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Showing posts with label configure price quote software. Show all posts
Showing posts with label configure price quote software. Show all posts

CPQ meaning

Posted On Wednesday, August 28, 2019

CPQ meaning


Definition

The meaning of CPQ is Configure Price Quote. The acronym is used to describe a system to support sales by guiding selling, governance of pricing and automation of document creation.

Configure Price Quote (CPQ) is the combination of techniques, strategies and technologies that companies use to manage and customize products throughout the customer lifecycle, with the goal of improving customer service and assisting in customer retention and driving sales growth.

CPQ systems compile product and pricing data across different channels, across the company, which usually include the product management, sales, marketing and R&D.

A CPQ systems can also give customer-facing staff detailed information on buying preferences thru a guided sales process.

CPQ has historically been used by larger enterprises, but the market is now moving toward small and medium sized businesses mostly due to cloud technology lowering the overall cost.

Components of CPQ


At the most basic level, CPQ consolidates product information, pricing and documents into a single “CPQ database” so business users can more easily access correct information. Business logic explains dependencies and ensure product correctness, pricing alignment and unified quote documents.

Over time, many additional functions have been added to CPQ systems to make them more useful. Some of these functions include automating various workflows, various calculations, advanced pricing structures and pricing models. Analytic capability gives managers the ability to track customer preferences and product inefficiencies based on information logged within the system.

Sales automation: CPQ tools with sales automation capabilities can automate customer interaction offering a 24/7-service for advance product enquiries. For example, as sales prospects come into the system, it might automatically send the prospects marketing materials, budgetary pricing indications typically via email, with the goal of turning a sales lead into a full-fledged customer.

Workflow automation: CPQ systems help businesses optimize processes by streamlining mundane workloads, enabling employees to focus on creative and more high-level tasks.

Lead management: Sales leads can be tracked through CPQ, enabling sales teams to input, track and analyse data for leads in one place. This is often combined with online presence of the configurator.

CPQ Analytics: Companies are keen to capture customer sentiment, such as the likelihood that they will recommend products and want to measure the overall customer satisfaction to develop marketing and service strategies. Companies can integrate CPQ data with other customer data from sales or marketing departments to provide a consistent view of the customer. Analytics in CPQ help create better customer satisfaction rates by analysing user data and helping create targeted marketing campaigns.

Geolocation technology: Some CPQ systems include technology that can create geographic sales campaigns based on customers' physical locations. This is important to make the product offering more adapted to the country or region. Geolocation technology can also be used as a networking or contact management tool in order to find sales prospects based on a location.


Types of CPQ technology


Some major players within CPQ systems are Apptus, Salesforce and Oracle. Other providers are popular among small to mid-market businesses, but these three tend to be the choice for large corporations with simple configuration problems. Some CPQ providers offer more advanced solutions for specific business segments such as Tacton that offers advanced CPQ with primary focus on the manufacturing industry.



The types of CPQ technology offered are as follows:

On-premise CPQ: With this system, the information about the company needs to be managed, controlled, backed up, and maintained using the CPQ software. With this approach, the company acquires licenses in advance rather than purchasing annual subscriptions from a cloud CPQ provider. The software resides on the company's servers and the user pays for upgrades. In addition, a longer installation process is usually required to fully integrate a company's data. Companies with complex CPQ requirements can benefit from a local deployment.

Cloud-based CPQ: Cloud-based CPQ, also known as SaaS (Software as a Service) or on-demand CPQ, stores data in an external remote network that employees can access anywhere, anytime. Sometimes an internet connection is established with a third party who oversees the installation and maintenance. The cloud's fast and relatively simple provisioning capabilities address companies with limited technological expertise or limited resources.

Companies might consider cloud CPQ as a more cost-effective option. Vendors such as Tacton charge by the user on a subscription basis and offer the option of monthly or yearly payments.

Data security is a major concern for companies using cloud-based systems because the company does not physically control the storage and maintenance of their data. If the cloud provider gives up the business or is taken over by another company, a company's data can be compromised or lost. Compatibility problems can also occur when data is first migrated from an in-house system to the cloud.

Finally, the cost can be an issue because paying subscription fees for software can be more expensive over time than with on-premise models. On the other hand, with a hosted SaaS solution improved functionality is constantly added to the CPQ platform.

CPQ examples in practice


Direct sales: Traditionally, data intake practices for CPQ systems have been the responsibility of sales and marketing departments. Sales and marketing teams procure leads and update the system with information throughout the customer lifecycle, and with the help of CPQ they gather data and revise customer history records through calls, meetings and technical support interactions. The CPQ system provides accurate pricing, correct product selection and impressive quotes.

