For years, companies have used word processing and spreadsheets for client quotes, involving discovery, configuration, customization, review, and approval. This method is time-consuming and error-prone, risking inaccurate pricing, unapproved discounts, and missed revenue opportunities. Modernizing with CPQ software streamlines this process, allowing sales reps to quickly generate accurate quotes, email them to clients, and include e-signatures to close deals efficiently.
What is the CPQ process?
CPQ stands for Configure Price Quote, which is the process salespeople follow when configuring products, determining the price of the products, and producing a quote.
The CPQ process simplifies the quoting process for configurable products and is an integral part of the quote-to-cash process.
CPQ software is a tool widely adopted in the manufacturing sector for automating and streamlining the CPQ process. Businesses dealing with complex configurable products find it particularly valuable, as it has the capability to transform their operational efficiency.
How Epicor CPQ works across the configure-to-order (CTO) lifecycle.
CPQ software equips sales teams with powerful tools that simplify their tasks, enhance their productivity, and enable them to respond confidently to customer inquiries. It frees sales reps from the burden of complex configurations and calculations, allowing them to focus on engaging with customers, understanding their needs, and closing deals.
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Product configuration
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Dynamic pricing
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Quote generation
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Engineering automation
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Shop floor automation
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The final product
Why is CPQ important?
In a fiercely competitive, high-tech business environment, CPQ is a vital tool. It addresses several challenges your company face, such as meeting rising customer expectations, improving efficiency, enabling sales teams, and empowering customers.
Customer Expectations
B2B buyers want to buy personalized products. CPQ tailors offerings to their unique needs, boosting satisfaction and loyalty
Efficiency and accuracy
CPQ automates slow, manual processes, ensuring quicker, more accurate configurations and quotes.
Dynamic pricing
CPQ offers dynamic pricing, adjusting prices in real-time for a competitive edge and profit maximization.
Sales enablement
CPQ empowers sales teams with tools to simplify tasks and boost productivity. It lets them focus on customer engagement and closing deals.
Engineering automation
CPQ streamlines engineering, auto-generating CAD files, bills of materials, and 3D product renderings.
Data analysis and forecasting
CPQ collects data on customer behavior trends and product performance, aiding in strategic decision-making and sales forecasting.
Disadvantages of MTO
While MTO methods provide various advantages, including enhanced customization and lowered inventory costs, they also come with distinct challenges.
These challenges often involve difficulties in gathering custom orders, conveying them to manufacturing, minimizing lead times, and adapting inventory management processes within the supply chain. Let's examine these aspects in detail:
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Complexity in Production Planning and Management
- Pressure to Shorten Lead Times
- Difficulty in Manually Quoting Complex Products
How CPQ Overcomes MTO Challenges
CPQ software is an all-in-one tool that streamlines the selling, engineering, and manufacturing of customizable products.
It guides users through the configuration process, ensuring all selections are compatible and manufacturable, and then generates accurate pricing based on these options. CPQ also creates professional quotes with product specifications, pricing, and lead times, and can produce CAD files, BOMs, and other necessary documents for production.
Let’s explore how CPQ supports MTO in more detail:
- Managing Complex Configurations
CPQ software simplifies managing the numerous options and customizations in MTO products with a user-friendly visual interface. It ensures compatibility and manufacturability, reducing errors and improving efficiency. Some platforms, like Epicor CPQ, offer AR and VR capabilities for interactive product configurations. - Generating Accurate Pricing
CPQ automates pricing by calculating it based on the selected configuration, ensuring accuracy and optimizing profitability. Solutions like Epicor CPQ can integrate external data sources to maximize margins and maintain a competitive edge. - Streamlining the Quoting Process
CPQ software allows users to generate detailed, professional quotes quickly, freeing salespeople to focus on selling and enhancing customer experience. - Integrating Sales and Production
CPQ connects the sales process with production by generating manufacturing documents like CAD files and BOMs from the configured product. Integration with ERP systems ensures accurate and up-to-date information for the production team. - Simplifying Complex Product Logic
CPQ solutions use intuitive rules engines to manage complex product configurations, reducing reliance on IT resources and enabling quick updates. For instance, Epicor CPQ's Snap rules engine allows non-technical users to create and maintain configuration rules easily, even for demanding products.