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Showing posts with label cpq process. Show all posts
Showing posts with label cpq process. Show all posts

Tacton CPQ Enterprise vs. Tacton CPQ Professional

Posted On Thursday, September 26, 2019

Tacton CPQ is available in two editions – Tacton CPQ Enterprise and Tacton CPQ Professional.

The Professional Edition is an out-of-the-box solution with predefined industry-specific workflows, templates and processes. This typically meets the needs of small and medium businesses looking for the advantages of a standard CPQ solution.

The Enterprise Edition can be more tailored to meet specific business requirements and extends the functionality of Tacton CPQ with even more configurability.

So, what’s the big difference?

In Tacton CPQ there are different objects very much in the same fashion as you find in CRM-systems like Salesforce and Microsoft Dynamics. Standard objects are Account, Opportunities, Solutions, Approvals, just to name a few.

In Tacton CPQ Professional all necessary objects are already predefined but new objects can not be created, but the existing objects can be tailored. In Tacton CPQ Enterprise it is possible to create new objects.

So, what does this mean? 

Let me give an example…

Say that you have something called “Purchasing agreements” that gives certain customer an extra discount for selected pricelists. Both Tacton CPQ Professional and Tacton CPQ Enterprise supports pricelists, but if you want to add additional business logic to your pricing combining pricelist with account one way to do this would be to define a new object, a purchasing agreement object.

In practice this means that if the initial CPQ-analysis shows that there might be a need for one extra object there is usually no need to worry. If we wanted to solve a few “Purchasing agreements” we could extend the pricelist objects, add a few extra pricelists and the problem would have been solved. 

The real difference is when there is a need for multiple new objects to sort out complex business logic. So, rule of thumb is to move to Enterprise once such complexities gets too tricky.

There are a few limitations to Tacton CPQ Professional that one needs to take into consideration. In the table below we point out the major differences in the table below.


Tacton CPQ Professional
Tacton CPQ Enterprise
Advanced Configuration
X
X
Advanced Pricing
X
X
Simple document generation
X
X
Advanced document generation
-
X
CPQ Branding    
-
X
Workflows
X
X
Lead generation
-
O
Industry-standard User roles
X
X
Custom User roles
-
X
Business approvals
X
X
Technical approvals
X
X
Visualization
O
O
iPad App
O
X

Tacton CPQ Professional is set up based on years of CPQ-experience to give an out-of-the-box setup ready to tackle the common CPQ challenges. In the illustration below the standard workflow and supporting objects are displayed. To put it simple; if you need to define more blue or gray boxes Tacton CPQ Professional is not for you. If you think that your business operates like most businesses, you should probably get started with Tacton CPQ Professional. 



So, what about the price? Is there a difference? What do I need to pay?

We’ll let you do the math and give you a clue; if you pay the same amount of dough Tacton CPQ Professional will increase your number of users by 50 % compared with Tacton CPQ Enterprise.

It’s our firm belief that 90 % of small and medium business will be more than satisfied with Tacton CPQ Professional. After a CPQ Analysis workshop we can tell you for sure.

Tacton CPQ consultants in Sweden

Posted On Wednesday, September 11, 2019



Tacton CPQ is a software product for configuration, pricing, quoting (CPQ) automates and manages advanced configuration, pricing and bidding processes for complex products and services. Our CPQ consultants will help you gather the information you need, prioritize and help you execute your CPQ roadmap.

CPQ SE offers

- The most experienced Tacton CPQ consultants with extensive experience from Swedish manufacturing industry- CPQ domain experts with minimum 10+ years in CPQ consulting (Tacton CPQ, TCsite and Tacton Studio)

- Local advice for small and medium-sized businesses in the Nordics
- A large network of Tacton CPQ partners to expand your investment
- Special Advice on Supporting Processes, Change Management and Roadmap Priorities
- Fixed price plan to bring you full transparency and weekly showcases throughout the project in Sweden and the Scandinavian countries
- Global consultation for global businesses

Tacton CPQ, a cloud-based solution, is often used by sales teams to quickly create bids and increase the efficiency of the sales process. Our Tacton CPQ consultants will configure the system to get you started without delay.

