CPQ Is an Organization System

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CPQ and similar process automation systems are often seen only in the context of their immediate functionality. It is tempting to see CPQ as a “sales process” system or an element within the overall guided selling process.

While the quote process is a critical part of guided selling, it extends far beyond the selling silo and the sales rep’s laptop. Numerous systems are touched, queried and accessed by CPQ to facilitate the fulfillment of the CPQ mission.

Let’s take a look at the CPQ functionality, by its main components, and see each interacts with other enterprise systems.

Configuration Process

Configuration is determined by needs flowing from the customer’s pain and specifics related to the customer’s requirements. As these needs are identified, specific parts, assemblies and other variables are selected within the configurator to address each individual need.

Things like the customer location will drive configuration selections related to electrical power and documentation language. Environmental considerations will drive other selections related to insulation, ruggedized cases and water resistance.

Where does this information come from? Product Management and Engineering collaborated on the assorted designs, and as usage scenarios were identified, specific options were developed to address these different options. They have supplied the basic information into the catalog of options available for the product.

As the product moves through its lifecycle, these options will increase and decrease over the years. Product Management and Engineering remain tightly tied to the configuration process and the maintenance of that process over time.

Pricing Process

Each part, assembly and product have an associated cost and resultant price. As the configuration is completed, the pricing function is busy behind the scenes, running a part-by-part tally of costs and prices.

Product Management and Engineering initially helped to identify the cost basis of the assorted parts, and Finance may have participated in this as well, particularly in the area of overhead costs. Marketing would typically take the cost elements, and in consideration of things like anticipated sales volume and profitability, targets established list pricing for the product line.

Marketing also would develop the discount structure, if any, to reflect volume discounts, national account status or government discounts. CRM would supply the pricing system with individual customer status and attributes that would drive any discounts.

Like configuration, pricing maintenance is not a one-time process. Pricing must be adjusted periodically for inflation, changing sales volumes and other variables. Product Management, Engineering, Finance and Marketing all must review and adjust prices over time.

Quotation Process

The quote process is designed to assure consistent, accurate and error-free quotations. These may be ballpark quotes requiring only a list of products and prices or full-blown proposals.

Proposals may carry some level of legal liability, so the wording, design and content of a proposal will likely require some intervention by your legal team. This is in addition to the Marketing content required in terms of product and functionality descriptions, collateral and user stories included in the proposal package. Finance may include revisions to ROI calculations as well.

All of these elements are dynamic over time and will require modification and updating. The actual fonts and logos used within the documents produced will need to reflect the most current image that Marketing is deploying for the company.

CPQ provides great value in terms of being a process automation tool, as a key ingredient in your guided selling strategy and in your quote process in general. Supporting all of that information and keeping it current requires the ongoing participation of many corporate elements within the enterprise.

Yes, CPQ is most visible from the vantage point of the sales rep onsite building a quote. But it does not stop there. CPQ extends into many corners within the enterprise. CPQ is an organization-wide enterprise system.


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