The drivers for change…...
IT projects, of whatever flavor, can be high risk.
Some projects include the discarding of incumbent systems, and the adoption of expensive replacements. Sometimes this can even involve removing systems that may still adequately perform to their original specification.
Two of the biggest ticket items within any business are its front-office (CRM) system, and back-office (ERP) system. They may have been in place for some years.
Many companies however are now recognizing gaps within and between these systems; and they are investigating how such gaps can best be plugged. Frequently the gaps are associated with the production and processing of quotes.
Applications using the three letter acronym ‘CPQ’ are now offering solutions. CPQ stands for ‘Configure Price Quote’ - and the term has been adopted to describe applications that specifically address the shortfalls between and within CRM/ERP.
Anyone still using spreadsheets for producing quotations will be familiar with the problems that can exist!
The good news is that with the arrival of CPQ solutions, it is no longer necessary to replace either a recently acquired CRM system, or a well worn ERP system.
The less good news is that CPQ is becoming a bit of a ‘catch-all’ for a range of quite different solutions. It is now not uncommon for terminologies such as ‘Quote to Order’, ‘Quote to Cash’ and ‘Lead to Order’ to appear alongside CPQ.
It is important to understand the differences between these terminologies - as an understanding can reveal the strength, experience and philosophy of a software solution and its provider.
Ultimately, gaining such an understanding can help to indicate the best fit of a solution for any given business.
- CPQ - Quote to Order. These solutions bridge the gap between CRM and ERP - by providing for the production of quotations and their conversion to an order. Some systems cope only with simple quotes. Others handle complex quotes of large scale.
- CPQ - Quote to Cash. These products bridge that same process void; and in addition extend backward into the traditional ERP area of control - in order to incorporate the production of invoices and the collection of cash.
- CPQ - Lead to Order. These applications seek to bridge the same process gaps. But they reach forward from a company’s CRM system to embrace potential buyers, and to guide buyer journeys from the first touch point
Determining which flavour of CPQ best suits a business will often flow from a review of objectives, and a determination of the key issues which are affecting the customer journey and experience.
Identifying the type of CPQ most suited to your organisation is however only one element of a successful implementation. The other is delivering a successful project outcome.