Our Tacton CPQ consulting helps clients set up and deploy CPQs quickly and efficiently. In addition to the application, our Tacton CPQ consultants will assist you with personalized training and support you with any challenges associated with Tacton CPQ.

Our ultimate goal is to eliminate ourselves as your Tacton CPQ consultants. At the end of the day, this will give you the softest and most up to date CPQ system.

Of course, our Tacton CPQ consultants will stay on to make sure you take advantage of new features and stay on top of the game. However, our long-term goal with any project is very clear - to help you maintain your Tacton CPQ independently.

Our Tacton CPQ consultants are experts in the Health, Industry, Heavy Vehicles, Food Processing, Packaging, Transportation, Energy and more sectors.

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

Check out our consultants on LinkedIn


Curious about our pricing? Sign up for our newsletter and we will send you our price list.



 

What is a sales configurator ?

Posted On Monday, September 9, 2019




With an online sales configurator – like Tacton CPQ – your customers, resellers, retailers, and sales teams can easily configure and display their products on any device. Access to the online sales configurator is possible anytime and anywhere. It's much like having an experienced product manager who offers the best suggestions while ensuring products can be produced. The pricing module of the sales configurator will make sure the price is competitive and profitable.

The sales configurator controls what products are available to what user.  Changes to new products, options, pricing, promotions and marketing materials can be distributed instantaneously, so all sales channels always have accurate updated information.

A sales configurator helps translate product features into value and benefits. A sales configurator integrates rules and business logic for design, manufacturing and cost, and will reduce the training needs and the in-depth product knowledge. A sales configurator also reduces costs due to errors and incomplete offers.

By presenting the entire product range in an online sales configurator, your customers can configure their product choices, get quotes instantly, set accurate delivery dates, and even place orders with no or minimal impact on sales.

A sales configurator is often used to guide customers to the right buying decision based on their needs and budget. The “Guided Selling” approach identifies ways to promote higher value products and introduce new revenue streams, such as: service contracts, aftermarket packages, add-ons, and warranties.

By making it easier to buy the products thru the sales configurator enterprises build strong relationships with customers and strengthening brand loyalty. A smooth sales process has a very positive impact the sales process and the way companies bring their products to market.

Today's B2B and B2C customers want options and customizations for most offers. Customers also want to receive complex offerings in no-time. Finally, customers expect a quick response to changing demands on purchase contracts.

To provide customers with this flexibility the sales force will need tools like a sales configurator that accelerate supply, ensure accuracy, and make selling custom products and services as easy as selling standard offerings.

With a sales configurator a sales rep can create quotes and quotes that are instantly. It’s no longer necessary to search for price list information, brochures, old proposals and other sources. The sales representative doesn’t need to request expertise from other teams and departments. Instead, they can launch the sales configurator from a tablet or browser. Intuitive questionnaire will deliver the right product, the right price and a fancy quote within minutes.

The sales configurator business logic provides non-sequenced questions, 2D and 3D visualizations, and continuous calculations to ensure product conformity. Pricing, discounts, margins, and more are calculated in by the advanced pricing engine to ensure bottom line profit.

With an advanced sales configurator – like Tacton CPQ – a sales rep will NEVER get stuck between conflicting choices. The sales configurator will always present a valid product selection and will also indicate conflicting choices. There’s a big difference between different techniques to describe “the product rules”. All will stop you from doing wrong, just a few will help you do right. This makes a difference front-end but will also dramatically simplify maintenance of the business logic.

How a sales configurator contributes to business success

Customer Confidence: the product selection is customer centric and asks questions based on customer needs and budget. A sales configurator an suggest the optimal solution for a specific customer. This creates confidence

Guided Selling: A modern sales configurator will guide sales representatives through the sales / 
quotation process. The sales configurator quickly identify ways to cross-sell and up-sell accessories and other products, helping the sales representatives to better meet customers hidden needs.

