What is SAP CPQ

Curious to learn what is SAP CPQ? Well! You have landed on the right page. In this blog spot, you will learn what is SAP CPQ, its benefits, key features, capabilities, and many more. Know that SAP CPQ is a SaaS product that simplifies product configuration, pricing, and quotation generation. Sure! By reading this blog, you will thoroughly understand what is SAP CPQ and how it helps to boost sales performance and business productivity.

We all know that sales is the lifeline of any company. This is because the sales team takes the products and services of a company to the external world more than any other. A company's business outcome hugely depends on its sales team's performance.

Generally, sales professionals spend a lot of time generating quotations and proposals. So, if they find a tool to minimize their time on mundane tasks and maximize their time on sales, it will be a big boon to them. Thanks to SAP CPQ software! It is one of the cutting-edge SAP tools that help sales professionals to simplify preparing quotations, configuring products, and optimizing pricing efficiently. As a result, sales professionals can direct their focus only on sales activities, thereby improving sales performance. Sounds good? Do you want to know more about what is SAP CPQ?

This blog will aid you in exploring the SAP CPQ tool in-depth. This blog unveils what is SAP CPQ software, its benefits, key features, functionalities of SAP CPQ, and a lot along the road.

What is SAP CPQ: Table of Contents

What is SAP CPQ?

Essentially, SAP CPQ is a cloud-based tool that stands for SAP Configure, Price, and Quote. It is a Software-as-a-Service (SaaS) product that streamlines various sales operations such as product configuration, quotation processing, and pricing. This tool helps to improve sales performance and business outcomes significantly.

Still, wondering what is SAP CPQ? Read on the following.

The important thing about SAP CPQ software is that it employs Artificial Intelligence (AI) technology to automate many mundane and time-consuming sales processes. The AI capabilities of the tool automate workflows in sales operations. Also, it simplifies sales operations removing unnecessary approvals and reviews. Additionally, the advanced embedded algorithms of the SAP CPQ tool process sales data and yield valuable insights. Sales teams can make solid and informed decisions to enhance sales performance with the help of insights.

SAP CPQ Process

The biggest thing about the SAP CPQ tool is that sales professionals can tailor quotations and pricing based on clients' needs. Also, they can swiftly respond to customers’ requests that may be complex queries regarding quotes. Simply put, SAP CPQ is the best tool for processing complex product configurations, quotations, and pricing.

As the SAP CPQ tool simplifies all the quotation-based operations in sales, sales professionals can zero in on their efforts on sales, which in turn improves sales and boosts productivity.

If you want to enrich your career and become a professional in SAP CPQ, then enroll in "SAP CPQ Training" This course will help you to achieve excellence in this domain.

Key Benefits of SAP CPQ

SAP CPQ is a fantastic tool that caters to the needs of sales professionals by minimizing their time on quotation processing and pricing negotiations. Not just that, the tool provides sales teams with plenty of benefits.

Let’s take a glance at the key benefits that SAP CPQ software offers to sales teams.

  • Margin-secured pricing models

SAP CPQ comes with an efficient margin-based pricing model. SAP CPQ allows sales teams to see all the product price margins in a single view. It helps them to make quick sales discounts without crossing the defined sales margins. As a result, sales teams can enhance sales performance and hence revenue.

  • Personalised Reports and Dashboards

With SAP CPQ, you can create customized sales dashboards and reports. These tools allow you to gain improved visibility across your cumulative quotation value for a specific period, statuses of quotations in progress, and much more.

  • Improved Sales Efficiency

SAP CPQ software helps sales professionals to prepare sales quotations without any errors. Also, it aids in preparing quotes based on customer-specific pricing models. In short, it simplifies quotation processing, increases sales efficiency, and heightens productivity.

  • Smarter Work

With the AI-powered SAP CPQ tool, you can deeply derive valuable insights by analysing sales data. The insights help sales teams identify new sales channels and opportunities for upselling and cross-selling. Besides, the insights support sales teams to optimize product pricing – but simultaneously without compromising price margins.

  • Enhanced Operational Efficiency

SAP CPQ magnifies the operational efficiency of a sales team, undoubtedly. It is done by quickly generating quotations, speeding up approval processes, cutting down the timeline of sales life cycles, and so on. Thus, sales professionals can engage more in sales rather than spending time on mundane tasks.

  • Customised Configurations

SAP CPQ is a wonderful tool that allows effortless product customizations based on the client's requirements. Also, this tool offers a product bundling feature that enables clients to see multiple product options. Hence, it opens up many sales opportunities and increases revenue.

MindMajix Youtube ChannelFeatures of SAP CPQ

SAP CPQ is a robust tool that offers many out-of-the-box features to sales teams. Be it margin protection, configuration management, or integration, the features of SAP CPQ are noteworthy.

