Big Improvements to Opportunities in Dynamics CRM 2011

Most organizations implementing Dynamics CRM use the sales functionality. And when you use Dynamics CRM for sales, you generally start with the Opportunity record type. Opportunities represent potential sales, and they can be customized to line up with most organizations’ sales processes. But they had a significant limitation in Dynamics CRM 4.0 that prevented many organizations from taking advantage of some potentially great functionality: unlike the other record types in the Dynamics CRM sales process tetrarchy (quotes, orders and invoices), CRM 4.0 opportunities did not support write-in products.

Yes, I’m aware that a lead-in like that will be considered hard-hitting in only certain circles, and that even if you’re a current happy user of Dynamics CRM opportunities it might not sound like that big a deal. I think it’s important, though, since this one little change – adding support for write-in products to opportunities – allows you to realize several significant benefits for free.

Opportunities, the Product Catalog and the Sales Process, 4.0-Style

On the default opportunity form in Dynamics CRM 4.0, there’s a field that allows you to select between System Calculated and User Provided pricing. Selecting the User Provided option means you can enter anything you like in the Est. Revenue field. This is easy, but it’s not very scientific! The alternative option — System Calculated pricing — does what it sounds like it would: rather than simply entering a number for estimated revenue, you select products from the product catalog, enter a quantity, and let the system calculate what the revenue will be.

Some of the advantages of system calculated pricing are obvious:

• It gives sales management control over pricing.
• It makes it easier for sales people to create and price sales opportunities.
• It can improve the consistency and repeatability of the sales process.

Others aren’t as obvious, especially if you’ve never used it because it was too much of a hassle (I’ll get to that part next). For example, here are two of the most important non-obvious benefits:

• From an opportunity created with system calculated pricing, you can automatically create – with a single click — any combination of the other sales transaction records (quotes, orders or invoices). A transaction record created in this way will include all of the line items on the underlying opportunity.
• Another thing you can do is select a different
  price list and immediately see the impact on the opportunity pricing: for all of the line item combinations and the total for the opportunity.

But that last bit – about selecting price lists – gets to the reason system calculated pricing was under-used in CRM 4.0, and how the addition of write-in product support in CRM 2011 can help.

The basic problem in CRM 4.0 was that in order to use system calculated pricing, you had to have a completely built-out product catalog. Here was the process:

1. If you selected System Calculated pricing, you had to select a price list to apply to the opportunity.
2. After selecting a price list, you could add Opportunity Products (the line items for the deal) and have the system calculate the sub-total based on the quantity you enter. These are referred to as “Existing Products”, meaning they already exist in the product catalog.
3. This meant that every product you added had to have a corresponding “price list item”…which meant that price lists had to be configured in the Product Catalog area.

4. And configuring price lists can be a lot of work:

   1. First you had to create the right Unit Groups.
   2. Then you had to add your product records.
   3. Then you had to create price lists, and add any product you wanted automatic pricing for to every price list…

I’ll spare you the rest of the details, but if you’re getting the idea it was a lot of work, you’ve got the idea. What does any of this have to do with write-in products? Well, it turns out that Write-In Products are the alternative, when adding a line item to a sales transaction, to Existing Products. So, in CRM 4.0, the fact that opportunity records did not support write-in products meant that you had three basic options:

1. Suck it up and configure the product catalog, adding every product as a price list item in every price list you need.
2. Skip opportunities entirely, starting with quotes, orders or invoices, all of which do support write-in products.
3. Just go with user provided pricing and let everybody enter any prices they want to.

Opportunities, the Product Catalog and the Sales Process, 2011-Style

With that background, let’s take a look now at what you can do in Dynamics CRM 2011.

First, the only requirement to use system calculated pricing is that you have a price list you can apply to an opportunity. It does NOT have to have any price list items, which means you can start realizing benefits from system calculated pricing without being required to perform the tedious product catalog configuration tasks first. In the following demonstrations I’ll use an un-customized CRM 2011 organization, but this should work pretty much the same in any organization you’re working in.

If you don’t have one, you can create a price list by following these steps:

1. Click Settings, and then click Product Catalog.
2. Click Price Lists, and then click New in the Records group.

3. Give the price list a name, supply a currency that agrees with the transaction records you’ll want to create, and optionally enter Start Date and End Date values:

   

Create an Opportunity with System Calculated Pricing

After saving and closing, we’re ready to create opportunity records. Start by creating a new opportunity with system calculated pricing:

1. On the site map click Sales, and then click Opportunities.
2. Click New, and provide required information (Topic, Potential Customer and anything else you’d like to enter), then click Save.
3. In the Forecast Information section, make sure System Calculated is selected, and then scroll down to the Price List field and select the price list created above. Save the record.

4. Click Line Items in the Information section of left navigation, and then click inside the Line Items sub-grid. The opportunity form should look something like this:

   

5. Click Add New Opportunity Product, and in the Opportunity Product form, select the Write-In Product option.

6. Enter a description in the Write-In Product field, and then enter appropriate values in the Price Per Unit and Quantify fields. Click Save to have the system calculate the extended amount. This example shows how you might add services priced on an hourly basis:

   

7. Click Save & Close, and then click General in left navigation. Click Recalculate Opportunity to see the extended amount get totaled up to the Est. Revenue field.
8. Follow steps 4-6 to add another product to the opportunity. For example, suppose in addition to services you also sell product, such as a software product with a per-user license fee, a book, or anything else you’d like to sell. Note that you can apply a manual discount or add tax.

