In most companies, the need for a CPQ is driven by the desire to produce quick and accurate proposals. The ability to move quicker than the competition helps to establish a perception of responsiveness to the needs of the prospects . If that responsiveness is coupled with a smooth proposal and contractual process which ensures that the clients gets exactly what they require, then they are likely to feel that they have chosen the right partner. This outcome is valuable to any company and is a great reason to implement a CPQ.
However, the ability to turn around quotes and proposals quickly has now evolved beyond something that the sales team can manage on its own. Once a company has reached the position where its products are either too complex or too numerous or both to manage normally, it will need a CPQ solution. In such a case it follows that the design and implementation of a CPQ solution will require the involvement of several different parts of the company in order to be able to come up with the most suitable and accurate offering to the prospects.
Consider a scenario where an organisation offers compatible parts and related services for a range of third party fitness equipment (for example Bluetooth interfaces). The organisation will need a fair amount of information to be able to prepare a quote:
- What product/solution does the prospect want?
- What existing equipment (make/model etc) must it interoperate with?
- Does it need to design any new hardware or software to ensure interoperation? How much will it cost?
- What effort is required for installation?
- What warranty is it providing? Does the prospect require an extended warranty?
- Will it be providing ongoing maintenance? Will it do this in-house or through a third party?
The answers to these key questions may require input from a range of disciplines within the company. For instance R&D may need to review the requirement for new components; Professional Services may need to provide input on installation and Customer Care may need to be responsible for pricing the warranty elements; Procurement may be required to get quotes for third party products and services required to support the solution.
Managing all the different departments and capturing their required input for a speedy turnaround becomes critical in delivering on the company objectives of quick and accurate sales. Once these other functions are brought in, the impact of the CPQ on the wider organisation becomes evident. For instance, if the Professional Services team is to provide input on installation, would it be required to use a different tool to do so and then enter the output of that process in the CPQ? Questions like these soon appear – “I thought this tool would simplify the process. Now I have to enter the same data in two systems?”
This sort of thing raises the issues of master data management, data ownership, integrations between systems, inventory and resource management etc. All these points highlight that, though the need for a CPQ solution is often driven by sales, the reality of a CPQ implementation is companywide. It can start as a sales supporting tool but to maximise its value to the company, to further reduce errors and move even quicker in the sales cycle, the reach of the CPQ solution will extend to many more areas of the organisation.
The perception of CPQ solutions as sales tools that they reach slightly into other parts of the company for the purpose of supporting sales is still common with; companies in the process of adopting them; vendors and implementers. In our view, the CPQ should be considered as a tool enabling improvement in the whole of the client’s organisation. Every CPQ implementation should be carried out with the underlying idea of supporting the whole company and the specific goal of a speedier more accurate sales cycle.
- On April 20, 2016