Service Master Data – is there an ROI?

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Now my last couple of posts started talking about SAP service management, and the power that it has.  I noticed that I left out some key information.  Namely, is there any return on investment for maintaining all of this data in your system?  Now, ROI is a very subjective term when it comes to something like data within SAP.  One organization might easily be able to monetize that data, while others struggle.  So, let me give you some ideas to consider when you decide from a financial perspective, what is all that data worth?  I’m going to go through several different scenarios that I’ve seen throughout my career.  Keep in mind, not all of these scenario apply to ever business, but I’m willing bet if you read through these, you might be able to make the leap to your own processes.

1.  Product Registration.  Now, this is something that I often see overlooked in organizations.  Collecting product registrations.  Now, if you buy an appliance, or piece of electronics, you will often see a little card you can fill out to register your product.  Often it is used to start your warranty, or maybe just to give you special offers, or updates as new software becomes available.  From the business side, this information has huge potential upside.

  • it allows you to connect to your end user.  If you use distributors, without registration, you’ll never be able to find out who is really buying your stuff.
  • It allows you to start and end standard warranties on your products.  This is especially valuable, if you offer your user a one year warranty.  Well, most business don’t start that warranty from the time it’s produced, rather when it is purchased.  If you customer buys it 3 days or 3 months after production, you’re still on the hook for 1 year worth of warranty.  If you run into any percentage of returns or product defects, being able to cut off your free service has a definite financial advantage.
  • When you know your end user, you can go to the up sell.  By that I mean, you can offer discounts to buy extended warranty, upgrades, etc.  This allows you to extend the life of your products, while keeping your customer happy.  If you keep providing the latest upgrades or enhancements to your customers, they will remember.  Or more the point, if you don’t provide this, they will remember.

2.  Keeping track of what your customer owns.  This is valuable for any industry, especially if you offer systems of products that might work together.  When you maintain this data, you will quickly be able to know what your customer has at a particular site, or even be able to drill down to a particular area within a site.  This is often contingent on doing the installation yourself, however, it still buys you a lot of valuable ROI with your customers.

  • If you provide on-site service, the more you know about what a customer has installed and where, the faster your technician can get your customer up and running again.  You can minimize the down time by having the correct parts with them.  You can do initial troubleshooting, just by knowing that product X & Y are both installed, and sometimes can have side effects if used in certain ways.  KNowing that in advance better equips your technicians to  fix the problem the first time.  That saves you money, and gives you a lot of goodwill from your customers.
  • If you install serialized components installed into other serialized components, you don’t to ask your customer to disassemble half the unit, just to tell you the serial number.  Instead, you can quickly look into your installed base, and see what is installed within each unit, often drilling down several levels.  While this might not generate a lot of money, it will generate goodwill with your customers by making it easy to do business with you.
  • If you ever need to do a recall (like say GM), knowing where every serial number is located will quickly let you be proactive with your customers, to let them know what needs to be fixed/upgraded/replaced.  You can generate campaigns to notify your customers before they start having problems.  This will save you definite dollars by avoiding last minute, emergency service trips, and instead garnering more goodwill with your customers by letting them schedule when things can be serviced.

3.  Maintaining as accurate warranty dates.  This one seems pretty obvious, but I’ve been surprised how many organizations  are willing to “wing it” for this information.

  • Not only can you cut costs buy knowing when a product is no longer under warranty.  You have the ability to generate revenue when it does break down and your customer wants it fixed.
  • You encourage registration (see above) by allowing that date to be the starting registration date, rather than the original ship date.
  • You can quickly run reports on items coming off of warranty in the next month to send an offer to extend their warranty for a reduced cost.  This keeps customers coming back to you, and not your competitors.

There’s more I can say, but I’ll save it for another time.  The thing to take away from all of this is that if any of this stuff applies your business, and you aren’t collecting this data, you are losing out on all of the benefits that come with it.  I can even show you simple ways to start collecting that data…  but that’s for another post.

thanks for reading,

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

3 thoughts on “Service Master Data – is there an ROI?

  1. Very interesting to read on this topic and it is by chance.

    In the legacy system that we have today in the company, the product registration is automated. i.e. Upon a new sale, the product is registered and the warranty dates are also automatically calculated based on the invoiced date.

    How is this done in the legacy system?
    The sales contract, the sales quotation, the new sales orders, the material master transactions are equipped to capture information regarding standard master warranty or contract warranty, end-users, etc…

    The final information for the product registration or equipment/installed base creation is from the sales order that is being shipped.

    If the sales order has a reference to the sales contract or sales quotation then the product registration information is copied from the sales contract or sales quotation. If the sales order is without the a reference to the contract or quotation, then the default product registration information is from the material master.

    I understand that this is not a standard solution in SAP.
    How was this resolved from your side?

    Thanks and regards,

    1. Unfortunately, there is not a standard way for dealing with this in SAP that I’m aware of.
      You would either end up using a third party tool (like some of the things I have at, or you will end up writing you own user exits and programs in order to accomplish this.
      Feel free to email me directly, and I’d be happy to understand your exact specifications and see if we might be able to help you out with some tools we currently offer.

      1. Thanks Mike for your reply.

        We are going to write our own user-exits to accomplish this. I was just curious as to how this was being handled at other customers. We have also created a program which is run a batch at the end of the week to update the missing information like warranties, object type…etc.

        Its just weird that SAP has not provided a standard solution for this when warranty information is so-key for a service environment.

        Yes, will get in touch sometime.


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