CPQ Best Practices: How To Configure, Price, and Quote

in B2B E-Commerce and for Internal Sales

SAP CPQ on hybris
Harald Reitz, Steve Lenz, SAP
May 2015

Agenda: SAP Configure, Price, and Quote (SAP CPQ)

Solution Overview and Strategy

SAP CPQ with hybris 5.3, 5.4, 5.5
SAP CPQ for Solution Sales Configuration 2.0
Overview CPQ related SAPPHIRE and ASUG presentations

2013 SAP AG. All rights reserved.

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Configure, Price, and Quote (CPQ)

Industry Priorities and Trends Impacting SAPs Strategy

Mobility/Cloud
Consumerization of IT
Social Everywhere

Intelligent Customer
Engagement - Embedded
& Predictive Analytics

Omni-Channel Commerce
Order Any Time/Where/Device

Increased Product
Personalization
Lot Size of 1

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Business Model Innovation

Servitization, from Product
Vendor to Solution Provider

Customer Service
Excellence Perfect
Order Execution

Public

SAP Point of View: Configuration Maturity Model

Solution
Selling

Configure,
Price, and
Quote

Engineering
Integration

Variant
Configuration
Management
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Solution Configuration

Fulfillment Orchestration

Flexible Solution Billing

Customer Portals

Dealer/Distributor Portals

Sales Front Office

Integrated Product Development

Modularization

Engineering BOM to Manufacturing BOM

Configurable Product Model

Sales Back Office

Manufacturing and Service

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SAP Configure, Price, and Quote (SAP CPQ)

Configure, price, quote, and order products and solutions more efficiently

Configure, price, and quote (CPQ) offers a significantly

improved sales configuration solution that enables sales
teams, customers, and channel partners to configure,
price, quote, and order products and solutions
accurately and efficiently. Leveraging the hybris
platform, sales and marketing can manage the content
for rich and proper display of options and values, with
high flexibility to customize and extend the user
experience.

Capabilities

Key benefits

User-friendly CPQ solution for sales, customers, and

channel partners
Product configuration
Solution configuration, guided selling
Modular user experience, easy-to-use, easy-to-adapt
Flexibly enrich configuration options and values in hybris
Integration to hybris B2B Commerce and ERP order mgmt
Integration to CRM and Cloud for Customer/Mobile*

Increase sales efficiency by enabling sales to enter

configurations easily to fit customer needs
Sell more configurable products and solutions by
offering user-friendly self-service in a customer and
dealer portal
Reduce quote to order cycle times by integrating
customers, channel partners, and internal sales

*) future capability

SAP Configure, Price and Quote (CPQ) Info Day

2013 SAP AG. All rights reserved.

Demo: SAP CPQ with hybris

Back
Public

Multi-Channel CPQ in hybris: E-Commerce to Internal Sales / Channel Partner

Role: End Customer in E-Commerce Portal (Desktop, Mobile)

Catalog & Search

Option Pricing

Guided Selling,
Configure Solution

Cross/Up-Selling
Recommendations

Configure Product

Checkout

Visualize 3D

Create Order
Request Quote

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Multi-Channel CPQ in hybris: E-Commerce to Internal Sales / Channel Partner

Role: Internal Sales Rep or Channel Partner (Desktop, Mobile)

RFQ from
Customer

Configure, Price,
Visualize

Fuzzy Search Dealer/OEM

Configured Inventory

Quote, Pricing,
Costs & Margins

Opportunity

Generate
Proposal

Approval
Workflow

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Release Quote
to Customer

Create Order,
Order Status

Sales & Configuration

Analytics

Public

SAP CPQ on the hybris platform Leverage the user

experience flexibility of hybris for SAP Configuration
hybris enables unique user experience
The hybris platform allows customers to
easily build a unique user experience for the
web shop storefront and product catalog

hybris product content management (PCM)

hybris Web Content Management (WCMS)

