CPQ: SAP, Pricefx, or a Hybrid Approach?

This article was first published by Canidium on September 15, 2021.

We thought it might be interesting to look at how Pricefx and SAP approaches to Configured, Price, Quote (CPQ) compare and how they can best be aligned for success. The approach for considering where solutions align, differ, and complement one another is based on recent interactions with companies across multiple industries, market research, and Canidium’s first-hand insights as an implementation partner of both SAP and Pricefx solutions. Read this blog to learn more about which approach is right for you.

SAP CPQ Approach

SAP CPQ is a good CPQ tool as ranked by multiple industry analyst firms and customers alike. It has many core functions that provide excellent usability including the following elements:

• Comprehensive user management
• Ability to deliver complex product configurations
• Powerful guided selling and configuration capabilities
• Ability to handle complex pricing, cost, and margin calculations
• Flexible document generation
• Extensive capabilities in providing workflow and approval management

It also has a flexible and open approach to integration, not only with SAP Sales Cloud, but also with a broad ecosystem of front-office systems including Salesforce, Microsoft Dynamics, and others. Of critical importance for many customers, it has a strong connection solution with SAP S4/HANA, ECC, and Variant Configuration using purpose-built SAP solutions.

What Customer is Right For SAP CPQ?

An SAP CPQ typical customer profile will cut across many industries, and positive results can commonly be seen in manufacturing, sales and distribution, technology and telecom, and other verticals. Organizations with the following needs tend to be a good fit for SAP CPQ:

• Complex and multi-level product configurations
• Dynamic part numbers, product images, and complex product details
• Diversity of product types, groups, permissions, and documents
• Attribute or property based guided selling

SAP CPQ has had many successful implementations across a variety of industries since their acquisition. Among these are Invacare, MediaKind, and Cleaver-Brooks. Canidium is a key CX partner and was the chosen provider of integration services for these clients.

Pricefx Approach

One of our valuable partners, Pricefx, also offers a highly capable quoting solution, as part of a complete end-to-end price optimization and management platform. Pricefx quoting tools are typically utilized by companies with standard configuration and document generation needs but require pricing optimization and management capabilities beyond the basics that SAP CPQ covers. This includes anything from detailed margin analysis, special pricing agreements, contract pricing and promotions, evaluation of rebates with accruals and payouts, and claims automation. Pricefx also offers unique and industry-leading price optimization capabilities, value estimation and large deal negotiation tools, and a KPI and benchmarking service. This offers customers a tool that emphasizes the “P” in pricing capabilities, which is not purpose-built into SAP CPQ A core strength of Pricefx is its platform approach, which allows customers to choose pricing capabilities that best fit their specific needs and leverage existing investments in SAP IT infrastructure.

What Customer is Right For Pricefx?

A typical Pricefx customer profile also cuts across multiple B2B and even B2C industries with positive results being seen in industrial manufacturing, automotive and service parts, packaging, high-tech, chemicals, industrial distribution, food and beverage, and retail / digital commerce. Organizations with the following needs tend to be a good fit for Pricefx:

• Quoting with guided selling and ML/AI-based optimized pricing guidance
• Detailed margin analysis, contextual decision support, and in-quote analytics
• Complex pricing and discounting strategies, real-time pricing, frequent cost or price adjustment, and allocation updates, and strong index and formula pricing
• 360-degree view of pricing including on-invoice agreements and promotions, off-invoice rebates with accruals and payouts, and claims validation
• Complex IT environments with multiple ERP and CRM instances with the need for robust APIs and a headless architecture that can easily leverage existing investments in legacy CRM, ERP, digital commerce, and related IT infrastructure

Pricefx has an impressive list of clients that they have developed over the past few years. Many such as Cox Automotive, Dana Corporation, and Michelin to name a few.

What About a Hybrid Approach?

Many SAP customers would be well served with a hybrid approach. Due to our partnership with both SAP and Pricefx, we have seen many instances where clients require a best-of-all-worlds collaborative approach with the following needs and capabilities:

• Complex configuration with guided sales and optimized pricing guidance
• Quoting requirements with many variables, complex calculations, and real-time pricing
• Large quote documents with multiple segments and sections, and guided selling
• Pricing based on historical trends, margin and profitability analysis, and the need for a full 360-degree view of pricing with rebate or dealer incentive impact on profitability

So how do you craft a solution? Pricefx is offered as a complete pricing platform and can be implemented in a more modular format. This offers an extensive library of integration solutions to the top CRM, CPQ, eCommerce, ERP, and Pricing Intellectual Property Sites. Further, Pricefx is an excellent solution to partner with SAP CPQ. In the case of suggested pricing, Pricefx can process CRM opportunity data as well as account type, products offered, and other details to support price targeting within SAP CPQ. Pricefx capabilities in profit and margin analysis can also support those SAP CPQ clients who require far more detailed information than offered by SAP CPQ’s margin health or discount guardrails functionality.

In summary, both SAP CPQ and Pricefx have their place in the market. They serve different types of customer needs and capabilities. Making the right choice means evaluating your current investment in SAP tools and technology, evaluating which pricing-related workflows are best supported by Pricefx and SAP CPQ, and determining if the best solution might be in a collaboration between tools and platforms.

Check out Novus  CPQConsulting’s latest podcast. In this episode you learn more about the recent Canidium, Pricefx Partnership announcement. Bill Thane (Go to Market Lead) at Canidium and Garth Hoff (Director, Pre-Sales) at Pricefx talk about why they decided to partner, how they both work with SAP, how they envision their collaboration, why Pricefx and SAP CPQ are not competitors and much more.