Let’s look at the magnificence of the features below.

Features of SAP CPQ

  • Configuration Optimization

SAP CPQ software allows sales professionals to prepare multiple variants of product configurations. And it is done based on the requirements of clients. Not just that, various configurations and versions can be easily managed with the help of SAP CPQ.

  • Margin Protection

Another important feature of SAP CPQ software is margin protection. This tool controls sales margins by applying some mechanisms. The mechanisms are ‘channel price controls’ and ‘margin protecting guardrails’. Besides, this tool allows sales discounts only based on rules-driven eligibility. The SAP CPQ tool offers AI-based recommendations to sales teams with which they can upsell and cross-sell products. In addition, the tool provides valuable insights into product pricing.

  • Quick Quotation processing

When professionals prepare complex sales quotations, they are prone to making errors. This shortcoming can be overcome with the help of SAP CPQ. Of course! Sales professionals can create error-free quotes with the SAP CPQ tool in no time. It doesn't matter what the size of the quotation or its complexity; SAP CPQ simplifies quotation processing reducing the burden of sales teams.

  • Connectivity and unified data model

SAP CPQ tightly connects sales processes from raising quotations to order fulfillment. Also, this tool adopts a unified data model. It means that the SAP CPQ tool integrates with other SAP platforms such as SAP Commerce Cloud, SAP Sales Cloud, and SAP Service Cloud. This integration increases sales efficiency, encourages client engagement, reduces costs, etc.

Functionalities of SAP CPQ

Undeniably, the functionalities of SAP CPQ are magnificent. Yes! SAP CPQ software's various functionalities help remove glitches in sales processes to improve performance.

Let’s go through the key SAP CPQ functionalities that you need to know.

  • Margin Automation

By leveraging SAP CPQ, companies can apply margin policy in sales. Tight margin controls are highly important for businesses to avoid losses due to over-discounts. Also, SAP CPQ compares competitor margin policies automatically. It helps companies to understand their position in the market and plan their sales strategies for the future.

  • Product Configuration and Management

SAP CPQ supports configuring products based on the different interests of clients. The tool simplifies managing various product configurations and versions. So, sales professionals can eliminate ambiguity in handling multiple configurations and versions of products.

  • Automated Approval Workflow

SAP CPQ tool allows sales teams to make automated quotation approval workflows. This setup reduces the quotation approval turnaround time drastically. It is done by cutting down the unnecessary quotation configuration and approval processes in the workflows. In short, SAP CPQ ensures hassle-free sales operations, enhancing productivity.

  • Analytics and Reporting

The advanced analytics of SAP CPQ allows sales professionals to monitor sales performance, conversions, and other KPIs closely. The insights offered by SAP CPQ help to make effective pricing strategies, product configurations, integrations, and thus enhancing sales performance and business productivity.

  • Sales Performance

With SAP CPQ software, sales teams make effective product configurations and prepare quotations based on clients' requirements. The tool also helps to optimise pricing strategies. Also, SAP CPQ boosts sales performance by automating mundane sales operations, thereby minimising the unnecessary workloads of sales professionals.

Key Capabilities of SAP CPQ

SAP CPQ is an excellent tool that comes with superb and unparalleled capabilities.

Capabilities of SAP CPQ

Let’s read through the capabilities of SAP CPQ below.

#1.Intuitive-Guided Selling

SAP CPQ tool speeds up the process of generating quotations. No wonder SAP CPQ generates quotes that may contain more than 10k lines within a few seconds. So you can reduce the duration of the sales lifecycle dramatically. Moreover, SAP CPQ encourages cross-selling and upselling of products by offering relevant product recommendations to clients. In return, sales and revenue are increased to high levels.

#2.Proposal Generation

Importantly, SAP CPQ allows generating proposals in different formats such as doc, pdf, and docx in the best way. This tool empowers the sales team to tailor quotations based on clients' needs. It is worth noting that this tool offers an e-signature feature too.


As you know, SAP CPQ is a cloud-based SaaS product that allows sales professionals to access the required information anytime from anywhere. The tool's embedded intelligent search algorithms help gather product information quickly. This facility drives sales teams to be highly productive and smart. SAP CPQ comes with an intuitive and intelligent user interface that can provide a delightful navigation experience to sales professionals.

#4.AI-based Recommendations

Know that SAP CPQ comes with intriguing analytics capabilities. The tool's AI capabilities help analyse all the sales data and recommend valuable insights to sales teams. The insights help to make less negotiations and win great deals for sales professionals. For example, it provides the details of fast-selling products and other KPIs with which the sales team can make concrete sales decisions and boost sales performance.