Unique user experience for configuration

With SAP CPQ on the hybris platform, the
modular configuration user experience can be
adapted very flexibly, resulting in an easy-touse and fast CPQ process tailored to the needs
of external users and internal sales users
Modular Configuration UI
Floorplan in SAP CPQ

Model KB from
Backend

Custom tailored UI for different

markets, channels, user groups

Data Enrichment
by Sales & Mkt

Model Data
used in CPQ

hybris platform
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SAP CPQ on the hybris platform:

Strongly improved performance and user response times
CPQ Configuration Runtime (SSC)
offers optimized load times,
performance and memory usage
Faster complex solution configuration,
large multi-level solution configurations
and guided selling models containing
many configurable products
Knowledge base orchestration, so that
only the configurable product KB used in
the configuration is loaded
SAP CPQ based on CPQ Configuration
Runtime (SSC) on the hybris platform offers
very fast user response
SSC configuration runtime, configuration UI,
configuration model interactive pricing data,
and catalog all on the hybris server
Direct engine-UI communication independently
of SAP backend for very fast response times
2013 SAP AG. All rights reserved.

hybris platform
hybris user interface
Browse
Catalog

Guided
Selling

Product Catalog Data

Model KB +
Pricing Data

Configure

CPQ Config
Runtime
(SSC)

Public

SAP Solutions for Sales and Configure, Price, and Quote (CPQ)
Multi-Channel CPQ across Customers, Partners, Internal Sales
Core

E-Commerce

Sales
Planning

Account, Lead,
Opportunity &
Pipeline Mgmt

ERP

hybris E-Commerce & CPQ

Cloud for Customer or CRM

Partner
Channel
Internal
Sales

Catalog,
Search
Cross &
Up-Selling

Configure, Price,
and Quote
Products and Solutions
3D

Proposal
OpenText

CPQ Runtime (SSC)

Optional

Sales Back Office & Fulfillment

Order
Capture

Order Management
Order Fulfillment
Billing

Model

Variant Configuration
Solution Modeling

SAP
HANA

Sales &
Operations
Planning

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hybris
Marketing

Fuzzy Search for

Configured Inventory
Channel Partner / OEM

MRP on
HANA
with VC

Eclipse

Sales &
Configuration
Analytics

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Agenda: SAP Configure, Price, and Quote (SAP CPQ)

Solution Overview and Strategy

SAP CPQ with hybris 5.3, 5.4, 5.5
SAP CPQ for Solution Sales Configuration 2.0
Overview CPQ related SAPPHIRE and ASUG presentations

2013 SAP AG. All rights reserved.

Public

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hybris-SAP Integration Methods Overview

Loosely Coupled

Flexible Scenario

Tightly Coupled

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asynchronous communication

customer interaction happens only through and within

hybris

hybris stays completely independent from SAP backend, with persistency and business processes

asynchronous and synchronous communication

customer interaction happens through hybris with

synchronous calls to SAP back-end

hybris stays largely independent from SAP back-end

synchronous communication

customer interaction happens through hybris

Persistency and business processes reside in SAP

back-end

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hybris-SAP Integration, CPQ SAP CPQ Overview

Agile, wave based approach
hybris 5.3 Q3/2014

H1/2014

hybris runs on HANA DB

Ariba PunchOut scenario

hybris on SAP HANA

Enterprise Cloud (HEC):
Pilot Customers

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Transfer of Products, Prices,

Inventory, Customers, Orders,
between hybris & SAP using
hybris Data Hub

Order integration scenarios:

Asynchronous B2C
Asynchronous B2B
Synchronous B2B
Flexible Scenario asynchronous
order integration with synchronous
pricing API to ERP

CPQ for Product Configuration

hybris Marketing (Customer

Engagement Intelligence-HANA)

Marketing segmentation

Product recommendations

hybris 5.4 Q4/2014

hybris 5.5 Q1/2015

CPQ for Product

Configuration (continued)

Flexible Scenario:
Synchronous Credit Check,
Available-to-Sell

CPQ for Solution Sales

Configuration 2.0 Q1/2015

Guided Selling, Solution

Configuration in hybris

Extended configuration
syntax and modeling

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Configure, Price, and Quote (CPQ)

