There are well over 100 different Configure, Price, Quote (CPQ) solutions available globally, and they have all been developed for many different industries and business use cases.
The first challenge in selecting a CPQ solution is usually to understand what solutions are available.
The second challenge is to understand how these CPQ solutions are different from each other. This is not a trivial task, because they may all share the same ‘CPQ’ acronym somewhere in their name or on their website, but they have been developed for many different industries, provide very different capabilities, and offer numerous different price points.
The first challenge is relatively quick to address by looking at a list of CPQ solutions (see here ). Keep in mind that this list is incomplete and that more CPQ solutions are available in different geographic locations. As an alternative or to further expand the search for CPQ solutions, one can also do extensive searches on Google, LinkedIn, Capterra, and G2.
The second challenge can be addressed by looking at key differentiators of CPQ solutions. In a three-part series for this Christmas calendar special, we will have a look at a total of five key differences:
- Industry-specific solutions
- Ability to handle complexity (Products, Prices, Quotes)
- Feature & Function focus
- Basic integration capabilities
- Advanced integration capabilities
Historically speaking, CPQ solutions, also known as Product Configuration solutions, have been developed by Manufacturing companies. That started in the 1960s, then over time capabilities like Pricing and Quoting and more have been added. These capabilities were added to standard ERP solutions since the 1990s and then to CPQ solutions since the 2010s.
Hence, most CPQ solutions are available to manufacturers, but many other industries are adopting them now for years, like High Tech, Software, Telco, Health & Life Sciences, and many others. In fact, the number of industries using CPQ is steadily increasing.
Since every industry has its own specific business requirements, it is important for every (new) CPQ customer to understand which industry (or industries) their potential CPQ vendor is specialized in. The best fit is usually there when the majority of a CPQ vendor's customers are in a specific industry.
For example, an SMB manufacturer should look for a CPQ vendor with a large customer base of SMB manufacturers. A software company should look for a CPQ vendor with a large customer base of software companies.
While it is not always obvious for a future CPQ customer to recognize in which industry a CPQ vendor is specialized, a CPQ vendor website, webinars they offer, blog posts, customer references they have, and so on are good indicators of the CPQ vendor’s industry focus.
Next in our series on what to look for in a CPQ Solution: Learn about the importance of the ability to handle complexity, and which features and functions to look for.