The document summarizes Oracle's service contract renewal process. It discusses setting up renewal rules, automating renewals, communicating renewals to customers through notifications and online portals, managing the approval process, and additional features like integration with pricing, coverage entitlements, and forecasting to optimize recurring revenue from contract renewals.

1. Powering the Future Enterprise
Girish Bakshi
White Paper
Optimizing Contract Renewals with Oracle
Service Contracts
Reverse Logistics
& Repair BI
Spares
Management
Planning
Integration
Service Contract
Renewals
Repair
Automation

2. Abstract………………………………………………………………………………...3
Renewal Process...………………………………………………………..…...……..4
Renewal Communication……………...…………………………………...………...5
Online Acceptance Portal………………………...................................................6
Admin Workbench…………………….................................................................7
Additional features useful for renewals….………………...……….…………...….8
Summary……………………………...…............................................................11
www.jadeglobal.comJade Global © 2013 2
Table of contents

3. www.jadeglobal.comJade Global © 2013 3
Abstract:
Managing contract renewals can proactively minimize revenue leakage while
improving overall customer satisfaction. Renewal of service contracts represents a
high margin and recurring revenue opportunity for service providers. Oracle service
contract renewal process is designed to improve process efficiencies and customer
experience. For example, renewal of large volumes of lower value contracts can be
highly automated to reduce administrative costs, while higher value contracts may
require special attention from sales/operations people. Renewal representatives are
now able to initiate renewals easily based on pre-defined business rules. Once the
renewal process is initiated, sales reps can easily track progress and initiate follow-up
actions. Renewal process, at a high level, can be represented as below.
Renewal Process
Customer
notification
Customer
Acceptance
Contract
Administration

4. www.jadeglobal.comJade Global © 2013 4
1. Renewal Process
1.1 Renewal Rule
Renewal rule can be set up at Contract, Party, Org and Global levels for Default
renewal process. Default values set up at these levels take the precedence in the order
they have been mentioned. For Online and evergreen renewals, these rules can be set
based on the threshold limits at party, organization and global level. Based on the
setup of the contract and the Global Contracts Defaults, the renewal process
determines the effective renewal rule. This rule includes three values:
• Default Renewal Process: follows the contract, party, organization, global hierarchy
• Evergreen Threshold Amount: follows the party, organization, global hierarchy
• Online Threshold Amount: follows the party, organization, global hierarchy
Once a renewal rule/process is identified then the next step is to automatically create
the contract based on the rule.
1.2 Renewal Automation
For automating the renewal process, following setups are required to be completed:
• Process definition: A process may be either an Oracle Workflow process or
procedure, either packaged or standalone. This Process Definition can be invoked
by either: an outcome, a function, a quality assurance checklist, auto numbering, a
change request process, or to approve or renew. Oracle has already provided few
seeded Process Definitions like “Service Contracts Renewal Outcome”.
• Independent Condition for Renewal: Independent condition is the Business
required condition that must be met before an outcome, i.e. contract renewal is
processed. Oracle has defined seeded Independent condition like “Contracts Auto
Renewal Condition” which is linked to process definition “Contract Renewal”. This is
the place where Business required criteria for selection of contracts for renewals (90
days or 120 days) is captured.
• Schedule the following programs
a. Workflow Background Process “Contract Alert”.

5. www.jadeglobal.comJade Global © 2013 5
2. Renewal Communication
2.1 Manage Renewals Proactively by Notifying Customer
Renewal quotes and reminder notifications can be generated automatically at user-
defined intervals prior to contract expiration. Sales representatives are notified of
upcoming expirations, so that they can proactively start the negotiation process. In
addition, quotes and reminder notifications can be delivered directly to customers. For
electronic renewals, customers provide payment information and accept their quote
online, simplifying the contract administration process. Renewals can be performed
manually or electronically. Service Contracts integrate with XML Publisher to support
user-defined layout templates for customer communication documents.
2.2 Renewal Negotiation Management
Once a customer is notified of an upcoming service renewal, contract goes through
several stages. The negotiation workflow manages each of the stages of the negotiation
cycle to better manage and track the renewal negotiations.
2.3 Contract Renewal and Branching
The application can create a renewal from a renewal event or you can create a renewal
manually from the Service Contracts Authoring form. After the renewal contract is
created, the application initiates a workflow for that contract and the negotiation status
is set to Draft. Workflow determines the routing of the renewal contract based on two
parameters: Renewal Process Type and threshold amounts.
2.4 Notify Customer
Customer receives notifications that a renewal contract has been created and is
awaiting approval. For manual renewals the renewal specialist who is managing
contracts has three options for notifying the customer. Renewal rep can:
 Print a quote letter to fax or mail.
 Send the quote letter in an e-mail.
 Publish the quote online.
The application stamps the negotiation status accordingly.
2.5 Online Renewals
Contracts that qualify for online renewals are published to the customer and do not
require manual intervention. Every time a quote is sent by e-mail or published online,
the workflow process runs a quality assurance (QA) check to validate the contract. If
the contract fails this QA check, the action is abandoned and the application stamps the
negotiation status.

