Product Configurator System: Tool, Solution or Integrated System?
Sales configurator software, and more specifically, product configurator software, comes in a wide range of varieties, formats and sophistication. For the sake of simplicity, I’m going to toss them all into one of three bags: tools, solutions and systems.
Depending on your application and your level of complexity in terms of product, market, price or organization, you may be best served by a simple, free-standing tool, or you may require a more elaborate, full-function integrated system.
Here are some examples of what I’m talking about.
John sells cleaning supplies to large companies and janitorial services. His product line is made up of roughly 50 cleaning compounds that are designed to address specific cleaning needs based on the composition of the surface to be cleaned and the type of soiling to be addressed.
The biggest variables in quoting his customers are price, volume and delivery requirements. Because of the content in some of the products and demand, the pricing may be prone to seasonal adjustment.
John’s biggest challenge is to make sure he is quoting a current price for a given product in stated quantities.
He doesn’t need to design complicated variations of the products or negotiate elaborate contracts with his customers. He needs to confirm that this product costs this much per pound or ton and that it is in stock.
For this level of sophistication, a simple tool—tablet resident or cloud-based—will deliver real-time quotes based on the few variables necessary to scale a proper and accurate price. Pricing can be updated automatically in real time to assure that the tools are always using current prices.
Moving up the complexity chain, we will consider Pam’s selling challenge. She sells a line of vehicle cleaning equipment. Her products are highly variable, but use standardized components to address things like vehicle size, water temperature, detergents used, hourly throughput requirement, soil composition and vehicle tracks installed.
Her company offers small, self-contained, automated units that are installed behind fuel centers or filling stations. They are coin operated, unmanned and fully automated. They also offer large vehicle units for truck stops that are designed to be operational in freezing weather and equipped to remove road salt quickly and completely.
Pam’s main product line is sold to operators of commercial drive through car wash facilities. These are configured to fit into buildings designed from the ground up as car washes. She has single-site customers as well as customers with a regional footprint involving up to 100 sites.
Some of the car washes feature multiple tracks, and some are single-lane capacity.
The machines used in equipping these facilities are highly customized to conform to climate changes, traffic volume and composition of the soil to be removed. Optional waxing stations, brushless scrubbers and air-drying make the final product very unique.
The tracks themselves are subject to a high degree of variability based on sophistication of the services offered and the size of the building.
Lots of variability in product configuration, pricing components as well as delivery and installation requirements make these quotes extremely complex.
A full-blown configure-price-quote solution is necessary here. Many different suppliers need to be reliably quoted with the expectation that their stated prices are good for establishing a cost base for the quote. Customer status, such as volume discounts applied for multiple sites or a national account status granted for annual business volume, automatically adjust prices quoted.
This requires much more than an automated price list. There are too many places where memory will fail, critical information will be left out and uninformed third parties will not “get the message” in terms of delivery requirements or special needs.
A configure-price-quote solution will handle the product complexity and pricing flexibility required.
Product Configurator Systems
When you have complex product requirements like those mentioned in the second section and you also have a complex organization. An organization with multiple business units, multiple product lines selling into multiple countries, pulling supplies out of a complex supply chain with highly variable demand and margin sensitivity, you are talking about a need for an integrated system.
When you rely on real-time data to supply your performance measuring facilities that feed an appetite for reporting sliced and diced by geography, product, business unit, year over year and all other permutations, you want your system to be integrated into a single overarching structure.
CPQ feeds data into the order management system, which alerts the supply chain management system and opens a production slot within your plant operations and scheduling systems. Your ERP system picks up and routes all data to those functions that require it.
These systems are far more than what Bob or Suzy may have on the laptop or tablet. These are architected with precision and sophistication and tailored to the specific organization they serve.
Consider a company like GE. They make appliances, jet engines, automotive systems, aerospace systems and just about anything else you can think of and manage the parts, assemblies, subassemblies, pricing, availability, internal and external sources, the back-up supplier networks, the product queue and the financial reporting requirements for all of it.
Driving the future product directions, the marketing, engineering and testing along with the selling and supporting of the thousands of direct and indirect customers requires a committed and highly evolved IT infrastructure.
This is the difference between a system and a solution. A system is integrated and interfaced throughout the enterprise.
Selecting what you need for your particular operation should be based on current requirements with a bit of room for growth. But, avoid overbuying and overcomplicating your business processes with capability you simply do not need.