Key Capabilities
Based on SAP CPQ Configuration Runtime (SSC), deployed on hybris server
CPQ for product configuration (as supported with IPC), using configurable products modeled with SAP
Variant Configuration (VC) hybris 5.3, 5.4, 5.5
CPQ for solution sales configuration supporting Solution Configuration and Guided Selling in addition
released February 2015

Configuration User Experience in storefront via hybris-Add-On

Single level and multi-level configuration
Flexible navigation tabs, accordion (+/-), specification structure
Interactive pricing during configuration, delta pricing for option values
Flexibly enrich options and values in hybris replicate from ERP, adjust in hybris
Maintain extended long text for options and values in hybris
Replicate material variants to hybris, integrated to faceted search

In synch with the Order Management Scenarios to ensure end to end process
integration
Focused on the needs of B2B in general and Industrial Machinery and Components
(IM&C) / High Tech in specific
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Configure, Price, and Quote (CPQ) on the hybris platform

User Experience Approach

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Easy-to-adjust Configuration User Experience using

hybris Web Content Mgmt (WCMS)

image

tab navigation / configuration flow

product description

summary

content area

help &
support

configuration options
specification

overview of
configuration
2014
2013SAP
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rights
rightsreserved.
reserved.

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Demo: SAP Configure, Price, and Quote (SAP CPQ)

in hybris B2B Commerce

Demo: hybris Robot Configuration

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Easy to adjust Configuration user experience in hybris

tabs, accordion (+/-), specification structure navigation

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SAP Configure, Price, and Quote (SAP CPQ) in hybris

User Experience on Mobile Devices

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CPQ Showcase Demo: End Customer Portal to Internal Sales

hybris CPQ and E-Commerce Platform: Easy-to-Use, Easy-to-Extend
End Customer hybris E-Commerce Portal

Catalog, Search,
Cross & Up-Sell

Guided Selling,
Configure Solution

Configure, 3D
Option Pricing

Create Order
Request Quote

Create Order,
Order Status

Internal Sales or Channel Partner hybris E-Commerce

RFQ from
Customer

Configure,
Price, 3D

Search
Inventory

Quote, Pricing,
Cost & Margin

Generate
Proposal

Approval WF, Configuration

Release Quote Analytics

Opportunity

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CPQ Showcase Demo hybris CPQCloud for CustomerERP

MEGAMACHINES: End Customer to Dealer to Manufacturer
hybris Customer Portal Find and Configure Product, send Quote Request to Dealer

Dealer using Cloud for Customer: View Lead,

Convert to Opportunity, Launch hybris Quote

2013
AG. All rights reserved.
Demo:
CPQSAP
Showcase

hybris Dealer App/Portal: Review & Complete Quote,

Generate Proposal for Customer, Create ERP Order

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SAP CPQ Showcase Demos

POC: CPQ on
Smartphones

POC: CPQ with SAP Cloud for

Customer for Internal Sales Reps

POC: Seach for Similar Configurations in

Dealer/Manufacturer Inventory and Production

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POC: Proposal Generation SAP

Document Presentment by OpenText

POC: Visual Configuration,

Visual Service Parts Selling

Proof-of-Concept
Public Demos

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Proposal Generation SAP Document Presentment by

OpenText with SAP CPQ and hybris (Showcase Demo)

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SAP CPQ on Smartphones (iPhone, Android)

Showcase Demo

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SAP CPQ with SAP 3D Visual Enterprise:

Showase Demo

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Proof of Concept Demo: Visual Service Parts Selling

in hybris 2D/3D, leveraging SAP 3D Visual Enterprise

Demo: hybris Service Parts Selling 2D/3D

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SAP CPQ with SAP Cloud for Customer (Desktop/iPad)

Internal Sales Scenario - Proof of Concept Demo

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Search for similar Configurations in OEM/dealer inventory or

production: Proof-of-Concept Demo (CPQ in hybris, HANA)
1. Configure with CPQ in hybris

