Configure, Price, Quote (CPQ) platforms are relatively new on the scene. But, as often happens with technology, the pace of market change has been so swift that the first platforms have soon become outdated. As a result, second-generation CPQ has emerged before the first wave has been fully appreciated.
CPQ is a sales tool designed to help companies produce accurate and highly configured quotes. It centralizes all complex product, pricing and business rules, making them automatic and available in real time. But so much for definitions. Why is it needed?
Appropriately for an application that’s evolving so rapidly, the topline answer to this question is that CPQ turns ideas into reality more quickly. Taking a great new concept from initial discussion to fruition used to take anywhere up to a year or so. In many sectors, such as telecoms or software, this is no longer fast enough; the markets move so quickly that by the time the product or service is launched, it may no longer be relevant.
Due to this constant need for reinvention and renewal, product portfolios have become increasingly complex. Technology advances, new compliance regulations and increasing globalization have also played a part in making life more difficult for sales and marketing teams who struggle to optimize their entire catalogues. It hasn’t helped being hampered by outdated legacy IT, which can present them with a confusing array of configurations.
Enter the first CPQ platforms. At first, these were exactly what was required at a functional level to make the sales process more efficient. But now, these sales operations need more streamlining and more agility. It has become even more urgent to quickly launch new products and services, to eliminate clunky business processes and excessive admin tasks in order to stay competitive. Businesses now want something that takes them beyond CPQ to help them manage the entire customer lifecycle from quote to cash. So, a new generation of platforms that includes CPQ – and more – has emerged in the market.
Needless to say, this can be confusing for anyone considering investing in the technology and naturally wants to ensure a fast return. How can they be sure they get it right? In this slideshow, Rowley Douglas, executive vice president of CloudSense, explains more about this disruptive new technology and issues that should be considered.
Configure, Price, Quote (CPQ) Adoption Considerations
Click through for more about CPQ technology and factors that organizations should consider to ensure they get it right, as identified by Rowley Douglas, executive vice president of CloudSense.
Not Just an Add-On – More a Real Disrupter
Next-generation CPQ is like an iron fist in a velvet glove. In other words, it’s far more powerful than it first appears. But because it provides unprecedented agility to change the way a company goes to market, it can be highly disruptive – if and when required. It can be used to just replace older technology and still offer great operational efficiencies and cost savings. But think beyond this and you will be rewarded.
Next-gen CPQ provides a platform to quickly adapt and launch goods and services across a range of different market sectors. But it goes even further by supporting teams throughout the entire product and sales cycle. By ensuring orders are accurately configured, there are higher levels of consistency and fewer errors.
More specifically, CPQ will help reps guide the sales conversation by defining the order of questions and parameters of potential answers, while streamlining the process by showing or hiding options based on earlier selections.
Perhaps even more importantly, however, the process enables the business to experiment and find the right formula, the innovative products, commercial models and the most effective channels to market, enabling them to disrupt and lead the field. This capability ultimately provides the leadership team with the flexibility and agility it needs to react rapidly to changes in the market and identify the most efficient ways to fund growth.
Involve the Entire Company
Next-generation CPQ is great for sales, enabling teams to exceed targets for new customers and renewals. But others within the company will find it valuable too. For example, it will help product managers run the entire product lifecycle, and it will allow marketing teams to easily develop and implement promotional plans. So you need to make sure that your colleagues understand CPQ and the benefits it will bring to their team in particular.
The recommended tack is to explain predicted and measurable improvements for each business function, focusing on the metrics that will best resonate with each team. For example, the sales team will like to hear about the number of quotes per person, higher percentages of quota achieved and improved retention rates. On the other hand, marketers will appreciate the shorter time to market, improved conversion rates and lower costs per lead. Customer service will be looking for other benefits, such as a good user experience and improvement in productivity through a reduction in admin.
Beyond these functions, CPQ typically integrates with other ERP systems. This capability provides a seamless transition of data and processes to other parts of the business such as fulfillment and finance.
Prepare to Improve the Customer Experience
CPQ platforms enable companies to look beyond traditional channels to provide a unified buying experience. They provide a single customer view to deliver a seamless cross-channel experience, thereby encouraging loyalty and retention.
Moreover, the ability of CPQ platforms to enhance customer engagement through easy upselling, cross-selling and bundling of different products and services will serve to enhance customer engagement and build customer loyalty.
Because of this, CPQ platforms will enable an enhanced alignment of the sales process to customer experience. So teams can build customer experience foundations based on a genuine understanding of the most valuable customer interactions.
Consider the Cloud
As with many of today’s solutions, CPQ tools can be delivered as software as a service (SaaS) through the cloud. That means there is no major capital outlay or long implementation time required. The system will typically come pre-configured and ready for set up and integration into the business. The responsibilities for running and maintaining the system lie with the vendor.
Freedom for the IT Department
CPQ takes certain elements out of the IT department and puts them into the hands of teams who are not necessarily experts or technological wizards. Administrators in a range of different departments can quickly and easily keep systems up to date and make rapid changes without recourse to expert IT staff.
This provides a solution for IT skills shortages and frees up existing teams. Instead of concentrating on the nuts and bolts and making systems speak to one another, they must first ensure the platforms are being adopted properly and that everyone is accessing the right information. They can then move downstream to information management, focusing on more proactive and strategic tasks such as analytics. However, this will need planning, training and careful management.
Next-generation CPQ can help break down organizational barriers and provide a single view of all aspects of the customer, the sales process and the product. In other words, in the future, it could be as vital a business tool as CRM or ERP, for example.