"Selling the Impossible": Sales representatives will never again sell impossible solutions, products that can neither be produced or delivered. “Selling the impossible” is a far to frequent and often costly job mistake. In a sales configurator an impossible combinations is simply blocked.

Mobility for responsive service: Sales representatives can work anywhere on devices from laptops to smartphones to create and adjust outstanding quotes. The information is stored and version handled directly in the sales configurator.

Full Insight: With a modern sales configurator sales representative can quickly show how options can affect weight, price, production time, and other critical variables.  

Product Visualization: “Seeing is believing” and depending on customer expectations both the 2D and 3D views can be presented directly in the sales configurator. This makes the configuration easy to understand and has proven to shorten the sales cycle for both simple and complex products.

A sales configurator will change the way your sales representatives do business, negotiate complex deals and respond quickly to changing product and service requirements. Learn how to use the sales configurator to configure virtually anything on any device to ensure a fast quote and responsive customer service!

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.

Top 7 CPQ features

Posted On Friday, August 23, 2019



CPQ increases revenue and profitability by making it simpler and faster to sell complex products

CPQ improves efficiency with an automatic quotation process

CPQ support manufacturing by enabling a multi-channel sale with flexibility, speed and insight

CPQ significantly reduces internal work for sales support

CPQ dramatically reduces order errors

CPQ enables effective guidance in customer-facing applications

CPQ is nowadays provided as a service and can be set up quickly given that your organization is ready

Multi-channel sales CPQ with ease

Posted On Wednesday, August 21, 2019



Multi-channel sales are made simple with CPQ. Managing multiple sales channels within the same tool can be troublesome but, this is a worry of the past. This might be a bumpy road, but in this article will sort out what you need to consider in order to support your multi-channel sales challenges.


What is multi-channel sales?



Multi-channel selling is the process of selling your products on more than one sales channel. Multi-channel management includes a mix of your own sales representatives, partners, OEM-suppliers and maybe directly on your website.

Selling on multiple sales channels increases your exposure to potential customers and will increases your sales opportunities. Multi-channel sales are also a way to minimize risk, especially for niche buyers and markets.

In the age of digitalization there is an increasing demand for online presence. In the time of of self-service sales, it’s important to minimize the product complexity and the potential errors due to misunderstanding. This is one of the main drivers for guided selling and high-level product guidance in the CPQ software.

Multiple sales channels give the opportunity to differentiate prices to match your service level commitment. The delivery terms and after-market commitment can also differ between channels.
The three main challenges in multi-challenge sales are the following;

Product offering per sales channel
Pricing and discounts per sales channel
Term and conditions per sales channel

Let’s dive deeper into each one of these topics and how a multi-channel CPQ can support these requirements.

Product offering and guiding your customer

The CPQ solution must be able to easily handle variations in the product portfolio. To start, not all products are sold to all markets. In the same way, it must be possible to control what options and features that are available for different sales channels. Obviously, all CPQ systems can manage this – the key questions is the effort to keep this kind of information up to date.

The second thing is the possibility to communicate and speak the language of the end customer. Different sales channels have different knowledge about your product. Where users in one channel care more about the overall performance of your product is in big contrast to a sales channel with very much focus on details. Here you want to keep the same “core product logic”, but be able to adjust what kind of questions to ask depending on sales channel.

A modern CPQ solution will provide effective tools to tailor general product logic to a specific sales channel.

Pricing and value


Price lists and discounts will most likely be different when you do multi-channel sales. Depending on the perceived value of the product and services provided thru a sales channel it’s very likely that prices are adjusted accordingly.

With multi-channel sales it’s possible to sell both highly standardized products and highly customized products at very different price points. A customer asking for higher level of customization will likely have a more expensive products as their next-best alternative.

