# SAP CPQ and S/4HANA variant configuration: LO-VC vs AVC

> Source: https://netray.co/stack/sap-cpq-variant-configuration-sap-s4hana
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: ERP Stack

## Short answer

SAP CPQ is SAP's own quoting tool for configurable products. It supports both the classic LO-VC engine and Advanced Variant Configuration (AVC) in S/4HANA, so the choice of engine in your ERP decides how product logic reaches the quote. It is first-party, so there is no third-party connector to certify.

## Erp

SAP S/4HANA (also SAP ECC)

## Erp Key

sap-s4hana

## On Prem

true

## Product

SAP CPQ

## Vendor

SAP

## Category

CPQ

## Integration

**Method:** First-party CPQ to S/4HANA integration

**Detail:** SAP CPQ is a SAP cloud product that exchanges master data, pricing and orders with S/4HANA through SAP standard integration content and APIs. Note that CPQ itself is cloud-delivered even when the ERP is on-prem, so check data residency and connectivity (Cloud Connector) requirements.

**Method:** LO-VC or AVC configuration engine

**Detail:** Configurable materials use either Logistics VC (classes, characteristics, dependencies) or AVC (the newer engine in S/4HANA). The CPQ session calls the engine your material uses, so the same model drives quote and order.

## Data Flows

**From:** S/4HANA

**To:** SAP CPQ

**Data:** Configurable materials, characteristics, customers

**Trigger:** Initial load and periodic replication

**From:** S/4HANA

**To:** SAP CPQ

**Data:** Pricing conditions

**Trigger:** When a quote is priced

**From:** SAP CPQ

**To:** S/4HANA

**Data:** Quote or sales order with configuration values

**Trigger:** Quote approved and submitted

**From:** S/4HANA

**To:** SAP CPQ

**Data:** Order number and status

**Trigger:** After order creation

## Setup

### Decide the engine

**Detail:** Confirm whether each configurable product uses LO-VC or AVC. Do not mix within one product family without a reason.

### Connect the landscape

**Detail:** Set up the connection between CPQ (cloud) and an on-prem S/4HANA, typically via SAP Cloud Connector and a communication arrangement.

### Replicate master data

**Detail:** Load configurable materials, customers and sales areas, and verify characteristic descriptions in all required languages.

### Build the quote process

**Detail:** Define quote templates, approval steps and discount rules in CPQ.

### Align pricing

**Detail:** Decide whether CPQ calls S/4HANA pricing or uses its own price books, and document it.

### Test order handoff end to end

**Detail:** Create orders for edge configurations and confirm the BOM and routing explosion in the plant.

## Pitfalls

- Assuming LO-VC dependencies behave identically under AVC. Model behavior differences appear during migration and need testing.
- Cloud CPQ against an on-prem ERP adds network and certificate dependencies that are often forgotten in the plan.
- Pricing done twice, in CPQ and in SAP, produces quotes that disagree with the invoice.
- Characteristic text changes in SAP that are not re-replicated leave stale labels in the quote UI.
- Approval rules in CPQ that do not match SAP credit or release strategies cause orders to block after a quote was already approved.

## Ai Layer

### Configuration rejection explainer

**Description:** When an order fails in S/4HANA, an assistant reads the error and the CPQ session and explains in plain terms which value combination is invalid.

### Engine migration check

**Description:** Compare sample configurations under LO-VC and AVC and list where results differ, for engineers to review.

### Quote vs invoice reconciliation

**Description:** Ask why a billed price differs from the approved quote, answered from both systems.

## Alternatives

- For simple configurable products, S/4HANA sales order configuration through the standard UI may be enough without a CPQ layer.
- A specialist CPQ such as Tacton may suit highly complex engineered-to-order products better.
- If your sales team uses Salesforce, a CRM-led quoting setup may fit better than adding another tool.

## Faq

### Is SAP CPQ on-prem?

**Answer:** SAP CPQ is a cloud product. It can connect to an on-prem S/4HANA or ECC system, usually through SAP Cloud Connector, but the CPQ application itself runs in SAP's cloud. Consider that if you have strict data residency rules.

### What is the difference between LO-VC and AVC?

**Answer:** LO-VC is the classic variant configuration engine used in ECC and S/4HANA. AVC is the newer engine in S/4HANA with a different runtime and modeling approach. SAP CPQ supports both, but you should test models for behavior changes.

### Do I need ECC for this?

**Answer:** No. The record describes S/4HANA configurable products. Check SAP's current documentation for ECC support on your release, as it depends on version and add-ons.

## Source

https://www.vincit.com/we-do/sap-cpq-for-configurable-products-fitting-into-your-enterprise-landscape

## Search terms

sap cpq variant configuration s4hana, sap cpq lo-vc, sap cpq avc advanced variant configuration, sap cpq on premise s4hana, configurable products sap cpq

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