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Effective Commercial Strategies and improved Sales Ops: discount optimization with SAP C/4HANA



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Effective Commercial Strategies and improved Sales Ops: discount optimization with SAP C/4HANA

Alessandro Lavazzi | Sep 07, 2018

Although we are in the 21st century, with fast, simple and cost-effective access to technology in several forms, many companies today still fail to provide their sales force with a proper tool to support and improve their daily work. However, digitizing the work of a sales rep can make a real difference in delivering more effective commercial strategies.

Let’s consider, for example, a typical business pain point: discount optimization

Effective commercial strategies and improved sales ops: discount optimization with SAP C/4HANA

Discount Optimization - win or loss?

Many times sales representatives work in a hurry, negotiating high discounts to close the deal, pushed by the sales incentives that tend to preserve volumes, but without checking the order profitability.

To overcome this challenge, companies provide their sales force with standardized procedures to propose the proper discounts. To ensure that the guidelines are respected, sales managers are then overloaded with tons of discount approval requests.

This way of managing discounts not only fails to increase sales, but worse: it can actually be damaging to the deals themselves.

The key: real-time information in the field

So, what can be done? The solution is to assist the sales people directly in the field, helping them to take the best decision in a matter of seconds.

This can be achieved providing the sales force with the relevant pricing information in real-time and monitoring immediately the sales order profitability, with instantaneous discount and margin checks.

In this way, sales people can still have a good amount of flexibility, using their experience and sensibility to negotiate with the customer. At the same time, they are aware of the last updated company guidelines and they are held responsible for sales profitability.

Delivering effective commercial strategies with SAP C/4HANA

Delivering effective commercial strategies with SAP C/4HANA

SAP Hybris Cloud for Customer (C4C), now part of the SAP C/4HANA Suite as "SAP Sales Cloud Solution", is a perfect tool to support and guide sales people in the field - hence solving our discount optimization challenge. Let’s see how.

A first immediate advantage of C4C is that it can be natively and fully integrated with SAP ERP systems, giving sales people complete and updated information directly in the palm of their hand. Referring back to the business scenario described above, the ERP integration plays a key role since it allows a series of improvements:

  • Full control & alignment on company margins
    According to the combination of product, quantity and discount, the margin is calculated in the ERP system and then, immediately visible in C4C sales order, along with the possibility to even block the creation of orders with margin below a certain threshold value (avoiding unnecessary managers approvals).
  • Compliance with the company discounting guidelines
    According to the discount proposed by the sales reps, C4C can raise relevant discounting guideline messages, letting sales reps know if they are compliant with the company objectives or not - also gamifying the order intake process.
  • Always relevant - and proper - pricing information at hand
    C4C will replicate ERP pricing values in real time, as ERP is and continues to be the central master system for pricing - but at the same time, if needed, can keep some pricing details undisclosed (i.e. product costs). This will give to the sales rep the correct, but proper, set of pricing info that she/he needs to close the deal.
  • A 360 degree view of the customer
    Master data and sales transaction details are always updated and fully aligned, thus helping to build a 360° view of the customer.

Another helpful feature of C4C that supports salespeople in the field is the analytic functions, which provides the sales rep with all the necessary metrics needed to make the best sales decisions. Analytic data are collected from C4C itself (or from external systems) and can then be merged together to obtain truly holistic reporting.

Focusing on the discounting scenario, extremely valuable reports such as historical price and discount data per customer and product, order margin and value trend, sales performance with target comparison - and many others, can be easily developed.

All of these C4C capabilities, along with cross-accessibility (access via web browser or mobile app, online and offline, always with the same user-friendly interface) and several other features not mentioned here, will let your company digitize the sales force, guide execution in the field and ensure that company strategies are applied across the organization.

Sales Performance Optimization: the future is in the Cloud

Provide your sales force with real-time information, everywhere with SAP C/4HANA

Sales Performance Optimization: the future is in the Cloud 

In the Cloud Era, several products are often combined together to create a powerful solution that is able to solve complex business issues quickly and effectively. This is exactly the strategy behind the SAP C/4HANA Suite.

According to this strategy, the next steps for the Sales Performance Optimization leveraging the SAP C/4HANA Suite is the integration of the following cloud products with C4C: 

  • SAP Analytics Cloud, to provide a powerful analytic tool to the Sales Management, combining data coming from several sources (sell-in, sell-out, marketing...)
  • SAP Callidus Cloud, to implement a Sales Performance Management solution to increase sales productivity, automate the sales compensations and forecast the pipeline.

These enhancements will allow to develop increasingly effective tools to help companies digitize the work of their sales representatives, improving daily activities and allowing the delivery of consistent commercial strategies.

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