Best CPQ Software For Manufacturing
Buyer's Guide
Combining manufacturing and sales processes can be like mixing oil and water. Fortunately, CPQ software for manufacturing exists as a chemical bond to help you get the best of both worlds.
To put it lightly, new software implementation can be a headache, but you don’t have to risk it to get the biscuit. A clear understanding of what to expect in terms of costs, features, implementation and perks makes the medicine go down sweeter.
Executive Summary
- CPQ software for manufacturing consolidates manufacturing and sales workflows for shorter conversion cycles, better sales rates and accurate margins.
- Integration and API access are essential to successful implementation, as you will likely already have MES or ERP software installed.
- A successful software selection process involves setting a strategy, planning for hidden costs and asking the right questions internally and of vendors.
What Is CPQ Software for Manufacturing?
CPQ software for manufacturing is a suite of tools used to streamline conversion cycles with workflow management, complex configuration and pricing rules. It automates manufacturing information, like BOM, routing and shop orders, to save time, reduce errors and improve communication between sales and engineering.
Just like Liam Nesson in Taken, CPQ software targeted at manufacturers has a very particular set of skills. It requires enterprise integration, CAD viewing and collaborative tools. Plus, the features you’d find in a typical CPQ solution.
Primary Benefits
The chaos and challenges new software implementation can bring are real. Despite all the malarkey, tangible perks are up for grabs. Before you make the play for CPQ software, here are five reasons why it should skyrocket up your list of priorities.
More Accurate Pricing
Manufacturing highly configurable products means pricing is a bit of a tightrope act. Errors in margins can cut into profits or even lead to a loss, while higher prices can result in low order rates. A robust pricing engine taps into past orders, analyzes market rates and uses set pricing rules to ensure the price is right.
Quicker Conversion Cycles
In this era of instant gratification, quick response times play a role in whether you make a sale. Avoid time spent browsing through spreadsheets, manually pulling numbers from machinery or waiting on CAD drawings from engineers with a centralized database and collaborative tools.
Added Visibility
The lack of a centralized quoting process can be a doozy for sales reps. At worst, you may compete against past quotes or sales reps. At best, customer interactions may fall through the cracks.
Higher Quote and Sales Rates
Manually creating quotes can be a long, drawn-out process prone to errors and communication breakdowns. Automation, rules-based structures, approval workflows and centralized information make these concerns a thing of the past.
Better Margins
Getting back to sales reps on costs for product customization probably isn’t an engineer’s favorite pastime. Guesstimation based on similar orders or parts can eat into your profits. Identify profitable quotes and contributing segments, reps and channel partners.
Key Features & Functionality
| Product Configurator and Catalog | A dynamic product configurator is worth its weight in gold. Bring your clients’ vision to life with 2D and 3D custom visualizations and CAD drawings. Set configuration rules and allow clients to create their customizations within your manufacturing scope. Provide a digital product catalog with a search feature for easy self-quoting. |
|---|---|
| Automation of Manufacturing Information | Make life easier for your engineers and shop floor with automated bills of materials, shop orders, routings and even CAD drawings once you convert quotes into orders. |
| Quote and Proposal Creation | Use pre-built templates and types to create branded quotes and proposals. Avoid pricing errors with automatic system-wide price management updates and data from work orders for cost tracking. Auto-fill information from similar past quotes and enable prompts to ensure you fill all fields. |
| Approval Workflow Management | Manufacturing involves many moving parts and departments, so staying on top of workflows is paramount. Set up user permissions, price and discount margins to keep sales processes running smoothly. Alert upper management and send reminders when outliers in discounts and customizations need to be rubber-stamped. |
| Price Optimization | Analyze historical data, market forces and costs to find an optimum selling price for your product. Construct pricing rules and use a pricing engine to account for product modifications. |
| Guided Selling | Provide customers with comparisons and customized quotes showing suggestions that will add value to their purchase. Increase margins and improve the customer purchasing experience with relevant up-selling and cross-selling during self-configuration. |
| Integrations | More third-party integrations and API access equal fewer problems. Eliminate double-entry and errors in communication with real-time visibility and integration with CRM, ERP and MES solutions. |
| Reporting and Insights | Want to know where you’re hitting the mark in your sales funnel? CPQ’s robust reporting helps you figure out what’s going right in the ordering process, from discounts to promotions and customizations. |
Software Comparison Strategy
Manufacturing companies aren’t one-size-fits-all. Giving a garden-variety CPQ solution the old college try may hurt more than help. Before you narrow down your options, here are a few things to think about:
Business Size and Industry Experience: Multiple sites and products are a different ball game compared to smaller, niche goods. Industries are as varied as Sean Bean’s many character deaths. When choosing a vendor, you’ll need to consider scalability and past industry experience.
