CPQ: Successful Selection, Development and Implementation

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Configure, Price, Quote (CPQ) is a software solution that allows you to tailor your sales activities precisely to the needs of the end customer. This blog post will explore how to find the right provider for your organization.

Growing customer demands within B2B sales and increasingly complex products and services lead many companies to digitally transform their sales processes. Implementing a CPQ solution that supports sales representatives – starting with the configuration and pricing of customer-specific products and services and ending with the quotation – is an integral part of a successful sales transformation. CPQ makes it possible to align sales exactly with the customer’s needs and make the process efficient, error-resistant, and digital. You can read more about further advantages of CPQ in our first blog post of our CPQ series.

Choosing the right CPQ provider is the first milestone on the Sales Transformation Roadmap

To use CPQ successfully, it is necessary to select a suitable tool as an essential component of the planned sales transformation. To do this, a detailed analysis to identify and specify core requirements has to be conducted. Complex requirements, which have a massive impact on the implementation timeline and thus also on costs, are evaluated from the very beginning using a fit-gap analysis. Essential design decisions that are customer specific and include options and implementation recommendations can be made based on this analysis, providing efficiency and out-of-the-box functionality. Subsequently, a narrower selection of suitable CPQ providers is made in accordance with the defined requirements. These providers then demonstrate their solutions based on defined use cases and a final selection of the provider with the best possible match to the requirements profile is done.

[Figure 1: The selection process of the right CPQ provider]
The final selection of the CPQ provider depends on several factors. A basic prerequisite is the industry-specific fit to a B2B environment. For example, complex products with many variants or a high engineer-to-order (ETO) ratio require a powerful configuration engine of the CPQ tool. To ensure a seamless end-to-end process, it is essential that the CPQ solution is integrable into existing front- and back-end systems (e.g. ERP, CRM). In addition, aspects such as scalability, licensing fees, and application maintenance costs must be considered in the selection process. The provider’s future and innovation capabilities are also relevant. Digital leaders are already dealing with the question of how the data obtained can be used to further automate sales processes, sharpen the product portfolio, or optimize price points with the help of intelligent algorithms and data analytics. Learn more about data analytics and user experience in the context of CPQ in upcoming posts of our CPQ series.

The use of agile methods leads to success 

After a CPQ vendor has been selected, it is important to implement a demonstrator or minimum viable product (MVP) to validate the core requirements by using an agile project approach based on Scrum. This not only helps convince key decision makers of the added value of the CPQ solution, it also helps to prioritize the remaining requirements through short iteration cycles and continuous feedback while disqualifying requirements that are no longer needed. For larger programs that require the coordination of several projects and teams, scalable agile frameworks such as SAFe or LeSS are suitable. Once they have been adapted to the agile maturity level of the organization and the particular project, they represent a key success factor. Based on our experience, CPQ projects involve the respective business units, IT, and experts in the agile development process from the very beginning. In this context, both the orientation towards the end customer and the reference to the respective business case play a significant role.

[Figure 2: The application of agile methods]
For a long-lasting change in the sales organization and a high acceptance rate of the solution within the sales department, it is also important to manage the change process in the organization at an early stage, actively guide it, and to train the users accordingly.

Start now the transformation of your sales department

Through numerous successful projects for the design and implementation of CPQ solutions and the broad spectrum of expertise within the Capgemini Group, we are able to support you in your CPQ ambitions, from strategic analysis to the implementation and launch of the software. To find out more about how CPQ can help you make your company’s sales activities future-proof, tailor your sales processes consistently to the end customer and how Capgemini Invent can support you in this, please contact our experts.

This article has been co-authored by Derya Karabulut and Jonas Frey.

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