Coffee, Commissions, & CPQ: WTF is CPQ in SaaS?

Coffee, Commissions, & CPQ: WTF is CPQ in SaaS?

Coffee, Commissions, & CPQ: WTF is CPQ in SaaS?

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Author: Canidium Podcast

Coffee, Commissions, and CPQ is a podcast that will cover topics about all things sales, sales operations, sales enablement, and SPM! In the second episode of our series, Eric Hoftiezer, a CPQ consultant at Canidium, talks about the importance of CPQ and focusing on Saas. Tune into our podcast by clicking the link below, or read the transcripts on this blog! 

Questions?

Bailey McCaffrey : Hello, I'm Bailey McCaffrey and this is Coffee, Commissions, and CPQ a podcast where we talk about all things related to your sales team and improving sales operations. Today's episode we are going to be focusing on software as a service or SaaS, and configure price quote or CPQ software. This episode will benefit you whether you have a CPQ solution, you have thought about getting one before, or you have no idea what CPQ is at all. But before I get into that, I would like to introduce you to today's guest speaker who knows far more than me about CPQ software, Eric Hoftiezer, do you mind telling us a little bit about yourself and your career?

Eric Hoftiezer: Hey, sure. So yeah, I'm Eric and I have been a CPQ consultant for about seven years now. I primarily do CPQ development here at Canidium. I do also have a touch in some other programming things that I've been trying to do. But for the most part I will talk with clients and discuss the best way to get them what they want, and then implement that in their site.

Bailey McCaffrey: Awesome. And where are you located for this?

Eric Hoftiezer: I'm currently located in a suburb outside of Chicago. I just say Chicago because no one ever knows where it is.

Bailey McCaffrey:  And what do you enjoy doing during your free time? And is there anything that you wish you had more time to do?

Eric Hoftiezer:  So recently, since I got the job here at Canidium, I've been getting a lot more into actual software development. And I found I really enjoy it. Like it's really great to have a problem, work on a solution that's basically just a giant puzzle. You know, same thing with CPQ, like there's so many moving pieces. So you have to figure out the solution and test it and give it out to our internal people, which is a different audience than you know a CPQ customer. It's really rewarding to just build something from scratch. So if I could I think I would do that full time. But we need to also do some consulting work too.

Bailey McCaffrey:  For sure. And what types of software do you enjoy developing or what is a project you've been working on?

Eric Hoftiezer: Sure. So specifically in CPQ, we have a code extraction process, which basically uses the API to call the CPQ site, which runs a script that does a whole bunch of SQL calls. From those calls, it returns the code information that's contained in the site back to my program, and then my program phases that out into the individual files. This has been hugely helpful for getting a ton of information out of CPQ onto your desktop system so that you can just browse it as needed, modify it, and then go back and paste it back into CPQ to see run. This has been super helpful to our team.

Bailey McCaffrey:  That goes pretty far over my head but I am so glad that we have people who are able to understand that and do that. And what do you enjoy about doing this job or working on software, as you've kind of talked about?

Eric Hoftiezer:  So first of all, working at Canidium is awesome, because everyone here is just super helpful. And it's all very much a learning experience. So we're all just learning and if you want to do something, you can generally just go ahead and try to figure out a way to do it. I do enjoy working in CPQ, specifically this job because like I said, CPQ is just like a big puzzle. In fact, it's almost too big of a puzzle, which kind of makes it overwhelming. But I mean, that's where our job comes in. And so it's really nice to talk with the client and have that relationship with a client where you can anticipate their needs and then put that into something technical. And honestly, like the most rewarding thing is when a client is like, Oh my God, thank you, I can't believe you did this, like that is one of the best feelings in the world.

Bailey McCaffrey: Awesome. Yeah, that totally makes sense, especially because you have helped me on numerous things. So, I can totally see that loving to help aspect of your personality. So and how long have you been working in this industry or in a job similar to what you do today?

Eric Hoftiezer:  So I said about seven years, it might be more towards eight now. I started with a no longer existing company called Big Machines, because they got purchased by Oracle. And I worked for Oracle for about five years before coming to Canidium.

