12 Tips You Need to Know Before Implementing a CPQ Solution

by | Sep 18, 2019

Face It. Implementing any major software across an organization is typically a complex and arduous process, but it doesn’t have to be. Follow these twelve tips before you start your implementation to set your organization up for a successful CPQ launch.

Tip #1 – Form a Complete CPQ Evaluation Team

Successful teams recognize the value that each role brings to the success of the overall organization. With a CPQ solution, finding the right fit requires input from across the business.  Your team charged with selecting and deciding on the CPQ should contain a mix of front-line users and managers across departments including inside and outside Sales Representatives, Senior Sales Managers, leadership from the IT department, Customer Service Reps and Managers, the Order Entry team, Engineering, the Marketing Team, and the Accounting & Finance Group as well.

In most cases, members of all of those groups will need to interact with the CPQ, or at least the data and workflows generated from the CPQ, and their cross-functional insights will help you customize a better solution right out of the gate. Once you have your team in place, establish agreed upon guidelines for timelines and communications. Create an environment where everyone has an equal voice and vote for this group so that members of the team are not afraid to voice opinions or share thoughts.

Tip #2 – Identify the Key Pain Points You Are Trying to Solve

Typically, there is an overall impetus that has started an organization down the process of seeking a CPQ solution. Sometimes it’s trying to find a better solution for generating and managing quotes, other times its a margin protection initiative. Whatever the initial reason, many businesses often see the list of requirements grow as they get deeper into the process. In those cases, it can be easy to lose sight of the primary goals of the CPQ implementation. To avoid this, create an extensive list of the largest and most pressing concerns the team needs to resolve.

Qualify the Pain

Once you have you list, determine how these issues affect the team as a whole, and also how they impact each department. Score these issues in a spreadsheet across departments with No Impact, Low Impact, Medium Impact, and High Impact to each department. This scoring can help you determine your top priorities and will often uncover important issues not considered with the initial push to seek a CPQ solution.

During the evaluation of the issue list, ask the team poignant questions and be honest with yourselves. Many times, a CEO or VP of Sales will not fully understand the frustrations and challenges faced by the front-line employees with the software, systems, and processes employed by the company. Conversely, front-line team members don’t always understand the complexity and impact of errors, missing data, or other problems as they scale across the organization.

Try to determine how the pain points identified affects your team. Seek answers to questions such as:

      • How does this issue impact your (or your department’s) productivity?
      • How large of a frustration is this, and how can the process be improved? And is this a gripe, or a real underlying problem?
      • Is this issue creating additional errors in our department, or for other departments?
      • Are we losing clients or potential new clients because of this?
      • Does this issue cause us to potentially lose good employees?

Quantify the Pain

By now, you have your team together and you’ve identified the key issues you are trying to resolve, along with keen insights into the impact of those problems. Don’t stop there.

These problems, and the costs associated with them are already impacting your business, and ultimately, your P&L statement. If you don’t make a change to resolve these issues, you’ll continue to carry those costs, and potentially see them increase over time. To help you create a cost baseline for comparing your current situation with any new CPQ solution, you’ll need to determine just how much doing nothing costs you. This doesn’t mean you have to do a full scale financial impact study or that you’ll need anything more complicated than the back of a sheet of paper to determine the impact. But it’s critical to have a clear understanding of your current state’s associated costs so that you can see a clear comparison when looking at budgeting for a CPQ solution.

Start with the most obvious costs. What are the cost impacts of improving productivity, or reducing inaccurate or returned orders, or of limiting cross-departmental costs with customer service or engineering teams by having accurate quotes and happier customers?

On top of this, seek to uncover hidden costs to your organization. Hidden costs may include impacts to your brand reputation by always taking too long to get quotes back to customers, or from not getting orders delivery accurately. Other hidden costs could include:

      • Are your processes creating barriers to growth, or preventing you from adding new distribution channels or partners, or keeping you from expanding? 
      • Are you having to employ additional customer service reps or sales managers just to keep it all under control? 
      • Are there liability costs as a manufacturer that you are incurring because you’re doing the work that a distributor should actually be doing? 

Quantifying these hidden costs can help you gain additional support across the C-Suite and from your Finance team. These total of these quantified costs should give you a good baseline for comparison, and you’ve got to ensure your team is aware of the magnitude of the problem you’re trying to solve.