2. Set must-have values for configuration

2. Launch inventory search

2013 SAP AG. All rights reserved.

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Search for similar Configurations in OEM/dealer inventory or

production: Proof-of-Concept Demo (CPQ in hybris, HANA)
3. Review Dealer Inventory and Production
match%, price, availability, distance & location

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4. Compare selected configurations side-by-side

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SAP Configure, Price, and Quote (CPQ) with hybris

Business Value and ROI
Uplift on
Revenue

Reduced Sales
Costs

Additional sales channels: Portal

for customers, channel partners

Higher share of self-service by

customers, channel partners

More quotes in less time from

internal sales, without support
from engineering

More efficient quote processing

Less support from engineering

to offer complex products

Faster, more accurate quotes

better win rate

Improved Margin
Product Mix

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Move from lower margin standard products

to higher margin configurable products

Become a solution provider high margin

solution bundles with products, services,
service contracts, pay-per-use models
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SAP CPQ with hybris

Enable End-to-End Processes to make CPQ Successful
End Customer to Distributor to
Sales Front Office to Back Office

Model Once,
Configure Anywhere

Customer self service to configure your

products, create orders or request quotes

Tools to pick up abandoned carts and

configurations create leads, follow-up by
distributor or internal sales rep

One consistent approach to model configurable

products manufacturing model, sales model,
guided selling/sizing model, solution model

Consider integration costs ongoing

maintenance, and order incompatibility
problems, when using multiple tools and
vendors for modeling

Leverage existing configuration models for

customers, distributors and internal sales

Enable sales and marketing to influence certain

aspects of the model, without breaking model
integrity, to avoid order grief

Enable distributors to quote and sell your

configurable products to the end customer

Trigger internal CPQ process through

customer or distributor, if required

Easy process from sales front office to back

office, if required costing, pricing, ETO
special requests, availability

Quote-to-order submitting valid configuration

to trigger shop floor immediately

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SAP CPQ with hybris

System Architecture Solution for Sales and CPQ
Pre-Integrated Solution

Various Functional Products

Overall process consists of various

functional products by different vendors

Integration through customer project with

various parties involved

Different technologies and tools to tailor

E-Commerce catalog and experience,
and CPQ data and experience

CPQ runs tightly integrated on the ECommerce platform, independent from

backend, responsive user experience
CPQ pre-integrated with E-Commerce, SFA,
order management, analytics by one vendor
One toolset, approach and technology to
enrich and tailor E-commerce catalog and
experience, and CPQ data and experience

ECommerce

Catalog

Analytics
SFA

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CPQ

Order
Mgmt

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Summary: SAP Configure, Price, and Quote (CPQ)

Significantly improved sales configuration solution
SAP CPQ with hybris
SAP Configuration Runtime engine (SSC) and
modern HTML5 UI on hybris - direct engine-UI
communication, fast response times
Product Configuration, Guided Selling,
Solution Configuration
Interactive pricing during configuration
Modular user experience, embedded to hybris
Web Content Mgmt (WCMS) easy-to-use, adapt
Flexibly enrich options and values in hybris
Flexible integration to ERP: VC models pricing and
order management

Future Direction Focus Areas

Integration to CRM, Cloud for Customer
Improved Guided Selling

Better Modeling for Sales & Marketing

Predictive Proposals, Embedded Analytics
3D Visualization

Mobile Configuration
Collaborative solution configuration in
business networks

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Differentiators of SAP CPQ on hybris

Multi-Channel CPQ across Customers, Partners, Internal Sales
Easy-to-use, easy-toadapt, visual selling
Standard out-the-box
integration, end-to-end
processes, multi-channel
One vendor, one platform,
one toolset/skillset to adapt
Powered by big data:
Configuration analytics,
fuzzy inventory search,
cross-/up-selling

State-of-the art CPQ platform:

Products configuration, guided
selling, solution configuration
Model once, configure
anywhere: protect existing
investment in VC, IPC, SSC
All models ATO, CTO, ETO,
with easy transition
Sales and marketing can
easily enrich backend models
in hybris

Sell more configurable Easy to do

products & solutions business with
2013 SAP AG. All rights reserved.

