Today’s manufacturers use multiple systems to run their businesses. But the ERP is the nerve center that powers them all.
ERP handles everything from financials to supply chain, ecommerce, business intelligence, reporting, and HR. It’s the most reliable solution for storing your company’s vital information and making it accessible organization-wide.
So if ERP manages core functions so effectively, why do you need CPQ? Because, as this article explains in detail, CPQ offers a wealth of functionality that ERP lacks.
Only by combining CPQ and ERP can you unite your front and back-of-house systems, eliminating data silos, manual rework, and “invisible” data. Through the careful integration of CPQ and ERP, you can provide industry-leading buying experiences that are personalized and frictionless.
What is ERP?
ERP (which stands for Enterprise Resource Planning) is a suite of process management tools designed to manage and store all of your company’s most valuable data.
ERP provides a single source of truth that’s highly accessible to individuals across your organization, enhancing visibility and transparency, breaking down silos, and fostering collaboration.
Gathering all of your precious data in one centralized repository helps generate data-driven insights that would otherwise remain locked away. But that’s not the only benefit. Business leaders can use the wealth of data stored in ERP to automate the most tedious back-office tasks such as shipping, inventory management, forecasting, and reporting.
What Can ERP Do For Your Business?
- Real-time visibility into operations
- Powerful reporting and forecasting
- Rapid decision-making
- Early identification of challenges and opportunities
- Automation of tedious, time-sapping tasks
- Creative and strategic thinking
- Increased productivity and efficiency
- Improved collaboration between individuals, teams, and third-party vendors
- A secure repository of data (always-on and accessible from anywhere)
What is CPQ
You could say that ERP handles the back of house and CPQ deals with the front. That’s sort of true but it only paints half the picture. It all depends on the CPQ solution you’re using. Because while more basic/traditional CPQs are limited to front of house operations (essentially just sales), today’s visual CPQ solutions automate the entire engineer-to-order process.
Let’s begin by quickly laying out the basics of how CPQ works.
CPQ: The Basics
CPQ helps to automate and therefore streamline three processes central to make-to-order manufacturing: configure, price, quote:
Configure: CPQ makes it easy for sales reps to configure complex products for customers. They don’t have to contend with thousands of product options and dependencies; all they need to do is input their customer’s requirements and output an optimized custom product. Configuration is governed by pre-programmed product rules that codify and dictate which options will work together most effectively in each use case, maximizing customer satisfaction and margin for the seller.
Price: CPQ calculates prices for configurable products in real-time. It enables sales reps to give customers instant pricing feedback and saves hours of time and potential errors.
Quote: CPQ takes the information from the configuration and pricing stage and uses it to automatically generate a quote for the customer (in a range of formats.) Again, this automation saves reps a tremendous amount of time formatting and guards against typos and other manual errors.
CPQ: Advanced Functionality
The best CPQ solutions have evolved from internal sales tools into customer-facing configure price quote solutions. Sales reps can still use them behind the scenes, but, crucially, end buyers can use them independently online.
Instead of configuring products by entering text and checking boxes as you would with a traditional CPQ, users of best-in-class visual CPQs configure products visually by interacting with 3D product renderings.
Today’s best CPQ solutions benefit engineering and production departments as well as sales. Thanks to the additional functionality outlined below, they automate the entire engineer-to-order process, from shopping cart to shop floor.
Visual Product Configuration: Users configure products by interacting with 3D visuals on-screen. They watch as their custom products come to life and can view the finished articles in lifelike detail before committing to a purchase. Visual product configuration is an immersive buying experience that removes the guesswork from the customization process. Gaining a deeper understanding of products enhances decision-making, which leads to an increased conversion rate (40% higher for the average Epicor CPQ customer.)
No-Code Rules Engine: As is always the case with CPQ, product configuration and pricing are governed by “rules.” Traditionally, manufacturers had to rely on third parties to write the code that creates the rules. But Epicor CPQ has a no-code rules engine that non-technical employees can program themselves. This ability to maintain product and pricing rules in-house means manufacturers can launch new products faster (no waiting on third parties) and significantly reduce costs.
Engineering and Manufacturing Automation: In addition to the quotes that every CPQ generates, best-in-class visual CPQ solutions output various engineering and manufacturing documents. CAD files, BOMs, assembly guidance, sales drawings, and more can all be generated with a couple of clicks, saving engineers a considerable amount of time while automating those tricky sales-to-engineering handoffs.
Integrate CPQ and ERP to Provide an Unbeatable Customer Experience
Today’s B2B buyers want a consumer-like buying experience–personalized and frictionless–regardless of product complexity. Integrating CPQ and ERP makes this possible.
Thanks to the power of CPQ and ERP integration, customers configuring products in CPQ can access up-to-the-second information pulled live from ERP. Stock levels, lead times, delivery costs, purchase history, outstanding invoices, and orders in progress are just a few of the data points that can add significant value to self-serve buyers and sales reps configuring orders.
You might be wondering why it has to be ERP that feeds this information to CPQ. After all, lots of customer data is held in CRM. It’s because the data that lives in your ERP is the most reliable. Anybody can mess around with your CRM, but only a small number of people can make changes in your ERP. And these are usually accounts/finance people who have an eye for detail. ERP is the data source that should supply your CPQ.
On an efficiency level, seamless integration of CPQ and ERP keeps information synced across both systems. Inputting data into one system means it’s automatically shared, eliminating manual data entry and ensuring employees always have access to the most up-to-date information.
Additional Benefits of CPQ and ERP integration include:
Better collaboration among teams and alignment between systems: Integrating CPQ and ERP creates a single source of truth that improves visibility.
Enhanced personalization: The more data made available to CPQ, the better products and configuration experiences can be tailored to each customer’s needs.
Improved procurement and inventory management: CPQ can access live stock levels and guide buyers towards in-stock items
Lower costs: Automation across systems relieves the pressure on teams and lowers the costs of hiring and general screw-ups.
Erosion of siloization of data: Merging CPQ and ERP data reduces redundancy, rework, and inaccuracies.