Efficient management of sales operations is vital for companies looking to build better relations with customers, accelerate sales processes, and generate more income. Still, sales personnel may encounter various problems such as complex product configuration, incorrect pricing, delays in quotes and fragmented customer data. SAP provides various options to help overcome these problems, among others SAP CPQ and SAP CRM.

Both tools aid sales operations but they serve various functions within the business. Comparison of SAP CPQ vs SAP CRM will help to understand the difference and find out how to use both solutions effectively. 

What is SAP CPQ?

SAP CPQ is a sales solution that allows the company to configure its products, pricing and quotations. The tool is especially valuable for businesses with complicated products or services which have many configuration opportunities.

In order not to prepare the quotations manually, sales employees can use the SAP CPQ to select the required product options and pricing rules and generate professional quotations.

The key advantages of SAP CPQ are:

• Product Configuration – the option which allows sales employees to select product options and configurations depending on customers' needs.
• Pricing Management – allows applying pricing rules, discounts and special approvals for the price calculation.
• Quotations Preparation – generates professional quotations including all the necessary information about products and their prices.
• Approvals – allows applying special discounts and non-standard pricing approvals.
• Sales Automation – reduces repetitive tasks and helps sales employees prepare the quotations much faster.

SAP CPQ is especially valuable for manufacturing, technologies, engineering and other industries with complicated product configurations.

What is SAP CRM?

CRM stands for Customer Relationship Management and SAP refers to the use of such software which aids organizations to manage their customers' relations as well as sales.

The important elements of SAP CRM are Organizing Customer Data: Customer data includes all information regarding the customer, contact details, previous interactions with the customer, and so on.

This would help sales people to understand the needs of the customer and build up a good communication channel.

SAP CRM Features:

• Customer Data Management: This would include all the information regarding the customer profile, customer contact details, customer interaction history, and so on.
• Lead Management: This would help organizations manage and track potential clients.
• Opportunity Management: This would help sales people track their sales opportunities.
• Pipeline Management: This would aid in the management of ongoing sales deals.
• Interaction Management: This would include customer meetings, calls, emails, and so on.
• Sales Performance Management: This would help improve sales activities.

SAP CRM is useful for organizations who want to gain insights regarding their customers.

Comparison between SAP CPQ and SAP CRM

The key difference between the two lies in their core function. While SAP CPQ deals with product configuration, pricing and preparing quotations, SAP CRM deals with customer information and sales opportunities.

Difference Between SAP CPQ and SAP CRM:

1. Core Function

SAP CPQ is used by sales people in order to produce accurate quotations for complicated products and services. SAP CRM is used for managing customer relationships and the sales process.

2. Product Configuration

With SAP CPQ, the representatives are able to configure products according to customer needs and business rules. SAP CRM deals mainly with managing customer and opportunity information and not product configuration.

3. Pricing and Quotation

SAP CPQ handles pricing calculation, discounting and quotation generation. SAP CRM handles sales processes and product opportunities, but not the advanced CPQ features.

4. Customer Relationship Management

SAP CRM has solutions to manage customer profiles, leads, interactions, and sales opportunities. SAP CPQ is more inclined towards assisting representatives in making appropriate product offers and quotations.

5. Sales Process Management

SAP CRM can help in the entire process of selling, starting from generating leads to managing sales opportunities. However, SAP CPQ assumes greater significance if there is a need for product configuration and quoting in the sales process.

How does the Use of SAP CPQ Complement the Use of SAP CRM?

Integration of SAP CPQ with SAP CRM can help establish a relationship between customer management and quoting process.

To illustrate, let us consider a manufacturing firm wherein the firm receives an inquiry from its customer for customized industrial machinery.

In the first step, the sales person will utilize SAP CRM for collection of customer data, analysis of requirements and formation of the sales opportunity.

After the customer is ready to discuss the specifications of the product, SAP CPQ can be used for configuring, pricing, offering discounts and quoting of the product.

Some of the benefits of integrating both the systems would include:

• Greater co-ordination between the sales and quotations team.
• Effective product configuration and pricing.
• Efficient and quick quoting process and approval.
• Greater understanding of the customer requirements.
• Savings in time and efforts for manual process.
• Consistency in the purchase experience of customers.

Which Solution Should You Choose?

Your choice would depend on the nature of your business.

SAP CPQ is recommended for businesses that work on customized products, complex pricing structure, discounts, and full quotes.

SAP CRM will suit you well if you need relationship management, lead and opportunity tracking, as well as insights about your sales pipeline.

In case your company needs all the above features, it would be a good idea to integrate SAP CPQ and SAP CRM. But the decision lies in your hands.

Conclusion

Understanding SAP CPQ vs SAP CRM can assist companies in making an informed choice regarding their sales software. The former is oriented toward dealing with customer relationships management and sales opportunity management, while the latter streamlines the configuration of products, as well as the process of quotation. Contrary to what may seem initially, there is no rivalry between these tools, but they can be used together to facilitate the sales process.

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Prompt Edify offers SAP training to business and professionals who are willing to learn more about SAP solutions and ways to use them in practice. If you need to improve your SAP skills or understand more about sales processes in enterprises, we are here to help.