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Over the past few months we at In Mind Cloud have received many queries on how our solution provides CPQ (Configure, Price, and Quote) functionality in SAP Cloud for Customer. In this article I would elaborate more on this standard cloud product offering and will also address some of the needs SAP customers have in moving on to a Cloud Based CPQ solution.

What use case does the Cloud CPQ Express Add-On address?

The Opportunity-to-Order sales process has multiple touch points and data flowing in from various systems. For a non-CPQ-system this is addressed very well by a SAP CFC and SAP ERP combination. However, if a customer wants to use configurable products with product master, price and knowledgebase data pulled from SAP ERP in real time, there arise multiple challenges ranging from process orchestration to data consistency.

How does Cloud CPQ Express tackle these challenges?

Cloud CPQ Express addresses this problem in the most SAP-centric way: by first integrating with Cloud for Customer on an Internal Quote level, so that customer won’t have a break in Opportunity-to-Quote process. A Quote created in SAP CFC will be imported into Cloud CPQ Express and will be worked upon there. More so this integration is presented in a single screen so that sales users can use the system without any complications. Check out this video to see how this comes together.

SAP CFC and Cloud CPQ Express work together based on web service based integration. Just by setting up communication arrangements and enabling integration relevant web services, the system is ready for use within a few days. This integration is kept as simple as possible so that customers do not have to extend their existing or new SAP CFC installations via SDK coding. The Single Sign On problem is well addressed by usage of SAP Cloud Identity Service which provides simple and secure access to both the SAP CFC and Cloud CPQ Express.

Before we dive into how we keep data consistent and use product master data from SAP ERP it would be helpful to look into the architecture of Cloud CPQ Express and its various key components:

  • Java based application, hosted on SAP HANA Cloud Platform.
  • SAP UI5 based front end with SAP FIORI Theme.
  • In Mind Cloud Engine middleware for Insights.
  • SAP SSC based Configuration and Pricing Engine, enriched by In Mind Expertise.
  • SAP HANA capabilities offered by cloud platform.
  • SAP HANA Cloud Connector for back end connectivity.


Architecture.png


Most SAP CPQ customers like to use condition type based SAP pricing on cloud with real time updates in the pricing engine based on changes in configuration engine. This is a hard nut to crack in cloud primarily because of two reasons. First, there is no engine except SAP SSC that does this outside of SAP Kernel, and second, for SAP SSC to run on cloud it needs to have access to this data in real time as it had in old IPC scenario. That too, in a scalable and performant manner. Couple this with data coming from SAP Cloud for Customer such as Account, Sales Area and ERP Product ID, all of which is crucial to determine the price context. This is just the gist of the problem, it has several deep rooted touch points that need to be addressed and are beyond the scope of this write up.

In Mind Cloud´s CPQ: real Pricing, real Configuration

One can visualize the challenge in the above scenario and why various partner solutions fulfill one part or the other of it, but none offers a complete solution. Having said that, the development journey for us was also long and indeed an intensive one, though in the end rewarding. With Cloud CPQ Express SAP customers would now able to do run SAP Pricing and Configuration using Price Data and Product Knowledgebase from ERP in cloud respectively. Something we are In Mind are proud to offer.

The silent features of this huge step forward are as follows:

  • Cloud CPQ Express
  • ERP connection is standard SAP RFC Connection running on top of HANA Cloud Connector.
  • The time frame to load the product kb and price data is kept configurable.
  • LO-VC/IPC configuration runs in cloud powered by In Mind Engine and supported by SAP SSC.
  • Condition type based SAP Pricing Engine runs in cloud with changes of configuration characteristics (product attributes) effecting the price engine calculation real time.
  • Customers can choose to run pricing procedure written in SAP ERP for a particular sales team/channel.
  • SAP UI5 based generic product configuration UI that renders any product model of any complexity.

Still this was not it for us or for our customers. This is probably the 80% of the feature set, the rest is what matters even more to customers due to the need of the industry and in comparison to their existing investments. Let’s look into the some of the most relevant additional features that SAP customers want from a CPQ solution.

