We know we talk a lot about Configure Price Quote (CPQ). But, what is a configurator, really? Obviously, it’s the C in CPQ, right?
But what does configuration really stand for?
Is it about modules, variants and selections?
Partly – yes. We need modules, variants and selections, but to your sales force and customers, they don’t really matter.
How we choose to describe the product in the configurator isn’t important for the end user. It’s just a way for our business consultants to structure the problem.
But structure is indeed important:
- Provide the simplest possible maintenance in the long run.
- Reduce the 100,000 old-school rules to 100 cutting-edge constraints.
- It’s a way to reduce a department to a single person.
- It’s the way to turn days into minutes when it comes to updates.
Is it about rules, constraints or product structure?
In a way it’s about rules, constraints or product structure, but that’s not how I see it anymore. We need constraints, but they’re just a tool to meet a critical business objective.
So, what’s the business objective? What’s the driver for the C in the CPQ project? Why do manufacturing companies need a configurator?
The reason is very simple. It’s about limiting selections.
By limiting the selections we make sure that we don’t sell anything that we can’t produce and deliver.
Why is limiting selections important?
Limiting selections is important because it’s so expensive to sell something you can’t deliver. Here’s why:
- Most likely there will be a negative margin on deals. That’s not ok.
- Most likely there will be delays in the delivery- and customer time-plan. That’s definitely not ok.
- Most likely the customer will choose another supplier the next time. That’s absolutely not ok. We all know that the cost of gaining new customers is remarkably high.
These facts are definitely not easy to live with – for any company. But if you can limit the selection at the point of sales, then there’s a huge potential for savings.
What do companies who aren’t using product configurations struggle with?
Companies who don’t have a configurator usually begin every sales process by a sales rep talking with a customer to learn about their, wants, timelines, and any other information. The sales rep then takes this information and begins the process of finding the perfect product. Once the best option is found, usually using an excel sheet or homegrown configurator, the sales reps begin a lengthy back and forth with engineering to see if the product is buildable. This process usually sees CAD files shared to close the deal. The sales rep then goes back into their excel or homegrown tool and produce a quote.
Do a lot of manufacturers struggle with this process?
The short answer is yes. This process takes a long time to complete, and that’s not even considering the increasing demands for customization from your buyer. Quoting with homemade tools, or excel sheets can lead to error-prone quotes, a slow sales process, and disappointed customers. This process can go from days to minutes if the correct product configurator is implemented with time savings and customer in mind.
What does the ideal product configuration look like?
Remember above when we discussed limiting selections? A good configurator presents users with a series of question and user their answers as inputs. With these answers the sales rep will be able to see configurations that are valid and buildable for the customer. No need for double checking, because the configuration is 100% correct.
What are the benefits of a product configurator?
Some common benefits Tacton customers see from our product configurator are
- 34% efficiency increase
- 30% sales volume increase
- 20% increase in profit
Can configuration help with conflict resolutions?
Although the configurator makes implicit selections on its own, based on the constraints, it does respect any selections explicitly made by the end user. If two explicit user selections are in conflict, Tacton configurator automatically presents a conflict resolution and alternatives to the end user.
How can a configurator help with Bill of Material and Pricing?
Instant updates of the sales Bill-of-Material, customer net prices and product visualization after every user configuration selection, makes the user understand the technical and commercial consequences of her choices. And if your sales Bill-of-Material is extensive, yes, we do support multi-leveled BOM.
Is it possible to mass configure products?
Some of our customers oftentimes sell hundreds of individually configurable products in one and the same opportunity, e.g. pumps or valves for a complete pulp or chemical processing plant. In these cases, Tacton CPQ’s Mass Update and Mass Import saves a lot of time, by handling a batch of configured products in one go without having to open them one-by-one.
How is Tacton shaping configurator technology?
Although Tacton configurator looks like an ordinary questionnaire, there is more to it under the hood. For every selection made by the end user, the configurator validates all attribute constraints and automatically selects compatible modules and features. In this way, the configured product is always 100% correct and valid. The user is never led into configuration “dead ends”, being asked to go back X steps to change a selection.
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