6. www.jadeglobal.comJade Global © 2013 6
3. Online Acceptance Portal
Certain low value, high volume contracts can be automatically presented to customers
for reviewing and accepting via an online portal. New and manual contracts can be
published online for customer acceptance. Renewal reps now have the ability to
manually publish in-process contracts to customers for online revision and
acceptance. The biggest benefit is that this procedure reduces manual processes and
paperwork, and increases salesmen efficiency by automating customer acceptance.
The salesman does not have to send quote letters via fax or email. Similarly, the
customer does not have to send paper copies of their acceptance.
• Customers can review / accept their renewal contracts from a self-service web
page.
• Electronic Renewal process places renewed contracts in “Entered” status.
• Notification to the sales representative and customer.
• E-mail notification with a username and password to the customer.
Customer acceptance can be both implicit and explicit when the quote is published
online. If the customer accepts the contract from the online portal, workflow updates
the negotiation status and routes the contract back to the renewal specialist. If the
renewal specialist submits a contract in “Quote Published” status for approval, this
assumes implicit customer acceptance. For manual contracts, the renewal specialist
submits contract for internal approval after securing written or verbal customer
acceptance.

7. www.jadeglobal.comJade Global © 2013 7
4. Admin workbench
4.1 Contract Authoring, Administration and Approving
In addition to contracts created automatically via the selling process, contracts can be
authored within Service Contracts. These types of contracts may incorporate more
complex billing scenarios, or sell usage of products or services in addition to covering
them. Templates can be defined to default coverage terms and other contractual
attributes onto a new contract. All or part of a contract can be copied, referenced,
changed or defaulted, further reducing administration overhead.
• Identify follow-up actions on contracts.
• Publish contract online to customers.
• Submit contract for internal review.
• Manage reminders and notifications.
• Run quality check to validate contract information.
• Open the contract in the Service Contracts authoring window for editing.
• Initiate communication with customers through e-mail.
4.2 Contract Approval
After a contract is submitted for approval, workflow uses Approvals Management
Engine (AME) to derive the contract approver and routes the contract to that
approver.
4.3 Contract Activation
After a contract is approved, the application activates the contract. After that the
contract status changes to Active or Signed and the negotiation status changes to
Complete.

8. www.jadeglobal.comJade Global © 2013 8
5. Additional features useful for renewals
5.1 Integration with Oracle Advanced Pricing
Oracle Contracts integrate with Oracle Advanced Pricing to retrieve the prices of
services or usage supplied on the contract. Price breaks can be set up to vary the
price applied depending on volume used. Usage of products or services can be based
on an estimated (fixed) quantity, or on actual counter readings. Default values can be
used in place of the actual reading if reading is not received in time. A minimum
‘threshold’ quantity can be applied to the contract if necessary. Price adjustments can
be automatically applied to the contract or by simply adjusting the price manually. Any
adjustment applied, whether automatic or manual, is tracked and is available to be
viewed from the contract.
5.2 Workflow integration
Standard contract approval workflow integrates with Oracle Approval Management
Engine (AME). Standard AME features support rules based approval routing and
definition of approval groups.
5.3 Coverage and Entitlements
The coverage definition outlines the entitlements available to the customer, e.g. days
and times of coverage, reaction times, and preferred resources. Preventive
maintenance may be linked to the coverage definition, which would include the
schedule to perform activities associated to the preventive maintenance required on
the products covered by the service. Entitlement information such as coverage hours,
contracted reaction times and bill rates are made available to other applications. This
end to end support for the business flow facilitates the proactive management of
contractual terms and provides enhanced customer service.

