The ABCs of Sales Acceleration with CPQ

January 24, 2020

We aim for and take action based on (even though subconsciously) social proof in all spheres of life—inclusive of how we function and the buying decisions we make on the internet. That social proof holds more value when it comes from industry experts and analysts. And that’s why we need to take the latest analyst study — that states that CPQ, based on its potential benefits to customers, will dominate the business world in the future — seriously.

CPQ — also known as Configure Price Quote — is a solution that has seen rapid adoption across industries for use with configurable products such as bills of materials and variant configurable materials. Research from leading organizations has shown that companies that have adopted a fully integrated CPQ solution have been able to reduce their sales cycle by 27%, increase their average sales quota achievement by 26%, increase average number of proposals, quotes, and RPPs delivery by 50%. In this blog post, you will learn how to achieve these benefits by using a  Configure, Price and Quote (CPQ) solution built on the SAP HANA cloud platform that is fully integrated with SAP ERP. But first, let’s start with the basics and talk about the differences between simple and configurable products.

Simple Products

A simple product is a physical product that is shipped to a customer. It can be a lamp or a vacuum cleaner, which has no options attached to it such as size, color, material, and so on. Each simple product has its own identity.

Configurable Products

A configurable product can be defined as an item that needs customers to choose options around it and make their own choices before making a purchase. These include items such as cars and computers.

Configurable Products

CPQ comes into the picture to make this purchase simple. The solution facilitates customer choices for the accessories of the products, which are an integral part of the product purchase process. For example, a company sells products and its accessories in various sizes, colors, and some specially designed components at higher prices. CPQ software helps customers and companies to make the purchase process in such scenarios easier.

For one, the customer has visibility into the prices and discounts, which are displayed during the purchase. For another, CPQ provides flexibility to choose from among various products and simulate prices to suit their needs and budgets. Thus, CPQ helps in better planning, visibility, and transparency in the business, thus strengthening the positive relationship between the business and its buyers.

Real-Time CPQ Business Use Cases

Market requirements are getting more and more sophisticated. Customers are getting more demanding, as the problems they need to solve become more complex. In turn, the products that a company offer have become more and more complex as well.  The complexity of the products come in different flavors:

Process Equipment Solutions Industry

There are products that are just incredibly complex. One of our customers in the process equipment solutions industry manufactures products as complex as an LED manufacturing machine, which is integrated with a TV or a cellphone. These machines are changed a hundred times during the quotation process before they get into production. Maintaining the integrity of the configuration – what is actually in every single machine – is a huge undertaking. Our customer offers a range of industry leading MOCVD equipment, including the TurboDiscMaxBright M Multi-Reactor and TurboDisc K465i™ GaN MOCVD systems, designed to maximize throughput while lowering cost of ownership.  Our Systems Performance Components maximize system uptime and yield, allowing our customers to achieive the highest throughput of high-brightness LEDs.

Heavy Equipments Industry

And then, there are products that are reasonably complex, but every customer wants their own version of it. The heavy equipment industry is a typical example. Depending on the usages of equipments such as excavators, buyers can customize the products according to the options offered by the contractor in a project-specific manner. For example, one of our customer's excavators is built specifically for railroad projects.

Telecom Industry

Another level of complexity is introduced when the product extends its physical boundaries so that there is hardware + service contract + accessories + apps + content. Only if all these elements come together in a perfect way will it help create value for the customer. All these use cases make it clear that in order to stay successful, companies need to develop, sell, manufacture, and service more and more complex products and solutions.

What CPQ offers industries

CPQ software helps companies to automate sales cycle processes — from improved quotation to sales order creation — thereby enhancing customer relations. This ensures that goods are sold to customers to fulfill their specific requirements. The process starts with understanding customer needs and providing them with an optimized quotation on the basis of their request. So, the CPQ process extends from when a customer requests goods from a company to the sending of a detailed quote to the customer or prospect by the company. CPQ software is employed in sales teams to step up the sales process while bettering quote precision and customer relationships.

CPQ Sales

A superior CPQ solution meets some of the prime business requirements, including:

  • Basic sales activities, which are part of the configure, price, and quote cycle
  • Higher profitability and revenues
  • Creation of accurate proposals in customized templates in doc, xls, pdf format
  • Boosted efficiency and shortened sales cycles
  • Flexible, standard, and custom pricing to suit customer needs
  • Quote tracking during the sales cycle
  • All required information from which sales offers can be made that can benefit both the customers and the company
  • Supporting workflows for approvals for users based on sales, marginal discounts during the quotation process, and allowing quote tracking
  • Managing changes requested by customers, when there is a business need
  • Access to all information to create a quote anytime, anywhere and on any device

CPQ constitutes one of the most favored technologies that sales teams are relying on these days. The only way you can benefit from this software is to, of course, try out one of the leading CPQ software solutions out there that fits your business needs. CPQ solutions such as SAP CPQ Cloud  stand out from the rest due to their sheer performance.

SAP CPQ Cloud enables sales teams to develop precise and practical proposals with its adept Configure Price Quote add-on for SAP C/4HANA. This solution is customized to the requirements of manufacturing and high-tech industries.

Food for Thought

Food for Thought CPQ

To conclude, I can say that, with the emerging customer needs and varieties of configurable products that facilitate customer selection as per their choice and budget, CPQ will continue to be a way of life for businesses in the years to come. CPQ solutions from In Mind Cloud can be efficiently integrated with SAP C/4HANA and be used as a powerful tool to sell configurable products to customers.

What new technology does your sales team currently rely on the most? If you have a minute to share your experiences at, I’d love to read about them and respond.

Want to learn more about CPQ in the buying process, how to create the best customer experiences, what to do to sell more efficiently, and much more? Subscribe to Knack Systems’ weekly blog feed.

Nagaraj Rao

Author: Nagaraj Rao

Nagaraj is a Senior Managing Consultant at Knack Systems with about 15 years of experience in implementation of various SAP Hybris modules, including CRM Service, Sales, TPM, MDF, Social Service, Interaction Center, Contact Center, Cloud for Customer (C4C) Sales, Service, and Marketing. He is currently involved in multiple SAP Hybris C4C and Configure Price Quote (CPQ) Project implementations.


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