What is CPQ?

Configure-Price-Quote (CPQ) enables customers to obtain customised quotes for intricate products. In the context of made-to-order products, customers have the flexibility to select parameters that influence the pricing. For instance, a luxury lounge suite may necessitate the selection of fabric, leg wood finish, and springing and filling options. Manufacturers face the challenge of producing all possible combinations, but needing to avoid the risk of manufacturing certain options that have low demand.

More complex CPQ situations occur across many sectors, and the quoting of these products is likely either being done in either old, on-premise applications that predate cloud technology or using spreadsheets models built and maintained by key staff in their business.

‍Why Choose and Implement a Modern Cloud CPQ Solution?

The CPQ quoting system can be made available for either a B2B or B2C situation to enable customers to select the key parameters to suit their requirements. The potential advantages of this are:

• ‍Speeding Up the Quoting Process: The customer performs the work to order, akin to an online shopping cart. This approach mitigates errors in entering parameters, as CPQ orders frequently necessitate comprehending and inputting parameters into the internal application or spreadsheet. These parameters are typically communicated over the phone, handwritten, scanned them and subsequently emailed. An online CPQ process effectively addresses this communication risk.

• ‍Lowering the Cost of Ordering: Whenever staff interpret customers’ preferences, such as gathering parameters for a CPQ application, it can lead to delays in order fulfilment and poses a competitive risk. Even experienced and skilled staff, including owners, may be required to handle this task. Not all quotes may be accepted, resulting in lost productivity and potential bottlenecks during peak periods or stress from backlogs.‍

• Cost Savings and Efficiency: Transitioning from an on-premises application or spreadsheet CPQ system to an online, cloud-based CPQ system incurs costs, but the advantages become evident upon its implementation. This transition directly saves time for key staff members and reduces errors. Evaluate the cost-benefit analysis by comparing the total end-to-end staff time expended on a made-to-order workflow currently to the time saved after the cloud CPQ system is operational. Repurpose the saved staff time to productive areas, such as manufacturing the confirmed orders. Quality cloud CPQ solutions necessitate minimal additional configuration for new products, unlike legacy on-premises CPQ applications or spreadsheet processes. These processes lack the substantial benefits offered by cloud CPQ solutions.‍

• Improved customer experience: Consider the potential benefits of a superior CPQ solution for customers. Accurate upfront pricing enhances customer service and fosters trust. This mutually beneficial approach leads to increased satisfaction for both parties.‍

• Competitive advantage: High-quality cloud-based CPQ solutions provide businesses with a competitive edge by optimising systems and workflows. They offer swift and precise quotes, optimising time management and minimising human error. This efficiency is particularly significant when considering the potential consequences of incorrect quote interpretations in the context of manufacturing processes. ‍

• Integrations with other systems: Look for a cloud-based CPQ solution that integrates seamlessly with your existing cloud infrastructure. Integrating inventory management and project/process management systems offers numerous benefits throughout business processes. Implementing a cloud CPQ system into your organisation’s workflow will continue to yield substantial, streamlined workflow savings and productivity enhancements over time, compared to the costs and bottlenecks associated with traditional methods.‍

• Scalability with business growth: As businesses grow, sales processes can become more complex, requiring more time and consideration to efficiently and effectively complete tasks. The tools a business uses should be able to scale as it experiences growth. Before implementing any kind of solution into a workflow, the company should consider the solution’s ability to scale according to future business needs. This particularly applies to CPQ solutions. Ensuring the CPQ solution will scale when sales demand/growth occurs, it will be able to adapt to increasing sales volumes and evolving business needs without added disruptions.
  

Cloud CPQ summarised

Implementing a modern cloud CPQ solution can significantly enhance the efficiency and accuracy of the quoting process for complex products. By automating and streamlining the configuration, pricing, and quoting stages, businesses can reduce errors, save valuable staff time, and improve customer satisfaction. The transition from on-premises or spreadsheet-based systems to a cloud-based CPQ solution may involve initial costs, but the long-term benefits, including scalability, integration with existing systems, and competitive advantage, make it a worthwhile investment. Ultimately, a well-implemented CPQ solution not only supports business growth but also ensures a seamless and positive experience for customers.