CPQ in Dynamics 365 Sales

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How to implement a CPQ solution and integrate it with Dynamics 365 Sales

What is CPQ and why do you need it?

CPQ stands for Configure Price Quote, and it is a software solution that helps sales teams to quickly and accurately generate quotes for complex products and services. CPQ solutions can also automate pricing rules, discounts, approvals, and contract generation, as well as provide product recommendations and upsell opportunities.

OOB CPQ in Dynamics 365 Sales

There are many third party CPQ solutions on the market which can integrate with Dynamics 365 Sales. While Dynamics 365 Sales does not offer a fully-fledged CPQ module, it does include out of the box (OOB) several CPQ functionalities that can be combined and extended that you should evaluate first and determine if they can deliver on your CPQ requirements.

Configure

In Dynamics 365 Sales, a quote can be created individually or from an existing opportunity:

The product lines related to opportunity and quotes, can be created from either existing active products from your product catalog or can be new write-in products created on the fly.
There is an enhanced UI for adding multiple products to quote, opportunity or order with customization capabilities for updating the view and search columns.
For adding and updating product lines, the editable grid control can also be used.
Use related products feature for cross-sell, up-sell, substitute or accessory products.

Enhanced UI for adding multiple products

Price

You can configure the pricing engine in Dynamics 365 Sales to use predefined prices, or to allow sellers to override prices or to use custom pricing rules by implementing plugins:

When using existing products on your opportunities and quotes, you can define product prices using price lists. You can create multiple price lists so that you can maintain separate price structures for different regions, sales channels, or sales territories. Discounts list allow defining amount or percentage discounts based on the number of products sold.
If you don’t want your sellers to use predefined prices, its possible to change at environment level if price lists should be optional or required. In this way, sellers can use existing products or write-in products with custom prices.
Instead on relying on the platform to calculate the totals, you can leverage the CalculatePrice platform message and write a plug-in for your custom pricing needs. The plugin would be triggered on create and update for the entities: quote, quotedetail, opportunity, opportunityproduct,invoice,invoicedetail,salesorder, salesorderdetail.
If you are implementing Dynamics 365 Sales with Dynamics 365 F&O apps, you should evaluate the dual-write supply chain app on-demand pricing function for quote and order.

Product catalog settings

Quote

For generating the quote document, there are the Word Templates and the Export to PDF and save to SharePoint features that could be leveraged.

What are the challenges and best practices of CPQ implementation and integration?

Implementing and integrating a CPQ solution with Dynamics 365 Sales is not a trivial task. It requires careful planning, analysis, testing, and collaboration.
Firstly, you should determine if a CPQ custom solution is actually needed or if the OOB Dynamics 365 Sales product catalog, pricing and quoting capabilities can cover your use cases.
If a custom CPQ is needed due to the complexity in quote creation and pricing, choose carefully the right CPQ solution for your requirements. There are many CPQ ISVs solutions available in the market and customers can also built custom in-house solutions. Here are some recommendations to have in mind when evaluating a CPQ solution :

Considerations for CPQ solution selection	Details
Fit-gap analysis and extension capabilities for the gaps	Consider if the CPQ solution does not fully cover your requirements, does it allow for extensions? What’s the complexity of the extensions and required effort?
Compatibility with Dynamics 365 Sales	Some CPQ solutions might have their own databases, APIs, or UI components that are not aligned with the Dataverse data model or the Dynamics 365 Sales features. This might cause issues with data synchronization, security, reporting, or user experience. You should also check if the CPQ solution can integrate with other relevant Dynamics 365 or Power Platform features, such as dual-write or Copilot for Sales.
Initial setup, configuration (personalization) and extensions (pricing rules, products, approvals, etc.)	Consider the skills and effort needed to setup and configure the CPQ solution as per your use cases. Do you have the skills in-house for this or do you need to work with specialized consultants?
Performance	CPQ solutions often involve complex calculations, validations, and integrations that might affect the performance of the system. You should plan for performance testing and optimization to ensure that the CPQ solution can handle the expected load and volume of quotes, products, and users. You should also monitor the performance of the CPQ APIs and consider the network latency and bandwidth between the CPQ solution and the Dynamics 365 Sales environment.
Roadmap and maintenance	Consider the CPQ solution roadmap, update frequency (is it the same as of the Dynamics 365 Sales app) as well as the support model – e.g. are you comfortable with the CPQ ISV’s SLAs and the release cadence for eventual bug fixes?
Collaboration with business SMEs	You should ensure that the CPQ implementation team collaborates with the business SMEs, fully understands the end-to-end flow and does not work in silos. The end users should be involved in the user acceptance testing and feedback sessions and trained on how to use the CPQ solution effectively.
Cost	Balance the benefits and ROI with the costs for setup, configuration, extensions, performance testing, training, maintenance and support of your custom CPQ app.

Conclusion

Implementing and integrating a CPQ solution with Dynamics 365 Sales can bring a lot of benefits to your sellers and customers such as improved efficiency in quoting, accuracy, and customer satisfaction. However, it also comes with a lot of challenges and complexities that require careful planning and execution. By following these considerations, you can increase the chances of a successful CPQ project and deliver a high-quality solution to your customers.

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CU18071011-1
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CPQ in Dynamics 365 Sales

For adding and updating product lines, the editable grid control can also be used.

Use related products feature for cross-sell, up-sell, substitute or accessory products.

How to implement a CPQ solution and integrate it with Dynamics 365 Sales
What is CPQ and why do you need it?

@cinehd CPQ stands for Configure Price Quote, and it is a software solution that helps sales teams to quickly and accurately generate quotes for complex products and services. CPQ solutions can also automate pricing rules, discounts, approvals, and contract generation, as well as provide product recommendations and upsell opportunities.

Dynamics 365 Sales offers a solid starting point for CPQ with its built-in quoting, product catalog, and cross-sell/up-sell features, and many businesses can extend these capabilities before investing in a third-party CPQ solution. A careful review of your pricing and configuration needs first can help you choose the most cost-effective integration approach.

For adding and updating product lines, the editable grid control can also be used.

Use related products feature for cross-sell, up-sell, substitute or accessory products.

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CPQ in Dynamics 365 Sales

What is CPQ and why do you need it?

OOB CPQ in Dynamics 365 Sales

Configure

Price

Quote

What are the challenges and best practices of CPQ implementation and integration?

Conclusion

Comments

What is CPQ and why do you need it?

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