#5.Seamless Integration

Know that the SAP CPQ tool comes with robust prebuilt connectors with which you can integrate the tool with other SAP as well as non-SAP systems. It means you can integrate SAP CPQ with SAP ERP, SAP CRM, SAP S/HANA, etc.

Seamless Integration

This integration helps to share data seamlessly.

#6.Competitive Analysis

With SAP CPQ, you can easily make competitor analyses. So if you identify any noteworthy parameter in the analysis, you can take necessary measures to take advantage of your competitors. As a result, it allows you to go forefront in the market.

#7.AI-driven automated quotations

The AI capabilities of SAP CPQ drive sales teams to go the extra mile. SAP CPQ tool offers AI-based features such as pricing-behavior intelligence, intuitively guided selling, predictive analysis, and more to the sales team. These features allow sales professionals to make strong sales decisions.


The scaling features of the SAP CPQ tool are noteworthy. The tool makes seamless integration with many SAP and non-SAP software. The native cloud architecture of the tool plays a pivotal role in the integration.

Related Article: SAP HANA Administration Tutorial

The Challenges that SAP CPQ resolves

There are many challenges that the sales team encounters every day. However, you can positively overcome the challenges with SAP CPQ's help.

Let’s address the challenges and how SAP CPQ assists in overcoming them below.

  • Complex product configurations

Handling the different configurations of quotations and versions of various products is tedious for a sales team. SAP CPQ simplifies this complexity and smoothens quotation processing.

  • Manual Overhead

Similar to preparing quotations, sales professionals must also put more effort into responding to quotations. This is because clients may pose many questions on quotes regarding prices, product comparisons, discounts, and so on. It will consume the productive hours of sales professionals. SAP CPQ optimises generating quotations and helps to respond to clients quickly.

  • Time-consuming quoting process

Preparing a neat quotation is a time-consuming activity. If a sales professional spends much time preparing quotations, they must compromise on sales. SAP CPQ tool resolves this challenge and instantly supports the generation of quotes.

  • Human Errors

Undeniably, human errors are inevitable. When the sales team prepares quotations, they are bound to make errors. It will result in loss of sales, costs and reputation, client dissatisfaction, and more. With SAP CPQ, we can overcome this challenge and generate quotations without errors.


1. What is CPQ, and why do we use it?

CPQ is one of the SAP products that simplify product configurations, process quotations quickly, and optimise pricing options.

2. Who mainly uses SAP CPQ?

Sales teams use SAP CPQ to streamline operations and instantly accelerate sales conversions by generating accurate quotations.

3. What do you mean by SAP CPQ implementation?

By leveraging the SAP CPQ tool in their systems, a sales team can optimize sales operations and improve sales performance to greater heights.

4. What tools can SAP CPQ integrate with?

SAP CPQ can integrate with SAP and non-SAP systems. Mainly, SAP CPQ integrates with SAP sales cloud, SAP CRM, SAP ERP, etc.

5. What is the significant difference between SAP CRM and SAP CPQ?

SAP CRM is a tool that improves customer relationship and satisfaction. On the other hand, SAP CPQ is the tool that processes quotations quickly and gears up sales processes.

6. What are the vital benefits of SAP CPQ?

  • Increases sales performance and business productivity
  • Improves conversion rates
  • Processes quotations quickly
  • Reduces sales life cycle timeline
  • Automates workflows and optimizes sales operations

7. How are SAP CPQ and SAP ERP connected?

SAP CPQ is the tool that tightens the gap between SAP CRM and SAP ERP.

Check Out: SAP CRM Interview Questions

8. What are the skills required for SAP CPQ developers?

They must have good designing skills and prototyping. They must collaborate with various cross-functional teams. Mainly, they must be familiar with the CPQ tool, quotation processing, and pricing strategies.

9. Is coding knowledge required to learn SAP CPQ?

No coding is required to learn SAP CPQ since this tool is developed for sales professionals.

10. Is learning SAP CPQ tough?

No. Learning SAP CPQ is not tough. This is the tool designed for sales teams. So it is easy to learn the tool.


In a nutshell, SAP CPQ is an excellent tool to configure products, simplify quotation processing and adjust pricing options. We hope this blog might have helped you understand what is SAP CPQ, its key features, benefits, and more. Simply put, this tool streamlines sales operations and enhances sales performance. Furthermore, we have highlighted the key functionalities and capabilities of SAP CPQ neatly in this blog. If you want to enrich your career and become a professional in SAP CPQ, then enroll in "SAP CPQ Training" This course will help you to achieve excellence in this domain.

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Last updated: 16 Aug 2023
About Author


Madhuri is a Senior Content Creator at MindMajix. She has written about a range of different topics on various technologies, which include, Splunk, Tensorflow, Selenium, and CEH. She spends most of her time researching on technology, and startups. Connect with her via LinkedIn and Twitter .

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