Take time to understand these five things and be able to convey your organization's view on these to a shortlist of CPQ vendors. This will help them to show you how they can help you, making it easier for your team to make an informed decision on which CPQ vendor will best meet your specific needs and deliver the outcomes you desire.
1. Key Measurements for Improvement
There will be many measures for success around sales; however, it is important to understand which of these will be addressed through the introduction of a CPQ solution and by how much.
Typical measurements that can be improved are:
- Average time to produce a quote: Firstly, the time for a person to do the work. Secondly, the elapsed time due to constraints on key individuals, collaboration and approvals
- Average quote size
- Quote to Order conversion rate
- The number of quotes per month/week or perhaps more importantly the capacity in terms of volume that the organisation can deal with
- The cost of pricing errors and incorrect selections
2. Factors that Will Make a Difference
With so many things that can be addressed with a CPQ solution, it is critical to establish the ones that will deliver the biggest ‘bang for your buck’. A great way to establish this is to consider what would help your buyers to become minded to select your quote or proposal – in other words, how would you become easier to buy from. Luckily, there are some common factors that heavily influence the buyer, regardless of the industry.
Proven factors for success:
- Speed of response to a quote or price request. Being first really does matter.
- Frequency of engagement. Quickly build rapport and understanding.
- Unambiguous, clearly presented proposals. Make it easy for the buyer to find what they need to make a decision.
- Consistent, high-quality proposals. Perception means everything.
Understanding where your organisation has existing constraints to achieving better performance in these areas will help validate the priorities from your CPQ project
3. Desired Process
Document your vision of the ideal process that would transform your quoting and pricing process. Paint a vivid picture of this vision and let your selected CPQ vendors work out how they will bring this to life.
- Do not be afraid to think big. For example; are the people currently producing quotes the right ones? In an ideal world, who should be doing this? How might these different people wish to access/use the system?
- Do not worry too much about how the vision can be achieved, or even if it can. Give this challenge to the potential vendors to solve.
4. What is Likely to Change
Change is inevitable. Some changes will be known and expected. Other changes will be less predictable and sometimes impossible to predict. Faced with the fact that changes are going to happen, there are some trends that it would be wise to consider:
- Pricing dynamics: There are many pricing models. High-performing businesses are open to exploring and testing new and evolving pricing strategies. Is your business considering these? Are your competitors considering them – and if so, what impact could this have on your business?
- Advanced services: There is a trend with OEM businesses to increase revenue and profitability through the addition and/or repositioning of the services they offer – often transforming their business model. Can your business embrace advanced services?
- Acquisitions: The range of products and services may change with mergers and acquisitions. How will your CPQ system cope with new products, services, pricing models and perhaps even new markets?
- Buying process: Buyers are far more likely to know more about your products and services before they make contact with your organisation. How will your sales process align with the needs of the buyer?
- Other systems: A CPQ system is unlikely to exist in isolation. It will often work alongside and even integrate with CRM, ERP, CLM and eCommerce systems. How might these other systems change over time – and what would happen if one was replaced?
- The unknown: There will always be unplanned or unforeseen circumstances to deal with. Is your chosen CPQ system flexible enough to cope with most that is likely to be asked of it?
5. Time to First Value
When thinking big, particularly in business transformation projects, there may be a temptation to want the vision delivered in one big bang launch. There are three potential issues with this:
- The team may find the change too big and not fully embrace the solution
- The delivery may take many months to come to fruition
- By the time the solution is delivered, the original requirements may have changed.
A good way to mitigate against these risks is to seek lots of smaller, faster wins. Involving others in the business to review after each step and contribute will usually bring increased engagement and buy-in, and better solutions in the medium to longer term.
Conclusion
Taking time to consider what your business really wants and needs from a CPQ solution and challenging vendors to show how they can support you through a project that should deliver business transformation and competitive advantage is a wise and solid investment. A structured approach that uses these five criteria will make your buying decision far easier and your project more likely to succeed.
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