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Siebel Pricing – Component Based Pricing || Combination of Fixed and Roll-Up Pricing

In last Article of the series Siebel Pricing – Component Based Pricing we will learn about Siebel Pricing – Component Based Pricing. Scenario A and scenario B will refer to Fixed pricing and Roll based pricing respectively in this article. Last but not least, the last scenario: a combination of scenario A and B. To be honest, scenario C is non-existent. There is many ways to use component-based pricing and I will just show one example of a combination. Again I’ll use my laptop to illustrate how to set-up this. Here is the product structure and its prices.

You will notice that the root CxP product has a List Price again (like in scenario A) The default components also have a List Price (like in scenario  B) but their price will be set to zero in the Pricing Designer because the List Price of the root CxP already include the cost and margin of the default components Optional components have a list and a price override that is equal to the difference between the default component and the optional component. Example: the default DVD/CD burner costs $50.

 

If you upgrade the optical unit to a Blu-Ray burner, you will not pay the full price of the Blu-Ray burner but only the price difference (because you remove the DVD/CD burner from the configuration): 350-50= 300 The reason we have a List Price for every product is because we can sell these products separately (which was not possible in scenario A) Finally, you can still add discount for product that are bought in a laptop configuration (example: the Docking Station is 25% if you buy it in a laptop configuration. If you buy the laptop and the docking Station separately, even in the same order, you will not get the discount. (Aggregate Discount would be the solution if you would still want to give the 25% to the Docking Station even if it is not purchased as part of the laptop configuration).

I will not show the Price List and the Pricing Designer. You should easily guess what they’re going to look like by now. You will now also guess how the order will look like (no screenshot provided here): The laptop (line 1) has a Start Price of $1000, this price includes the cost of all default components. Therefore, default components (XGA Panel, RAM 2 GB on lines 1.1 and 1.2) have a Start Price of zero Since I selected the Blu-Ray optical Unit (line 1.3), I have to pay extra. This extra is $300 (List Price of the Blu-Ray ($350) minus the cost of the DVD optical unit ($50). The same logic apply for the 250 GB hard disk (line 1.4), we only charge the extra cost to replace the 170 GB with the 250 GB, that is $20. I have also bought 2 more 250GB hard disks (lines 1.5.1 and 2), one for the Docking Station and a spare one. They are charge at their full price ($70) because they don’t replace an existing drive. I have also 2 docking Station. The first one (line 1.5) is part of the laptop configuration, therefore we get 25% discount. I have bought another one (line 3), separately, therefore I pay the full price ($120).

 

 

 

Further considerations

There is a significant number of pricing fields in the Line Items Buscomp that you can modify to fine-tune your pricing requirements for rollup prices the vast majority are calculated fields and are easily changeable. When  you decide to use “Component-Based Pricing” make sure you simultaneously understand requirements from Sales/marketing, ordering and back office (including accounting) requirements. The design decisions you will make must comply with all these parties. Always keep in mind that end-users must also be able to quickly and easily understand the prices shown in the application. Resist the temptation to show too much (too much is probably what Back Office will ask, so give them what they want but hide it from the GUI!) “Starting At Price”: When you add an Adjustment in the Pricing Designer and click the “Check Starting At Price” button you will not see any change.

You must first click on “Refresh Cache” in the Price List and return to the Pricing Designer to recalculate the “Starting At Price”. This is because the button calls the same Pricing Procedures than in the Order/Quote and are based on cached information. In scenario C, the cardinality of the memory is 2,1,1, so you can actually buy 2 memory items. There is an undesired side effect here. Since we put the price override to 0 (because the cost of the memory is already included in the root CxP) buying 2 memories will still give a price of zero (as per the price override rule in the Pricing Designer). Obviously the second memory should be charged as its cost is not included in the Laptop base price.  You can either create a second relationship in eConfigurator (called “Memory Extension” or whatever) or change the Pricing workflow (not recommended at all in this particular case, but it’s possible)

[EDIT from Matthieu Hattab, 21st of May 2012]: if you have installed 8.1.1.5 there is a bug in the pricing designer. download "Siebel Maintenance Release Guide Version 8.1.1.5, Rev. D" and search for section "Instructions for Bug 10604001"

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