A customer looking at a very standardized product might not expect to get the extensive know-how your company can offer and will therefore not value the product at the premium price point normally used. Selling a limited product portfolio thru a dedicated sales channel can be an opportunity to reach these customers that in other cases would have chosen a different vendor.
A modern CPQ solution will provide multiple price lists associated with specific markets or customer types in a multi-dimensional fashion.


Terms, conditions and appearance


Selling thru multiple sales channels will require different content and branding of the generated quotes and proposals. With multiple sales channels it’s possible to deliver exactly the same product but with different terms and conditions to match expectations within a certain sales channel or industry vertical.

A CPQ solutions can produce much more than just line-item prices; it can automatically create a full-blown proposal including customized 2D- and 3D-drawings. This is especially important in sales involving complex products or applications and can create a unique conformity in the quoting process.

The content is likely specific both to country and sales channel. For a global company it’s also important to support quoting in more than one language.  When it comes to multi-channel sales it’s equally important to align sales pitch as getting the language correct.

Bottom line


With modern CPQ software you can address all of the issues of multi-channel sales mentioned above with ease. With a CPQ solution it’s possible to deliver market and channel specific proposals, priced correctly and, of course, only with products available in alignment with your overall product strategy.

If you need advice on multi-channel sales CPQ, please get in touch.

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.

Top 5 things you should read or listen to before starting your CPQ project

Posted On Saturday, July 20, 2019


Ok, so you're planning to implement CPQ at your business. You figured you should maybe do some reading to learn some tips and tricks. Where should you start?

We've collected the 5 most important things you should read or listen to about CPQ before starting your project.

1. Gartner's Magic Quadrant

Gartner publishes a research paper once a year in the form of a Magic Quadrant. The latest version was released in November 2018. The document can usually be downloaded for free from some of the vendor's web sites (Apptus).

2. Knowledge-Based Configuration: From Research to Business Cases by Alexander Felfernig, Lothar Hotz, Claire Bagley, Juha Tiihonen

This is an academic-styled book about configuration. We don't recommend you to read the whole thing, as it will gain you limited value for actually implementing CPQ. We do recommend chapter 2 for a brief history of configuration, chapter 6 for understanding of different technologies for CPQ and chapter 16-19 for valuable insights into implementations at different companies.

3. Product Customization by Lars Hvam
This is a really good book for preparing your company for a CPQ implementation, how to document your CPQ data before the implementation.

4. The CPQ Podcast

Novus CPQ is an independent CPQ analyst firm. Their podcast is focused on CPQ tools and processes, and will provide you with useful insights. They conduct interviews with many CPQ leaders and analysts.

5. Top 10 reasons why CPQ projects fail

Don't miss this blog post describing the top 10 pitfalls when implementing CPQ. Learn from mistakes made in other CPQ project, and avoid doing them in your project.

Top 10 reasons why CPQ projects fail

Posted On Saturday, July 13, 2019

The CPQ does not have backing from senior management

The CPQ process is spread all over the enterprise and touches many groups including sales, IT, engineering, marketing and order management. The planning and development of a CPQ solution must involve all of these organizations and must address the requirements of each group.

CPQ is a knowledge-based tool, and it's never better than the actual knowledge and data in the tool. Usually the product expert or senior sales rep who is too busy working with deals, is the person most needed for this type of project.

Backing from senior management is essential, to allow for prioritization of the implementation of the CPQ over the day-to-day business tasks for all these organizations, including the busy experts.

Scope creep

Scope creep is an uncontrolled growth in a project’s scope after the project has begun. This is very common in CPQ projects as you learn about and define processes that quite often were never documented before. 

This is why it's important to define project objectives early in the project, and refer to them as much as possible when deciding on changes to the project. It's also important to have a defined change control process, with a steering group that has backing from senior management. 

There's no easy solution to scope creep, but being aware of the problem is essential. 

