In B2B, when our customers need to prepare offers to their end customers’ requests, we often use a CRM system to enable such functionality. Sometimes, commerce is also used when customer portal functions are needed, particularly in online cooperation between the customer and sales team. Or even both commerce and CRM, in most complex environments where approvals and sales pipeline reporting are needed.
This all works well when dealing with simple products.
However, when configurable products are involved, CRM is not enough. To enable product configuration for quotes with hundreds of characteristics and dependencies, pricing per element, a flexible UI, and an appealing document generator, we need a CPQ (Configure Price and Quote) application.
Here is a short review of one such application, SAP CPQ
SAP CPQ is a cloud solution, easily accessible via web browser so that it can serve multiple locations of a company worldwide without any special IT requirements. It's fast and can handle offers with hundreds or more line items – each with a configurable product.
Product configuration:
The key here is to minimize errors resulting from product configuration done by end users. Dynamic rules between attributes help to validate a product setup. This also reduces work on own product configuration that sales representatives use. This streamlined configuration process can be designed in various ways in CPQ as the application gives many possibilities on how to do it.
This is important, especially in a standalone implementation or one not reusing an external VC (variant configuration) product model. We have in CPQ lots of product characteristic options that we can use for modeling a product to be used in offers, like:
- many types of characteristics in standard – their behavior, validations
- rules and messages – with scripting
- containers for building nested structures
- options to reuse previously made structures in many other use cases
- subscriptions related ones as well
Each can be connected to specific price determination logic.
Products can also have various ways of displaying them, like:
- simple, without attributes
- with attributes that can be set up during product configuration in the quote
- collections of configured products
- lists of configured products but with the ability of setting attributes for the whole list
- parent and child products.
Also, there are interesting capabilities regarding product’s use like:
- product ID generation (that can be dynamic according to rules when we e.g. want to use one more generic product but need to send it to the ERP system concrete one),
- recommendations of other products while creating a quote,
- guided selling that helps in determining the right product from a catalog based on chosen attributes’ values,
- product comparison feature.
So we can enable configuring sets of configurable products or services. They can be also bundles with physical products and services related to them. Subscription feature enables adding to offers also contracts with timeframe and fee. We can also automatically add a product or service to a particular offer. Or help adding multiple products or services to an offer.
Pricing and special conditions approvals:
This needs to work in pair with product configuration – each attribute needs to be reflected with an adequate price. We have a dynamic pricing mechanism that enables automated price determination and calculation of the value of our offer. This is indeed the intention of having a CPQ to be able to automatically determine the value so that sales representatives can save time on preparing offers.
Prices may be stored in so called pricebooks in CPQ, or retrieved from ERP via Variant Configuration & Pricing middleware. They can be differentiated per markets that we define in CPQ (that could be geographical regions, countries, or some product areas. SAP standard pricelists separation by sales area also works). That helps in building an offering tool for businesses around the world in one application.
Some other elements of pricing are:
- allowed discounting levels,
- many currencies,
- market factors giving the option to differentiate price levels per market with one pricelist,
- checking margin and signaling its issues.
When giving in an offer special conditions, we can activate the approval workflow, which will ask the supervisor to check and approve or not an offer.
Adaptable UI:
Parts of the screen are enabled for deep redefinition. We can completely change how fields and sections are displayed. We can add also new sections and tabs.
For one of our customers, we completely redefined product configuration views, where attributes are divided into tabs and sections enabling better visibility of parts of a final product (the product consists of a few similar parts where each can be separately configured with hundreds of attributes). The aim here was to make those views as easily used by end users as possible.
We can also embed external applications there – a common example of it can be product visualization. In this case, we can in the part of a screen where we set up the configuration of a product, dynamically display its visual form. That is a common case when we want to present a product to a customer or use visualization to validate our product.
An even more extreme use case here is using an external visualization engine to help configure the product and later fill in product attributes for us in an offer.
Authorizations:
There is a deep authorization model inside CPQ that enables detailed segregation if needed. We can split products and customers between user roles or markets. We can also set what actions are available for whom. That also applies to allowed extra items or margin levels that particular user roles can use.
Team collaboration:
During offer preparation or negotiations, more users need to be involved. That can be for reasons of product fit to customer request, configuration check, pricing conditions, terms, transport, etc. For that reason, we have a few tools for that. This is status workflow, approvals with rules, reminders - we can customize that to achieve our way of handling the process. There is also a collaboration with commenting option, which helps in chatting and commenting on each offer.
Printouts of offers with PDF generator:
Offer generation is robust and flexible here. We are able to create templates with multiple languages, dynamic sections, and rich graphic design to make printouts nicely looking and easily readable for customers.
We can dynamically attach other documents to the printout of our offer like:
- references, our product use cases,
- work conditions,
- standard pricelists etc.
That can be done by the user with few checkboxes during printout generation action. That helps organizations also control the quality and validity of documents sent to customers.
PDF with the offer and other materials can be sent directly from CPQ by email to the customer.
What’s more:
SAP CPQ is an easily extendible system. Both product models with pricing and frontend. That makes it easy to show or get some additional data from other systems during the product configuration and makes the product configuration process handy and fast.
If this seems to be interesting for you, do not hesitate to contact us and discuss how we can help you with streamlining your sales process.
My next blog will be focusing on integrations. And especially those towards the SAP ecosystem.
