Service Management – Service Contract Profitability

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Today is another pulse question.  By that I mean how do you handle Service Contract profitability.  Service contracts, maintenance contracts, warranties, etc all have a very important fact in common.  They all need to be tracked to figure out if you are making or losing money.  Let’s take the example of an extended warranty contract.  You charge $1000 for a 1 year extended warranty.  But how much does it cost you to live up to the contract?  More importantly, do you actually know exactly what you earned or lost on any particular service contract?  Can you see how many times you performed service on the item?  how much was spent on parts?  labor?  travel time/expenses?

If you don’t the answer, how can you accurately determine what you should charge for your extended warranty?

I’m thinking about adding a new Dashboard report to show the service contract details.  Especially, the cost vs. price, and all of the attached documents, service, serial numbers etc.  But again, I’m always wondering, is this something people want?

So I’m hoping you can help me out.  First, is service contract profitability reporting something you could use?  If so, what would you be looking for?  if not, why not?  do you already have a custom solution?  do you use service contracts?  In either case, I’d love to hear from you.  Any insight you could provide would be greatly appreciated.

Thanks for reading and I look forward to your comments.


As always, thanks for reading and don't forget to check out our SAP Service Management Products at my other company JaveLLin Solutions,

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