ship to details and indicate whether notes and attachments are copied for the
transferred service. For mass terminations, install base administrators are now able to
review the service contracts impacted by a mass termination batch, select a termination
reason and indicate whether a credit is issued to the customer when service is
terminated. For mass update of installation date for a selected group of item instances,
install base administrators are now able to see a list of warranty contracts that are
impacted by the change to item instance installation date.

Create Streamlined Item Instance

In Release 12, Service Contracts introduces several improvements to streamline and

simplify the process for creating and covering new item instances. Contract
administrators can now open a new forms UI directly from the authoring form and quickly
enter key attributes such as serial number, external reference number, quantity and
UOM, installed date and location attributes to create one or more item instances. Once
created, the new item instances are automatically added to the contract as covered
products.

Terminate Usage when Item Instance terminates

Users can enter RMA orders or update Install Base directly to terminate an item instance.
Terminating an item instance also terminates any service lines that cover the product in
Service Contracts. In Release 12, install base instance terminations also terminate
associated usage lines. This prevents erroneous invoices for usage lines that invoice
based on minimum or estimated periodic consumption in the absence of actual counter
readings.

OKS R12 Upgrade Steps

Prior to Oracle Applications 11.5.10, Oracle Service Contracts uses a set of Rules and
Time Values tables to store contract attributes that were not included in base Oracle
Core Contracts or Oracle Service Contracts header and lines tables. This storage
approach resulted in data volume and performance issues for some customers.

In Release 12, Service Contracts follows the new architecture where the rules and time
values generic data structures have been eliminated. Service Contracts tables now
stores the relevant attributes in specific OKS/OKC tables and columns, better leveraging

OAUG Collaborate 2007 Conference © 2007 Mohan Dutt

8
Oracles database technology and delivering higher performance with lower data
volumes.

The upgrade steps to Release 12 Service Contracts include assessing the volume of
service contracts data and thereafter validating and correcting data types. This would
be followed by apply pre-upgrade data model changes and applying rules bulk data
processor. Then one would reprocess errors and synchronize new records before and
after the Release 12 upgrade scripts are run (See Fig. A – OKS R12 Upgrade Steps)

Fig. A – OKS R12 Upgrade Steps

One is required to apply patch # 4684603. This would introduce Service Contracts
Validate Rule Data concurrent program and Rules Migration Utility form as a result of the
patch. One is required to check the number of lines in OKC_K_LINES_B. If more than

OAUG Collaborate 2007 Conference © 2007 Mohan Dutt

9
500,000 then one should follow the pre-upgrade steps, otherwise run the Release 12
upgrade scripts if the volume is smaller.

The next step would be to apply patch # 3335269. The rule attributes are migrated from
OKC_RULES_B table to OKC_K_HEADERS_B, OKS_K_HEADERS_B, OKC_K_LINES_B,
OKS_K_LINES_B and OKS_K_LINES_TL. If there are any processing errors, the error data is
stored in OKS_RULE_REPROCESS. This is followed by applying patch # 5212775 which
processes large volumes of rules data efficiently using bulk data processor. In case, the
processing encounters any data type validation error, the entire transaction set is rolled
back and would be required to be correct. One would submit Service Contracts
Reprocess/Synchronize rule data concurrent program and then View and correct errors,
if any, in Rules Migration Utility Form. This would be conducted before and after running
the Release 12 upgrade scripts.

OAUG Collaborate 2007 Conference © 2007 Mohan Dutt

10