CPQ Cloud

CPQ (configurer, prix, devis) is a software system that streamlines the sales-to-manufacturing process, supporting product configuration, pricing, and quote generation.

CPQ software guides businesses through the process of selling custom products. It helps users select the custom product options and configurations (Configure), calculates the price for these configurations (Price), and then generates a quote for the customer that reflects their choices (Quote).

The CPQ process enables businesses to offer error-free, customer-specific configurations, ensure profitability through advanced pricing strategies, and rapidly produce quotes, enhancing customer relationships​​.

CPQ, like most business software, has been revolutionized by the cloud, transitioning from a traditional on-premises deployment to a more dynamic, scalable, and cost-effective model.

This has enabled businesses to adapt swiftly to market changes and enhance customer engagement through features like 3D visualization and virtual reality (VR) showrooms.

This article thoroughly explores cloud CPQ, including benefits and key features to be aware of.

How Does CPQ Work? Key Aspects

Before addressing how cloud computing has transformed CPQ, let’s first address how CPQ itself functions.

Configuration du produit

The product configuration stage involves an interactive product configurator, essentially a user-friendly interface allowing for the customization of products. The interface offers 2D and/or 3D visualization of different configurations.

Here's how it works:

• Interactive Interface: The configurator provides a visual and interactive platform where users can select and customize products. This interface is designed to be intuitive, often featuring drag-and-drop functionality and real-time visual feedback.
• Predefined Product Rules: The backbone of the configurator is a set of predefined rules. These rules are established based on the company's product knowledge and engineering guidelines. They dictate what configurations are possible, ensuring that any combination the user chooses is viable from an engineering and production standpoint.

Prix

The pricing component of CPQ controls how prices are calculated.

Traditional methods, often reliant on manual input like Excel spreadsheets, are replaced by a dynamic, automated system capable of calculating prices in real-time.

Pricing considers various factors, including raw material costs, promotional offers, inventory levels, and competitor pricing.

• Automated Price Calculation: CPQ calculates prices for the given customized selection, taking into account real-time pricing data, discounts, promotions, etc.
• Real-Time Price Adjustment: CPQ adjusts prices in real-time. As variables such as material costs, market demand, or inventory levels change, CPQ instantly recalculates and updates the prices, ensuring they are always current.

Citer

Last but not least, CPQ software creates an accurate quote and automatically generates the documents required for manufacturing. Documents are auto-generated for the specific product in question, ensuring continuity throughout the entire process.

• Automated Quote Generation: CPQ automates the creation of sales documents, generating accurate quotes for the chosen product configuration.
• Integration of 3D Models and Technical Specifications: CPQ systems can output detailed 3D models, technical specifications, CAD files, and bills of materials (BOMs) with their quotes.

How the Cloud Has Transformed CPQ

The evolution of cloud technology has impacted virtually all software categories, and CPQ is no different.

The cloud refers to internet-based computing where data and applications are stored and accessed over the internet rather than on local servers.

By embracing the cloud, CPQ systems have become more robust, offering enhanced features like real-time data updates and broader accessibility. This aligns CPQ tools with the needs of today's fast-paced, digitally-driven business environment.

Here’s how CPQ benefits from cloud deployment.

1. Flexibility and Accessibility: Cloud CPQ, being hosted on the internet, is accessible from anywhere and on any device. This is crucial for businesses that sell through multiple channels in different locations worldwide.
2. Scalability: Cloud-based CPQ is highly scalable, allowing businesses to deploy the technology to new channels and manage users and access controls.
3. Cost-Effectiveness: With lower upfront costs and a reduced total cost of ownership (TCO), cloud CPQ is economical. Businesses save on hardware and IT infrastructure expenses, and the pay-as-you-go pricing model means costs are predictable and manageable​​​​.
4. Enhanced Security: Vendors of cloud Solutions CPQ invest in enterprise-grade security measures, including data encryption and strict access controls. Automatic backups and disaster recovery plans ensure data protection and business continuity​​.
5. Rapid Implementation and Future-Proofing: Cloud CPQ solutions can be implemented quickly without hardware installations. They’re also straightforward to update with new features.
6. Integration with Other Cloud Applications: Cloud-based CPQ solutions enable integration with other business cloud applications, such as enterprise resource planning (ERPs).