Digital twin CPQ: CPQ can interact directly with customers thru a 24/7 business portal. CPQ gives the customer the possibility to investigate and understand the product offering prior to contacting a sales representative. This gives the company the possibility to find new lead thru automated channels and it give the customer a digital sales companion to guide thru the early phases of the sales journey.

Mobile CPQ: CPQ applications for smartphones and tablets are a must for salespeople and marketing professionals who want to access customer information and perform tasks when they are away from their office. Mobile CPQ apps use features that are only available on mobile devices, such as mobile devices. For example, GPS and voice recognition capabilities enable sales and marketing professionals to access customer information from anywhere.

Business-to-Consumer (B2C) Practices: A CPQ system in a B2C environment helps monitor sales as they go through the sales funnel and enables a business to solve any issues that may arise during the process. CPQ systems in the B2C market help improve the transparency of leads and thus increase the efficiency of the entire sales process.

CPQ challenges


For all the advancements in CPQ technology, without the proper management, a CPQ system can become little more than a glorified database in with product information is stored.

Companies may struggle to achieve a single view of the product portfolio. Challenges also arise when systems contain inconsistent data or outdated information. These problems can lead to a decline in customer experience due to lack of trust in the CPQ tool.

CPQ systems work best when companies are able to keep the product information up to date without involvement of consultancy services.

CPQ consultants in Sweden and the Nordics

Posted On Tuesday, August 27, 2019



Tacton CPQ is a configure, price, quote (CPQ) software to automate and manage the configuration, pricing, and quoting processes for advanced products and services. Our CPQ consultants will help you gather the required inputs, do the priorities and help you execute the roadmap.
CPQ SE offers

- The most experienced CPQ consultants for advanced manufacturing with Tacton CPQ
- CPQ domain experts with 10+ years in CPQ consulting including Tacton CPQ
- Global consulting for global enterprises
- Local consulting for small and medium sized businesses
- Broad network of CPQ partners to extend your investment
- Dedicated advisory to support around processes, change management and roadmap priorities
- Fixed price project to have you up and running with total transparency and weekly showcases throughout the project in Sweden and the Nordics


Tacton CPQ, a cloud-based solution, is often used by sales teams to quickly create offers and to increase efficiency of the sales process. Our CPQ consultants will configure the system to have you up and running in no-time.

Tacton CPQ consulting services assist clients with configuring and deploying CPQ quickly and efficiently. In addition to implementation, our CPQ consultants will assist with tailored training and support you with any challenges related to Tacton CPQ.

Our final goal is to eliminate ourselves as your CPQ consultants.  At the end of the day, that will give you the smoothest and most up to date CPQ system.

Of course, our CPQ consultants will stick around to make sure you take advantage of new features and stay on top of the game. But our long-term goal with any project is very clear - to help you independently keep your CPQ system up-to-date.

Our CPQ consultants are industry experts in Healthcare, Manufacturing, Heavy vehicles, Food processing, Packaging, Transportation, Energy and more.

Our CPQ consultants work with Tacton CPQ, Salesforce, SugarCRM, Dynamics and QlikView.

What is a CPQ process?

Posted On Wednesday, August 14, 2019


Definition

CPQ stands for Configure, Price, Quote. The CPQ process includes selecting components (configure), handling prices and discounts (price) and generating various documentation (quote, technical specifications, 2D- and 3D-drawings).

The CPQ process has a long history with manufactures of complex products, but with the introduction of SaaS (software as a service) the market is currently expanding into service offerings and less complex products.

The CPQ process

- supports a simple way to select valid product combinations with respect to product rules and limitations

- prices the product according to bundling and discounts (manual or automatic)

- creates an accurate and persuasive quote documents based on configuration and pricing information information

CPQ software connects front and back end systems and automates the lead-to-cash process.

What is a CPQ process?

What’s normally included in the CPQ process? Is it all automated and in what way is it adoptable and flexible?

Configure (the C in the CPQ process)

The overall problem is that complex products often have limitations in the way a product can be configured. This can be physical limitations how options can be combined. It’s also very common that there are sales/marketing reasons for limiting availability of certain product combinations. 

A modern CPQ process simplifies the interaction by asking high-level questions about requirements. This is often referred to as guided selling.

The magic bullet when it comes to the CPQ process is the ease of maintenance. The time it takes to do updates as the product portfolio evolves is the real differentiator between a “good” and a “not so good” CPQ process.

Price (the P in CPQ process)

The pricing can, if you let it, be just as complex as the product itself. Manufacturing costs, geographies, competitive situation, and local protocols all comes into play with a clever pricing strategy.