The X Feature Set

Everyone talks about cross- and up-selling and we are no different in that regard. However, what we learnt working with mature SAP Customers from the DACH market is that they have already thought about these concepts and have actually built those deeply into their product models. We learnt that there was no standard software to run such concepts and we seized this opportunity. Let me explain by taking an example: a customer sales representative is configuring a product. While doing so he/she would like to set certain options that he/she additionally wants to offer to the customer but does not want them to be part of the quote offer yet. Hence, it should not be part of price calculations but offered additionally. These options could be additional product features or additional complimentary product/parts which have a price impact.

  Cloud CPQ Express calls these options as additional items and any price relevant characteristics (product configuration options) can be viewed as additional items which you can select. This works on top of SAP Configuration and Pricing engine and provides a meaningful view to these options even before they are selected, moreover with Cloud CPQ Express you can set up the system as you want, so that your Sales Reps can set all such options always or limit the options offered based on the current state of product configuration (filtering out the options that cannot be selected).


Quote Details Options and PDF.PNG

Secondly, the ability of Cloud CPQ Express to quote products optionally means choosing to exclude a certain line item from your quote – not by deleting. Again this is a feature which customers in EMEA and particularly in DACH region use extensively to either offer some products that customers can choose additionally or even quote a product that is yet to be offered. Another use case is to simply record a customer request that they will fulfil later and do not want to ignore in quotation process. With our solution they are able to do all of this and more in a standardized SAP controlled way on HANA Cloud.



Optional Line item.png


There are other cool features such as:

  • Quote Versioning
  • Custom Approval/Routing
  • PDF Proposal Generation
  • Excel Report Generation

Which together bring completion to a standard Quotation Process supporting CPQ Product offering. All made available inside a SAP Cloud for Customer driven CRM process.


We continuously enhance our feature pack and make it more usable for our customers. You are welcome to visit our website: www.inmindcloud.com for a full feature list and pricing or find our solution in the SAP Store. You can also reach out to me for any process, technical or general questions about the product. We welcome your feedback and thanks for your time.

Dhaval Bhardwaj

VP – Product Development

In Mind Cloud

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2 Comments

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  1. Avineesh Khare

    Hi Dhaval

    Thanks a lot for the detailed description on how the CPQ Express works and the cool features which it offers. I have following few questions for you:

    1. For implementing the CPQ Express do we need to have an installation of SAP SSC?
    2. Is CPQ Express compatible with Hybris C4C 1608 Release?
    3. What is the minimum patch level on SAP ECC 6 required for CPQ Express to work with?
    4. If there are variant tables and variant functions used for preparing the configurable products in SAP ECC, would the same work out of the box in C4C with CPQ Express or the logic developed using the Variant tables and Variant Functions needs to be re-written somewhere and uploaded in CPQ Express like it had to be earlier dealt with IPC?
    5. SAP ECC Variant Configuration with BOM supports multilevel BOM up to 3 levels with complex selection conditions and procedures. Is there any special handling required in CPQ Express for enabling such scenarios?
    6. Does CPQ Express supports the Dependencies, Dependencies Net and Constraints processing out of the Box as setup in SAP ECC Configuration Profile or some additional activities are required to enable the processing of such logic in CPQ Express.
    7. Does CPQ Express supports the Variant Pricing and P-Functions?
    8. Is the UI5 based UI of CPQ Express configurable and extendable?

    Will appreciate some more clarity on these aspects, as we wish to propose the CPQ Express to some of our clients.

    Regards

    Avineesh Khare,

    Associate Director, Management Consulting KPMG India.

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    1. Dhaval Bhardwaj Post author

      Hello Avineesh,

      Please find answers to your question below:


      For implementing the CPQ Express do we need to have an installation of SAP SSC?

      CPQe can be consumed in multiple scenarios. For ease of understanding, I list three of them here:

        1. Using SAP SSC: In this scenario, SSC application engine is used for configuration and pricing where as ERP is used as the repository of product models and price conditions. Standard RFC Destination connection is used to facilitate the transfer of data from SAP ERP to SAP Hana Cloud Platform and made available to SAP SSC in there. This scenario is most suitable for those customers who would like to make use of existing LO-VC product models in cloud for sale process enablement. Also the customer sees a need to use the condition type based pricing offered by SSC, in which the configuration engine and pricing engine work together to update document and line item based pricing as the product configuration changes state.
        2. Using Pricing from SAP ERP (External pricing) and Configuration from CPQe itself: as evident in this scenario no SAP SSC is used. Bulk of pricing is provided by SAP ERP external pricing interface and the sales configuration centric capability is provided by CPQe. This scenario is most suitable for those customers who do not envisage manufacturing product models in LO-VC to be same as the sales system selection or feature selection models in CPQe. The bulk of sales effort is to put a quote together using a combination of finished goods that are priced in ERP but put together in CPQe using CPQe system and feature selection centric knowledebases.
        3. Using cost model approach of CPQe: another of In Mind cloud offering which facilitates bottom up creation of Sales BOM and Prices using the base costs of underlying RAW materials. This implementation does not use SSC nor the external pricing from ERP because the cost model logic to build up the costs exists in CPQe. This is most useful for contract manufacturing customers who offer made to order good based on RAW Materials, Semi Finished goods or both.
        4. In all of the three cases most of the CPQe features are available for example: proposal generation, price condition mapping-readability-and-hiding, etc. In addition, CPQe offers a sales model which runs on top of all the scenarios, this model helps in customizing the system further and provide further calculation and configuration capability. Lastly, integration with SAP CFC or ERP remains the same in all the scenario with minor scenario based changes.

          Is CPQ Express compatible with Hybris C4C 1608 Release?

          In Mind Cloud also runs four yearly release cycles which closely match to CFC releases. All new CPQe release undergo a regression test cycle to test all integration aspects with CFC.

          What is the minimum patch level on SAP ECC 6 required for CPQ Express to work with?


          For Scenario 1.1 above: EHP5 or above as SAP SSC needs ERP side to be on that level.

          For Scenario 1.2 above: SAP ERP needs to be installed with SAP CFC ABAP add on to support external pricing.

          For Scenario 1.3: EHP5 and above.

          If there are variant tables and variant functions used for preparing the configurable products in SAP ECC, would the same work out of the box in C4C with CPQ Express or the logic developed using the Variant tables and Variant Functions needs to be re-written somewhere and uploaded in CPQ Express like it had to be earlier dealt with IPC?


          Another good question, for the scenario 1.1 above we support only IPC compatible LO-VC product models. In most cases the variant tables and variant functions (constraints) need to be compiled into a run time version in ERP. ERP compilation will check for IPC compatibility. Once through this kb run time version is consumable in CPQe using SSC.

          SAP ECC Variant Configuration with BOM supports multilevel BOM up to 3 levels with complex selection conditions and procedures. Is there any special handling required in CPQ Express for enabling such scenarios?


          This is supported, as already stated, the LO-VC Knowledge base in ERP needs to be compiled into an IPC compatible run time version. If this process runs through CPQe is built to support any level of depth in BOM tree with or without SSC usage, however in this case as SSC executes the product model the same level of dept is achieved. For more details on SSC supported features please refer to its help portal.

          Does CPQ Express supports the Dependencies, Dependencies Net and Constraints processing out of the Box as setup in SAP ECC Configuration Profile or some additional activities are required to enable the processing of such logic in CPQ Express.


          Apart from compiling the KB in ERP into an IPC compatible run time version none.

          Does CPQ Express supports the Variant Pricing and P-Functions?


          Yes, to support scenario 1 a pricing procedure needs to be maintained in CPQe , for scenario 2 pricing procedure determination is handled by SAP ERP. Also on p-functions if the customer is using ABAP p-functions the conversion from LO-VC Kb to IPC Kb would not succeed. We recommend customers to move over the p-function logic to the constraints. Though if not possible this can be moved to Java P-functions. Another approach would be to move this logic to CPQe sales model where the logic runs on top of the SSC Configuration and Pricing. Here it’s more important to analyse customer requirements and offer the best implementation possible.

          Is the UI5 based UI of CPQ Express configurable and extendable?

          We support disabling, enabling, hiding UI sections as per user role. Also using customizing one can create new tabs in the UI and put in more data points to capture customer needs on a Quote Header level. Other such features are also available based on Quote life cycle status.

          Hope this helps and please reach out to us at https://www.inmindcloud.com/ or at info@inmindcloud.com 

          Regards,

          Dhaval Bhardwaj

          VP – Product Development

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