The following section investigates the benefits of cloud CPQ for businesses, customers, and manufacturing teams.

The Benefits of Cloud CPQ

Cloud CPQ offers businesses an innovative solution for uniting sales channels and bridging them with manufacturing. At the same time, it supports customer demand for configurable products and a convenient and flexible sales cycle.

Avantages commerciaux

CPQ offers unique business benefits that apply across multiple departments. It helps businesses automate time-consuming tasks, saving money in the process.

• Catering to Trends and Demand: Data shows that 50% of customers want businesses to offer customizable products, and companies that cater to this enjoy revenue uplifts of up to 15%.
• Streamlining Product Development: Cloud CPQ simplifies complex product configuration. This reduces the time and resources spent on developing multiple product variants. With CPQ, businesses can efficiently manage a diverse product portfolio, enabling them to respond quickly to changing market demands and customer preferences.
• Cross-Department Collaboration: Cloud CPQ fosters enhanced collaboration across various business departments, saving everyone time—from sales and marketing to design and engineering.

Customer Benefits

With easy-to-use product customization, cloud CPQ helps businesses deliver the personalized customer experiences buyers want:

1. Personalized Sales: Cloud CPQ automates product configuration and pricing, empowering sales reps to better understand and meet individual customer needs. Reps can tailor products without constant back-and-forth with design and engineering teams.
2. Data-Driven Insights: CPQ collects valuable customer data on preferences and behaviors. Sales teams leverage this data to create targeted sales strategies, aligning offerings with customer expectations. It also aids in refining marketing approaches based on trends and feedback.
3. Enhanced Efficiency: Customer inquiry response times improve with cloud CPQ. Sales reps can generate detailed, accurate quotes, even for complex configurations. This enhances customer satisfaction, accelerates sales cycles, and boosts competitiveness.

Manufacturing Benefits

Cloud CPQ’s benefits extend into manufacturing and production:

1. Bridging Sales and Engineering: CPQ acts as a vital link between sales and engineering, ensuring precise communication of customer requirements to the production process. This is crucial in supporting custom manufacturing scenarios.
2. Quality Control: By minimizing human intervention, CPQ reduces errors and maintains stringent quality standards. Fewer errors mean less rework, contributing to efficient production cycles and cost savings.
3. Supporting Manufacturing Automation: Cloud CPQ automates critical manufacturing processes like CAD file generation and materials lists. This accelerates design and production, reducing time-to-market and errors.

The next section describes how cloud CPQ helps businesses build “constellations of technology” that push and pull data to and from each other with minimal human input.

Integration Capabilities of Cloud CPQ

One of the key advantages of cloud technology is integration. Integrating cloud software through APIs and connection layers like MuleSoft enables businesses to build software ecosystems that are stronger than the sum of their parts.

By connecting systems with a ‘digital thread,’ cloud CPQ brings its own benefits while contributing to the effectiveness of other systems.

Leading cloud CPQ vendors offer the following integrations:

1. Customer Relationship Management (CRM) Integration: Integrating CPQ with CRM systems allows leveraging customer data to personalize experiences and make intelligent product recommendations.
2. Product Lifecycle Management (PLM) Integration: This ensures that product configurations offered are always up-to-date and feasible, managing complex product information effectively throughout the lifecycle.
3. eCommerce Platform and Website Integration: Embedding CPQ in eCommerce platforms and websites enables customers to interact with products online, configure, and place orders conveniently.
4. CAD Solutions Integration: Integration with CAD solutions like AutoCAD or Solidworks automates time-consuming engineering tasks, enhancing engineering efficiency.
5. AR and VR Integration: Taking the product configurator to the next level, this integration offers an immersive and interactive customer experience, setting businesses apart from the competition.
6. Business Intelligence (BI) Tools Integration: By integrating with BI tools, CPQ provides insights into sales performance, product trends, and pricing strategies for informed business decisions.
7. ERP System Integration: This ensures consistent data sharing across departments, updating relevant data in the ERP system for accuracy and consistency.
8. Document Management Systems Integration: Enhances the management and storage of critical documents like quotes, improving efficiency and security.

