I recently came across a blog piece in Manufacturing Magazine that offered five specific benefits related to CPQ software and configuration technology for manufacturers. It’s a strong list that offers five good reasons why manufacturers should be exploiting this technology. The author also talks about the fact that 60 percent of companies do not utilize CPQ technology other than spreadsheets or similar tools.
Here is a brief, summarized version of the list.
- Accurate pricing
- Faster quotations
- Automation of a time-consumptive, error-prone process
- Allows Sales to concentrate on selling
- Provides an accurate source of sales data for forecasting
First, the list is fine, and I have no argument with it. Second, the fact that management sees no value in investing in CPQ is troubling, but it may be due to the fact that these five benefits are presented as tactical advantages. Management may see these five advantages as having beneficial effects for the salesperson and perhaps even to sales management, but not to the enterprise as a whole.
That’s an important distinction, because this tactical view may cause them to miss out on the very real strategic advantages that CPQ Software can facilitate. Cincom CPQ™, coupled with the Cincom Estimating capability, will facilitate certain strategic benefits that will aid the manufacturing enterprise on its journey to Advanced Manufacturing.
How Is Cincom CPQ Strategic?
Let’s start with the fifth reason listed: accurate sales data facilitates forecasting. It certainly does, and more importantly, it points out the need for sales to be participating in the strategic planning processes that lead to annual sales plans, product development and other critical customer-impacting directions that the enterprise may be contemplating.
Obviously, Sales cannot operate on its own, but Sales must be held accountable for more than making a top-line revenue number. That means Sales must be measured over what they sell along with how much revenue is generated. This means they should have input into the strategic-plan development for any given year.
Cincom CPQ, CRM and Cincom Estimating all will deliver the kind of strategic data needed to inform sound decision-making in the areas of marketing product development, sales forecasting and R&D investment. This data is not only fed back into the configuration tools but also into product data modules within AX itself.
Since the plan is developed and is agreed to by both management and Sales, it is only natural that the systems used by Sales should facilitate the execution of that plan. CPQ Software and Estimating do just that.
How Does Cincom CPQ and Estimating Impact Execution?
Cincom’s Estimating module gives Sales the option of going beyond the stock models and configurations of standard products. But, with Cincom Estimating, this is done in a formal process that includes direct involvement of the back-office supply chain and engineering functions. There are times when companies should pass on specials, and there are times when specials represent an opportunity to expand the product line and return additional profits. Cincom Estimating provides the strategic sense that allows the enterprise to know the difference between a loser and winner product before committing resources to build it.
Voice of the Customer
Customer demand should trigger production in the advanced manufacturing enterprise, and the systems supporting Sales should facilitate accurate, quick turnaround of customer requests for quotations. More advanced manufacturers see the necessity of only making what is sold versus the push methodology of selling what they have made. This is what customer focus is all about.
When management of the manufacturing enterprise understands that Cincom CPQ software and Cincom Estimating deliver these benefits, their interest in these technologies will certainly increase.