Deployment Model: On-site deployment may require an investment in hardware and software, while cloud deployment may need tweaks in machinery data collection.
Training: It’s essential to understand how many team members will need training and if the learning curve is steep. Some vendors don’t provide training and resources free of cost, so you may need to pencil in additional charges.
Cost & Pricing Considerations
Buying CPQ software for manufacturing will cost you. The question is, how much? Smaller companies with fewer sales reps can choose a subscription-based model and pay per user monthly.
You may want to purchase a license if you’re a larger enterprise with multiple sites and products. It can be an expensive investment initially. You’ll need to speak with a sales rep to get an exact quote, but the cost is worth it when you consider it can streamline sales processes enormously.
The Most Popular CPQ Software for Manufacturing
Choosing a new solution can be as complicated as picking a restaurant to eat at before a first date. We’ve turned into your very own personal Yelp to help you look up the most popular CPQ software for manufacturing.
FPX
FPX is a cloud-based CPQ solution explicitly created to configure quotations for manufacturers. Guided self-service capabilities streamline the product selection process. Save past product selections, configurations and proposals in a centralized portal for easy access. Import relevant data to create quotations, branded cover letters and brochures.
FPX Product and Quote Management Portal.
Verenia
Verenia is a native CPQ module of NetSuite designed to provide manufacturers with a flexible configurator and 3D CAD automation. Use the latest product information and dynamic pricing to create quotes, custom proposals and orders. Streamline quote approval and sales order processes to shorten sales cycles.
Verenia Quoting and Ordering Process.
Configure One
Configure One is a web-based solution that covers the sales to production process. It uses bill of material data and integration with CRM to auto-populate quote data. Show clients a glimpse of the finished product with configuration rules and real-time 3D visualizations. View and edit BOM, manage customers and generate documents using the quoting interface.
Configure One Real-time Visualization.
Questions To Ask
The devil’s in the details. A clear understanding of your business needs, down to the nuts and bolts of your manufacturing operations, can be a game changer. These questions provide a great starting point:
- What are our business requirements?
- What’s our budget?
- What features are crucial and which can we skip?
- How will the software add value to our existing operations?
- Will this software meet our future manufacturing needs?
- Does this software integrate with our current ERP, MES and CRM systems?
- Are companies of our size selling similar products incorporating CPQ software for manufacturing?
- Have our competitors implemented any CPQ solutions? How has it helped them?
Less is definitely not more when grilling vendors on software features and support. To avoid costly add-ons, updates and integrations, make things crystal clear by asking the following questions:
- Do you offer migration or implementation support?
- What solutions integrate with the platform?
- What features do you include in the basic plan?
- Are there any hidden costs or add-ons?
- What kind of training and support do you offer?
- Are there industry-specific templates?
- How advanced are the BOM and cost estimating features?
In Conclusion
The right CPQ software for manufacturing can act like a magic formula to solve a plethora of problems. To nip potential problems in the bud, be clear about your needs, budget and expectations for vendors. Use our free requirements template to help you fill in the blanks. You’ll ace software shopping in no time at all!
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