Tip #3 – Document the Time Required to Complete Specific Tasks

Gather a handful of your top performers in each role and follow each of them as they complete tasks you’d like to see handled in your CPQ. Take notes and compare the averages for how long it takes them to:

      • Create a Quote
      • Update a Quote
      • Upload Spreadsheets for Quote Line Items
      • Create a Proposal Package with Relevant Product Documents such as Technical Specifications, Wiring Diagrams, Cut Sheets, Installation Manuals or Product Brochures
      • Obtain Approval for Special Engineering Requests
      • Obtain Approval for Special Pricing Requests
      • Submit a Customer Service Request
      • Convert a Quote into an Order
      • Process Order Entry
      • Complete Pipeline or Forecast Reports (for Sales Managers)
      • Update Master Price Lists
      • Create, Update, and Deliver Reports for Management

Of course, this is just a sampling of the processes that your organization may have to go through. You may have other tasks you’ll want to document the time allocation for, but the overall idea is to use this time value as a baseline to help you quantify the hidden costs that will continue in the organization if you elect to not move forward with a CPQ software solution.

Tip #4 – Ensure Organization Wide Commitment to a Solution

With a cross-functional team, qualified and quantified pain points, and corresponding cost analysis, getting organization wide commitment to addressing the problems should be much easier to attain. However, you’ll want to ensure that you have a shared vision and that everyone is all-in with the solution. Further, when evaluating, it won’t help you to get the Sales, Marketing, or Customer Service teams excited about a solution, only to find out from IT that it’s not viable because of integration or security issues.

Appoint an Internal Champion

Your internal champion should be someone who can generate and facilitate cross-departmental collaboration. This may not be an executive, but should have the support of the leadership team and be empowered to keep all teams moving forward and meeting deadlines. This will often be the primary point of contact between the CPQ vendors and the organization as well. Finally, your internal champion should have a depth of understanding of the issues, needs, and problems across departments and be able to facilitate compromise when balancing features, customizations, rollout phases, and overall cost of the solution.

Tip #5 – Find a CPQ Vendor Committed to Your Success

Sure, during the vendor selection process, pretty much all vendors will make it seem like they want you to be successful and that their solution will magically transform your business. However, ensure you take the time to get to know the vendor, and find out what your implementation will be like. Is there a third-party partner team that will have to be involved to implement the software, or does the vendor handle it themselves? Do you get along with the vendor’s team? Do they seem competent, insightful, and genuine in their desire to help you? Are they asking questions that are helping you develop a better solution?

Remember, you’ll be spending a lot of time working with the implementation team over the next three to six months, and perhaps longer depending on the complexity of your implementation, so find someone you can work well with. Most businesses only go through a CPQ implementation once, and rarely more than twice, so seek guidance from your vendor on best practices. Also, since these teams work on implementations all the time, find someone who can deliver actionable insights that will save you time, money, and frustration in the long run by helping your avoid costly mistakes.

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Tip #6 – Don’t Get Lost in Feature Comparisons

Modern CPQ solutions are loaded with features. Some may wow you or dazzle you, but the reality is you’ll rarely need or use all of the features available with any software platform. It doesn’t matter how many different size socket wrenches you have in your tool box if what you really need is a hammer. Ensure your CPQ solution can do exactly what you need it to do. Seek the solutions that are critical, and refer back to the prioritized list of business problems you’re trying to solve.

Further, consider the cost of the features along with their relative value to the organization. Some solutions offer an all-in-one bundle that centralizes many features in one platform. Is the convenience worth the additional cost? Does that lock you into one provider and increase your switching costs if there are problems in the future? Are you really going to use all of the features offered, or will they constantly be on a “when we get to it” list? Don’t oversell or undersell your needs, but find the right solution.

Tip #7  – Encourage User Adoption with User-Centric Design

While this may seem self-explanatory, too often organizations seek to maximize benefits to upper-management without thinking about the impacts to the front-line users. Ensure you create experiences that have a real impact to users, and assist them in doing their jobs faster, better, or easier. Management may love having access to the plethora of data points available, but if it causes an unnecessary time burden on sales or customer service reps to enter the data, odds are they are less likely to want to use the software.

