Purchasing recognizes items, while eAM recognizes resources. As a result, the contractor service item must be linked to a resource for the purchase order to be tied to the Work Order. This is associated via the Resources window. Additionally, the
resource must be associated with a department. The department must specify the location where the services are to be delivered. This must be a valid location for the organization.

For each contractor service resource, you can determine whether the rate charged to the Work Order will be a standard rate or the actual amount, based on the purchase order price. This is set up within the Resources window, and may vary for each resource.

To set up outside services as items

Create an item for each outside service, such as landscaping services.
1. Navigate to the Master Item window.
2. Enter the item Name for the contractor service. For example, Landscape Service.
3. Select Copy From within the Tools menu.
4. Select @Outside Processing Item from the Template list of values.
5. Choose Apply.
6. Choose Done.
7. Within the Purchasing tabbed region, ensure that the Outside Processing Item check box is selected.
8. Select the Resource Unit Type.
Resource: Costs are based on the resource standard rate.
9. Select a Default Buyer from the list of values.
10. Enter a List Price for this contractor service.
11. Select Each for the Unit of Issue. This is the unit of measure you use to issue the item from inventory.
12. Within the Receiving tabbed region, select Direct from the Receipt Routing list of values.
13. Save your work.
14. Select the Organization Assignment tabbed region on the left side of the window, then assign this item to the eAM organization.
15. Save your work.

For other setup details please check @
http://www.oracleug.com/user-guide/work-process/osp-cycle