Bailey McCaffrey:  Gotcha. So in the industry for quite some time and then at Canidium for how long?

Eric Hoftiezer: Two years, two or three. Time flies.

Bailey McCaffrey:  Yeah. And so okay, I would love to jump into the topic of this podcast, which is it's good to be SaaS-y. And or, as you had mentioned, another fitting title, which is, WTF is CPQ and Saas, which resonates with me and probably some of our listeners as well. Do you mind expanding on this topic?

Eric Hoftiezer: Yeah, sure. So SaaS, 'saas' is software as a service, which is different from, you know, back in the old days, you would buy Microsoft Office, and you would get a CD with your product key, you would install it, and that's your product, you paid 100 bucks or whatever, and you owned it. Software as a Service is more like Netflix or you pay a subscription to access a software service. That is what you pay for the access to that service.  Theoretically, you could run your own Netflix on your own computer. But you know, that's that's getting rid of the whole service aspect of it that's the software but not the service. And so Netflix provides that for you. 

In CPQ, we get into software as a service as in if you want a CPQ system, you usually would have to pay a subscription to, for example, SAP in order to gain access to the CPQ system that they offer. You don't actually own that software, you're just paying for access, usually in terms of like licenses, like how many users you have. And so it's good to be SaaSy because having your software in the cloud, I know that's a buzzword, but it is a real thing, having it off your desktop and accessible from anywhere, on any device. That's what the definition of cloud is. It's an amazing tool for nearly everyone. I mean, how many of us check our email from our phones and then from our desktop, if we could only check our phones from a specific computer with a specific piece of software installed, that kind of not work very well. 

So it's good to be saasy. Everything is in the cloud, you can access it from everywhere. And then yeah, WTF is CPQ, because there are so many acronyms in this business. We have CRM CLM ERP, CPQ, I mean, it goes on. So this is going to be a little disambiguation of all those acronyms.

Questions?

Bailey McCaffrey:  Will you now talk a little bit about what a CRM is and how that fits into the SaaS landscape or the software as a service landscape?

Eric Hoftiezer:  Sure. So the focus of this podcast obviously is CPQ. But before we can get into that, for a little bit of context, we're going to talk about the CRM so The CRM customer relationship management tool is what people use what companies use to organize their sales leads and determine who's the best person to sell to and how much. If you've ever used Salesforce and chances are if you're listening to this podcast, you've heard of Salesforce at least, that is the biggest CRM in the world, arguably, almost everyone is familiar with its capabilities. You have salespeople that log in, they generate opportunities for different clients. They can track their information like their business headquarters, they can track how confident they are in the sale, and other stuff that sales people care about. And honestly, I don't. It is a very important piece of software, which is why it is included here. Without CRM, then you have no one to sell to it. Even if your CRM is an Excel spreadsheet that just lists people's names and phone numbers. That's technically a CRM. Without that, you can't sell anything.

Bailey McCaffrey:  Gotcha, that’s helpful, especially to understand the landscape of CPQ. And so is a CRM, usually or sometimes software as a service?

Eric Hoftiezer:  It really depends on the client. I would say, a majority of the time since most people use Salesforce, it is going to be software as a service. You pay a subscription to get access to Salesforce. You don't actually own the Salesforce software. And so it's Yes, it is a software as a service. If you however, were to build your own, like maybe it's a super customized Excel spreadsheet, that would not be.

Bailey McCaffrey:  So, like you had mentioned before, this podcast is really about CPQ or configure price quote software. Will you tell me a little bit more about what CPQ is and how it connects to a company's CRM?

Eric Hoftiezer:  Sure, after you have a sales lead, you then need to actually sell the products. And then this is where the CPQ comes in. CPQ is at the very basics, configure price quote, if you've ever gone online and used an online food ordering software service, like Grubhub, you have used a CPQ, you have configured your pizza, you got a price for that pizza, and then you got a receipt once you order that pizza, which is basically the quote. And so with that in mind, CPQ is the tool that you use to configure products and get them in front of the client. And these products can be simple like you know, selling a pencil, where there's only one type of pencil and you can't configure anything about it or it could be as complex as not to name names because we can't. But we have worked with very large automotive industries to configure specific manufacturing vehicles down to the cylinder size in the engine. Once you configure that vehicle, it will automatically generate all of the parts that are necessary to build that vehicle and send that off to be purchased.

