Advanced automation tools like CPQ (Configure, Price and Quote) provide the cutting edge technology to the estimation process by automating and speeding up configuration of products, reducing inaccuracies, shortening lead times and increasing sales & productivity.
In today’s competitive market, manufacturing firms struggle to keep up with the high demands of delivering bespoke products to customers within a short, stipulated time. Manual quoting makes the entire estimation process labor intensive and time consuming while increasing the probability of errors.
An interactive, sales acceleration software like CPQ integrates ERP and CRM systems and reduces silos, thereby enabling the linking of remotely located sales teams and customers from the very first sales inquiry.
Customer satisfaction is enhanced due to price optimization and real-time visibility of the product in 3D that customers can configure themselves as per their needs and specifications.
Gartner, USA, one of the top global research and advisory firms in the world, predicts, “CPQ will continue to be one of the hottest enterprise apps for the foreseeable future, predicting a 20% annual growth rate through 2020”.
The move from manual quoting to an automated, custom, interactive sales management solution like CPQ is noticeably on the rise, among most of the top-performing organizations. The 2018 Aberdeen research data reveals that Best-in-class firms are 63% more likely than All Others (52% vs. 32%) to plan on increasing their CPQ utilizations over the next calendar year.
Inaccuracies in quotes and pricing is a huge problem for sales teams as even a small error may lead to a huge monetary loss. Manual quoting is monotonous and time consuming, while allowing room for errors and inaccuracies.
The relationship with the customer is adversely affected when the company provides inaccurate quotes, does not meet the required specifications or is not able to deliver the product within the stipulated time. This affects not only the relationship with the customer but also the reputation of the company.
The process of configuring products is becoming increasingly complex due to customization and the need to manually identify all possible combinations and permutations of product attributes and features.
New sales persons have limited knowledge on how to document configuration options, pricing rules, quotation formats and spreadsheets. Unapproved discounts that a sales person may use to close a deal, maybe lower than what the company guidelines allow and cost the company financially.
Gartner believes enterprises can target success metrics on growth, margins, process efficiencies and customer experience to drive business outcomes like:
Ruchika Chopra, Manager- Sales Operations at Nimble Storage, San Jose, USA, reported that “when her team used a manual quoting process, one in five quotes contained errors in pricing, configuration, or account information. When they started using CPQ solutions, almost 100 percent of quotes were accurate.”
CPQ creates accurate quotes in real-time within minutes, eliminates manual errors by drawing data from reliable sources to auto-populate the required information like BOM, drawings, sample products etc.Learn more about CPQ Solutions →
CPQ offered 100% Accuracy
An ETO manufacturer in USA and a design expert in Pressure Vessels, faced challenges of developing a Tank Configurator. They needed to provide accurate quotes, while reducing their time to deliver quotes and design models. They collaborated with Hitech to develop an interactive, user friendly Configurator that had all the possible options as per the customers’ needs.
Hitech automated the entire process from inquiry to design stage, providing real time pricing according to the selected configuration and the maximum possible available options related to the design of the pressure vessel. The accuracy was 100% as the error ratio was reduced due to minimum human intervention in the entire process.Read Complete Case Study →
CPQ is an extremely effective sales tool for speed and precision. It reduces the time required by sales persons to configure a quote by automating and streamlining the selling process from hours to just a few minutes. It also integrates with a wide range of ERP applications to shorten cycles and helps in getting orders right the first time.
Quotes offered 98% Faster
A Metal Door Manufacturer in US, needed to do away with their paper and spreadsheet processes to improve their quote-to-purchase time. In order to quicken the process of generating quotes to keep up with the demands of their customers, they partnered with Hitech to standardize, improve and speed up their quoting and pricing processes.
