Configure Price Quote, commonly referred to as CPQ, is a tool used by manufacturers to quickly and accurately turn complex products into quotes and orders.
In order to truly understand what CPQ is, you need to break down the acronym even further.
Starting with the C in CPQ, Configure. Your complex products will be easier to design with a real time product configurator. Perhaps there are a lot of moving pieces and parts to your product, or there are a million combinations, or your customer require customization and special pricing, or maybe all those things are true for your business! With customized products like your’s, your first step should be to configure your product by asking a series of logic-based questions. Because the configurator uses logic, it will eliminate non-compatible options as you select answers. This eliminates the chance for errors and unsupported combinations
Next, P is for Pricing. Manufactures and services businesses rarely stick to a rigid pricing structure. Perhaps you offer bundles and volume pricing, or any other type of special pricing. CPQ gives you the ability to keep pricing clearly defined for everyone inside and outside of your organization. While still having the ability to customize pricing for certain dealers and customers. It’s important to your bottom line that discounts are applied correctly and consistently throughout your business. With a CPQ system, prices are automatically calculated while you are configuring the product. Any special deals, discounts, promotional codes, and product bundles can be added at anytime.
The final letter Q, stands for Quote. You’ve configured your product and you have an accurate price for it, finally you turn it into a formal document. The quote can be emailed immediately or created as a PDF document. Including product specifications, warranty information, drawings, detailed pricing and terms. Sales representatives can generate a quote, send it in an email, and send a follow up, with just a few clicks. CPQ software streamlines the quoting process for manufacturers and dealers.
Lastly, there’s one more key feature of CPQ that’s not in the acronym, but it is equally as important – Integration with ERP and CRM. The same CPQ solution that services your dealers and outside sales reps is also the same configurator that runs within your ERP and CRM. This alleviates having to maintain more than one quoting tool and your product changes take place across the whole system. After you create your quote it is quickly turned into an order when integrated with your ERP system. Starting from the quote, your order can be completely fulfilled by passing BOMs and routings to the shop floor. This is why it is important that ERP integration is an option with the CPQ system you choose.
CPQ Designed for You
Your product and system is unique and complex. You need a CPQ provider who is willing to customize the software to fit the needs of your organization.
RenaissanceTech has over 200 successful CPQ implementations, in a variety of industries. The founders of RenaissanceTech worked on the initial development of the infor CPQ solution. Contact us when you’re ready to work with the CPQ Experts.