More and more companies are currently moving to a more value-based pricing. What value does your superior product offer deliver to a specific customer? This requires some heavy lifting when it comes to analysis but once that’s in place the CPQ process can really leverage the bottom-line profit and still keep customers loyal to your brand.

Price adjustments is also an important part of the pricing step in the CPQ process. This can be set up to be automatic but should also offer flexibility and advice for sales tactics.

Quote (the Q in the CPQ process)

Once the product is configured and prices correctly, respecting both product limitations and pricing rules, the result is presented in one or more documents. These documents describe the product and is often personalized to resonate with various stakeholders it should be presented to.

The documents generated in the CPQ process describe the product an includes texts, illustrations, data sheets and sometimes drawings, all customized for each offer generated. 

The level of details can be personalized, and document generation should be fully automated.

Why use CPQ?

Posted On Monday, August 12, 2019


As the product portfolio grows many companies choose to use a CPQ system. A typical CPQ-user works for a company that offers a very wide range of products or services. The sales representatives (and to be honest usually others in the staff as well) have a hard time managing product prices and product dependencies. The products sold often have many options with critical technical/commercial dependencies.

CPQ software is useful by companies that need to quickly calculate prices. If a sales representative needs to quickly prepare a quote for a customer, the CPQ software automatically sums up all important information. This means that the representative can produce the quote and come back to the customer far quicker. Time is an important differential factor for all companies, regardless of whether the company works in faster or slower markets. Speed ​​is always important.

Global companies, large and small, use CPQ to quickly and effectively send pricing information to partners and customers. This means that customers can get the information right when they need it.

CPQ software is an effective way to unify how the products are presented to the customer. By using an automated tool for quote documents product can be presented in a consistent way and critical information is never missed due to human errors.

Studies show that the companies that respond the fastest have the greatest chance of finally winning the deal. This means that the speed offered by a CPQ system can have a major impact on the company's bottom line results.

In the past only large corporations could afford to use CPQ, but nowadays we see a big expansion of CPQ in small and medium sized business.

8 secrets for a successful CPQ project

Posted On Monday, July 8, 2019

1. Focus on solving concrete problems 

Always start with a concrete product and set a goal to get the product live in a production environment. With today's SaaS-CPQ-solutions, efficient product modeling/pricing tools and a straightforward system configuration, it is not at all impossible to launch a first product within a month or two.

2. Be aware of the limitations of CPQ

In the field of psychology, the Dunning–Kruger effect is a cognitive bias in which people mistakenly assess their knowledge in a specific field is greater than it is. It is related to the cognitive bias of illusory superiority and comes from the inability of people to recognize their lack of ability. Without the self-awareness people cannot objectively evaluate their competence or incompetence.

When you try to launch a CPQ-system, it is easy to fall into this trap. To describe the logic that limits how the product can and may be sold in a general way is somewhat cumbersome. Here it is important to understand what you need to understand before you start with product logic. Then the way to a working CPQ will be as straight as it can now be.

3. Listen to everyone involved – and to the customers

For some, external assistance may be required to ensure that the CPQ system provides useful results. Ideally, if you kick-start a project with a whiteboard meeting where all the key people involved spend an afternoon figuring out details and documenting the requirements you have.

4. Take on industry expertise

More and more companies have begun to realize that CPQ is not a miracle cure in itself. Many companies that start working with CPQ assume that "we have a lot of product data – plug in a CPQ and let it tell us something interesting".
Here we see that we as consultants have an important role to play in moderating, questioning and provide industry best practices.

5. Realize the value of tests in reality

By making a rapid first version of your CPQ-system you’ll get a quick take part in multicultural, multilingual and even intergenerational insights and learn from them. By going live quickly and exposing the CPQs ability of the organization, you can quickly make customizations that make the system several hundred percent better.

6. Be aware of the "black box-problem"

Trust is another subject that CPQ is forced to face when it comes out in reality – something that is known as the black box problem. How can this be overcome? An important part is not to complicate things more than that they can be explained.
Often it is domino effects in product logic/price models that gives weird (but accurate) effects. Here it is important to be well prepared to explain and describe the logic in an educational way.

7. Establish clear measurements

Having clear operational measures for your CPQ-project is important to prove that it works – and deserves continued support. But many companies do not give this aspect sufficient attention in their CPQ projects.
This is a problem with emerging new technologies such as CPQ. The result is likely to be CPQ projects that are bridges to nowhere, pilots that are not scaled up and projects without any business value. Therefore, we do not make pilots. We make sure to go directly to production and in this way are the goals we set up linked to the company sales. It makes it very easy to judge what works and not.

