First CPQ Implementation Guide

basic information

In this guide, we will answer your questions about CPQ. 1. What does a CPQ system include? 2. Can a CPQ system integrate with existing systems and data? 3. Do we need CPQ? 4. Which department benefits the most from implementing CPQ? 5. What risks does CPQ mitigate, and how does it contribute to the success of digital transformation (DX)? 6. What is the optimal CPQ system? <For more details, you can download from the related link> https://www.cincom.co.jp/resources/cpq-introduction

Applications/Examples of results

1: What does a CPQ system include? "C" - Product Configurator The product configurator is a powerful feature of the CPQ system. Here, rules for model selection, product specifications, sizes, material choices, and more are embedded in the system. The process of manually approving estimates by engineers is transformed into rules that are automatically applied, significantly speeding up the estimation process and making it more user-friendly. In the CPQ product configurator, the available options are determined by the user's selections, ensuring that incorrect configurations do not occur. Sales representatives can input selection items, and other sales channels, such as websites for agents or customers, can be set up to create estimates using the same guidance and rules. With CPQ, even the most complex products can be estimated in minutes rather than days or weeks. The technical department no longer needs to approve every estimate, the production department is spared the hassle of rejecting incorrect configurations, and customers receive exactly what was quoted.

Detailed information

• 

  "P" - Pricing Engine For companies that want to maintain profit margins and achieve revenue goals, the CPQ pricing engine is extremely valuable. In CPQ, labor costs and raw material costs are set and can be viewed in a management view for each case, but they are not displayed to customers. The pricing functionality acts as a guardrail, preventing sales representatives from making deals below the established margin. Pricing strategies and options can be defined based on various criteria such as location, customer loyalty, and risk factors. By visualizing profits, decision-makers can prioritize cases and prevent wasting resources on unprofitable deals.

• 

  "Q" - Proposal/Quotation Creation Function The ability to automatically create consistent and attractive proposals is a groundbreaking feature for sales representatives. In a cumbersome quotation creation process that requires sales representatives to cut and paste parts from other proposals, the result often ends up being unprofessional and requires hours of revision. With the user-friendly document generator of CPQ, sales representatives can quickly create consistent and appealing proposals. By using CPQ, sales representatives no longer need to manually create proposals, allowing them to spend more time on sales activities.

• 

  2: Can the CPQ system integrate with existing systems and data? The implementation of an appropriate CPQ solution can significantly contribute to the promotion of digital transformation (DX). Behind the scenes, CPQ integration allows data to flow between different enterprise systems, eliminating the silos of information that hinder the efficiency and effectiveness of digital solutions. CPQ can collaborate with data from CRM and ERP, pricing and configuration rules, and product inventory status, enabling various sales channels to create their own quotes. The integration capabilities of the CPQ system are central to the benefits of DX. To fully leverage the advantages of interconnected systems and maximize robust CRM, ERP, PLM, and other enterprise applications, data needs to flow between systems. CPQ eliminates silos and provides a framework for sharing information across departments, thereby removing error-prone copy-and-paste steps.

• 

  3: Is CPQ necessary for our company? Many companies initially use spreadsheet systems or other in-house developed applications to tackle product configuration and quote generation in a fragmented manner. However, as the business and product lines grow and become more complex, and as the number of sales representatives increases, these ad-hoc systems become inadequate. Companies that could benefit from the efficiency of a CPQ solution often exhibit the following signs or symptoms: - It takes days to create quotes, reducing the probability of closing deals. - Inconsistent pricing leads to internal confusion and customer dissatisfaction. - Inaccurate configurations cause multiple change orders and rework. - Product and pricing information is siloed across departments, leading to information fragmentation. A CPQ solution built for your company has many advantages compared to Excel-based systems and others.

• 

  4: Which departments or types of people benefit the most from the implementation of CPQ? While it is often the sales team that first recognizes the benefits of CPQ solutions, CPQ is a solution that can be effective across multiple departments, not just the sales team. Sales representatives do not need to learn and use multiple systems to gather the necessary information. Engineers only need to review special cases and do not have to review every quote. In the case of automated configuration, engineers can access configuration data at any time. The IT department does not need to update multiple systems when costs or prices change. Updates are made automatically and quickly, providing the sales department with the latest information directly drawn from financial systems, ERP, CRM, and more. The purchasing department can take proactive measures by analyzing the types of quotes and customer trends. For example, they can view quotes that are likely to include hard-to-order parts with sufficient time to change suppliers if necessary.

• 

  5: How does CPQ mitigate risks and contribute to the success of DX? An appropriate CPQ solution can have a significant impact in solving business issues arising from the use of inefficient systems. - Risk of low margins squeezing profits ⇒ Pricing embedded in CPQ acts as guardrails to protect margins. - Latest product and pricing information not presented to customers ⇒ CPQ integration eliminates silos and synchronizes sales with current pricing and correct product configurations. - Scalability hindered CPQ provides the infrastructure for guided selling that can be utilized across multiple sales channels, such as dealers. - Risk of missing sales opportunities with existing customers ⇒ CPQ can suggest upselling and cross-selling opportunities that sales representatives may not be aware of. - Risk of not meeting production deadlines CPQ enhances pipeline visibility and allows for early intervention on potential issues in the supply chain. - Opportunities lost to faster competitors CPQ reduces quote time by over 50%, leading to the closure of deals that were previously lost due to delayed quotes.

• 

  6: What is the optimal CPQ system? Available CPQ systems range from those focused on streamlining basic product quoting to those equipped with robust document generators, complex product configurators, and infrastructure that supports integration with multiple enterprise applications. Use the checklist below to identify the type of CPQ system your company needs: [Checklist: What features does your company need in a CPQ system?] 1. A complex product configurator capable of handling thousands of product configuration patterns 2. A robust quoting tool integrated with CRM 3. Integration with enterprise applications such as ERP, PLM, and SAP 4. Multi-channel sales support 5. Back-end logic for web sales UI 6. Guided selling capabilities 7. Price guardrails 8. Product visualization 9. E-commerce functionality 10. AI suggesting products and prices