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SAP MANUFACTURING INDUSTRIES FORUM 2015 RUN SIMPLE: INTELLIGENTLY CONNECT EVERYWHERE

SAP Manufacturing Industries Forum – The Westin Lombard

Lombard, IL | June 23-25, 2015

Mohan Pillai VP-CRM, SAP SBU

Best practices for deploying configure-to-order and SAP CPQ with SAP ECC and the hybris Omni-Channel Commerce suite

© KPIT Technologies Limited

In this Session

• Opportunities for CPQ Scenarios to today’s world

• Best Practices of setting up CPQ scenarios with SAP® ERP and hybris®

Commerce Suite

• Seamless integration of Product Configuration data especially with SAP

ERP

• Increased Product Personalization capability

• SAP Solution Sales Configurator (SSC) functionality and how it can solve

complex sales bundles

• Establish some use-cases for Dealer/Distributor/Customer Portals

• You can’t manage if you can’t measure: CPQ Analytics with SAP HANA®

to the rescue

2 7/1/2015


What we’ll Cover

• Demands of a modern day Customer/Dealers when it comes to

Configurable products

• Is this your CPQ state of affairs?

• Best Practice CPQ scenario

• SAP Hybris CPQ at the center of the solution

• End to End Scenario with CPQ and Back End Integration

• Use Cases of a CPQ Scenario

• Wrap-up

3 7/1/2015


Demands of a modern day Customer/Dealer When it comes to Configurable Products

• Diverse callers with different “Needs”

– Customers/Prospects

– Partners/Dealers

– Employees

– Mobile Users

• World of diverse personalization preferences

— more than ever before

– Configuration on demand

• Guided Selling

• Visualization

– Up to date Pricing

– Quoting

– Flexible Bundling / Solution Packages required

• And of course the newer “Social Media” that makes meeting demands very dynamic

4 7/1/2015

Typical Customer and Dealers–

Quite simply require ability to

Configure, Price, Quote and Buy

Different channels

pose technical and

process challenges

Any time, any channel


Opportunities for Dealer/Distributor Commerce Portals

5 7/1/2015

Most Commerce

websites lack

functionality

B2B websites lack

B2C experience

Inflexible ways to

buy and personalize

Products

Offline dealer

applications cause

problems, data

redundancies and

manual processes

Customers lack

access to latest

product/360 deg

information

Online product

interest not leveraged

in marketing


Is this Your Situation ?

6 7/1/2015

Front End

CRM

Configuration

Bolt-On

Dealer Portal

Solution

ERP

- Duplicated Configuration Rules

- Different Front End Tools for various use cases

- Pricing / Orders Errors

- Master Data Challenges

- Huge Manual Effort

- Lack of Manufacturing Integration


Multiple Integration Points to Consider

7 7/1/2015

CPQ

CRM

E-Commerce

ERP

If you throw in PLM/Visualization and other channels,

the scenario gets really complex…

BI


Challenges toward a coherent Dealer CPQ Solution

• Lack of end-to-end integration

– Multi-vendor landscape – ERP, CRM, E-Commerce, Sales Configuration Rules, Visualization,

PLM, Content Management etc.

– Several variants possible due to hardware and software deployment involved

– Insufficient certified solutions

– Rules keeps changing

– No single version of truth

• It is not pure business application

– It involves data, process and business logic integration

– Flexibility to change rules on the fly required and quite difficult

• Involves various elements of an organization – Sales Teams, Business, Operations, Compliance, IT

, Marketing, Product Development and Manufacturing – a classic case of change resistance

