Service contract life cycle

  • Release version: Xanadu
  • Updated August 1, 2024
  • 2 minutes to read
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    Summary of Service contract life cycle

    The Service contract life cycle in ServiceNow defines the various states a service contract passes through and the actions allowed in each state. Understanding this life cycle helps customers effectively manage service contracts, contract lines, entitlements, and related sold products or install base items within their date and state constraints.

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    Key Features

    • Life-cycle States and Actions: Service contracts progress through Draft, Active, Expired, Canceled, and Suspended states, each permitting specific modifications and actions:
      • Draft: Modify start/end dates (within constraints), add/remove contract lines, entitlements, and sold products/install base items.
      • Active: Modify contract via manual actions, integration, or CRM workflows. The start date is fixed; the end date can be extended. Contract line items and sold products/install base items can be modified.
      • Expired: No actions allowed; contract is deactivated upon expiration.
      • Canceled: No actions allowed; contract is canceled.
      • Suspended: Occurs when a sold product is suspended. Contract lines and entitlements in Draft or Active move to Suspended. In this state, editing fields and creating related records are allowed, but other activities are paused.
    • State Inheritance: Child entities (contract lines and entitlements) inherit the Expired state from their parent service contract. However, child state changes do not affect the parent.
    • Sold Product/Install Base Item State Alignment: Sold products or install base items referenced in contract lines or entitlements must share the same state as the referencing entity.
    • Resuming Suspended Entities: When a sold product is resumed, related lines or entitlements return to the appropriate state based on current dates (e.g., Active if within valid dates). If a suspended entity has reached its end date during suspension, it automatically moves to Expired.
    • Date Validations: Contract lines must be created or modified within the parent service contract’s start and end dates to ensure consistency.

    Key Outcomes

    • Customers can confidently manage service contracts and their components through clearly defined states and rules.
    • Automatic state inheritance and synchronization with sold product states reduce manual errors and ensure contract accuracy.
    • Date validation safeguards maintain contractual integrity by enforcing valid active periods.
    • Suspension and resumption mechanics provide flexibility to pause and reactivate contracts and entitlements without losing state consistency.

    A service contract goes through the various states in each phase of its life cycle.

    In each state, a service contract is enabled to perform certain actions as mentioned in the following table.
    Table 1. Service contract life cycle, related states, and actions that it can perform
    Life-cycle State Action
    A service contract is generated. Draft
    • The start and end dates of the service contract can be modified such that the child records' dates are within the date range.
    • The related contract lines and entitlements can be added, removed, or modified.
    • The sold product/install base item covered can be added or removed.
    Service contract gets activated on the date of activation. Active
    • Modifications to the service contract can be done manually, via integration and via Sales Customer Relationship Management workflow.
    • The start date can't be modified.
    • The end date can be extended and should be greater than the current date.
    • Service contract line items can be added.
    • The sold product/install base item covered can be modified.
    Service contract is deactivated on the date of expiration. Expired No action.
    Service contract is canceled. Canceled No action.

    The service contract line items and entitlements also perform similar actions in the respective states.

    When a parent entity moves to the Expired state, the child entities inherit the same state. For example, when a service contract expires, the related contract lines and entitlements also expire.

    However, the state change of a child entity doesn't affect it parent entity.

    The sold product or install base item referenced either in the contract line or an entitlement must be in the same state as the entity where it's referenced.

    Suspended state

    When a sold product is suspended, the related service contract lines and entitlements, in the Draft or Active states, move to the Suspended state as well.

    A suspended service contract line or entitlement is paused for any activity, except the following:
    • Editing the field values.
    • Creating records in the corresponding related lists.

    On resuming the sold product, the related service contract line item or entitlement acquires the state depending on its start and end dates. For example, a resumed entitlement that has its start date in the past and its end date in the future, acquires the Active state.

    Exceptionally, when a contract line or entitlement in the Suspended state has reached its end date, it moves to the Expired state automatically.

    Date validations

    A service contract line associated with a service contract must be created within the service contract's start and end dates. Any modification to the dates of service contract lines must comply with the date range of the parent service contract.