Efficiency:
Fast quotes,
error free orders

One pricing logic in

frontend and backend
Powerful quote management:
Pricing, costing, approvals,
proposal documents
Flexible deployment on
premise, hosted/cloud, mobile
Largest CPQ customer base
and ecosystem, continued
investment, strong roadmap

Reduced sales
costs -

Efficiently integrate
customers, dealers,
sales, manufacturing
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Agenda: SAP Configure, Price, and Quote (SAP CPQ)

Solution Overview and Strategy

SAP CPQ with hybris 5.3, 5.4, 5.5
SAP CPQ for Solution Sales Configuration 2.0
Overview CPQ related SAPPHIRE and ASUG presentations

2013 SAP AG. All rights reserved.

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Business Model Transformation

Moving from Selling Products to Selling Solutions

PRODUCTS

PARTS

SERVICES

TRADITIONAL BUSINESS MODEL

Products, Parts and Services are sold by
independent companies or operating lines of
business

Revenue Streams
PRODUCTS

SERVICE

SOLUTION BUSINESS MODEL

SERVICE PARTSMAINTENANCE FINANCING

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Deliver Turn-key solutions

Single point of contact
Leverage ecosystem transparent to customer

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Solution Business Process

A Solution is an answer to a business problem that produces a measurable
value for the buyer.

Customer

SSC Engine

Solution
Quote

Sales Order
Fulfillment

Our Offer
Hardware DX710
Software Easy Sync
Installation Service
7x24h Full Service
Your fixed Price:

Or Rent
Monthly rate
Validity period

2013 SAP AG. All rights reserved.

$251
$ 67
$ 48
$ 34
$ 400

$33
36months

Sales Order
Fulfillment
Service
Order
Service
Contract
Usage-based
Service Contract

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SAP CPQ for Solution Sales Configuration

Top-Down vs. Bottom-up Configuration

Top-Down: CPQ for Product Configuration

Configurable Product
Configuration of an individual (Hardware) products

Bottom-Up: CPQ for Solution Sales Configuration

Configurable System
Mix / Composition of configurable and
non configurable (Hardware) products

Configurable Solution
Mix / Composition of configurable Product
or System with configurable or non configurable
Software, Services, Financials, etc...
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Product Configuration and Solution Sales Configuration

hybris Integration - Overview

CPQ for Product Configuration

CPQ for Solution Sales Configuration

CPQ Configuration runtime (SSC) on

hybris supporting product configuration
Modeling in ERP-VC, generate IPC
knowledge base (KB), replicate KB to
hybris
Modern, modular configuration user
experience, easy to adjust & enhance
using hybris web content management
system
Integration from hybris to SAP backend
Shipped with hybris 5.3, 5.4, 5.5

CPQ Configuration runtime (SSC) on hybris

supporting product configuration, guided
selling, solution configuration
On top of product configuration in hybris
Specifically enhanced hybris user experience
to cover guided selling and complex solution
configuration
Integration of solution configuration from
hybris to SAP backend
Shipped as Focused Business Solution

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SAP CPQ with hybris

Integration and Process Flow

SAP CPQ for Product Configuration

SAP CPQ for Solution Sales
Configuration

hybris
Browse
Catalog
Configuration
Model (KB)
Solution

Configuration
Model (KB)
Product
Replicate
Config. Model

Configure
Solution

Configure
Product

Guided
Selling

Add to
Shopping Cart

CPQ Configuration Runtime (SSC)

Product
Configuration
Capabilities

Solution
Configuration
Capabilities

Replicate
Config. Model

Optional
synchronous API

Configuration
Model (KB)
Solution

Synchronous API or
asynchronous

Quote/
Order API

Model Solutions,
Guided Selling
Configuration
Model (KB)
Solution Modeling
Environment (Eclipse)
2013 SAP AG. All rights reserved.