9. www.jadeglobal.comJade Global © 2013 9
5.4 Publishing Quote online
Contracts that are marked for online renewal get published online upon renewal. This
action can be used to publish additional contracts online to the customer for
acceptance. Once a quote is published online the negotiation status changes to “Quote
Published”.
5.5 Renewal Quote creation & Electronic delivery
For Electronic renewals, Negotiation workflow sends e-mail notifications to customers at
various points during the negotiation cycle. For Manual Renewals, E-Mail Attachments
are sent by Renewal reps to Customers.
Following seeded document types are available in oracle service contracts
 Quote Document
 Cover Letter
 Reminder Letter
 Acceptance Confirmation
 Activation Confirmation
 Cancellation Letter
5.6 Change Service Level
Oracle “Update Service” functionality to upgrade or downgrade support for covered
products. Customers wanting to upgrade services at renewal can upgrade them to Gold
from Silver.
5.7 Bill Services
In case of customer disputes/issues, billing can be suspended and resumed at renewal
using Bill services “At Renewal” option. All eligible records are interfaced to AR.
5.8 Renewal consolidation
This feature is useful for renewals when a customer has numerous contracts expiring at
different times over the course of a year. This requires the customer to be contacted
multiple times per year for renewal confirmation and perhaps renegotiation, which
increases the workload for renewal. Renewal Consolidation addresses the problem of
multiple contracts expiring during a year (or other given period) causing multiple
renewals. With Renewal Consolidation, all the contracts to be renewed over a given
period are consolidated into a single renewal contract.

10. www.jadeglobal.comJade Global © 2013 10
5.9 Co-termination
To simplify renewals and accounting, customers sometime request all contracts to
terminate on the same date, such as the end of the calendar or fiscal year. This date is
called the co-termination date. This can be set up at a Bill to customer account level.
5.10 Forecasting
Oracle Service Contracts provides up-to-date information on current bookings and
renewals performance. Managers can easily compare actual bookings with forecast for
a given period; track renewal rates and average age of past due renewal; determine
the uplift or reduction in contract value at the time of renewal and take corrective
actions to minimize service revenue leakage.
5.11 Partial Periods Computation
Businesses require flexibility for defining how pricing, billing and termination amounts
are calculated for partial periods. Some businesses base partial period calculations on
fixed 30-day months, 90-day quarters and 360-day years. Others prefer to calculate
partial periods based on the actual number of days within a period. Partial period
settings influence the duration of calculation for pricing, billing and terminating service.
5.12 Partial Period Revenue Recognition
Oracle Receivables provide 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 integrate with Oracle Receivables to enable partial period revenue
recognition for services billed from service contracts.

11. www.jadeglobal.comJade Global © 2013 11
Summary
Oracle Service Contracts provide an automated renewal process
for improving recurring revenue by guiding customers and sales
representatives through upcoming renewals, ensuring un-
interrupted service for customers while minimizing service revenue
leakage for service providers. Enhanced and pro-active customer
communications, more flexibility to the partners by using online
acceptance features coupled with accurate pricing and flexible
billing encompass the complete renewal features that drive revenue
upwards for companies.

12. www.jadeglobal.comJade Global © 2013 11
Girish Bakshi is the lead consultant of Jade Global. He has 14
years of experience across Communication and High-tech domain.
He is an Oracle professional with experience in ERP and CRM
applications.
About the Author

13. www.jadeglobal.comJade Global © 2013 12
Corporate Headquarter
1731 Technology Drive
Suite 350
San Jose, CA 95110
Phone: +1 (408) 899-7200
Southern California
Oceanside, California
Phone: +1 (408) 899-7215
Central United States
Dallas, Texas
Phone: +1 (940) 594-2752
Jade Global, Inc.
East Coast
33 Wood Ave South,
Suite 600, Iselin
NJ 08817
Phone: +1 (646) 334-7165
India Office
Pune, India
Phone:+91-20-66081500
Noida, India
Phone:+91-20-66081500
Jade Global is an Oracle Platinum Partner and a leading enterprise
systems integration and IT services firm. We leverage the best practices
and process expertise across industries and facilitate increased
productivity, more efficient operations; and quicker and more successful
project implementations. For more information, please visit
www.jadeglobal.com or drop us an email at marketing@jadeglobal.com
Talk to our experts and find out how they can change the way you do
business.