Configure, Price and Quote (CPQ) applications enable and automate the end-to-end process for Sales organizations to convert customer interests to formal quotes, closed deals, and ultimately cash. The quote to cash process for products can be highly automated with CPQ but the same level of efficiency for service statements of work may often require manual configuration steps to account for the added complexities of selling services.
When service sales processes require manual intervention, the entire action is slowed and errors in the pricing or configuration of service proposals are likely to be introduced. Well defined Configuration, Pricing and Quotation practices and tools for services – Service CPQ – are essential to quickly and accurately responding to customer needs for the service resources required to accelerate the time to value for products.
Elements of the Service CPQ process and required capabilities for service sales automation are described below.
The configure element of Service CPQ provides a streamlined process to capture customer needs, align needs to recommended service offers, and assures adherence to established service sales guidelines. The result is the rapid and accurate configuration of new complex service proposals.
Customer needs are rarely the same when deploying new or expanding existing products. To help customers accelerate product adoption and achieve the successful outcomes they need, vendors must be able to provide customized service configurations aligned to customers’ unique circumstances.
Rapid and accurate response to customer service needs must also be balanced with accurately configured and priced quotations.
Service CPQ must assure that following activities can be supported during the service configuration stage:
The pricing element of Service CPQ determines pricing levels and discounting policies and establishes the necessary guardrails to assure that pricing policies are adhered to during proposal development. Through automation, sales workflows and system integration, pricing practices can be both consistent and accurate.
Every service resource and bundle starts with a base price. Effective proposal development requires that discounting rules and customer-specific terms can also be applied. The ability to automate service pricing minimizes the potential for errors and eliminates the creation of proposals with non-compliant pricing and discounting. Service CPQ must assure that the following activities can be supported during the service pricing stage:
The quotation element of Service CPQ is intended to pull all service entitlement, pricing and terms together in a final customer-ready quote within a matter of minutes, not days or weeks. Service CPQ should automate the creation of all selling documentation based on branded templates with up-to-date terms and conditions and facilitate the necessary approval workflow if necessary. Service CPQ must assure that the following can be supported during the quoting stage:
Services and the means to sell them are imperative. With the right resources Sales can quickly and accurately discover, understand, configure, price, and quote services. Service CPQ tools and processes are fundamental to selling services. The measurable benefits of Service CPQ solutions are realized when complex service quotations can be quickly and accurately prepared and presented to customers.
When companies lack the means to configure and sell the services customers need, product adoption and achievement of successful outcomes is inhibited. When adoption and success is impeded, the potential for customer churn increases placing recurring revenue at risk.