• Lack of strategy to define KPIs that supplement the Business case

8 7/1/2015


Best Practice CPQ Functionality/Tools

9 7/1/2015

Configuration Rules Engine, Leverage Back End ERP

Product Content Management – Structured and Unstructured

Visualization, Manufacturing, PLM Integration

Personalization

Reporting and Analytics

Pricing Rules

Guided Selling

Flexible User Interface

and Best in class CRM/ERP Integration

End to End Quote Life Cycle – Quotes, Contracts, Renewals


SAP Product and Solution Configuration

SAP CPQ, SAP Variant Configuration, SAP HANA

10 7/1/2015

Solutions of many

products, services

Systems of many

products

Guided Selling,

Product Selection

Sales Channels

SAP Configure, Price and Quote (CPQ) • SSC configuration runtime, modern user experience on hybris

• Product Configuration

• Solution Sales Configuration (SSC) - most advanced version of IPC technology

• Guided Selling

• Interactive Pricing during Configuration

• Pricing, Costing, Quote Management, Approvals

• Quote Proposal Generation

• All manufacturing models ATO/CTO/ETO with easy transition

• All channels – B2B/B2C commerce (customer, partner portals),

internal sales (front office, interaction center, back office),

• Flexible deployment – on premise, hosted, cloud, mobile

Back Office

Products

Front Office Multi-

Channel

SAP VC Variant Configuration

• Product Development, Modeling

• Fulfillment: Order Management &

Orchestration, Order Engineering,

Planning, MRP, Manufacturing/QM,

Projects, Procurement, Service

SAP HANA MRP with VC in

ERP on SAP HANA

Configuration Analytics

with SAP HANA

Co

mp

lex

ity o

f o

fferi

ng


SAP’s Vision and Strategy for CPQ

11 7/1/2015

SAP CPQ

SAP Configuration Runtime engine (SSC) and

modern HTML5 UI on hybris - direct engine-UI

communication, fast response times

Product Configuration, Guided Selling,

Solution Configuration

Standalone Configuration via SAP SSC

Interactive pricing during configuration

Modular user experience, embedded to Web

Content Mgmt (WCMS) – easy-to-use, adapt

Flexibly enrich options and values in SAP hybris

Flexible integration to SAP ERP, for 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


SAP CPQ Solution Stack – Complete solution stack

12 7/1/2015

Configure, Price and

Quote (CPQ)

• Enable sales teams, customers, and channel partners to configure,

price, quote, and order products accurately and efficiently

• Easily enter configurations that fit customer needs

Solution Sales

Configuration

• Increased margins by moving from product to solutions business

• Ability to win more deals if quotes for complex solutions are timely,

to the point and well priced

hybris B2B/B2C

Commerce

• Sell more service parts, standard products, configurable products,

and solutions directly to end customers and through distributors

• Easy-to use customer and dealer portals

Collaborative Sales

Force Automation

• Improve sales team productivity and collaboration

• Efficiently manage opportunities and analyze the pipeline

• Faster quote to order cycle times by integrated processes

Solution Sales and

Billing

• Sell solutions including complex usage based business models

• Creation of collective solution invoices across sales and service

orders, contracts and projects, in single- or multisystem landscapes

Configuration

Analytics with HANA

• Analyze sold options with other sales data to transform information

into business decisions for profitable growth

• Streamline product option offering, improve pricing and forecasting


SAP Hybris CPQ Solution

13

7/1/2015

Source: SAP

Latest Spring technology

Easy customization and integration

Lightweight, high-performing

architecture

Scalable and flexible

Configure, Price, Quote (CPQ) Account Management & Workflows

Advanced Search, Browse

Pricing

Cart and Checkout

Quote/Order Management

Communicate & Interact

Segmentation & Personalization

“Anytime, Anywhere”

Publish to Multiple Sites/Channels

Product & Catalog data

Structured & Unstructured content

User-generated Content

Rich media, documents

Integration with Best of Breed

CPQ solutions from FPX etc.