En conclusion

Cloud CPQ is a transformative technology that has redefined the way businesses operate. It bridges the gap between sales and manufacturing, offering intuitive product customization, personalized and adaptable sales experiences, and effective automation of manufacturing processes.

The adoption of cloud technology has further amplified the benefits of CPQ. Seamless integration with other business systems ensures data flows effortlessly across departments, enhancing businesswide productivity.

Épicor CPQ, for example, seamlessly integrates with major CRM platforms such as Salesforce, CAD systems like SolidWorks and Creo, and PLM tools like Propel, streamlining data flow across your business ecosystem.

Cloud CPQ FAQs

1. What is CPQ Cloud?

Cloud CPQ (configure, price, quote) is a cloud-based software solution designed to help businesses efficiently configure products, determine pricing, and generate quotes. It is particularly beneficial for companies with complex product lines or customizable offerings.

By automating and streamlining these processes, Cloud CPQ ensures accuracy in pricing and quoting, accommodates customer-specific needs through flexible configurations, and simplifies the sales process. CPQ cloud integration leads to enhanced customer satisfaction, improved sales efficiency, and the ability to quickly adapt to market changes.

2. Is CPQ a CRM?

CPQ (Configure, Price, Quote) is not a CRM (Customer Relationship Management) system. While both CPQ and CRM systems are used in sales processes, they serve different purposes. CRM focuses on managing customer relationships and interactions, while CPQ is specifically designed for configuring products, pricing, and generating quotes.

3. What is an example of a CPQ?

Epicor CPQ is an example of a CPQ solution. It offers features for product configuration, pricing optimization, and quote generation. Other examples include Salesforce CPQ, SAP CPQ, Apttus CPQ, and Oracle CPQ Cloud.

4. How does CPQ work?

CPQ software works by automating the configuration, pricing, and quoting process. It uses predefined rules and logic to guide users through product configuration, calculates accurate prices based on various factors, and generates detailed customer quotes.

5. Why do companies need CPQ?

Companies use CPQ to streamline their sales processes, reduce errors, improve sales efficiency, deliver better professional services for B2B buyers, and enhance customer experience.

CPQ solutions help businesses quickly provide accurate and customized quotes, leading to increased sales and customer satisfaction. Furthermore, the analytical cookies offered by web-based CPQ platforms provide valuable insights into user behavior on the quoting system, enabling companies to continually optimize the quoting experience.

6. What is the difference between CRM and CPQ?

CRM (Customer Relationship Management) manages customer relationships, sales activities, and interactions. It helps businesses track customer data, leads, and opportunities.

On the other hand, CPQ (configure, price, quote) is specifically designed for configuring complex products, determining pricing, and generating accurate quotes. While both systems are used in sales, they serve different functions within the sales process.

7. What are Cloud CPQ Integrations?

Integrating CPQs with ERPs, CRMs, BI, and PLM tools unites data in a singular ‘digital thread.’ Platforms are often integrated between different vendors, too. Some commonly integrated technologies include Epicor CPQ, SAP ERP, Oracle Sales Cloud, Oracle E-Business Suite, Oracle Cloud infrastructure, Salesforce Revenue Cloud, Microsoft Dynamics, Pros Smart CPQ, Calliduscloud CPQ, SAP Sales Cloud, Dealhub CPQ, or SAP Service Cloud.

8. What are Some CPQ Best Practices

Some best practices for Configure, Price, Quote (CPQ) software include:

• Visual Product Configuration: Provide interactive visual product configurators for both sales representatives and customers. This enhances understanding of options and creates an immersive, personalized experience.
• Maximize Configuration Options: Offer as many product and component choices as possible to enable better customization than competitors.
• End-to-End Automation: Automate repetitive processes from initial customer interaction through production to increase efficiency.
• Cross-Department Integration: Make the CPQ system accessible beyond just sales, including engineering and manufacturing teams. This facilitates collaboration.
• Tech Stack Integration: Integrate the CPQ solution across your technology stack to streamline data flows.
• Interaction Tracking: Track every customer interaction in the CPQ system so you can follow up with relevant, personalized messages if they abandon their configuration.