Five Things You Should Avoid for a Successful CPQ Project

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While configure-price-quote (or CPQ for short) solutions have been available for at least a decade, they are still new to many companies.

Anyone interested in a new CPQ solution, any CPQ solution, needs to be open, honest and critical when they review and adjust their current CPQ-related systems and processes, like their sales process or the process, to introduce new products and services.

During COVID-19 they have grabbed the attention of many more potential customers because they can help with many pandemic-related business challenges like remote selling, self-service selling and much more.

The emphasis here is on “can help” because, unfortunately, not every CPQ project is successful.

Therefore, it is important to highlight a couple of fairly common mistakes early on to ensure your CPQ project can succeed!

One big and common mistake has to be mentioned right at the start, it is that a good number of customers try to rebuild their old systems and processes in a new environment.

This challenge has been around for at least 25 years and it is still preventing many customers from taking full advantage of modern CPQ processes and systems.

Anyone interested in a new CPQ solution, any CPQ solution, needs to be open, honest and critical when they review and adjust their current CPQ-related systems and processes, like their sales process or the process to introduce new products and services.

This sounds easier than it is because people are used to working with certain systems and processes and it takes hard work, in the form of change management, to get buy-in for a new solution. Do not underestimate this effort! It may sound simple, but it is not easy!

Customers that are not willing to do this should not even consider acquiring a new solution since they won’t take advantage of the many, new opportunities; they have with a modern CPQ solution.

Plus, they may potentially waste a lot of money for very little progress or no progress at all.

But anyone who is open to using new processes and solutions has a lot to gain as long as they don’t make these five mistakes:

  1. Customers don’t engage independent experts to select a CPQ solution
  2. CPQ software buying decisions are flawed
  3. Customers don’t do any homework before a CPQ vendor is engaged
  4. No process is used to find a suitable system integrator
  5. Change management is undervalued

Customers Don’t Engage Independent Experts to Select a CPQ Solution

There are many different CPQ solutions for many different industries and use cases available.

In fact, there are 100-plus different CPQ solutions available, and if a customer has no in-house experts, they will greatly benefit from working with an independent expert to find the most suitable solution in the shortest amount of time for their business.

Note: Many “CPQ experts” only work with one or two CPQ vendors and, hence, will always recommend that solution because they benefit from it financially. Just think of Maslow’s phrase “If all you have is a hammer, everything looks like a nail.”

This is potentially good, at least in the short-term, for the CPQ vendor and the system integrator but not necessarily for the customer.

If you want to learn about CPQ solutions, talk to someone who knows many CPQ solutions and who doesn’t get paid to recommend one solution over the other. Note that this effort should only take a pretty small amount of the “CPQ budget.”

CPQ Software Buying Decisions Are Flawed

Often buying decisions are heavily influenced by three factors:

1. A customer has a specific, often overly aggressive, start date in mind. Whatever CPQ vendor and/or system integrator promises the earliest go-live date wins. There are multiple potential problems with that approach. For example, the fastest solution may not have the functionality that really makes a bottom-line difference. Therefore, the suggestion here is to consider CPQ a long-term effort that will require on-going development and improvements. So, while go-live dates are very important they should have less impact on a buying decision. A customer has a specific budget for a CPQ solution in mind and does not want to learn about CPQ solutions that don’t fit that budget. Whatever CPQ vendor and/or System Integrator promises the lowest price wins.

Consider that the cheapest solution doesn’t have to be the best or even the right solution and that it is possible and common to negotiate customer-specific prices. Hence, don’t exclude CPQ solutions right at the beginning of the buying process at least as long as they are not more than 50 percent over your budget.

2. Team members, on all levels, have a preference for a specific CPQ solution based on previous experience. For example, lower to mid-level employees often mention that they want to work with Salesforce because they expect that this skillset is beneficial for their careers, while more senior leaders have had success with a specific CPQ solution at a previous company and want to repeat that success now at their new companies. Instead of solely relying on previous experiences with a CPQ solution, it makes sense to do a business analysis of the current company to determine which CPQ solution fits best.

3. Customers Don’t Do Any Homework before a CPQ Vendor Is Engaged
If mistake 1 was made this is a typical consequence. Experience shows that in +90 percent of all new CPQ implementations this mistake is costing a customer the most amount of time and money!

Instead of preparing a CPQ project work in a small, internal group with one external CPQ expert they start the project with a CPQ vendor or system integrator in a larger group in a “discovery” phase. This delays the start time of the project and it typically makes the project more expensive since more external resources get involved.

Clear signs a customer didn’t do their homework:

  • Product master data has not been reviewed to determine if it is usable for configurable products. This is important because the product structure is the foundation for every CPQ project, and the product modeling rules. If the product structure is not right it will require more time and resources, while the project has started, to remedy this problem.
  • CPQ-related business processes are not documented or they are only documented on a very high level. Some examples are sales processes, channel sales processes and new product introduction. While the new CPQ solution obviously has to be taken into account to develop better processes it is important that the desired goals (i.e. KPIs) are defined.
  • Product configuration rules are not documented. They are hidden in people’s heads, in Excel formulas and so on. Even when a company has used a CPQ solution in the past their product configuration rules are often not documented outside the CPQ solution. If, on the other side, the product configuration rules are documented before a new CPQ solution is selected and implemented the implementation can proceed much faster.

No Process Is Used to Find a Suitable System Integrator

While many customers spend considerable time to find a suitable CPQ vendor they barely spend any time to find a system integrator that they can work with.

Many customers rely mostly on recommendations from the CPQ vendor they work with. This is a mistake since they may spend more time with the system integrator than with the CPQ vendor.

Here are some questions that should be part of any system integrator vetting process:

  • How long have the CPQ vendor and system integrator worked together? If they work together regularly, they are typically a well-rehearsed team which can save considerable time and money.
  • How much industry experience does the system integrator have in your industry? Tip: Ask for reference customers you can talk to!
  • How much integration experience has the system integrator with your CPQ solution and the rest of your IT architecture? For example, how often do they integrate with your CRM, ERP, PLM or CAD solution?
  • What resources (i.e. junior, senior) will be assigned to your CPQ project?

Be wary if a system integrator says “yes” too often to a customer’s business requirements! Experienced system integrators typically say more “no” than “yes!”

A common side-effect of saying “yes” too often is that custom code is developed. Which may also be an attempt to rebuild current processes and systems in the new CPQ solution as mentioned above.

Depending on the size and complexity of a CPQ project you don’t need to plan to spend more than 1-3 weeks on selecting a suitable system integrator.

Change Management Is Undervalued

This is a big and common mistake in CPQ projects! Successful CPQ projects need to be supported from the start and they need to be supported by top management all the way to the users.

Plus, change management doesn’t stop with the first implementation but is an on-going effort. Here some examples of change management challenges

  • No senior change leaders get involved
  • Expectations are too high (i.e., over-aggressive go-live dates are set, too much functionality is expected too quickly)
  • User adoption is not properly prepared (i.e., training requirements for users are underestimated, support is underestimated, users find workarounds if the solution doesn’t meet their expectations)

If a senior internal leader is dedicated to actively lead this effort most of the challenges can be prevented or quickly addressed.

A customer that is aware of these challenges at the beginning of a CPQ project has a much higher chance of success than a customer who learns these lessons the hard way.

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