Accelerating innovation, reducing costs, and meeting customer demands for customized products are just some of the pressures today’s manufacturers face. Configure-price-quote (CPQ) technology is one powerful digital enablement solution helping manufacturing companies remain agile and responsive to market demands while improving speed, accuracy, and margins. In particular, manufacturers with complex products, variable pricing structures, and stringent compliance needs benefit significantly from CPQ technology. This blog will discuss CPQ solutions for manufacturers, specific benefits for manufacturing CPQ, and how Hexaware can help transform your CPQ process.
What is CPQ for Manufacturers
Configure-price-quote or CPQ refers to systems that allow sales teams to rapidly provide accurate quotes for complex combinations of products and services. Manufacturers often have products with hundreds or thousands of options, custom configurations, variant components, add-ons, and pricing rules. Creating quotes for these options manually is tedious, time-consuming, and prone to errors causing delays, margin leaks, and poor customer experiences. CPQ for manufacturers solutions can automate configure-price-quote tasks so businesses can operate with greater speed and control.
Specifically, CPQ systems can:
- Configure: Validate selectable product options and features so only compatible selections are allowed.
- Price: Apply real-time pricing rules and validate against discounting and margins policies.
- Quote: Automatically generate accurate quotes and proposals with negotiated terms and conditions.
Why Manufacturers Need CPQ
Many manufacturing companies especially in verticals such as industrial equipment, automotive, aerospace, and others face challenges unique to their industries:
- Complex Configurations: Products have many configuration options that combine in thousands of ways. Employees cannot manually keep track of all possible valid configurations without making errors.
- Complex and Variable Pricing: Margins can be impacted by variable raw material costs, price changes, and complicated discount rules that must be applied accurately.
- Lengthy Sales Cycles: Inefficient quoting delays approval turnaround, recognizes revenue slower, and leads to dissatisfied customers.
- Margin Erosion: Without strict controls or visibility into pricing rules applied on quotes it is difficult to protect margins.
CPQ systems help overcome these manufacturing-specific pain points by allowing businesses to encode rules, apply pricing logic consistently, and automate the quoting process. These enable enterprises to operate more efficiently and competitively throughout the sales cycle.
Overview of CPQ Solutions for Manufacturers
Hexaware’s CPQ Solution
Hexaware provides enterprise-grade CPQ solutions specifically designed for manufacturers. With our CPQ software, businesses can automate and optimize the quote-to-cash cycle. Hexaware’s CPQ solution:
- Empowers employees to rapidly create quotes for complex configurable products.
- Integrates with existing ERP and CRM systems to sync data.
- Enforces pricing rules, discounting policies, and configurable product guidelines.
- Generates professional quotes and proposal documents quickly.
- Tracks quotes through dashboards and offers analytics to reveal insight.
From consulting and strategy to implementation, integration, and managed services, Hexaware provides end-to-end support to manufacturers looking to transform their CPQ processes
Enhancing Sales Productivity: Key Benefits of CPQ for Manufacturers
Implementing CPQ solutions offer many advantages to manufacturers. Here are some of the top benefits businesses see by deploying CPQ solutions:
Quoting Speed
With CPQ solutions, the quoting process is accelerated dramatically. Hexaware data shows manufacturing companies experience 40-50 percent faster quoting cycles with CPQ software. Sales teams can react faster to customer requests and convert more opportunities.
The ability to respond quickly to customers is important. Delays often lead to lost deals, which hurt revenue and your brand in the eyes of the customer.
Configuration Accuracy
No employee is perfect, but CPQ solutions can be. Manufacturing companies that implemented CPQ saw 70 percent fewer configuration-related errors. Products have rules that CPQ solutions enforce, so your sales team only offers valid product configurations.
Pricing Accuracy
Similarly, pricing errors are a thing of the past with CPQ. Complex pricing rules, volume discounts, contract pricing, and more can be managed and automated to ensure accurate quotes while protecting margin.
Analytics
CPQ solutions come with analytics that help leaders gain insight into quote activity. Trends around pricing changes, which sales reps sell most, products in high demand, etc. can be reviewed to improve decision making.
