There are many different Configure/Price/Quote (CPQ) tools available and while they are all called CPQ they have many different capabilities. This makes it challenging to find the best tool for your business. Before you try to investigate all the capabilities of these tools you should look inside YOUR company and truly understand the challenges of YOUR users. Companies who miss this step usually don’t have a successful CPQ installation and their implementation requires rework to correct this later.

Here are steps that should help you focus on your company, your processes and your users from the beginning so that you don’t have to fix it later!

1.Review your current business processes —> (e.g sell a new product, sell a new service). For this step keep in mind that the CPQ process consists of these six basic parts:

  • Create Configuration
  • Apply Pricing
  • Quote Approvals
  • Create Quote
  • Convert Quote to Order
  • Reporting & Data Analysis

While there may be more, integrated parts, for you to consider (e.g. Billing, CLM) for CPQ, for our purposes, let’s adhere to these six parts.

2.Determine your major pain points —> they need to be addressed with new processes that are    supported by your new CPQ tool

  • Configuration – e.g. high number of non-workable products on a quote
  • Price – e.g. your team grants too many discounts
  • Quote – e.g. new information on a quote requires  update of a quote form
  • General – too many approvals required (time-consuming)

The result of this step should give you an idea where your priorities are. Note: Only go as deep on the process levels as you need to, to get a high level understanding of your key problems. Going deeper usually adds more confusion, at this stage.

3.Develop User Stories or Use Cases (Read this article for more info ) to address your pain points. As a result you should have business requirements.

4.Prioritize your User Stories/Use Cases/Business Requirements

5.Determine Key Technology & Business Operations Considerations —> some examples  are below

  • Administrative Requirements (e.g. Security, Single Sign On, System access)
  • Adaptability of User Interface
  • Use of an Engineering Change Management system (setup of changes that become valid at a certain point in the future)
  • Debugging/Troubleshooting capabilities
  • Workflow capabilities

6.Develop improved business processes Determine how you can improve your business process flows. During this step you should focus on addressing the pain points you identified in step 2. Do NOT try to automate what you do today w/o investigating what can and should be improved. This is independent of any tool! Your goal is to develop the right process and not to automate or replicate current processes  and systems. At this point there is no need to go into too much detail since your future CPQ tool may not 100% support what you develop here

7.Determine Risks and possible Risk Responses for you new processes. You need to understand what can go wrong – get feedback from key stakeholders  (e.g. regional users, channel partners, or selected end customers). Document it and determine how you can best address the risks. Typical Risk responses are Avoid, Reduce/Mitigate, Transfer, Accept (Read more here)

8.Determine business impact of your proposed changes —> Perform a Change Impact Analysis

After you have gone through all these steps and truly understand what your users need you are ready to continue with the CPQ Solution Provider selection to determine which vendor best satisfies your requirements.

Just remember your Users need to be at the center of your CPQ effort to ensure the CPQ business process reengineering effort and CPQ tool really achieve the desired results.