Author: Bill Thane
High Tech Companies can use CPQ to improve Sales Models
High Technology companies can often improve their quoting processes through the use of Configure Price and Quote applications. Industries included in the high tech world include but are not limited to, Telecommunication, Equipment, Data Storage and Storage Networking, Consumer Electronics, Servers and Network Equipment, and Semiconductors.
What are the factors that drive High Tech companies toward quoting solutions? The following are some of those conditions:
- Customer demand for improved and expanded capabilities and functionality.
- Highly complex product configuration decisions that often require engineering personnel or engineering calculations
- Competitive pressures that demand quick and accurate responses to sales inquiries
- Supporting outside sales channels to efficiently quote the correct product and product configuration
- Maintenance of margins while offering competitive pricing.
How does Configure Price and Quote address many of these conditions?
Time to Market:
As with many industries, high tech is very sensitive to how quickly products come to market. Traditionally bringing a new product or product variation to market requires many departments including sales, engineering, product development, marketing, finance, etc. The method of delivery through employee training seminars or webinars and volumes of documentation can take months to compile and present.
With CPQ, all of this new information, pricing, legal documentation, etc. can be consolidated into a single application and allow quotations to be made with 100% configuration and pricing accuracy. Even product videos or product data sheets can be embedded in the CPQ application for reference as the sales personnel are quoting.
Complex Configurations and Engineering Calculations:
High Tech can have extremely complex configurations with many components and subcomponents. Often engineering calculations may be required to determine the proper configurations as well. Engineering calculators and enterprise configuration tools such as SAP Variant Configurator or Oracle Configuration Manager are not designed to be sales friendly tools. CPQ can access the data from these configuration tools and present this data in a user-friendly manner. CPQ capabilities can also be used to replicate and often simplify complex engineering calculators used to determine product configurations. This allows the quote user to have accurate, up to date data for configuration without interrupting the quote process to access external tools or resources. It is not uncommon in high tech environments to have as many as ten (10) configuration tools replaced by a CPQ application.
Also, at an increasing rate, CPQ applications, either offer or have the capability to integrate with 2D and 3D visualization tools as well. Although CPQ is thought of as a manufacturing feature, 2D and 3D are often used in quoting High Tech products for purposes such as visualizing data center rack, cabling or cabinet configurations or deployment layout at a customer’s location. A Prime example of this is CDS and its CDS Visual CX solution for customers to build and purchase products online.
Speed and Accuracy of Quotes:
It is well accepted that if properly implemented, the speed and accuracy of CPQ generated quotes exceeds manual and conventional methods of quoting. According to a study by the Aberdeen Group’s Research on Configure Price and Quote, CPQ can reduce quoting time by up to 33%, reduce the sales cycle by up to one third (⅓) the time and reduce the number of modifications or versions by 13%.
If the CPQ solution is implemented with accurate logic, product, and pricing data, then it follows that the quotation generated is 100% correct as well. All of this adds up to being able to react to customer and prospect demands and increase the chances of a successful sales effort.
Many High Tech companies have internal sales as well as outside partners. Controlling the accuracy of partner quotes, pricing, and ensuring correct configurations is a challenge. All of the challenges inherent with quoting in the High Tech industry are amplified for channels partners in the quoting process.
Pricing generally differs from internal sales pricing, products may be restricted by partners, and ensuring that configurations are accurate is challenging.
CPQ applications all have the ability to not only maintain product and services pricing data but cost data as well. Many systems also have additional functionality built around margins to show the user and management alerts that are specific to quoting at a low margin percentage. Add on or complementary products such as machine learning are often available for margin and pricing analysis to assist the users in determining the optimum margin level by product or by customer type. By controlling margins, some High Tech companies who have adopted configure price and quote technology are able to achieve top line and bottom line results simply by controlling margins without additional customer capture.
Canidium wants to help you get the most out of your CPQ solution no matter what industry you are a part of. If you want to Learn more about how CPQ can benefit your specific company, just reach out to our expert consultants by clicking the button below.
Find the author on LinkedIn: Bill Thane, Sr. CPQ Consultant, Canidium