Historically grown processes, tools, interfaces as well as manual workarounds characterize today's challenges for companies when creating customer offers. A lack of standardization and modularization of individual products or services can also make efficient working methods even more difficult. Such conditions reduce the speed and quality of offer management, increase sales costs and endanger the success rate of individual contract conclusions. Emil Matevski, Managing Consultant and Head of Digital Efficiency Transformation and Automation at Detecon, talks about the possibilities for solving these problems.
Currently, various SaaS solutions on the market are aimed at optimizing sales efficiency. Their functionality increases the speed of quoting and improves the customer experience during the quoting process. These solutions are known as Configure Price Quote (CPQ) systems. CPQ automates the configuration of individual customer quotations in interaction with the CRM system. At the same time, it leads to interaction between the existing order, product management, service management and ERP systems and provides the basis for order processing and order invoicing.
CPQ implementation - more functionalities and efficiency
Statistics show that companies using CPQ tools and processes have doubled their order size on average. One of the reasons for this is the quotation ratio per sales employee, which is 50 percent higher than the quotation ratio of companies without CPQ. In addition, companies benefit from leaner quotation processes, which can be very cost-intensive depending on the industry and competition.
By implementing a suitable CPQ solution, the following functions are gained in the offer process:
- Guided Selling: Thanks to CPQ, complex sales processes are simplified by "next step" suggestions and up-selling opportunities in real time.
- Configuration: Simplified configuration of individual products and services with the use of ready-made configurators is intuitively possible in one system.
- Product catalogs & pricing functions: CPQ integrates product descriptions and pricing strategies in one system and creates a simple overview. It also includes pricing functions that enable the creation of customer-specific price books.
- Quotation Creation & Team Collaboration: CPQ automates the creation of quotations and finds the required quotation content to speed up the sales process. It also enables virtual collaboration of several employees on a quote.
- Automation of quote approvals: Approvals are issued automatically via the CPQ system. Quotations are submitted faster.
- Integration of partners: Partner services can be more easily and digitally integrated into the quotation process via API interfaces of the CPQ solutions.
- Mobile access: via web access, mobile devices such as tablets or smartphones can also be used in customer meetings for quote generation.
- Self-used customer portals: Using web access, customers can configure individual products and services themselves and create their own offers.
- Sales analytics: Overview of the number of offers per customer and product, the orders won as well as the underlying sales, pricing strategies and margins.
With the implementation of CPQ solutions and functions, the following efficiencies can be achieved in the offer process as a side effect:
- System consolidation: Consolidation of several heterogeneous supply systems per product in one or a few integrated supply systems.
- Automated and simplified quotation process: Transformation of manual and multi-level interactions of individual specialists in an automated lean quotation process with generalists.
- Relief of employees in the quotation process: Reduction of the necessary work steps in the preparation of quotations or relocation of the preparation of quotations by the customer himself through customer portals.
- Reduce response time in the quotation process: Acceleration of the quotation creation process including approvals from several weeks/months to a few minutes/days.
- Increase the number of offers: By reducing the response time, it is possible to prepare several offers with the same resources. This increases the chances for an improved order intake.
- Reduce human error in the quotation process: Due to built-in real-time checks during product configuration in the CPQ system, only quality-assured quotations are possible.
- Standardized quotation templates: Standardization of the quotation design with prefabricated and legally verified quotation templates.
- Training of new sales colleagues: Thanks to the central quotation platform in CPQ, sales staff can get a quicker overview of the available products, their pricing strategies and quotation contents and provide solution-oriented advice to customers in real time.
- Automation of an order in the ordering systems: Via interface integration of individual ordering systems, accepted offers can be processed digitally.
The break-even point after the introduction of a CPQ system is on average between six and twelve months. However, these advantages can only be realized by selecting a suitable CPQ software. Since every company has different requirements for such a system, the vendor selection process is one of the greater challenges. Due to the multitude of options and functions, it is easy to lose track.
The approach to implementing a CPQ solution
The automation and digitalization of processes is always associated with risks. A transformation requires not only well-structured planning and implementation, but also support for the cultural change of the employees involved.
To ensure a smooth transformation of all affected areas and employee training, as well as to ensure the success of the CPQ implementation, the customer must go through four implementation phases:
- Maturity assessment: Determination of the status quo of the existing product complexity, the underlying offer processes and tools; as well as the organizational roles and responsibilities.
- Product portfolio, standardization & modeling: Optimization and standardization of the product structure, offer texts, product modeling, pricing as a basis for implementation in CPQ.
- Process, design & solution selection: End-to-end design of the new offering process, underlying IT architecture and organization, CPQ solution selection and implementation planning including business case.
- CPQ Implementation: Project management of the end-to-end implementation including CPQ training, organizational redesign and decommissioning of redundant tools in the offering process.
Whether the possible increase in efficiency of up to 75 percent can be achieved by implementing CPQ systems in sales processes depends on whether the individual steps from planning to implementation of the solution are integrated in a holistic program and whether top management will support this as one of the most important components of their own digital transformation.