Create rules for derived product pricing

Define product pricing rules for deriving the price of a product dynamically based on the pricing of related products or a pricing source.

Before you begin

Activate the Account option for the Scope field in the Derived Pricing Matrix. To activate the option, see Enable the Account scope option for derived pricing.

Role required: sn_csm_pricing.pricelist_administrator or sn_csm_pricing.pricelist_manager

About this task

Use the Derived Price Matrix to define the rules for deriving the pricing of a product offering relative to other product offerings or a price source based on a transactional header, such as items from quote headers.

The Derived Price Matrix defines pricing rules for both quotes and orders. When agents add products to a quote or order, the system automatically evaluates the rules in this matrix and generates, updates, or removes derived line items as needed. Agents cannot edit or copy system-generated lines. The system enforces these restrictions to preserve pricing integrity. When agents add products to a quote or order, the following occurs automatically:

• System-generated lines appear when pricing rules are evaluated and conditions are met.
• Existing derived lines update automatically when pricing conditions change, such as when source product prices or quantities are modified.
• Derived lines are removed automatically when they no longer meet the pricing rule conditions.
• System-generated lines display a System generated indicator and can't be edited, deleted, or copied. This restriction preserves pricing integrity.

Agents can review the line item for the target product to see how the derived price was calculated by checking the scope values and price point used.

Note:

Only one rule set for a derived product is supported.

Procedure

1. Navigate to Workspaces > CSM/FSM Configurable Workspace.
2. Select the List icon .
3. Navigate to Pricing > Pricing matrixes.
4. In the Pricing matrixes list, select the Derived Pricing Matrix.
5. If you have many rows in the decision table and you want to optimize rule matrix performance, in Query optimization variables, select the Search icon and one or more context variables that the system uses to filter the derived pricing decision rows that are evaluated.
6. In Rule selection criteria, select the option that indicates whether single or multiple rules are applied in the Derived Pricing Matrix.
   If multiple rules are applied, all applicable pricing rules are applied when evaluating relationships for derived pricing. If the option is Single, the first rule based on rank is applied for the relationship.
7. Select Edit Rule.
   The Decision Table for the Derived Pricing Matrix opens in Workflow Studio and displays the following:

   • Inputs: Lists the default inputs (Target Product Offering,Product Offering (the source product offering), Transaction Date, and Active).
     Note:

     If you have a custom context variable that represents a pricing value to be used as a pricing source, you can add a custom context variable as an input. Context variables are a reference to the Context Variable [sn_csm_ctxrul_mgt_context_variable] table.
   • Decision table: The conditions that you specify to derive the pricing for a target product from one or more source products, and the items used to generate the results.
8. In the Decision table, enter the derived pricing conditions:
   1. In the Conditions section, select Add new decision row.
   2. In the Target Product Offering column, enter the conditions for the target offering and the source Product Offerings if applicable.
   3. Set other mandatory inputs as needed.
9. In the results section, do the following:
   1. In the Scope column, select one of the following:
      • Bundle: The target product offering can be added only inside a bundle. The derived price is based on all the source offerings in the bundle. All instances of the source product offerings in the bundle hierarchy are considered and their prices are totaled.
      • Cart: All instances of the source product offerings in the transaction are considered and their prices are totaled.
      • Account: All instances of the source product offerings for a customer account are considered and their prices are totaled.
   2. In the Percentage Price column, enter the percentage of the source product price to be applied.
   3. Select the Price Point used to calculate the derived price:
      • Unit List Price: Product price that is based on a single unit of measure.
      • Unit Net Price: Product price after all adjustments such as discounts or reductions are applied.
      • Cumulative Net Price: Product price over a specific period, which considers discounts or price adjustments applied on the total quantity purchased.
      • Monthly Recurring Price: Product price that is paid monthly for monthly subscriptions or contract fees.
      • Annual Recurring Price: Product price that is paid yearly for annual subscriptions or contract fees.
   4. In the Header Variable column, enter the header variable for a quote or order to be used as the pricing source, for example Total annual recurring price.
   5. In the Aggregate column, select the formula that determines how multiple product source values are calculated and applied to determine a single product price for the derived product.
      Any adjustments, such as percentages or floor and ceiling values, are then applied to determine the final derived product price.

      • Sum: Use the sum of all the source product prices to calculate a single value for the derived product price. If the result is less than the floor price, the price is adjusted up to the floor price. If the result exceeds the ceiling price, the price is capped at the ceiling price.
      • Max: Use the maximum price of the source products. For example, if Product A price is greater than Product B price, use the Product A price.
      • Min: Use the minimum price of the source products. For example, if Product B price is less than Product A price, use the Product B price. The price is then adjusted to the floor price and capped at the ceiling price.
        Note:

        Floor and ceiling prices are applied after the aggregate formula is evaluated. The final derived price is within the floor-to-ceiling range defined on the price list line.
      • Average: The average price between the source products (sum of all the source product prices divided by the number of products). If the Average is less than the floor price for the derived product, the Average is rounded up to meet the floor price.
   6. Review the Validation Status and Validation Message columns to verify that the results are valid.
   7. Select Save.
10. In the Details tab for the matrix, select Publish.
    The derived pricing for the target product is available when the product is used in a transaction line.

    Note:

    After a matrix is published, you can't make further changes to it. If you have changes, create another version of the matrix with your updates and publish the new version. However, your admin can allow changes to a published matrix by using the allow_edit_on_published_matrices system property. To learn more, see Allow changes to published pricing and product eligiblity matrices.

Result

When sales or order agents add a product with derived pricing, the derived pricing for the product is automatically applied based on the conditions and the values set in the Derived Pricing Matrix. Agents can review the line item for the target product and see how the derived price was calculated, for example, by checking the scope values, such as Unit list price, Unit net price, Cumulative net price, Recurring monthly price, or Recurring annual price.