8. Look inward

Where do you find people who can both understand CPQ and the requirements from the business? It is not an easy task. There is a clear lack of CPQ skills.
One often overlooked method to bring down skills shortages is to look internally to find people who can take CPQ trainings. This way you can work so that there are people who have both CPQ and industry expertise. This is a very important part of our deliveries. We see no long-term benefit of the system if it cannot be managed internally. Our role should only be consultative once we have released the first product.

Configure Price Quote Software

Posted On Friday, July 5, 2019


CPQ is normally a cloud-based software that helps sales teams to automate their quotation routines and manage interactions with clients.

Configuration

The C in CPQ stands for configuration. This means keeping track of all the logic that goes into a complex product. Certain options are required, others can not be combined.
The number of permutations is normally enormous. Even simple products often have millions of possible ways of combining a product. This means that the maintenance-effort required to keep the product logic up to date is one of the most important factors when evaluating the configuration engine.

Pricing

The P in CPQ stands for pricing. The next set of logic to master is the rules and constraints regarding prices and discounts. Certain items come cheaper as a bundle, some item are alliable for bigger discount while other can not be discounted at all.
This means that workflow and organizational hierarchies are needed to do pricing effectively. Keeping track of prices and the possibility to escalate the sales opportunities to management is all part of pricing.
Support for different pricing models, pricelists and purchasing agreements are essential in pricing.

Quotation

The Q in CPQ stands for quotation. Texts, specifications and images all come together in an advanced template that dynamically adjusts the quotation for each customer.
The ease of use and flexibility of the document generation is a very important factor when evaluating how the quotation can meet your business needs.

For a global company it’s often a requirement that both configuration and quotation must natively support multiple languages.

Vendors

According to analysts the leading vendors in CPQ are Apttus, Oracle, Salesforce and SAP. Niche players in manufacturing are PROS, FPX and Tacton. 

Common abbreviations explained

Posted On Wednesday, December 19, 2018


Below is a list of frequently used abbreviations used in relation to CPQ:

  • ATO – Assemble To Order;  is a production approach where once a confirmed order for products is received, the products are assembled.

  • BOM – Bill Of Material; describes the different components/articles that together create a product. A BOM for a bicycle, for example, consists of all the parts that make up the bicycle: the frame, the saddle, wheels, and so on.

  • BTO – Built To Order; sometimes referred to as make to order (MTO), is a production approach where once a confirmed order for products is received, products are built.

  • CAD – Computer Aided Design; is the use of computer systems to assist in the creation, modification, analysis, or optimization of a design.

  • CPQ – Configure, Price and Quote; the complete software suite for configuring, pricing and quoting your custom product.

  • CRM – Customer Relation Management; the software suite for managing a company’s interactions with customers, clients, and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. 

  • E-BOM – Engineering Bill Of Material; the list of engineering components/articles in a product (see BOM). Typically used as an complement to S-BOM and M-BOM.

  • ERP – Enterprise Resource Planning; the software suite to manage information across an entire organization, including finance, manufacturing and sometime sales and service.

  • ETO – Engineer To Order; a product in which after an order is received, parts of or the design is done uniquely for the specific customer.

  • M-BOM - Manufacturing BOM; the list of components/articles required to manufacture a product (see BOM). Typically used as an complement to S-BOM and E-BOM.

  • MTO - Made To Order; see BTO (Built To Order)

  • PDM – Product Data Management; typically an IT-system containing information about the product like CAD-drawings etc.

  • PLM – Product Lifecycle Management; in essence the next generation of PDM (even though vendors of PLM like to differentiate)

  • Sales-BOM – As Sold BOM; which is the list of component that are sold to a customer. These components are broken down to a E-BOM.

  • SKU - Stock Keeping Unit; a distinct type of item for sale, often the items included in a S-BOM. Typically used as another term for article or component. 

Five common pricing mistakes a CPQ solution will address

Posted On Friday, September 2, 2016

Pricing is difficult and also very sensitive. Changes in pricing is one of the most effective way to level overall profit.

This list of pricing mistakes can be used to build a good business case for a CPQ (Configure-Price-Quote) investment.

Weak controls on discounting

It’s not uncommon that sales representatives are given a lot of freedom when it comes to negotiating the price. This means what the profit per deal is very dependent on the person executing the sales.

Discounts are often given without a controlled won/loss analysis and are more based on gut feeling. This means that prices will vary very randomly.

Without analysis and a proper approval process these issues will not go away. This is something a CPQ solution will address.

