Without robust integrations, we cannot fully realize critical business functions such as:
- Accurate product models
- Consistent customer data
- Credit control capabilities
- Consistent pricing across all applications
- Consistent discount levels
- Robust margin protection
These are the obvious reasons for having an integrated landscape for quotation, sales, financial, production and other business solutions. Integrating SAP CPQ with your existing SAP S/4HANA landscape isn't just beneficial—it's essential for optimizing your entire sales and fulfillment process.
The Imperative for Integration:
Disconnected systems result in costly errors, manual rework, and missed opportunities. Without real-time integration, organizations grapple with inaccurate product models, inconsistent customer data, a lack of real- time credit control and fragmented pricing. This directly impacts sales efficiency and profitability.
Conversely, a connected landscape establishes a single source of truth for critical business data, ensuring consistency across sales, finance and production capabilities. It enables real-time enforcement of credit limits and pricing rules, safeguarding margins, and automates the quote-to-order process, significantly reducing cycle times and accelerating revenue recognition.
For SAP CPQ, achieving connectivity with SAP ERP (S/4HANA) is relatively straightforward. A standard integration package, leveraging an already aligned data model, facilitates working in a connected environment.
Let me list the main components below:
Business Partner
This object and its functions are replicated in CPQ from S/4HANA. Firstly, it enables the replication of necessary Business Partner data from the backend SAP ERP solution. Secondly, the way Business Partner objects are utilized within the offer document – including their visibility on a quote – is consistent with the broader SAP ecosystem. This consistency significantly simplifies CPQ's integration with both CRM and ERP systems.
Product model
The first point here is the replication of material and service master data from S/4HANA. Secondly, the product model itself – encompassing its characteristics, rules, and validations – is integrated.
If you've already invested in a Variant Configurator product model or are planning to do so, reusing this investment becomes crucial.
Both SAP configuration engines are supported by CPQ: LO-VC (still available in S/4HANA Private Cloud) and AVC (which is the sole solution in the newest S/4HANA Public Cloud). This integration enables replicating the Knowledge Base runtime, along with the product model definition, to CPQ (and to the connected middleware solution, Variant Configuration & Pricing). It contains product characteristics definitions, their listbox values, validations, constraints, and procedures – providing everything needed to configure the product.
At one of our customers, this scenario helps in managing product model in only one system - S/4HANA that is the source for others. Continuous product model development and automated synchronizations to CPQ & Variant Configuration & Pricing helps in minimizing costs and having same model everywhere.
Ultimately, CPQ utilizes the same product configuration model as designed in LO-VC or AVC. This integration is easy to set up and reliable in use. This typically serves as an excellent starting point for enabling a new sales tool with a pre-configured product model, allowing teams to focus on enhancing it for specific sales needs.
Pricing
This includes pricing condition records as well as the pricing procedure with its setup. That investment can also be reused within CPQ by utilizing the Variant Configuration & Pricing middleware.
It operates by connecting to the S/4HANA database, where relevant tables are retrieved and cached in Variant Configuration & Pricing for an administrator-specified pricing procedure. For example, we can select ones to be used on CPQ quotes.
Subsequently, via the native Variant Configuration & Pricing – CPQ connection, this pricing model is applied to quotes created in CPQ. Thus, both variant conditions and document condition types are calculated online, ensuring high performance.
If pricing in S/4HANA includes custom logic enhancements, these can also be replicated in Variant Configuration & Pricing. Furthermore, redirecting calls to S/4HANA is possible should the customizations prove too complex.
Follow up order creation in S/4 HANA
Another key feature is an interface that allows orders to be placed directly in S/4HANA Sales & Distribution from a created quote in CPQ. This enables a seamless transition of a quote document confirmed with the end customer – already containing the necessary product configurations – into a Sales Order or Solution Order.
The order placed in S/4HANA then contains partner functions, dates, pricing details, and configuration data for products/services. S/4HANA also sends back order status updates to CPQ.
There are also different scenarios possible when business process is even more sophisticated:
Sales Cloud opportunity to CPQ quote
SAP Sales Cloud is a CRM system to handle lead-to-order process that in case of configurable or subscription products will need CPQ to set up a proper offer with adequate pricing. Process is usually built around sales opportunity in Sales Cloud that triggers in tab a new CPQ quote. This quote is created automatically in CPQ and can be filled in while still working in Sales Cloud.
So in this scenario we have CRM with whole customer sales context, AI assistants, pipeline planning and also CPQ to handle complex product/service configuration and its pricing.
External visualization engines
Having CPQ as a web application facilitates the easy embedding of other web applications. A common use case, for example, is physical product visualization. While attributes define the configuration, the actual visual appearance (in the case of a physical product) is a distinct aspect.
There are a few screen elements where this can be achieved in CPQ.
- We can embed an online visualization within a CPQ screen that refreshes with every configuration change of our product. Imagine changing a product's dimensions, color, or add-ons – the embedded visual representation of the product in a side panel will instantly refresh, aiding in product validation and even customer demonstration. We've done such an integration with a visualization engine chosen by our Customer. This involved exposing the product model to the visualization engine, then connecting it using a Configuration ID that enabled real-time access for the visualization app to Variant Configuration & Pricing, which stores the configuration. The visualization app was embedded in the responder view in CPQ, next to the product's pricing information.
- Visualization tools can also be integrated with CPQ as an overlay, acting as a visually-led configurator. Once complete, the entire setup can then be transferred into CPQ attributes to finalize the quote, generate printouts, send to the customer, and transfer to S/4HANA.
Additional process integrations
The ease with services retrieving contextually helpful information that can be added to CPQ is significant. We can simply trigger a service from CPQ scripting to enable access to external data, without the need for physical replication. Examples that we have implemented include:
- Related partners to a customer and other persons from S/4HANA
- Specific product ready configurations stored in S/4HANA
- Transport and customer cooperation details for a quote from S/4HANA
These services can function as autofill services used on user demand or as search aids presenting selectable options. Therefore, no replication of this data is needed; only a service for retrieval and a function to initiate a process on a quote in CPQ are required.
Business concerns
When operating within the SAP ecosystem and enterprise installations, organizations often face:
- Complex organizational structures
- Multiple sales organizations with different sales portfolios and/or processes
- Different pricing models and procedures for that
- Different customer bases among departments – and if shared, then having different conditions and processes for selling to customers.
SAP CPQ can accommodate these complexities, ensuring that different organizational boundaries and concepts are recognized within quotes. This can be achieved by initiating CPQ usage in specific company areas or by enabling visibility and the ability to select the relevant context within CPQ.
Integrating SAP CPQ with an existing SAP S/4HANA landscape transforms the quoting process from a potential bottleneck into a seamless, intelligent, and highly accurate component of your broader enterprise ecosystem. This strategic move enhances data integrity, accelerates sales cycles, improves customer experience, and provides robust financial control. It's an investment that future-proofs your sales operations, enabling you to confidently manage increasing product complexity and maintain a strong competitive advantage in a dynamic global economy.
If you are interested to hear more and talk about new quoting experience, please contact me.
Radosław Stefaniak,
Business Architect in CX