Aiming at 100% of sales done with CPQ

If you ask an engineer working for an elevator company how many floors the elevators can have the most, he might answer 100. However, maybe 95% of the sales have fewer than 10 floors, and all elevators above 20 floors require some engineer-to-order? So, does it really make sense to allow for 100 floors in the configurator?

We recommend aiming at 80-95% of the configurations done automatically by the CPQ software, and allowing for some manual work for the rest. The reason is that there is typically an 80-20 rule in regards to implementation, where the last 20% of the configuration complexity will take 80% of the implementation time of the tool.

It is much better to focus on 80% of the sales initially in the project, and to make sure there is a ready process for the other 20% of the sales. If the project is a success, why not aim higher in the next phase of the project?

Bad data quality

A good sales configurator will use your product data existing in current systems. But how good is the quality of that data today? Do you have an organization in which all knowledge is stored in people’s heads and documentation is missing? As stated above, the output from the configurator will never be better than the input, which means you need to make an inventory of your product data and documentation.

You might need to structure and systemize your product data before selecting or implementing sales configuration software. If you don’t, the implementation will probably take much longer than expected, and changes of the tool will be done multiple times back and forth before being able to release.

Too few or too many integrations

Implementing integrations take time, whatever the IT-guy will tell you. Even a standard integration may require some adaptation because the software you are already using and want to integrate to is probably customized. Adding integrations to all your surrounding tools will add up to a hefty budget, and with some delays added, your project might get stopped before it is released.

Hence it is important to prioritize integrations, and to allow for manual integration in the early phases of the project. Do your prices reside in ERP? Are they only changed every 6 months? Can you export them to Excel initially, to get the project going? If you can get a manual integration to work, try to push the implementation work to the future.

However, from a similar perspective pushing integrations to the future which require a large amount of manual work is also a bad idea. The manual work will cost money and may cause update errors.
When selecting a vendor, make sure they have standard integrations to the essential systems you need to integrate to. Focus only on crucial integrations in the early phases to allow for a quick return on investment. Add the additional integrations in later phases, and do separate ROI calculations for the specific integrations.

The configurator cannot solve the configuration problem

Configuration is a complex subject. To put things into perspective; the number of atoms in the universe is estimated to be 10^80. A configurable product with 100 choices, and 10 alternatives for each choice has 10^100 combinations.

It is important to select a configurator that is able to solve complex configuration problems, an incorrect selection of sales configurator may lead to being force to simplify the configuration problem too much and hence giving incorrect configurations or prices to the sales person.

Too much focus on tangible products

A typical product does not only consist of hardware, but also other intangible products. It’s not uncommon for companies to have higher margins on services, spares and extended warranties. These products should not be forgotten when implementing the configurator – because without these the configurator is not complete. And if the configurator is not complete, the deals will either be missing these high margin products, or the sales will simply not use the CPQ due to the missing products.

The CPQ isn’t easy to use

If the solution is difficult to use or just slow – it will fail because no one will use it.

Your solution should simplify a complex process, not replace one complex process with another. There are often tradeoffs in functionality when simplicity is the primary goal. Make sure your CPQ is achieving a good balance between these two elements.

The CPQ doesn’t focus on the key users

CPQ projects tend to be initiated by all other departments at companies except sales, because sales are too busy working on quotes for customers. Hence the key tasks of the tool often misunderstood and not implemented properly.

The most important task of a CPQ is to help the sales person create a correct, competitive and valid quote quickly – and what that means exactly is different for different companies.
Makes sure key people from the sales department are involved in the selection and development process to insure that their requirements are covered.

No focus on data maintenance

In most configurable products, the master data changes continuously. New options are added and old ones disappear, new suppliers emerge, prices change, etc. Often, these changes are made on a daily or weekly basis. Typically, these changes are managed in ERP or PLM systems by people not involved in the CPQ maintenance.

It's vital that master data maintenance requires minimal amount of changes in the CPQ software. It is also equally important that an organization is set up to be responsible for the maintenance of the software, because with even a minimal amount of maintenance it still needs to be tested and validated.

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. 

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.
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