Pricing Analytics within the Quotation process – leveraging In-Memory Computing using HANA
With SAP HANA it is now possible to provide real time in-memory Operational analytics from within the Business Suite which allows the processing of large quantities of real time data to provide immediate results from analyses and transactions. This convergence of OLAP (on-line analytical processing) and OLTP (on-line transaction processing) provides immediate decision support and more accurate guidance to the Business user. The enhanced performance and better visibility into processes provides opportunity for immediate adoption of the incremental value to the business process.
Below, I am going to delineate one such application of using Pricing Analytics within the quotation process, which can be enabled in either the ECC or the CRM (Business Suite).
In certain industry segments, such as – High Tech, Chemicals, Consumer goods distribution, price negotiations often happen on deal by deal basis. The Opportunity Owners or the Customer Sales Representative enter a quotation and a requested price which then needs to be analyzed, optimized and then approved from the specific line in the quotation and / or the complete deal basis. While the approval steps on the quotation can be easily modeled in Business Suite, the analytics and optimization support are not. The analytics and optimization are typically a branch-off outside of the Business Suite (ECC or CRM) and the approved / optimized quotation brought back.
- Based on the approved quotation, next steps of update of Pricing and Contractual information based on win and/ or execution of the order are also carried out within the Business Suite. This takes away a lot of time and visibility and has interfacing multiple times till final decision on approval of the quotation.
- If this process is brought inside of the ECC or CRM with real-time analytics using the computing performance of HANA it will allow the Opportunity owners and the Customer Sales Representatives, the information needed, to respond to Customers with their best quote quickly.
The idea is to provide not only the provide in-line analytics on demand, at both a particular item or the whole deal level, using the transaction specific data but also be able to include info to compare from historical data and competitor data (as available) on previous quotations / sales orders, win / loss status, customer group, material group etc. All this can be available in HANA and analyzed and compared on demand. Using the calculation view, an algorithm can also be there for calculation of deal score which provides immediate decision support with expected win probability. The business user is further able to change the data on the quotation and simulate different pricing scenarios and their effect on the price analytics/ profitability / win rate instantaneously.
This HANA enabled process therefore leads to –
- Higher quote to win rates
- Continuous improvement in quoting via analytics to the process.
- More importantly the user does this quickly, without interfacing in a heterogeneous system environment.
A pictorial representation of this quotation process is below for reference –
I would like to add that many more such requirements, based on current limitations / pain-points, such as, Decision support in resource allocation based on demand, Enhanced Catalog functions over the Web, Recommendation engine at POS based on Customer need, etc., can be thought of to be fulfilled along the same lines, utilizing the HANA capability of providing in memory computing within the Business Suite.