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Importance of CPQ for Industrial Manufacturing

 

Most Industrial Manufacturing organizations are dealing with constantly changing market dynamics & variables that make configuring accurate sales quotes a complex process. Existing pricing and quoting tools & processes across industries are disparate, stand-alone custom applications with repeated manual data entry in sheets and formula-based price estimates resulting in data duplication, inconsistent BOMs, inaccurate estimates with no historical insights, reporting & analytics. This repetitive, manual and tedious work for Sales to capture product requirements, price it right and present to their customers and often takes weeks & months before converting to order which results in lost opportunities and impacts sales efficiency.

A robust Configure-Price-Quote(CPQ) system is thus essential in today's dynamic and competitive markets in order to provide faster and consistently accurate estimates to your customers and improve Sales efficiency by automating the quoting process to capture and process all product configurations and pricing details in a single system.

The most important cog wheels to achieve a unified and harmonized CPQ process are:


  • Configurator: Industries today want to cater to specific business needs of their customers and thus need to provide their Sales with highly configurable products to generate unique sales BOM that can serve the purpose effectively. The configurator must be able to support complex catalog hierarchies and product selections in a guided flow bound by various rules to ensure accurate sales BOM is generated automatically. The configurator must also support logical bundling of products & associated components & services to allow different selling models to be readily adopted by Sales, distributors, resellers and partners.
  • Price Engine: A competitive and dynamic pricing strategy with pre-defined rules based on product attributes, service plans, price contracts or agreements etc. will improve the win probability and provide edge over market competition. It also ensures that discounts & margins are in control and go through systematic reviews and approvals to create accurate and winning quotes to end customers.
  • Quote Life-cycle management: A complete opportunity-quote-order (Quote to Cash) process to manage and track quotes or contracts all the way to order creation and fulfillment through ERP systems and is fully integrated end-to-end with an upstream CRM system for opportunity management. The system must be able to automatically generate quotes from pre-defined dynamic templates that can be tailored to present the quote information according to the currencies & languages preferences across different regions of the world.


Benefits of CPQ for Industrial Manufacturers

  • Improved Time To Market: Product catalogs and bundles are constantly changing keep with customer demands. CPQ enables you to logically organize, expand and update product catalogs, complex configuration & pricing rules ensuring your sales teams are always building accurate proposals and closing deals in time.
  • Multiple Sales Channels: CPQ creates more valuable customer experience through guided selling and dynamic pricing and also brings internal sales teams, partners, distributors and resellers onto a common selling platform improving margins by identifying more upsell and cross-sell opportunities.
  • Improved Sales Efficiency: CPQ equips and enables Sales teams with product knowledge and engineering expertise thus eliminate reworks and other costs associated with an inability to deliver as promised and also eliminates the need to manually enter data into multiple systems frees sales reps, allowing them to concentrate more on selling products and services to customers.
  • Maximize revenues with Improved margins : CPQ ensures optimal pricing and allows you to better manage promotions and discounts achieving maximum revenues and margins on every deal. It also provides easy and faster buying experience for your customers with less turn-around times and improved sales velocity.


In digital era, where customer experience (CX) is top-notch priority for industrial manufacturing organizations, CPQ technology is a must-have to drive sales productivity and customer engagement, while reducing costs to edge ahead of competition in the disruptive markets.

 

Other useful links:

http://www.infosysblogs.com/oracle/2017/03/cpq_for_industrial_manufacturi.html


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