Myth-busting CPQ: Clarifying 3 Common Myths
Configure, Price, Quote (CPQ) is necessary for any manufacturer selling complex configurable products. Unfortunately, when something sounds “too good to be true”, people start creating their own assumptions about CPQ that just aren’t true.
The following are 3 of the most common myths our CPQ experts have had to demystify over the years.
Myth no1. “We don’t need a CPQ, we already have a ERP/PLM for that!”
The Mythbuster: Marlene Mosquera (Senior Application Consultant, CPQ Expert).
“The “C” in CPQ is for configuration, and often some people stop there and jump to the conclusion that configuration is all CPQ does”, explains Marlene. “CPQ is much more than configuration, it’s a complete tool that supports the entire sales process.”
Often engineers rely on configuration software that helps them deal with complex designs. These software solutions are usually utilized by product/manufacturing engineers during the design/engineering process. Marlene points out that it is often the product managers, engineers, and designers of the products that erroneously assume that CPQ is “just another configurator”.
How the myth is busted:
“To get these individuals to understand what CPQ does, I ask them to walk me through their sales process. It usually turns into a story of salespeople going back and forth between the customer and their engineers, to configure the product to what the customer requires, then figuring out the price for that particular configuration, and preparing all the documents in the quote.
These stories help me to point out all the redundancies, workarounds, and inefficiencies required to just to get a quote ready”.
“This is where I tell them that with CPQ, there is no need to go ‘back and forth’ and that the product configuration, pricing, and all documents can even be prepared in minutes, even during the sales meeting.”
Can your ERP and PLM do that?
Marlene says that this is when they “get it”. She would often hear comments like “our sales engineers will no longer have to manually inspect every quote” or our “this can saves us a lot of headaches and internal finger-pointing!”.
Myth no. 2: "We don’t need a CPQ, we already have a CRM for that!"
The Mythbuster: Patrice Arnera (CPQ Expert, Digital Transformation Expert).
This is quite similar to the first myth, in that skeptics want to prove that there is already a tool that can do what CPQ can. In this case, it’s about the CRM – Customer Relationship Management. CRMs are primarily Lean management and customer management tools like Salesforce and Microsoft Dynamics.
“Whenever I explain that CPQ can generate a complete, error-free quote in minutes, some individuals assume that I am simply talking about the “Q” part of CPQ, as in the auto-generation of the branded documents (product descriptions, price lists, technical sheets etc.).” describes Patrice. “They then go on to show me how with their CRM they are able to submit quotes to the customer and track them.”
How the myth is busted:
“I’m quite used to seeing salespeople relying heavily on engineers to do the actual configuration and pricing. The salespeople must also be very clear on what their customer needs and relay the information clearly to their engineers. This is a very time-consuming process with too many handovers to remain efficient.”
Even when the collaboration between sales and engineering is great, the quoting process tends to be slow and very resource-intensive.
It’s not just the fact that CPQ allows the user to move from one stage of the quoting process to the next within the same tool, it’s also about how much quicker and simpler the sales process becomes. The configuration can even be done by junior sales, as every configuration is error-free.
“When I explain that they can reduce the time it gets them to quote by 80%, sometimes 95%, they start to lean in and get more curious.”
Myth no. 3: "My product is too complex to be configured by a CPQ!"
Mythbuster: Mathias Roitto, Solutions Architect, CPQ Expert
Product configuration is no easy feat. Complex manufacturing products are among the most complex things anyone can buy, where precision is key.
Engineers and product developers who know their product inside-and-out, understand the difficulty of calibrating their product just right so that it meets the customers’ requirements. A misconfiguration can be costly, and a last-minute order change can really delay production.
When they hear that CPQ is a “sales tool that can configure, price and quote” they normally are skeptical.
How the myth us busted:
As an engineer himself, Mathias can empathize with the important role sales engineers play in the sales process.
Here is a common scenario that, Mathias presents:
Customer: “CPQ will never be able to configure our products. It’s all specialized every time and there are no short-cuts. We deliver what the customer wants!”
CPQ Expert: “So does that mean? Do you start from a blank model every time?”
Customer: “Well no, the sales engineers are experienced, and they use modules in CAD and customize the product.”
CPQ Expert: “Interesting. What if a configurator was able to drive the CAD automation instead? So that sales would simply input the desired customer requirements, and the configurator would solve for a viable product. Letting you and your fellow engineers focus on product development rather than supporting routine sales cases.”
Like any new technology that aims to improve and change the way we work, there are always going to be a minority of skeptics that resist change. It’s therefore important to “bust” these myths and clarify the value of CPQ. At Tacton we have been delivering value to global manufacturers for over 20 years. The market demands keep evolving and at Tacton we have helped Manufacturers evolve with the market.
Ready to follow in the footsteps Siemens, Scania, Caterpillar, Swislogg, and Yaskawa ?
Book your personalized demo today OR try out our simulated Truck CPQ at www.tructon.com .