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Current functionality is that SLA KPI instances that are activated when a case is created, will continue to run even when the case record is canceled. Also the "Resolve in" Date/Time counter will continue to count down, even though the case is terminated. For organizations that depend on these KPI items for reporting the OOB is misleading, and we need to write functionality that on case cancellation action will update the status of related SLA KPI item to Cancelled. We think this should be an OOB functionality.

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Try using the following solution:

https://www.magnetismsolutions.com/blog/colinmaitland/2017/5/3/how-sla-kpi-instance-statuses-work-in-dynamics-365

Category: Customer Service (Case Management / Queues)