Bailey McCaffrey: So, it sounds like CPQ is a great platform to store product information, especially with products that are complex or are going to have more complicated pricing such as taking a computer or something that which may or may not have many different options within that product. So if it does store product information, but there are also other systems that can store that information. What makes CPQ so valuable to a business?

Eric Hoftiezer: So the CRM will track the clients. CPQ is what gets the products in front of the clients. And so without CPQ, you can't actually sell anything. Even if you have a list of products contained in a system somewhere else, you can't sell those products because you have no way to interface with them. CPQ also does so much more than just configure products. For example, it can do dynamic discounts, so that a certain person can do a 10% discount on any product, while a second person can do a 15% discount on certain products when certain criteria are met. There's also approvals in CPQ so that if you go over that discount amount, it'll require an approval from the manager. And that approval is sent out automatically to that manager so that they can approve it on their phone. It will also create documents so that when you're done configuring the products, you can create that potentially multi page document that contains technical specifications, product information, terms and conditions, and it'll automatically generate that send that to the customer for them to approve. CPQ is a majority of the sales process, I would say.

Bailey McCaffrey:  Awesome. And so CPQ can store product information, but there are other systems that do that as well?

Eric Hoftiezer:  Correct. So CPQ can store all of your simple or configurable product information. But there are systems that are designed to do that, and so they do it better. So we have the enterprise resource planning, or ERP system. That will track inventory across multiple warehouses. And then when a customer purchases a product from CPQ, it will interface with that ERP system to knock down that inventory amount. That way, if the inventory is zero, the next customer that tries to buy it, they can't, it's out of stock. And you've probably seen this online with Amazon if it's ever going out of stock. Their ERP system is tracking that and is saying there are no products available.

Questions?

Bailey McCaffrey: Definitely. So what I'm hearing is not only does CPQ help you sell more, because it's making the process so much more streamlined and able to configure these more complex products, but is also cutting down the amount of time that it takes to get approvals done and to decide on pricing and to actually know if that product is going to be able to be configured or not.

Eric Hoftiezer:  Yes that is very correct. So back in pre-computer times, this sales process was usually done, hopefully, in an Excel spreadsheet. I mean, we would back in the day it was just a regular spreadsheet, then we moved to Excel spreadsheets. And you would have to look up product information in a big binder that was printed probably once every six months. And thus inaccurate. By the time you had to look something up. Yeah, CPQ can take all of these tools, puts it into one place and makes it automatic. So you don't need to look up translations because the translations have been defined in the dictionaries. You don't need to do currency conversions because that's already been set up in the system. You don't need to worry about hey, did Bob approve my quote, because the system is set up to bother Bob every week until he does approve that quote or reject it. CPQ will dramatically decrease your sales time.

Bailey McCaffrey: And Eric, will you tell me a little bit about what industries CPQ makes the most sense for?

Eric Hoftiezer: Sure. So it really depends on how your business is set up. For example, SAP CPQ might be a little bit too much. If you're just a mom and pop shop just trying to sell candles, you might not need a fully fledged CPQ system. But that said, yeah, CPQ can handle basically any industry from a pizza shop to a super complex automotive. We've worked with medical suppliers in the past, we've worked with financial services. We currently have a client that is offering IT services. So instead of selling products, they sell hours of helpdesk support. So yeah, it's a massively configurable product that can basically sell whatever you're trying to sell whatever industry you're in.

Bailey McCaffrey: Awesome and can it be or does it tend to be customizable? Because those are very different. It sounds like from one CPQ from one industry to the next. But to have the same CPQ platform for all of them. Does that CPQ system have to be customizable for your business? 