9. Suppose you owe the customer a credit from a previous deal and want to reflect that on this opportunity, and net out the credit in the process. Another new feature supported by opportunities in CRM 2011 is negative pricing. You can create a credit with a negative price, and indicate a return by using a negative quantity. I’ll add a credit line in this way, save the record and recalculate it:

   

   You can see from the screen shot that the line items grid expands to show all of the line items, and that the extended amounts for the lines total up to the Est. Revenue field, which on a System Calculated opportunity is a read-only field (because it’s calculated).

What that example illustrates is building an opportunity record, using system calculated pricing combined with the new support for write-in products at the opportunity record. Although simple, even this has some advantages compared to user provided pricing:

• You’ve got a clearly defined method for coming up with prices (multiplying price by quantity) and at least your co-workers and potential clients will understand where the pricing came from.
• You don’t have to do the math in your head.
• You can revise the opportunity one line at a time. For example, if you needed to go back and apply a discount to the previously entered hourly rate for services, you could simply edit the opportunity product added in any of the above steps and apply a discount, then recalculate the opportunity.

But you can do more than that if you use some of the other records in the sales process. I’m not suggesting that using these will be a fit for every organization’s sales process. Rather, my observation is that the reason many organizations haven’t explored using records such as quotes and invoices is that the required product catalog configuration was too time-consuming. And since not having a set of price lists with fully populated price list items meant you couldn’t create those records automatically and tie them back to an opportunity…well, you just didn’t do it.

Here are a couple of examples, starting with the single opportunity record we created above.

Create a customer-ready quote based on an opportunity record:

1. Open the opportunity record, and click Quotes in the sales section of left navigation.

2. Click Add New Quote. After a couple seconds, the new quote form will open, and you can see that all of the line items were automatically carried over from the opportunity:

   

   This quote record is a “child record” of the original opportunity, and will be displayed in the associated Quotes view for the record.

3. You can click on Products in left navigation to verify that all of the products have been brought over:

   

   And by the way: if you don’t like the five decimal precision on the Quantity field, you can fix it with an easy customization on the Quote Product entity’s Quantity field.

4. Now, suppose you want to present the quote to a customer, but first you want to add something to the quote that doesn’t count as “revenue” in your sales process, so you didn’t want it on the opportunity record. Travel expenses might be in this category. For example, you might charge for travel-related expenses on a daily rate basis. Add these to the quote by clicking Add Quote Product, and then $500/day for five days will look like this:

   

5. Recalculate the quote record to reflect travel expenses in the total, and then (here comes the good part!) click the Run Report button on the Data tab. Select Quote and after a few seconds the Report Viewer will open, displaying the standard Quote report:

   

   This is a pretty nice report, and can easily be exported to several different formats for customer presentation. Here are a few of the things you can do with it:

• If you’ve got addresses entered for the potential customer the opportunity (and quote) is for, use the Get Addresses feature to select them, and fill in the Bill To and Ship To sections.
• Use the Select information… drop-down at the top of the viewer to specify which fields should appear in the quote.
• If you’re running Dynamics CRM on-premise, you can use SSRS to customize it, adding your company logo & so forth. (I’m still trying to verify this, but I believe that the out-of-the-box quote report cannot be modified using SSRS for CRM Online, which would be a tragedy of the first order. OK, the second order anyway. Somebody say it ain’t so!)

Create an invoice based on the opportunity record:

Dynamics CRM has an invoice record type, and even if you don’t integrate with your ERP it can be quite useful. For example, at my company our accountant generates and tracks invoices in a standalone accounting application where the chart of accounts lives, financial reports are generated & so forth. He’s got a complicated invoice request form that used to get filled out, which is essentially a manually-entered Word version of something we can generate (you guessed it, with one click) from the Dynamics CRM 2011 opportunity record, now that write-in products are supported:

1. Open the opportunity record and then click Invoices in the sales section of left navigation.

2. Click Add New Invoice. Just like the quote, the invoice record is created and automatically reflects all of the lines on the opportunity record. It’s associated with the opportunity record just like the quote, and has a few other characteristics in common with quote records:

• The Look Up Address function works the same as it does on quotes.
• Discounts can be applied at the overall invoice level, or for any of the line items.
• Line items can be added or modified if necessary.

• Invoices have a lovely built-in report that has the same basic structure as the lovely Quote report, and also (I fear) cannot be customized in SSRS for CRM Online. Here’s what this one looks like:

  

  You may have noticed that my quote has five line items while the invoice only has four. That’s because I created the invoice directly from the opportunity record, which I hadn’t added the travel-related expenses to. If you want the invoice to reflect the same information on the quote, there are a of couple additional steps – first Activate the quote and then create an Order record from it…then create the invoice from the order – but if you do that it works fine.

Summary

After using this approach for a while, I’m not sure I can come up with a good reason not to do it like this. If the reason you aren’t using System Calculated pricing is that you didn’t have time to configure the product catalog, well, that reason goes away with the new version. Give it a shot and let me know what you think.