SAP External Service Management

Firstly -- SAP External Service Management (ESM) must not be confused with SAP Service
Management (SM). ESM is the procurement of services. SM is to provide services to a client.
With External Services, you have a PO for services with Goods Receipt taking place. The Goods
Receipt is called Service Entries. In contrast with goods (stock or non stock) where receiving is
typically done by the inventory management group, the Service Entries are done by business
themselves. The logic is that the business generated the request for the service, that is where it
was done, it will be best if they do confirmation that service took place.
Lets look at the traditional SAP purchasing cycle vs SAP purchasing cycle for External Services.

The big difference is that the item category is D (services) is used. For the item, detail Service to
be performed can be specified. The receiving is a 2 step process. Create and then Accept
Service Entry Sheet

Lets step through the process and look at the documents. The steps are
Step 1 - Create Purchase Requisition
Step 2 - Convert to Purchase Order
Step 3a - Service Entry Sheet
Step 3b - Acceptance of Service Entry Sheet
Step 4 - Invoice and payment (not shown here)
----------------- DETAIL ------------------Step 1 - Create Purchase Requisition
What makes the PR a ESM PR is the Item category. For goods it is blank. For ESM it is D
(Service). if the item category D is selected, it is mandatory to provide the account assignment.

Step 2 - Convert to Purchase Order

The PR is converted to a PO. If me59 (automatic creation of PO) is used, the Material Group
must also be entered in the selection criteria, otherwise it doesn't work.
Step 3a - Service Entry Sheet

When creating a SES, the planned services can be copied from the original Purchase Order.

Where:
- P Plan - Items copied from Purchase Order

- C Unplanned from Contract - Items copied from Contract (was not in PO)
- U Unplanned - Items was not in PO

Step 3b - Acceptance of Service Entry Sheet

This is the equivalent of a Goods Receipt. The result of accepting a SES will be a material
document with movement type 101 (GR against PO). Depending of process the SES can be
created and Accepted by different people. Typically the acceptance is done by a more senior
person.

A traffic light indicate the status of the SES

- Red = Not yet accepted -- only SES
- Yellow = Accepted but still to be saved
- Green = accepted and saved

Additional notes on External Service Management

Release procedure and SES

Release procedures can be build in PR, PO and Service Entry Sheets. (Also possible on Outline
Agreements and RFQ's)
Service Outlines
The services in the PR / PO can be specified in a hierarchy. See this post [sap123.com] for more
information on this.

Outline Agreement (Contracts)

Services specified in PR / PO as well as Unplanned Services entered in SES can be pulled from
a contract (Outline Agreement).

Service masters & Service Conditions

The services can either be free text or Services Masters (similar to material masters for goods).
The prices for these services are stored in Service Conditions. Lots of SAP customers start using
ESM without Service Masters. And even if Service Masters are used, one do not need to use
Service Conditions.
Lets look at a simple Service Master

Account Assignment U
Under special cases (if allowed), an account assignment U (Unknown) can be selected when
creating the PR / PO. In this case the correct account assignment category must be provided
when the service entry sheet is created.
Configuration
The focus on this post is to introduce the concept, so no configuration options are discussed. See
below for config options related to this functionality. Config Menu: IMG > Materials Management
> External Services Management

Transactions
The following transactions were used for above screens:

ME51N - Create PR
ME21N - Display PO
ML81N - Create Service Entry Sheet
ML82N - Change Service Entry Sheet (Acceptance)
AC03 - Maintain Service Master