This blog addresses one of the possible solutions to use SAP CPQ to increase your growth rate, margins, revenue and reduce errors. We will start from the basic module, which is an SAP Product configuration and move towards an end to end solution, which will be SAP CPQ.
SAP Product configuration provides services that can enable different systems to configure products and price. SAP CPQ leverages this product configurator to manage vibrant displays with flexible UI for product configuration. It is a microservice also known as SAP Variant Configuration and is available for CPQ on SAP Cloud Platform.
Note: SAP Product configuration(On-Premise edition), is not supported on SAP Commerce Cloud and is not followed over here.
SAP Variant Configuration and Pricing is divided into three parts:
First, Variant Configuration Service, which is used to configure complex products and exposes SAP ERP or SAP S/4HANA Product Configuration capabilities to front-office applications.
Second, Pricing Service — “simple standalone stateless pricing service”. The calculation for a particular type of product could go as complex as required depending on constraints such as which customer, which product and in which date range. All factors could be variables which determine the price customer gets. Pricing service exposes sales pricing capabilities of SAP ERP or SAP S/4HANA capabilities to front-office applications.
Third, Data Replication, which is used to manage data for not only the two above mentioned services but also handles all other replications from your SAP ERP or SAP S/4HANA to SAP HANA tenant in SAP Cloud Platform, so backend is not required to be highly available.
SAP Variant Configuration and Pricing is designed to be integrated with SAP CPQ. CPQ is a tool for a back-office sales representative to create Quotes, proposals and orders. It is a UI based Catalog management with guided selling. Provides pricing, discounts and margin health as shown in the image below:
It also has AI-powered pricing recommendations and cross-selling, for example, if a specific product is on discount, if the customer is buying something related, suggestions will be displayed on the right to make it more meaningful for customers. It also provides configurable document export (quotes/proposals) with analytics for the sales representative to meet their or organization goals.
Note: SAP Variant configuration and pricing does not have an order management system. For that, look into Async order management(AOM).
SAP CPQ with SAP VC & Pricing + Product Configuration on SAP Cloud Platform, combined is a solution that would lead your organization to efficiently and accurately increase revenue, reducing human errors as suggested initially. This end to end solution not only does it provides your sales representative with the tools for better deals but it also easily integrates with other SAP solutions to provide necessary data exchange seamlessly for continued growth and not mention infrastructure you can depend upon.
- SAP Variant Configuration and Pricing on SAP Cloud Platform Features
- SAP Variant Configuration and Pricing on SAP Cloud Platform Architecture
- SAP Variant Configuration and Pricing on SAP Cloud Platform Implementation
- SAP Variant Configuration for SAP CPQ – SAP Commerce Cloud
- Variant Configuration Service
- SAP Solutions for Sales and Configure, Price, and Quote