As technology has improved, there has been an explosion in the results that manufacturing companies can achieve with the right tools. One of the most important tools in this equation, especially for B2B companies, is a proper CPQ solution. We will explore why we have found it essential to implement a CPQ solution in our sales process. Then, we will provide some insights into how we found the right solution (but not final, we are always in a continuous improvement approach) and why CPQ software solutions are effective for manufacturing companies like ours. Let’s start at the beginning, with the basics.
What is a CPQ solution?
A Price Quote Configurator (CPQ) solution is specialized software that helps us match customers to the right products for their needs, apply applicable discounts, and provide quick and accurate quotes. Let’s break down the individual letters in the CPQ acronym
Configurator – especially in sales of specialty tools for precision machining, customers tend to have very specific needs. Having a system that can configure products, features, and options into the perfect solution for each customer is invaluable.
Price-B2B manufacturing usually has to do with multiple orders, orders containing several products, or both. Offering toolkit pricing (more on this in future articles), discounts for larger quantities, and loyalty savings helps incentivize companies to order more and turn to us for their production. The right CPQ for tooling manufacturing makes this process fast and smooth.
Quote – as it is easy to imagine, providing a quote to a customer for a bulk request for specifically configured products with several custom elements requires more work and calculations than the average quote for a standardized product. The CPQ software, in our case it would be better to say the software, since it is 3 integrated web applications, for the tooling industry is able to do this with a good level of automation, with speed and accuracy.
Why we believe CPQ is critical to business success
To be successful, a business must collect more money than it puts in. This is the ABC of business.
However, what we have found is that resources dedicated to sales (this finding is widespread throughout the industrial manufacturing sector) generally spend only one-third of their time on sales. The other two-thirds are devoted to administrative tasks. How to remedy this problem?
Providing an accurate quote may seem easy. However, when you consider the amount of work and time spent on it, you realize how complex it is and the likelihood of making mistakes.
A commercial account must:
- Sift through huge spreadsheets to find pricing information
- Calculate prices for all individual products and features included in each configuration
- Calculate the cost difference for custom items
- Apply applicable discounts
- Talk to other departments (engineering and manufacturing) to make sure the configuration is possible, available, legally valid, and priced correctly
- Wait for the necessary approvals
Come potete immaginare, questo non è l’uso più redditizio del tempo.
A CPQ system is highly automated, so the process is much faster and streamlined, plus estimates are much more accurate and productivity increases b
Factors considered for the CPQ solution
- We then determined what a CPQ is and why we needed one. The question then was, how do we find the right solution? The solution adopted by OYO is able to consider factors such as inventory, materials, and shipments and thus integrate well with systems that do (ERP system).
Here are other important factors considered regarding a CPQ for tool manufacturing (special and standard):
COMPLEXITY OF CONFIGURATIONS
The CPQ solution can handle even the most complex tool configurations, to be in ready to easily expand and scale in the future without having to change.
FEASE OF IMPLEMENTATIOACILITÀ DI IMPLEMENTAZIONE
We tried to avoid the CPQ requiring the use of a ton of custom code to adapt it to our needs so that we could add new information without having to modify much code on the backend, so it was developed on microservices.
PERFORMANCE SPEED
Part of what makes a CPQ system so relevant is its positive effect on the customer experience. Customers spend less time going back and forth between sales and technical staff waiting for a quote, they get what they want faster and with less hassle.
FACILITÀ DI INTEGRAZIONE
The ideal CPQ solution integrates easily via API with other business systems and solutions (ERP and CRM above all). The more solutions that can be integrated easily and seamlessly, the better for business processes:
- Customer relationship management (CRM): an integrated CRM allows the team to access customer data to determine product recommendations, increasing conversions to orders and reducing quality issues
- Enterprise Resource Planning (ERP): an integrated ERP brings everyone and everything together. Information and integrations connect in one place, allowing all teams in the company (from Engineering to Sales to Customer Success) to access the same accurate, up-to-date information and communication options.
EASE OF INTEGRATION
The development of microservices, the basis of OYO’s CPQ, enables less resource-heavy maintenance.
UNIVERSALITY
The solution developed is “universal,” has several similarities between back-office and front-office, and is effective and intuitive both when used by customers who prefer self-service and when used by our team. The design is intuitive, both UX (navigational experience) and UI (user interface) side, and the solution is able to adapt to both the direct sales channel, such as the current one, but is designed to accommodate third parties in the future as well.