Eric Hoftiezer:  Oh, yeah. At the very basic CPQ is there to help you sell stuff. But outside of that how you get from point A to B is entirely customizable. Inside SAP CPQ, we have so many different options to customize. Just in the UI alone. We have HTML, razor, JavaScript, knockout, and there's probably a couple others that I'm forgetting. In the back end, we have customizable Python scripts, where if you can code it in Python, it can probably be done in CPQ which makes it entirely powerful and super customizable, we can go in and we can change the individual icons and fonts, we can change the processes and what's required. So let's say if you're configuring a pizza, and you want a meat lover's pizza, it will restrict your options to only show me options. That's a very simple example. But let's say you're configuring an automatic transmission, it will remove the manual transmission parts from even being an option. Stuff like that. Yeah, it can be customized, basically, any way you want.

Bailey McCaffrey:  Awesome, and is that where a consultancy or somebody like Canidium kind of comes in to help your business be sure that they are having the best CPQ system for their company?

Eric Hoftiezer:   Exactly. Because there are like five different options from getting from point A to point B. That's where I would come in and tell you which is the best option or which is like, you know, some considerations that you should have while taking other options. Because yes, there are many, many considerations. There are so many different pieces that you know, I mean, even the best here, we need to ask each other is this really the best thing to do? And it's a, it is a process and we are definitely trying to figure out the best way to do things.

Bailey McCaffrey:  Awesome. And just to kind of wrap this back to the beginning, as we talked about SaaS would CPQ be considered a software as a service or does it kind of depend?

Eric Hoftiezer: It would kind of depend again, so there are some on premises CPQ systems out there that you can purchase and then you manage you set up, you own that software, but for the most part SAP, Oracle, steel brake, all of the big names, they are all software as a service.

Bailey McCaffrey: Awesome. So Eric, will you just take a minute or so to wrap up for our listeners what the main takeaways are and summarize some of these points that you talked about CPQ, CRM and Saas.

Eric Hoftiezer: Sure. So Saas is Software as a Service, it generally means that you are paying a subscription to access something online. CPQ is the tool that will help you sell products to your customers. Now the CRM, the customer relationship management tool, is what you use to track your customers as in you know, Bob Joe lives at this address and he is very interested in selling or buying this product. After you have the sales lead, you then come into CPQ or you configure the product, you get your price. You do your approvals and you get your document that you sent to your customer. From there, we can even transfer that document to a CLM system, a contract lifecycle management system, that then organizes that contract and gets it approved by legal teams. Meanwhile, while that's happening, we're talking with the ERP system, the enterprise resource planning system, to adjust the inventory levels of the products you just purchased. And all of that comes together in the cloud, which is software as a service

Bailey McCaffrey:  For our listeners, is it important to have all of these systems or are there ones that may or may not be better for your company, and you don't necessarily need all the CPQ and CRM and ERP and CLM.

Eric Hoftiezer: So I mean each has their own uses. The first one that I would probably knock down is the ERP if you're not a really large company that has like multiple warehouses and need to have like immediate up to date information on your products, you probably don't need an ERP. If you're selling products, you're probably going to be using a CRM there's not really many chances where you would not use a CRM, because, you know, if you have an opportunity to sell a product, you're going to want to keep track of that. Even if the product if the sale doesn't go through, you're going to want to know that that opportunity was there, maybe the follow up on them. That said, you could potentially organize that in another system, like, you know, Google Contacts, maybe. This would be very ill advised to try to do this in a non system built for this, but it would be possible. And I guess if your company were selling products that were so simple, that they just needed like one button to click it, then maybe you wouldn't need a CPQ. Like if you don't have approvals you don't need documents. Maybe you're just selling a shirt at a county fair. That would not require a CPQ. But I mean for everything else CPQ is definitely going to help your sales process. A CRM is definitely going to help your sales contacts and follow up. And an ERP can help you with managing your products.

Bailey McCaffrey: Well, thank you so much, Eric, for your extensive Industry Insight and for sharing with me and our listeners, the software as a service landscape and what all fits into that. And I know we would love to have you on the show again soon if you are willing. But we can talk about that another time. If anyone listening has any follow up questions for Eric or for Canidium, please reach out to us at Canidium.com/contact and we will get back to you as soon as we can. Thanks so much for listening to Coffee, Commissions and CPQ.

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