The Three Stages of CPQ Readiness: A Business Guide

In today's competitive business landscape, Configure, Price, Quote (CPQ) solutions have emerged as the missing link in many CRM and ERP systems. CPQ streamlines the complex processes of configuring products, pricing them accurately, and generating quotes, ultimately leading to enhanced customer satisfaction and increased revenue. However, the journey towards CPQ readiness involves three distinct stages. Let's explore each stage to understand what stage you are currently in and if it makes sense to implement a CPQ-tool.

Stage 1: Identifying the Problem

At the initial stage of CPQ readiness, businesses often face a common challenge – they recognize the need for better configurability, pricing accuracy, and quoting efficiency, but they lack an internal solution. This realization often stems from manual and error-prone processes that hinder productivity and customer engagement. In this stage, companies must acknowledge that a problem exists and take the first step towards a solution. This involves assessing the limitations of their current processes and identifying the pain points that need addressing.

Stage 2: Implementing Manual Processes with Excel and Templates

The second stage marks progress as companies decide to take action. In this stage, many companies turn to familiar tools like Microsoft Excel or Google Sheets and create a library of document templates to handle configuration, pricing, and quoting. While this approach attempts to alleviate some of the challenges faced in the first stage, it often falls short of complete alignment with broader business objectives.

Using Excel spreadsheets and document templates can provide a level of flexibility, allowing businesses to customize their pricing and quoting processes. However, these manual methods may lack the scalability and precision required to drive sustainable growth. Maintaining a library of Excel-based document templates for quotes can be cumbersome, leading to version control issues and potential errors. In fact, we have previously highlighted that manual errors in the quoting process is costing businesses 5-15% of their total revenue in this blog post.

Similarly, some companies rely on the standard modules within their CRM or ERP systems to streamline their CPQ processes. While these modules offer some out-of-the-box functionality, they may not cover all the specific use cases required for comprehensive CPQ. This can result in a disconnect between the manual processes and the broader business objectives, as these systems were not initially designed with CPQ in mind. You can read more about the value a CPQ tool can add to CRM in this previous blog post.

In this stage, businesses need to recognize the limitations of using Excel and document templates or leveraging CRM/ERP modules for CPQ. While these tools may provide a temporary improvement over entirely manual methods, they often require adjustments and alignment with strategic goals to fully meet the demands of a comprehensive CPQ solution.

Stage 3: Need for Integrations and Optimization

The final stage of CPQ readiness is the most transformative. Here, companies have successfully implemented manual CPQ processes, but they recognize the need to connect these processes to other critical systems within their organization. Integration becomes key to achieving seamless workflows and harnessing the full potential of CPQ. Businesses in this stage invest in technology solutions that enable them to integrate CPQ with their CRM systems, ERP software, and other mission-critical tools. This integration not only streamlines operations but also ensures that CPQ is tightly aligned with their broader business objectives.

In conclusion, the journey towards CPQ readiness is a three-stage process, starting with problem recognition, evolving into the implementation of manual processes using Excel and document templates or CRM/ERP modules, and culminating in seamless integration with other critical systems. Each stage presents its own set of challenges and opportunities, but by navigating through them, businesses can unlock the true potential of CPQ and take a significant step toward enhancing their competitiveness and customer satisfaction.