I have a question about MM-ESM, I have read the documentation but am confounded in my effort to get clarity. We wish our users to raise requisitions linked to Outline Agreements. We have defined services and negotiated rates in our Outline Agreements and services are defined using Service Master Records.
However, often in our experience we wish to procure services against the Outline, having a clear budget in mind but uncertainty of the exact quantity of required services. We may have dozens of services lines for different tradesmen, each at different rates, linked to a common SMR or a select group of SMR's. The value of the works involved has made us decide to avoid using Blanket Purchase Orders, as already defined business rules preclude their use.
What we'd like to be able to do is pick the services from the Outline but not set the quantity against the Requisition line, but an overall value on the Requisition. This way the requisition gets approved by internal management (through Procurement Workflow).
Then once the services are delivered we receive timesheets as claims from the service providers and we want to enter in the exact quantity of each service line, with our limit on service delivery being the price of each trade skill up to the overall limit imposed on the Purchase Order.
FYI, we have automated conversion of PO's linked to Outline Agreements once final requisition release is achieved. Release is linked to a table of approval level, which we refer to internally as the delegation of authority.
When reading online the SAP portal offers the following advice:
“If you wish to make provision in the PO for services that are not precisely definable during the planning phase of a procurement project, set a money limit instead of entering a service description. This limit, which represents a budget for unplanned services, must not be exceeded. The service can be specified later - perhaps at the time of actual performance.
A value limit is set for each procurement project (i.e. the limit applies to the document item). For example, you can set a limit of $5 million for the construction of an office building. In addition, you could set limits on services covered by individual contracts (e.g. $500,000 for masonry work and $200,000 for electrical work). The system checks adherence to these limits at the time the work actually carried out is recorded.
In the window for maintaining value limits, you can set a variety of limits:
Overall limit only
Overall limit and limit on services covered by contract item(s)
Overall limit, limit on services covered by contract item(s), and other limit
Overall limit and other limit
Overall limit on services from model specifications or standard service catalog
Overall Limit Only
You set a general overall limit of $10,000 for a procurement project. The complete project may thus comprise any unplanned services with a total value not exceeding this figure. If performed services to the value of $9,000 have already been entered and you try to enter further unplanned services amounting to $1,200, the system will issue a warning or error message, depending on the setting in Customizing. The services can then only be entered after consultation with the responsible buyer (who may first have to increase the value limit).
Overall Limit and Limit on Services Covered by Contract Item(s)
You can set an overall limit and additional limits on services covered by one or more items of a contract with the service provider. This ensures that only such services can be performed - not any or all kinds of service.
Since the service specifications and prices are defined in the contract item, you ensure first that only these services previously agreed with the provider are performed and second that the price stipulated in the contract applies.
You can also maintain the limits in such a way that the sum total of the individual contract limits exceeds the overall limit. (Example: $100,000 overall limit, $50,000 limit on contract item 1, $10,000 limit on contract item 2 and $60,000 limit on contract item 3.)
This allows unplanned services to be entered unhindered in the early phase of the project, whereas services that come later cannot be entered up to their full limit because the overall limit has already been reached. “
But I cannot understand how to practically execute this feature.
Can anyone help point me to some clarity for this SAP component, the SAP help is poor in that it offers almost no documentation, and I own many SAP press titles but they haven't provided the answers I seek. I also plowed through dozens of Google searches without success.