Businesses that deal with complex quotes and sales processes can often find themselves hours to generate a single estimate.When quoting is complex it is costly and sometimes a disaster when price and materials are quoted incorrectly. When it’s a complex quote, it can seem like a never-ending process just getting it in front of the customer. Scaling a business with complex quoting is extremely difficult without the support of powerful tools like Configuration, Product and Quoting (CPQ) software. With thousands of product components being mixed and matched to meet the customer needs , attempting to speed up product configuration and quote generation can increase the risk of costly mistakes. Enter, CPQ.
So, what is CPQ?To streamline quoting, manufacturing and distribution, companies utilise CPQ to speed up selling and production scheduling. A CPQ app is made up of two main modules; Product Catalogue and Quoting/Configuration. The product catalogue details the products, prices, quantities, allowable customisation and discounts with a pre-defined set of rules related to the bill of materials and work in progress routing. Whilst the quoting/configuration works with the Customer Relationship Manager (CRM), Enterprise Resource Planning (ERP), Computer-Aided Design (CAD) apps. Companies will experience reduced errors and production workflow issues when a CPQ is used to guide the sales engagement.
Why would a business invest in CPQ?Businesses across industries are faced with costly and sometimes irreparable damage when quoting is completed incorrectly. Quoting problems are exacerbated by the complexity of the product, the multitude of components and customisations required. Product variation can mean hundreds of input fields causing high-risk quoting errors. Similarly, inconsistencies across data can result in formalised quotes with outdated pricing, incorrect costing calculations and high correction costs. Coupled with increased production and delivery times. Additionally, if engineering is required to formalise the quote, delays in providing pricing can often result in missed opportunities and lost sales. Regardless of the chosen method for designing and building a product, there are common hurdles that can be overcome with a good CPQ system. The need for collaboration across departments from engineering to purchasing to operations means the entire sales process must be integrated to optimise business operations. The bottom line, quoting is a big deal that benefits from a systemised approach to avoid errors and improve efficiency.
How does CPQ guide the sales process?The guided selling process within the CPQ eliminates errors and inefficiencies and in turn, reduces your sales cycle. Sales representatives can navigate complex products with queued questions, improving upselling and cross-selling practices. Whilst other businesses weigh up the time and cost investment for engineering teams to bundle product variations, the benefits of creating established rules within a CPQ offers sales teams customisable templates that are ready immediately. These sales templates with rules-based dynamic options built with the CPQ software ensure orders are complete, accurate and profitable. his in turn gives management confidence and visibility when approvals are required. This process can ultimately be completed in minutes. The traditional method of learning all the possible combinations whilst getting engineers involved in the process is an investment that hinders a business’ ability to scale.
How can CPQ improve inventory management?With good CPQ software, selling complex and configurable products doesn’t have to be a logistical nightmare when considering inventory management. CPQ software informs processes and when configured correctly should improve the management of products and inventory. >Intelligent CPQ software enables sales representatives to ensure all materials ordered are required which reduces the likelihood of wastage and surplus supply. Likewise, product substitution is enhanced as sales representatives can exchange what is currently in stock against the customer’s order to ensure timely delivery. Identifying appropriate product substitutions is critical to prevent ordering unnecessary products and draining your bottom line.
Win more contracts with CPQForward-thinking businesses are required to remain versatile, having a properly configured CPQ software not only improves internal workflow but also customer satisfaction levels. With all the far-reaching benefits of CPQ, the support of experts to guide implementation becomes pivotal to success. CPQ will guide your sales team through the selection of materials, validate combinations, and calculate costs while eliminating errors and accurately estimating gross margins. The team at Klugo are experts in Manufacturing Execution Systems (MES) and CPQ. Schedule a chat with the team to explore how CPQ can benefit your business today.
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