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Showing posts with label product configurator. Show all posts
Showing posts with label product configurator. Show all posts

Why is product configuration complex?

Posted On Thursday, January 17, 2019


In essence, a product configurator is only a bunch of selection menus that you need to keep track of to validate that it is technically correct solution. So why is it complex, and why do you need a tool for it?

The easiest way to explain this is to think of a typical configurator for a product. Imagine that our sales configurator has 25 questions, with an average of 10 answers to each question. This is a reasonably sized configurator, your product may very well have many more questions. So how many theoretical variants of the product do we have? To calculate this, you have to take the number of variants in question 1 which is 10, multiple by the number of variants in question 2 which is also 10, and keep on going...

So basically 10x10x10… until we get to 25 questions. So this gives us 10^25 number of solutions (that’s a 1 with 25 zeros).

This is a large number, but how large is it? Well, imagine we spend 1 millisecond (a thousand of a second) to analyze each potential solution just to make sure it is valid or not. Well, then we would spend the time equal to the age of our universe 10000 times (the age of the universe is about 10^21) to validate that our solution is correct.

So it becomes obvious we cannot analyze each solution in a configurator. We can cheat - and just try the configuration the sales rep put together and check that all rules are ok. But then we won't know if there are any better solutions out there.

Tacton uses a constraint-solving configuration engine, to try to do something smarter.

Contact us to find out what!

How CPQ analytics can improve product development

Posted On Friday, August 18, 2017


One interesting aspect of an implemented CPQ solution is the possibility to analyze sales in a new way.

Traditional sales statistics answers the question what has been sold. This is somewhat interesting but normally it doesn’t bring very much new insight to the table.

With clever BI-tools (like Tableau or QlikView) it’s possible to slice the data in a way that will give you a better understanding on what’s tending and who is really doing profitable sales. But this still doesn’t answer the big question… With ordinary sales statistics one can tell WHAT is selling, but it doesn’t answer the question WHY?

A CPQ solution makes it possible to keep track of all quotations. This opens up for analysis where one can compare successful quotes with the less successful. This type of analysis will give concrete measures on what products that has been offered and make it possible to compare it what has actually been sold.

The analysis gives the possibility to reduce the product portfolio based on what has been part of actual quotations and if it has been sold. This gives a rating per sub-component whether a certain product is providing adequate value on the market.

The analysis also answers the question where there is possibility for new business. By understanding the type of deals that are refused by customers gives great input for product development.

This video (found on the Tacton Youtube-channel) introduces the concept of CPQ analysis.

Top 4 reasons why manufacturers choose a CPQ solution

Posted On Wednesday, July 23, 2014

What criteria can you use to determine if your company needs a CPQ solution? How can you tell when it’s time to invest in CPQ software?

I wouldn’t set out specific criteria as much as offer four reasons that I think will help you sort out an answer.

This is what we hear over and over again from clients and potential customers.

Spend more time selling

Is there a feeling that not enough selling is being done by your team? If so, this deserves your immediate attention.

Sales people are expensive and their primary role is to engage with customers and prospects. This is how your organization generates revenue.

Preparing quotations and proposal documentation is still a major tasks in many sales organizations. If this can be reduced there will be more time for actual selling. This is the first reason to invest in a CPQ solution.

Better proposals

A good quote delivers a vibrant, crisp and compelling proposals that distinguish you from the competition. A superior quote will persuade your customer and win more business.

Developing best practice for quotes, RFP documents and other sales documentation enables your team to increase the overall quality of the delivered proposals.

A better proposal will tell the customer that you will fulfill their needs and deliver what the customer wants. A better proposal that will provide important benefits and clearly describe the delivered value. A better proposal that validate that you have the right qualifications to fulfill the customer needs.

The proposal should send the message why your company better than anyone else can deliver the optimal solution with the highest value. This is the second reason to invest in a CPQ solution.

Get the price right

Working with complex products is somewhat problematic. To get the price right is a challenge and it makes a big difference when it comes to bottom line earnings.

The first problem: One option often requires another option. Forgetting that other option in a quote can be will severely reduce the profit. But to keep track of all options and exception is a difficult task that requires up-to-date knowledge.

The second problem: When multiple products are combined there is normally a reduction in price that only applies under certain conditions. To work with packages is an efficient way to expand the offering, but it also requires that up-to-date knowledge.

The third problem: In a changing world pricelists need to adopt fast. What was previously done on a yearly basis is nowadays more likely to be day-to-day updates. To be able to adopt to changing circumstances also requires that up-to-date knowledge.

The third reason to invest in a CPQ solution is the fact that up-to-date knowledge should be part of the CPQ package.

First to respond

When a customer asks for a quotation or proposal it’s unlikely the request is sent only to your company. The most likely scenario is that the same questions and requirements will be sent to up to a dozen competitors.

Companies with an implemented CPQ solutions reports that speed makes a difference when it comes to closing more deals. A rapid respond really makes a difference.

Being the first to respond will in itself not guarantee better business. But in combination with more time selling, better proposals and correct pricing it definitely makes a difference. That’s why it’s the forth reason to invest in a CPQ solution.

CPQ - Configure, price, quote software

Posted On Sunday, July 13, 2014

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