Inadequate systems for tracking competitor selling prices and market share

It’s difficult to understand the completion and most companies don’t put any effort into analyzing the lost deals.

With a CPQ solution it’s possible to benchmark the won and lost deals in a very structured way. It’s possible to find what key features of the product that correlates with won deals and also what features that are typical for lost deals.

Cost-plus pricing

Cost plus pricing is still very common in the manufacturing industry. The problem with this approach is that it assumes that the customer value is dependent on the production cost. Everybody knows that this is not the case.

A CPQ solution can price on factors that are actually valued by the customer and at the same time ensure that margin.

Price increases poorly executed

There is a problem when price increases can’t be motivated. If we’re not providing any new customer value, why should I pay a higher price?

It’s essential to plan ahead and do price increases as your product improves. If your new engine will cut fuel consumption there is no problem to pay a higher price.

That’s why price increase should be coordinated with product development. This means that timing is essential. Do the math and plan ahead. This is a process that a CPQ solution should support.

Worldwide price inconsistencies

In a global market it’s no longer possible to have inconsistent pricing.

By introducing a central storage for local price it’s possible to understand and correct price inconsistencies. A CPQ solution normally connects the global and the local prices. This means that a CPQ solution introduces the possibility to have governance for local pricing.

Configure Price Quote software - the key benefits

Posted On Monday, August 25, 2014

Configure Price Quote software shortens the sales processes by automating the configuration, pricing and quoting of complex products, services and bundles.

“configure price quote” software is getting attention from global companies looking to reduce errors and streamline sales of complex product. Configure price quote software will serve as a consistent front-office interface with all necessary integration to existing back-office systems.

CPQ (“configure price quote”) is more and more becoming a critical advantage in several industry verticals. Fast and accurate quotation processes is no longer something to strive for – it’s now a critical factor in the competitive landscape.

The primary benefits with Configure Price Quote software include:

  • Guided and automation sales process supporting your customers through important selection including configuration, quoting and ordering.
  • Central pricing processes for establishing, maintaining and publishing pricing for products, services and combination bundles.
  • Workflow for quoting including creation, management and negotiation of sales quotes.

Guided and automated sales process

  • Increased deal size by simplifying cross-sell, up-sell and solution bundles. Service contracts and other related services are quoted together with the product ensuring returning revenue for a longer period of time.
  • Reduced costs and increased customer satisfaction as incorrect orders are dramatically reduced.
  • Increased sales productivity when repetitive, time consuming manual work is eliminated.

Central pricing process

  • Pricing consistency and automatic pricing changes instantly available in all sales channels.
  • Defined structure for pricing to decrease the maintenance due to changing market conditions.
  • Pricing models based on customer segments with analytics feedback for continuous improvements. Built in dashboards for sales and pricing governance.

Workflow for quotations

  • Significant time savings to create, negotiate and convert quotes into orders.
  • Increased visibility and traceability in the quoting process.
  • Support for channel and partners sales for complex products.

What is CPQ?

Posted On Tuesday, August 12, 2014

Definition

CPQ is an acronym for Configure, Price, Quote. CPQ is used to describe the process of selecting components (configure), handling pricing (price) and generating documentation (quote). CPQ software is primarily used for complex products, services or a combination of the two.

CPQ solutions
  • supports a simple way to select valid product combinations with respect to product rules and limitations
  • price the product correctly according to bundling and discounts
  • creates an accurate and persuasive quote based on this information
CPQ software connects front and back end systems and automates the lead-to-cash process.

What is a CPQ process?

What’s included in a CPQ process? Is it all automated and in what way is it adoptable and flexible?

Configure: All complex products have limitations to how modules or sub-components can be combined. The user normally specifies key features and main products, a configurator handles all limitations and itty-bitty details.

Price: Manufacturing costs, geographies, competitive situation, and local protocols - the pricing can be just as complex as the product itself. The price adjustments should both be automatic but also offer flexibility and advice for sales tactics.

Quote: Documents describing a complex product includes texts, illustrations, data sheets, drawings. All specific for each offer generated. The level of details should be flexible and document generation should be fully automated.

Why CPQ - business drivers at a glance

Posted On Monday, July 14, 2014

Configure price quote (CPQ) software cuts through sales difficulty to help leading corporations sell more effectively. CPQ empowers sales reps and associates to recommend combination of goods and services, generate accurate quotes, and gets deals signed faster.

With effective step-by-step guided selling and streamlined workflows for quotes, proposals and contract management CPQ software takes advanced sales to the next level. CPQ increases average deal size, accelerates sales cycles and makes your business more professional.

CPQ - Configure, price, quote software

Posted On Sunday, July 13, 2014

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