User adoption is critical to the success of any software rollout, so the platform should be intuitive and valuable for everyone. Implement solutions that improve the process and outcomes for as many parts of the organization as financially feasible. That means not everyone will get exactly what they want for everything, but the primary problems should be solved. Enhancements can always be added in the future to correct outstanding issues.

Finally, don’t rule the software rollout with an iron fist. You’ll catch more flies with honey than with vinegar, so encourage adoption by highlighting the benefits to productivity and time-savings across the organizations. Specifically with sales teams, when they see how the platform can help them sell more and earn more commissions, they’re often much more likely to get on board.

Tip #8 – Seek a CPQ that Delivers Meaningful Business Intelligence

Fast forward twelve months. By now, you’ve got a fully implemented CPQ solution, a faster sales process, and happier management. But can you visualize those results? Can you detect the subtle changes in quote activity that may impact your future orders? Do pricing managers have the insights they need to adjust pricing strategies to optimize revenues and margins?

The world will generate 50 times more data in 2020 than in 2011, according to an IDC Report. Having all of that data readily available for your organization can be impactful, but also overwhelming. Maintaining data for the sake of having data, or keeping data tucked away in a series of tables and spreadsheets is not good enough for modern businesses. With your CPQ solution, you’ll be collecting even more data than has ever been available to your organization. You’ll have insights on all outstanding quotes, not just wait for orders to come in. You’ll be able to forecast sales, plan for peak volumes for order fulfillment, and spending time coaching employees who are not hitting their targets. But to make the best use of that data, you’ll need tools to help you see and understand the data. Seek a CPQ solution that offers native tools to help you answer deeper questions, get actionable insights quickly, and share those observations across the organization in real time.

Tip #9 – Don’t Let Perfect Be the Enemy of Good, or of Done

Too often, organizations considering a CPQ solution get mired in the complexity of software features, product components, and what-if scenarios that the criteria for selecting a vendor spirals out of control. Remember to look back to the original prioritized list of business problems you are trying to solve. Many times a software solution can deliver improvements of 50-80% to the operations, but the selection process devolves into back-and-forth conversations that may add tens of thousands of dollars to the implementation cost while only delivering a small improvement to the overall outcome. Further, this type of focus on the “perfect solution” often delays the decision making process, the rollout of the CPQ application, and the ability for the business to see a return on their investment. Plan on taking a phased approach to your implementation and handle the largest issues first, then slate other enhancements into future iterations of the software.

Tip #10 – Be Prepared for Contingencies

As they say, the best laid plans of mice and men often go awry. No matter how well you have outlined your needs, must-haves, workflows, data structure and pricing rules, the simple reality is that there will be things that come up no one ever considered while you were working with the vendor and getting your implementation plans and budgets together. Certainly, there are ways to mitigate against some of these contingencies, but you are better off to expect this to happen. Sometimes, you just don’t know what you don’t know, and there’s no way the vendor could know some of these intricacies about your business either. Having a Finance-approved contingency plan in place can help you determine which scope changes need to be completed during the initial implementation, and which ones can be added in a future phase. Save your team the frustration, and plan for budget allowances for these contingencies while utilizing some of the other tips in this article to prevent them. 

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Tip #11 – Plan for Post-Implementation Support

Just like with mid-implementation contingencies, after your CPQ is launched, it is very common to have feature requests or data changes for the vendor that are outside the original scope of work. In most cases, the major enhancements will be planned, quoted, and scoped with a new agreement between your company and the vendor. However, there can be issues that arise that prevent the organization from maximizing the CPQ platform. Typically, these issues can be resolved from a few minutes to a few hours and do not require major changes. Many vendors are reluctant to provide assistance without a support agreement in place, and will instead refer your team members to online documentation, guides, or another member of your internal team. Having a plan for first-year post-launch support is a wise step in executing a successful CPQ rollout for the organization. As you near the end of your first year post launch, gather reports and feedback from the team to determine how much support you’ll need for the next year and continue to re-evaluate.

Tip #12 – Find a Solution that Error-Proofs Itself

While there are a number of benefits of a CPQ solution including generating quotes faster and giving tremendous insights to management, those benefits are all for naught if the quotes generated are incorrect. Your CPQ solution must ensure that sales reps are actually selecting and quoting the right products for your customers. Further, the pricing rules should protect your margins and prevent rogue discounting outside of normal guidelines. Find a solution that helps all of your sales reps to quote faster while selling smarter.