What is CPQ?
Whether your preferred term is Configure Price Quote, Quote-to-Cash (QTC), Order Management or Product & Pricing Solution, CPQ is an increasingly vital tool for any business selling complex configurable products. So let’s start with the basics.
Configure Price Quote (CPQ) software applications allow businesses to configure a product bundle, calculate their price and subsequently generate a quote.
So far, so simple. But by automating and optimizing this process, CPQ solutions help your sales team sell faster and more accurately.
Let's look at a break down of each CPQ function:
In short, CPQ lets you create (often unique) product and service bundles to suit all of your customers’ needs, quickly and at the right price.
Why is CPQ important?
In this era of accelerated commercial reinvention, companies, industries - and even entire economies - are in a global race to adapt and thrive in a digital-first future.
As technology and customer expectations grow, businesses are finding themselves obliged to operate at unprecedented levels of scale and complexity.
The arrival and growth of technologies such as 5G, IoT and Machine Learning, as well evolving customer expectations, means that businesses will easily find themselves left behind, unless they have true freedom to innovate and evolve their product offering quickly.
To learn more about how scale is impacting the telecommunications landscape, watch our webinar “Are you ready for scale in the world of 5G?”, in which CloudSense’s Global Communications Lead Vish Kumar discusses the impact of 5G on scale and complexity with Infosys Industry Principal Consultant, Shri Krishan.
In response to these changes, CPQ solutions have moved beyond their classic definition. Modern Configure Price Quote solutions have evolved from a sales transaction solution, to one that powers a more holistic sale.
In fact, by incorporating the management of things like self-service, bundling, discounting and invoicing, as well as services and subscriptions, CPQ can now provide the basis of an Amazon-like buying experience for your customers.
The market for CPQ software is enjoying a boom period, with analysts predicting it to grow by US$1.65bn to US$3.8bn between 2022 and 2026.
Does my business need a CPQ solution?
Businesses of all kinds implement CPQ solutions in order to streamline and future-proof their end-to-end sales process, and deliver sales transformation. If your business is suffering from any of the following critical issues, it may be time to consider implementing a CPQ solution:
These aren’t minor issues, and all of them directly impact your bottom line. They also mostly have the same root cause: legacy systems that obstruct the path to monetizing opportunities in the digital-first economy.
What problems does CPQ help address?
The principle challenges include, but are not limited to:
Managing the underlying complexity of new digital offerings
Products and services are becoming increasingly complex and difficult to deliver, price and sell.
Operating efficiently within new eco-systems
Both technology and customer expectations are evolving faster than ever, and businesses cannot afford to fall behind.
Maintaining strong customer relationships across digital channels
How to maintain a strong relationship with their customers across digital channels as we move to more digital contact (and away from human contact).
Acting at speed to capture demand
Speed is the currency of the digital economy. Businesses have to be able to execute at speed, as well as react and seize opportunity at speed.
Capitalizing on digital insights
As businesses move to digitize everything, they need to be able to mine information, process it and use it to their advantage, otherwise they will lose out to their competitors.
What is the future of CPQ?
Although they have been around for some time, CPQ solutions have moved beyond the classic definition of allowing businesses to configure a product bundle, calculate their price and subsequently generate a quote.
Advanced Configure Price Quote solutions have evolved from being focused on sales transactions, to one that is more holistic in its scope.
By incorporating the management things like contracts and invoicing, as well as services and subscriptions, CPQ can now form the basis of an Amazon-like buying experience for your customers.
What kinds of businesses can benefit from CPQ?
Any business with a highly configurable product set, that needs to handle high levels of scale and complexity, can achieve business and sales transformation by implementing CPQ technology.
Unlike other offerings, CloudSense is built to manage the demands of the fast-moving, digital-first publishing, advertising and subscription landscape. We take pride in enabling the kinds of complex use cases and scale that other providers shy away from. We don’t place limitations on your ideas and box you in; instead our versatile solution gives product, sales and marketing teams the freedom to continually innovate, grow revenue and reduce cost.
