Easy As CPQ: Launching A Successful Sales Cycle

Gain an early advantage over competitors by turbocharging the sales cycle! The origination of many sales cycles is the CPQ process – or configure, price, quote. When optimized processes are supported by the right technology, sales teams can provide better customer service and focus on value-added work that leads to more revenue. CPQ systems can improve efficiencies and reduce risk through automation, system workflows, analytics, controls, and other modern tools like machine learning. In addition, establishing proper governance and monitoring key performance measures will lead to more effective sales activities. Let’s look at common challenges organizations face during the CPQ process and how key metrics and analytics can help solve them.

Identify problem areas

Sales and accounting must work together to provide customers with maximum value through their CPQ process while minimizing downstream reporting issues. In addition to improving overall workflow, organizations can improve the CPQ function by streamlining these common, yet complex, activities:

  • Product design and development: A process should be thoroughly outlined involving appropriate stakeholders from sales, marketing, finance, etc. to translate customer wants and needs into a product catalog that can be easily converted into customer quotes
  • Kitting: Products commonly sold together should be added to the product catalog as formal SKUs to save time during quote creation
  • Bundling: The product catalog and quote configurator should be intuitive enough so products can be quickly packaged together on the fly
  • Discounting: Discounts should be applied against individual product/service line items or to the overall quote, so transaction prices are appropriately calculated for use in revenue recognition
  • Taxability: CPQ process design should consider the tax applicability of products and services to ensure transparency to the customer and appropriate handling in downstream order and billing processes
  • Amendments/renewals: Quotes, orders, and contracts should be linked together so any modifications to the original transaction are appropriately captured in billing and revenue, and the customer lifecycle can be tracked with a comprehensive change history
  • Data flows: The synchronization of master data (e.g., customers, products) and transactions (e.g., orders, amendments) to other financial systems is important to retain data integrity and eliminate duplicate data entry.

Measure success

CPQ solutions produce key performance indicators (KPIs) that management can leverage to support data-driven analyses. Valuable sales metrics to track include the average quote value, quote to opportunity turnaround time (sales cycle length), opportunity conversion rate, customer lifetime value, and churn rate. KPIs serve as data points to enable actionable insights and strategic decision-making.

How would an organization know if it is optimizing its CPQ process? What data is needed, how would those metrics be represented, and what is the best way to communicate any findings? Organizations need the right tools and processes to ensure they are getting value out of their KPIs. Collecting and managing data points is the first step to setting up KPIs for long-term monitoring. Data alone does not maximize return on investment. Once an organization defines its business requirements and ensures it can track metrics, continuous improvements can take place. Trend analyses, machine learning and reporting across relevant business dimensions can all provide insight into how the business is doing, and how it can perform better tomorrow.

Continuously improve

Organizations must consider a multitude of factors when selecting an appropriate CPQ solution. CPQ solutions should provide companies with the appropriate level of support, services and innovation, while catering to their needs for things like subscription selling, complex tangible goods, integrations, and analytics. The CPQ market is evolving and advancing quickly. It is increasingly critical to have experts help navigate the terrain and provide guidance, to help select the right solution, at the right time, with opportunities that enable growth.

Protiviti’s consulting practices provide a variety of offerings related to process improvement and redesign, software selection and implementation, and data analytics. Visit Protiviti.com or contact us for more information about how we help support business transformation.

Grant Horton

Manager
Enterprise Application Solutions

Simone Stavros

Senior Consultant
Enterprise Application Solutions

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