Most organizations implementing Dynamics CRM use the sales functionality. And when you use Dynamics CRM for sales, you generally start with theOpportunity 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:

   

Read the rest of the article in Richard Knudson's Dynamics CRM Trick Bag.