Configuring derived pricing

  • Release version: Australia
  • Updated March 12, 2026
  • 2 minutes to read
    • Summarize
    Summarized using AI
    This content was generated using new OpenAI-powered functionality. Results are provided on an as is basis and are not guaranteed to be accurate or complete.

    Summary of Configuring derived pricing

    Derived pricing in ServiceNow enables pricing administrators and managers to automatically set product prices based on other products or transactional values, such as quotes or orders. Pricing is dynamically calculated relative to other products or context variables like total contract value (TCV) or annual contract value (ACV). When products with derived pricing are added to a transaction, the pricing is applied automatically, simplifying complex pricing scenarios.

    Show full answer Show less

    Key Features

    • Dynamic Pricing Rules: Define pricing rules that derive prices based on related products or transactional values.
    • Use Cases:
      • Manufacturing: Price accessories as a percentage of base equipment price (e.g., extended warranty at 10%).
      • Telecom: Price add-ons as a percentage of specific product totals (e.g., 24x7 support at 10% of subscription products).
      • SaaS: Price support services as a percentage of all subscription fees (e.g., 15%).
    • Derived Pricing Matrix: Manage the configuration including:
      • Target product offering—the product receiving derived pricing.
      • Source product offering(s)—products used as the pricing basis.
      • Transaction header values—context variables like ACV or TCV.
      • Scope levels—such as Bundle, Cart, or Account.
      • Formula calculations—percentages and aggregate functions (SUM, MIN, MAX, AVG).
      • Price points—different price types like unit list price or recurring prices.
      • Price floors and ceilings—to set minimum and maximum derived prices.

    Key Outcomes

    • Automated, consistent pricing that reflects complex business rules and transactional contexts.
    • Reduced manual pricing errors and improved pricing agility across quotes and orders.
    • Flexibility to configure derived pricing for diverse industries and scenarios.
    • Note: Derived pricing is not supported for quotes of type sales agreements.

    Configuration Steps

    • Enable Derived Pricing: When creating a price list line, select the “Derive price” option and optionally set floor and ceiling prices.
    • Define Derived Pricing Rules: Use the Derived Pricing Matrix to establish product relationships and calculation formulas for derived pricing.
    • Roles Required: Pricing administrators or managers perform these configurations.

    Automatically set the pricing for a product by deriving its pricing from other products or pricing sources such as transactional values in quotes or orders.

    Derived pricing overview

    As a pricing admin or manager, you can define rules for deriving product pricing dynamically, relative to other products or transactional values such as the total contract value (TCV) or annual contract value (ACV). When products with derived pricing are added to a transaction, such as a quote or order, the derived pricing is applied automatically. Derived pricing can be used in various scenarios. For example:
    Table 1. Use cases for derived pricing
    Pricing scenario Industry use case
    Price accessories relative to related base equipment Manufacturing: Sell an extended warranty that is 10% of the price of a high-end industrial machine.
    Price add-ons that are based on Product X and Y total Telecom: Sell 24x7 support as an add-on that is 10% of all the subscription products in a quote.
    Price add-ons based on a percentage of all products purchased SaaS: Sell product support service as an add-on that is 15% of subscription fees for all software products purchased.
    Derived pricing for a product involves the following items, which you manage through the Derived Pricing Matrix:
    Table 2. Elements in derived pricing
    Item Description
    Target product offering Product offering for which pricing is derived.
    Source product offering One or more product offerings whose pricing is the basis for the target offering.
    Transaction header value (context variable) Field from the header for a transaction, such as quote, that is used as the pricing basis to calculate the derived price, such as the annual contract value (ACV).
    Scope Level from which the context variable is used:
    • Bundle
    • Cart
    • Account
    Formula calculation Percentage used to calculate the derived pricing
    Price point Price at which the product is sold:
    • Unit list price
    • Unit net price
    • Cumulative net price
    • Monthly recurring price
    • Annual recurring price
    Aggregate Formulas (SUM, MIN, MAX, AVG) used to determine a single derived product price when pricing is derived from more than one source product. Percentages and price floor and ceiling amounts are then applied as pricing adjustments to calculate the final derived product price.

    Limitations for derived pricing

    Derived pricing does not work for quotes of type sales agreements.

    Setting up derived pricing

    To implement derived pricing, complete these tasks:
    Table 3. Derived pricing configuration tasks
    Task Description Role
    Enable related (derived) pricing for a price list line When creating a price list line, select the Derive price option.

    You can also set the Floor price and Ceiling price for a price list line.

    		 Pricing admin or manager
    Create rules for derived product pricing Use the Derived Pricing Matrix to define the product relationships and calculations used when deriving product pricing. Pricing admin or manager