Pricing SAP C/4HANA-C4C Way – Accuracy, Consistency and Flexibility Delivered
Not a penny less, not a penny more
Cricket is an amazing game and I’m a Cricket fan. And while I’m writing this blog, India has clinched the trophy of Asia Cup Cricket Tournament beating the opponent team by 3 wickets with “zero” balls remaining in the finale. Victory came at the last ball. It was one gem of a game where the one who holds on to nerves wins. Completely on the money. Not a penny less, not a penny more. The champion Indian team won this tournament without losing a single game in the whole tournament. What makes this Indian team stand out is their commitment to Accuracy in bowling, Consistency in batting and Flexibility in fielding. They excelled in all the three departments.
But why am I discussing cricket when I should be talking about Pricing in C4C. Well, that’s because of the stark similarity between the pillars of success in this game and the pricing functionality in C4C. Accuracy, Consistency and Flexibility! Aren’t these what we want the pricing function in our business to be?
Yes. And this is exactly what sets apart the Pricing functionality in SAP C/4HANA C4C, the next-gen customer experience cloud solution from SAP.
Pricing in C4C manifests the following characteristics to the core.
Accuracy – in every respect, in every single transaction
Consistency – throughout the customer life-cycle
Flexibility – in choice of pricing options viz. Internal Pricing and External Pricing ensuring that the user is always in control to take run-time decisions
This blog targets to familiarize the reader with Pricing functionality in SAP C4C and its value to business.
Pricing in SAP C4C
C4C gives us the independence of using multiple options to choose from to best suit our business. Options include stand alone or internal pricing, external ERP or CRM pricing and integrated ERP or CRM pricing using pre-packaged integrations.
The first and foremost thing that we need is Pricing Master Data and that is the basis of all pricing. An accurate and up-to-date pricing master data is the main driving force behind accurate price calculations. Pricing master data mainly consists of Price Lists and Discount Lists which are maintained in Product work center. While Price Lists view enables maintenance and mass updating of price lists, the Discount Lists view enables maintenance of discount lists.
Price Lists are the pricing master data and govern the determination of a mandatory price element for a product or service viz. list price. Price lists are subject to a validity period and become active in the system as soon as the status moves to Released. Various types of Price Lists can be maintained as shown in the picture below:
For consistency, only one base price list can be active at a time.
Discount lists are optional and govern various types of discounts in the business transactions. Like price lists these are also maintained as pricing master data, are subject to a validity period and become active in the system as soon as the status moves to Released. Various discount lists are provided within the system as shown in the picture below.
While List Price and Discounts are the main price elements of pricing master data, there are other additional price elements that play a vital role in the calculations of the total price value. These additional price elements include surcharges, freight and cost estimates.
C4C offers myriad pre-packaged price elements for us to enable and activate when we carry out scoping of the system requirements and fine-tune the configuration activities. Which all price lists are going to be used is also governed by scoping.
Here is how List Price and Discounts are auto determined by the system.
List Price Determination
As we understand by now, list prices are mandatory price elements, are managed and automatically determined using the relevant price lists. This is done with the help of access sequences.
In a transaction, the system checks and considers the price lists that are relevant with respect to the data in the transaction like sales organization, account, product and product category etc. System starts with checking for customer specific price list first. If customer specific price list is not found, the next check is done for the customer group specific price list. In case customer group specific price list is not found then the system moves on to look for distribution chain specific price list. Now, if the distribution chain specific price list is also absent then the system looks for the Base Price List. This way the system moves from specific to generic price lists.
Discounts, as mentioned earlier, are optional price elements. These are managed and automatically determined using the relevant discount lists.
In a business transaction, the system checks and considers all the discount lists that are relevant with respect to the data entered into the transaction like customer, customer group and product category etc.
Let’s also take a look at some more smart features that make the flexibility of the system more visible.
Mass Change of Prices
As the name suggests, this refers to the capability of changing or updating prices for multiple or all products in one shot either by percentage or by a value.
Scale based prices are also supported in C4C. This enables automatic value calculation based on the scales maintained as master data.
Currency and Quantity Conversion
Calculation of the total price value in various transactions many times encounters special situations like currency and quantity conversions in case of conflict between transaction currency/UoM and user entered currency/UoM. Such scenarios are very smoothly handled in C4C transactions.
- If there is conflict between the currency maintained in the price master data and that in the transaction document, then the currency conversion automatically happens while calculating the total price based on the exchange rates master data.
- If there is conflict between the UoM in the transaction document and that in the price list, then the quantity conversion automatically happens while calculating the total price based on the quantity conversion master data.
The external pricing option in C4C compliments the internal pricing by enabling us to synchronize the pricing from On-Premise ERP or CRM systems. This accomplishes the objective of one source of truth for all pricing across the systems.
Simulate refers to the action in C4C that sends a synchronization request from C4C to On-Premise CRM or ERP system in an integration scenario. Simulate action returns the price calculation from On-Prem system to C4C resulting in the document price synchronized across both the systems. External pricing supports role-based authorization levels.
Pricing in action in Business Scenarios
Let’s look at some of the interesting scenarios where C4C pricing comes into play and enables the business user manifesting its inherent value by extending its accuracy, consistency and flexibility to business.
Business users have a completely functional automated pricing at their service. Based on relevant price list, the list price is correctly and automatically determined by the system for every single sales or service business transaction. At the same time business user has the independence and power to overwrite it manually, if needed.
Below picture shows the determination of list price and discount in percentage as well as the calculation of total price in a Sales Quotation.
Apart from the main price elements of list price and discount there are other essential additional price elements which contribute to the calculation of total price. These include manual overall discount, freight and surcharges etc.
Pricing within a sales transaction provides the detailed picture of pricing and enables the business user to make changes by manipulating item pricing and additional price elements like freight and surcharges. Every transaction is unique and based on the transaction parameters the pricing calculation is different. However, irrespective of the different transaction parameters the system always fetches the correct price and discount lists and calculates the prices after considering every relevant pricing component configured in the system.
Below picture shows the pricing tab showing item pricing and total pricing in a Sales Quotation.
Whether you are in a sales business or service business or both, SAP C4C Pricing has your pricing needs covered.
Simply speaking, it is the Accuracy, Consistency and Flexibility delivered for the growth of your business.
For more information, please contact me.