Seamless CPQ Solution with SAP

14 7/1/2015

Product Modeling

with Rules

“Right” information to the “Right” audience using “Right” delivery mode

Hybris Storefront

Product Master Link to Manufacturing

BOM

Create Sales

Bundles

Enrich Product

Master

Pricing Rules

Product Catalog /

Storefront Manage Configurable

Products

Manage

Quotes/Orders

SAP ECC

Hybris CPQ

Collaborative SFA Call Center Information Users

SAP VE


SAP CPQ Data Flow

15 7/1/2015

hybris Server

hybris Commerce Suite

SAP CFG @ hybris

Extensions

CPQ Configuration

Runtime (SSC)

SSC Jars

Config

API

Pricing

API

SCE SPE

DB layer Data

Loader

hybris DB

schema

SAP ERP

ERP DB

Configuration

Modelling in

Variant

Configuration (VC)

Asynchronous Master

Data Replication

based on Data Loader

SSC DB

schema


Two Approaches for SAP CPQ Modelling

16 7/1/2015

XML Legacy Rules Conversion

SAP

Modeling

Environment

SAP VC

Model (KB)

SAP SSC

Runtime on

SAP CPQ

SAP Hybris

Hybris Storefront

1

2 Standalone

SAP VC Based


Several Integration Scenarios with SAP CPQ and ERP

17 7/1/2015

Loosely Coupled

Flexible Scenario

Tightly Coupled

Loosely Coupled

Flexible Scenario

Tightly Coupled

asynchronous communication

customer interaction happens only through and within

hybris

hybris stays completely independent from SAP back-

end, with persistency and business processes

synchronous communication

customer interaction happens through hybris

Persistency and business processes reside in SAP

back-end

asynchronous and synchronous communication

customer interaction happens through hybris with

synchronous calls to SAP back-end

hybris stays largely independent from SAP back-end


Differentiation of SAP CPQ vis-à-vis Other Solutions

18 7/1/2015

SAP CPQ Solution Benefits SAP CPQ Solution with 3rd Party CPQ

•CPQ tightly integrated to end-to-end processes

for sales, product development, manufacturing,

service, analytics, cross company/system

•Deep end-to-end process support out of

the box, with a community of thousands

of other customers

•Different tools and configurators in SFA,

E-Commerce, sales, manufacturing – costly

custom integration

•ATO, CTO, ETO, easy transition Differentiate – CTO to ETO if required •No/limited support for ETO

•CPQ can use existing product models

(SAP VC / SAP IPC)