The design automation team at Hitech implemented an end-to-end CPQ software which reduced the quoting process from 4 hours to 5 minutes, giving their salespeople and customers a faster understanding of pricing and saving them from tedious quoting, while achieving shorter lead times.Read Complete Case Study →
CPQ creates a platform that allows access to all data related to materials, components, and products in real-time. Companies standardize and formalize rules, determine initial pricing, promotional pricing and markdowns, discounts etc. across the company so that all the information is easily accessible to all departments involved. This is modified as and when required as per the market trends.
Customers select their preferences and get an instant price quote as per their specifications, along with recommendations/suggestions. CPQ streamlines the pricing data and workflow, generating a single bill of sale, while providing the optimum price of a product to the customer with Real time visibility in 3D.
CPQ allows total integration of PLM/CRM/ERP systems, connecting the quoting system to enterprise systems such as CAD, CRM and ERP systems with improved virtual realization of products to configure.
CPQ software automates the entire sales process as the configurator validates the complete solution space after each selection, the proposed solution is always 100% correct, down to the bill-of-material (BOM) level. This connects sales and manufacturing in an entirely new way, ensuring that they are always in accord, and removes error-prone information handovers. Source: https://www.tacton.com/tacton-cpq/
CPQ provides a user-friendly interface, guided selling recommendations and a variety of configurations that help the sales team in managing product complexity.
The company is able to provide instant, accurate quotes to customers and deliver products that are optimized with CPQ tools, even via the mobile app.
CPQ users report that they are able to grow their profit margins, year-over-year as compared to non-users. CPQ Users have seen a 4-fold growth in net profits over a 5-year span. This increase in revenue is due to timesaving, discounts on products and the ability to customize products while offering multiple options as per the customer’s requirements.
CPQ software enables managing product variation as per commercial needs. CPQ apps increase productivity and reduce errors through real-time guided selling across complex products and bulk orders, drastically reducing manual intervention and creating the accurate quotes faster.
Forbes article, “Five Ways Cloud-Based CPQ Increases Sales Effectiveness and Drives up CRM Adoption”, Apr 17, 2016, by Louis Columbus, states that 83% of companies surveyed are using Configure-Price-Quote (CPQ) apps today, and have had seen an increase in their revenue by at least 10% due to the following benefits:
CPQ Increases Productivity
An Hollow Metal Door Manufacturer in USA, needed bulletproof doors to be configured, priced and quoted. They had challenges of delays in processing quotes, delays in configuration as well delays in delivery time, which were affecting their productivity.
They partnered with Hitech to develop a CPQ software that generated quotes and also included DriveWorks to provide a 3D image of their product and thereby provided an end-to end solution to their needs. This gave them reduction in time, shorter estimated delivery time and 100% accuracy.
Hitech was able to achieve an improvement in the configuration from 30% to 85% and were able to meet the high demand and increased their productivity at a rapid rate.Read Complete Case Study →
CPQ provides tailor made sales quotes to individual customers along with a 2D or 3D image, which shows thousands of product options that users can explore on the screen and receive accurate pricing information.
Companies can delight their customers by integrating CPQ with CRM, as any discounts and value-added services offered by the company are reflected automatically.Get in touch to get Winning CPQ Solutions →
The future of CPQ leverages on advanced analytics promising an exciting array of features including speech and image recognition, all guaranteed to take user experience to a totally new level. Business needs dictate that CPQ solutions transition from understanding and addressing customization needs and operational efficiencies to predicting and addressing future design and industry trends and dynamics. Although this brings a new level of complexity to business analytics, modern technology like integration of AI with CPQ will make this possible.
CPQ has become a crucial tool for Engineering firms today as it overcomes critical business challenges ranging from knowledge retention to the margin dilemma while making production data available in Real-Time. For organizations looking to increase their operational efficiencies, establish standardization in rules and pricing, increase profitability and enhance customer satisfaction, CPQ is the “go to” tool.
If you are a manufacturing firm that wants to streamline the quoting process, amplify your digital presence, and manage your customer communication with a secure platform, Hitech CADD Services is here to help you grow your business! Get in touch with us today →
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