If you challenge our competitors to support the requirements that CloudSense can handle, you’ll soon find that they struggle to absorb the demands on their systems. Whether your are a small, medium or large publisher, extend beyond the simplest of portfolio offerings and you’ll see performance levels drop to well beneath the requirements for a digital-first user experience.
CloudSense has a clear vision of a future for commercial operations that truly support digital-first businesses. These are key principles that can be applied to any industry.
Glossary of terms
Applications & Technology
What is an Order Management System (OMS)?
Order Management refers to the series of actions a business undertakes from when a potential order is first created, to the moment a customer receives their desired product or service to the customer.
An Order Management System is a platform used to fulfill orders and navigate order changes accurately and efficiently.
From order entry and inventory management to fulfillment and the post-sale experience – an OMS helps you manage the end-to-end customer journey.
Read our guide, Order Management explained in 8 steps
A Product Catalog should hold all the commercial product information your teams need to build, define and map new product offerings, while understanding business rules and interdependent products.
It gives you a centralized view of your products, empowering you to easily configure, deploy and manage products, services and commercial offerings.
Want to learn more? Check out our guide 4 reasons your organization needs a unified commercial product catalog
What is Quote-to-Cash (Q2C / QTC)?
Quote-to-Cash refers to the management of the end-to-end customer lifecycle. Right from a prospect showing intent to buy, to a business collecting the revenue.
The process covers the multiple steps between generating a quote, with Configure Price Quote software, to accepting and recognizing a customer's money in your billing system.
Customer Relationship Management (CRM)
Customer Relationship Management is a technology used to manage interactions with customers and prospects. A CRM helps build and nurture customer relationships and streamlines processes to boost sales, improve customer service and increase profitability.
Businesses often extend the functionality of their CRM with complementary technology that can better fulfill specific needs.
Salesforce is the world’s leading CRM – you can read why our platform is Salesforce native here
Digital Commerce vs eCommerce
Digital Commerce is the buying and selling of products and services using the internet including all of the marketing activities involved in the transactions.
eCommerce is online selling.
For more on Digital Commerce, check out these 37 Digital Commerce statistics worth knowing
SFDC stands for "Sales Force Dot Com". Salesforce is a software company that specializes in Customer Relationship Management (CRM).
It offers a host of cloud-based business applications for companies to use to stay connected to their customers, partners and prospects.
Read why CloudSense is Salesforce native
API stands for Application Programming Interface.
APIs let different applications connect, interact and exchange data.
MVP is the acronym for Minimum Viable Product. An MVP takes a product to market with basic features, but enough to be usable by customers. Feedback can then be collected to inform the rest of the product development. This approach saves time working on features that may not turn out to be useful.
We cover the importance of an MVP and working iteratively in our guide, The principles of a successful digital reinvention
FTE or Full Time-Equivalent is a unit used to measure the amount of hours an employee works full-time. FTE lets businesses compare part-time and full-time workers' hours and is often used to track costs.
A UI, or User interface, refers to the way a person controls a piece of software or device. For example, a user-friendly UI means the user can interact with the software or device with ease.
UX, or User Experience, is part of the overall customer experience that refers to the usability of the product.
CX stands for customer experience. Customer experience is the perception customers have of your company. It’s a product of every interaction they have with your brand.
WOW is one of those acronyms that stands for all kinds of things, from World of Warcraft to Week over Week.
But when we use it, we're talking about Ways of Working.
Check out our free guide, The principles of a successful digital reinvention here
In software, a POC, or proof of concept, shows whether a concept can be deployed successfully in a ‘real-world’ environment. POCs are often used to test whether a vendor can meet a customer’s needs.
MSA, or Master Service Agreement, is a contract between two parties that sets out the terms and expectations agreed for future work.