Create
Order

Configuration
Model (KB)
Product Modeling
Variant Configuration

ATP

Complex
Pricing

Credit
Check

Order +
Product
Configuration

Order +
Solution
Configuration

SAP ERP
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SAP CPQ for solution sales configuration

Solution Configuration in hybris Flexible access to product sources / catalogs

Product import button

Products

available

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SAP CPQ for solution sales configuration 2.0

Solution Configuration in hybris Seamless integration into SAP ERP SD

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SAP CPQ for solution sales configuration 2.0

Additional enhancements, supported with hybris, CRM, ERP deployment

Integration Scenarios
ERP - Lite ETO: Allow the creation of Sales Order BOM from a solution configuration
ERP - Promotion of Solution Sub-item: Intelligent product selector in the quotation process

SSC Engine and Solution Modeling Environment (SME) Enhancements

Advanced syntax and engine capabilities: Class specific domain restrictions, Ctics Groups,
not specified, not in, Sticky Defaults
Externalized Variant Tables & Object Descriptions
Increased user experience for expert modeling tasks: Multiple KB generation, Multiple
KB/Model graphical overview
Model distribution infrastructure: Pfucntions and Pricing Userexits distribution mechanism

New Naming
SAP CPQ for solution sales configuration replaces SAP Solution Sales Configuration

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SAP CPQ for Solution Sales Configuration

Summary
Solution Configuration Engine
Robust and scalable Configuration Engine optimized
for Solution composition in a Bottom-Up approach.
Solution
Configuration
Engine

Knowledgebase Orchestration allowing easier model

maintenance and better engine performance

Solution Modeling Environment

Eclipse Plug-In for high productivity and collaboration
based model maintenance

Order
Integration
Quotation /
Order Mgmt:
SAP CRM
SAP ERP
hybris

Sales and Service Process Integration

Seamless integration in SAP Sales and Service
processes - SAP CRM, SAP ERP SD, hybris

Analytics
Solution configuration data extractor allowing solution
data sales analytics

Business Benefits

Interactive
Pricing

Solution
Modeling
Environment

Solution
Configuration
UI

Solution
Analytics

Increased margins by moving from product towards

system/solutions business
Fast front office initiated sales processes, even for
complex systems and solutions
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Agenda: SAP Configure, Price, and Quote (SAP CPQ)

Solution Overview and Strategy

SAP CPQ with hybris 5.3, 5.4, 5.5
SAP CPQ for Solution Sales Configuration 2.0
Overview CPQ related SAPPHIRE and ASUG presentations

2013 SAP AG. All rights reserved.

Public

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SAP CPQ for Product and Solution Sales Configuration

Overview CPQ related presentations at SAPPHIRE / ASUG
ASUG
CPQ Best Practices: How To Configure, Price and Quote in E-Commerce and for Internal Sales
Harald Reitz (SAP), Steve Lenz (SAP)
CW701 Lecture presentation - S331D, Wednesday May 6th, 2015 12:30pm 01:30pm
Lessons learned from SSC implementations EMC, IBM, Lexmark and Ericsson
By Nishan Pillay (IBM GBS) and Steve Lenz (SAP)
CW1200 Lecture presentation - S331D, Wednesday May 6th, 2015 04:15pm 05:15pm

SAPPHIRE
Demo Theatre: Streamline Configure, Price, and Quote in E-Commerce and Internal Sales - IN20743
Harald Reitz, SAP
Industries Demo Theater IN101 - Wednesday May 6th, 2015 4:00pm 4:20pm
Industries Demo Theater IN101 - Thursday May 7th, 2015 4:00pm 4:20pm
Microforum: Sell More Complex Products & Service Parts Through E-Commerce & CPQ - IN20748
Harald Reitz, SAP
Industries Microforum IN106, Thursday May 7, 2015 2:00pm to 2:45pm

2013 SAP AG. All rights reserved.

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Thank You!
Contact information:
Harald Reitz
Solution Manager SAP for Industrial Machinery & Components
95 Morton Street, New York, NY 10014, USA
+1-215-253-7973
harald.reitz@sap.com