Save previous investment - one integrated

model across channels and processes

•High ongoing effort to synchronize sales

models with backend models

•CPQ based on SAP Solution Sales Configuration

– most power configurator

•Build guided selling/product finders and

solution models

•No/limited support for guided selling and

solution configuration

•SSC engine and UI on hybris •Fast configurator designed for very large

models, fast user response times

•Slow - calls between different layers,

not designed for very large models

•Easy-to-use, easy-to-enhance modular user

experience embedded to hybris WCMS

•Easy to adjust configuration UI, same

tools/resources as used for web shop UI

•Configurator is black box with different UI

technology than underlying applications

•SAP configuration model embedded to hybris

platform, leveraging concept of hybris PCM

•Sales can easily enrich the configuration

data, same tools as for product data

•Configurator is a black box, different

technology, skills, toolsets to maintain

data

•Flexible deployment – on premise, hosted, cloud,

mobile, leveraging existing sales tools

•Leverage latest technologies and user

experience paradigms

•Limited flexibility, technological dead end

•Strong roadmap, e.g. better sales modeling,

3D visualization, mobile configuration, predictive

proposals & embedded analytics

•Get future improvements out of the box

•Leverage the power of SAP HANA for new

innovative business process

•Unclear financial situation and roadmap of

smaller CPQ vendors, high continuous

investment in project specific extensions

Sell more configurable

products & solutions

Easy to do

business with

Efficiency – error free

orders, integrated CPQ

Reduced sales

costs

Efficiently integrate customers,

dealers, sales, manufacturing


Hybris Enables CPQ Storefront with Hybris Omni Channel

19 7/1/2015


CPQ Prototype for Product Configuration

20 7/1/2015


CPQ Guided Selling Example

21 7/1/2015


CPQ with SAP Cloud for Customer, Mobile and

Visual Configuration with SAP Visual Enterprise

22 7/1/2015

Visual Configuration,

Visual Service Parts Selling


FPX CPQ Solution Integration with SAP

23 7/1/2015 Sample Footer


Use Case for CPQ: Dealer Commerce

24 7/1/2015

Experience Management

Promotions

Cart Driven

Product

Driven

Product Quote

Request Quote

based on

Configured

Product

Product

Configuration

Use of SAP

CPQ

& hybris

Product Pricing

Multiple

Concurrent Price

Levels

Tiered Pricing

Reward

Customers for

increased

purchases

Gives the

Customer

options

Upsell/Cross

Sell Opps.

Drive Decision

Making

Guided Selling

Multi-Level

Configuration

Flexible Nav

Integrated

with hybris

Suite

Purchasing

Products

Search, Facets,

Quick Order, &

Searchandizing

B2C

Experience

w/B2B

Functionality

Easy to Order

Filter Results

Negotiate

Pricing

Minimize Time

Spent Ordering

Accept/Reject

Quote


Comprehensive Dealer Portal – Sales, Service, Marketing

25 7/1/2015

Product & Web Content

Management, Print

Catalogs

Service Parts

Management

Sales of Configurable

Products and

Solutions

Efficiently manage brands across

multiple channels

Boost your service parts sales –

leverage the full solution life-cycle

Enhance customer value -

tailor products & solutions

Best of breed, integrated product

information management

Intuitive web content

management

Efficient, automated publishing of

web & print catalogs as well as

brochures

Directly integrate product

information updates from

suppliers

Drive partner channel business -

distributors can add their own

products to OEM catalog

Boost your service parts business and

expand your MRO/consumables sales

Customers & distributors can easily find

& order service parts, MRO, &

consumables in the web or mobile

shops

3D visual service parts selection

Service parts sale initiated by equipment

with machine-to-machine integration

Extend market reach for service parts –

link hybris to thousands of buyers on

the Ariba Network

Become a solution provider to

boost profits

Offer customers & distributors

an intuitive way to tailor

products & solution bundles in

the web shop

Integrated process across

multiple touch points - from

customer to distributor to call

center, sales front office & back

office


What you can expect to measure with SAP CPQ?

Few KPIs and Metrics you can

expect to measure and report with

SAP CPQ solution:

– Most Popular Configurations

– Least Popular Configurations

– Characteristics never used

– Deal Size

– X-Sell / Up-Sell Revenue

– Cost to Serve per Quote

– Quote Conversion Cycles

– Quote Completeness Rates

– Reduced Production Order

Errors

26 7/1/2015

Real-Time Analytics with BI, SAP Smart Business Cockpits & SAP HANA Live


Wrap Up

• We reviewed the opportunity for a best in class CPQ solution

• We looked at ideal and best practice CPQ solution

• How SAP CPQ solution sets apart from the rest in terms of

offering a complete CPQ solution?

• Detailed understanding of SAP CPQ solution, Integration

Scenarios, Use Cases and some examples

• Few Metrics and KPIs to leverage from a CPQ solution

27 7/1/2015


.

.

.

Value Harvesting Approach to CPQ360 Transformation from KPIT

7/1/2015 28

Assessment

Identify Opportunities

Identify Optimum

Solution

Define Roadmap

aligned to Priorities

Define Change Impacts

Define tools to

measure business

benefits

Challenges of

Transformation

KPIT Value

Harvesting

Business Benefits & ROI

Solution Change Management in

live system

Impacts on Interfaces & Historical

Reporting

Organizational Alignments

Disparate Systems

Adoption Challenges

Best Practices

Cloud / On-Prem solution

Technology with scalability

and performance

Solution Demos / POCs

Leverage Existing Knowledge

Rules

Overall Holistic View with

Sales, Manufacturing and

Engineering

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