When we are getting approached by customers looking for a CPQ solution, we always ensure that we work towards a common understanding before we go deep into the business requirements and problem resolution. We found that almost everyone has a different definition or understanding of CPQ, which may be a quite elaborate process for establishing this common ground.
So, what is CPQ? Per Gartner’s definition, CPQ application suites provide an integrated set of software applications supporting the configuration, pricing and quote generation activities that accompany solution and negotiated selling. CPQ application suites are also deployed to support self-service sales environments, including B2C and B2B environments. CPQ systems typically include pricing engines, proposal generators, quoting systems, and rules or constraint engines, and are complemented by authorization and approval workflows.
A CPQ solution, which is used to configure, price and quote products and services, typically connects to a CRM system - such as Salesforce, which is used to manage and analyze customer interactions and data, as well as to an ERP system, - such as SAP or ORACLE, which is used to collect, store and manage data from all business areas.
For us, here at KBMax, CPQ includes all business activities, which are associated with generating the most accurate quotes or proposals for our customers’ products, by supporting all disciplines in the value delivery chain:
SALES: We automate cost and price quotes, orders, invoices, etc. which can all be routed and tracked through CRM systems
OPERATIONS: We automate BOMs, item numbers, OPIs, etc., which can be routed through virtually any ERP platform, and
ENGINEERING: We automates calculations, validations, plus models & drawings in CAD and route them to PDM systems and integrate with platforms like Solidworks, Autodesk and Creo.
So, what are the benefits of CPQ? One of major benefits in automating CPQ is eliminating configuration, quoting, pricing or contract error by defining the rules and processes once and make it available to everyone. This ensures the most accurate quotes and proposals are created, quickly - instead of weeks we are able to help our customers to do this in minutes, which in the end helps to close more deals faster.
Efficiently share best practices used by the best sales people, use what is working best, standardize and automate it, and make it available to the entire sales team so everyone can benefit from it. Our cloud-based platform allows access to standard and configurable products, is responsive and works on any device.
Another benefit I wanted to point out is the ability to increase deal sizes with cross-sell or up-sell guidance. Additional sales opportunities could consist of accessories, spare parts or services (cross-selling), or additional product options (up-selling). Being able to capture the additional revenues by automatically suggesting add-on items based on the rules specified significantly increases the sales teams’ effectiveness.