Integrates with ERP And CRM
Accurate quotes require synchronous pricing, which means your CPQ solution should integrate with ERP, CRM, and other systems. Hexaware’s CPQ solution does just that. Be assured of always having access to real-time product, pricing, customer, and inventory data.
Manufacturing CPQ Benefits Explained
There are numerous benefits of CPQ for manufacturers. Let’s take a closer look at how CPQ solutions can help your business.
Benefit 1: Faster Quote-to-Cash Cycles
Every step of the configure-price-quote process is optimized when using CPQ software. Instead of waiting on others to manually provide information, configure-price-quote automation empowers employees to self-serve more of the quoting process. Approval cycles also see drastic improvements as data can be validated in real-time before quotes are finalized. Streamlined quoting means faster quote-to-cash cycles.
Benefit 2: Quoting Delivers a Better Customer Experience
Customers expect fast and accurate quotes. CPQ puts that power in the hands of your sales teams. Proposals can be generated automatically, complete with pricing, terms, and conditions in minutes rather than hours or days. Improve your brand reputation and customer experience by deploying CPQ.
Benefit 3: Reduce Operational Costs
Latent cost will come out of the manual quoting process. From reduced labor costs to minimizing errors that cost money to fix. The less manual work your employees have to do the more time they have to focus on high-value activities.
Benefit 4: Sales Teams Can Do More With CPQ
Knowledge workers without technical product knowledge can generate quotes for complex products. No longer do employees need to wait for others to configure a product. CPQ empowers sales teams to do more.
Benefit 5: Sell More With CPQ
Imagine being able to offer customers the perfect product accessory or service upgrade every time you provide a quote. Configure-price-quote software allows manufacturers to make intelligent recommendations that can increase average deal size.
Benefit 6: Gain Greater Pricing Control
Because CPQ puts pricing rules into a central location that apply across the board you will have greater control over your pricing. This makes it easier to maintain pricing governance and protect margins.
Benefit 7: CPQ Integrates with Your Larger Business Goals
Manufacturers are busy modernizing core systems to better compete in the age of Industry 4.0. CPQ doesn’t stand alone, instead, it integrates with your larger digital strategy. Connect shop floor data with supply chain systems, ERP, CRM, and more for unified visibility.
CPQ Implementation Process for Manufacturers
Step 1: Understand your current quoting process
Before beginning a CPQ implementation, it is critical to document how employees currently configure, price, and approve quotes. What systems do they use? Where are the bottlenecks? Where could the process be improved?
Step 2: Map out your configuration and pricing rules
Coordinate with product, engineering, and pricing teams to understand the business rules that will need to be applied in CPQ. Engineering will have the product configuration rules and pricing teams will have discounting policies and margin guidelines.
Step 3: Integration with ERP and CRM
To pull product master data, pricing catalogs, customer information, and discount programs, CPQ will need to integrate with ERP and CRM systems. Proper integration allows for information to flow seamlessly between systems, ensuring synchronous pricing.
Step 4: Rollout your solution with change management
Training employees to use the new system is critical to CPQ solution adoption. Provide detailed documentation and use cases to support your sales and employee support teams. A strong onboarding process will improve employee satisfaction with the new CPQ tool.
Step 5: Measure and optimize
Just because your CPQ solution has gone live doesn’t mean your work is done. Use reporting and analytics capabilities to monitor KPIs and gather insights. Apply learnings to adjust configuration rules, pricing, and optimize the solution for other markets.
Manufacturing CPQ Software Use Cases
Here are a few example use cases of how manufacturers use CPQ.
Use Case: Industrial Machinery
Quote cycles can take long because industrial machinery can have hundreds if not thousands of configuration options. Not only do you have to document every valid configuration combination but also apply pricing rules.
Use Case: Automotive Components
Automotive component manufacturers have to deal with constantly changing prices based on raw material costs and more. CPQ can ensure your pricing is accurate while allowing for quicker quote approvals.
Use Case: Medical Devices
Medical device companies typically run into stringent compliance requirements. CPQ allows you to configure quotes automatically while adhering to regulatory requirements and getting them approved faster.
Use Case: Aerospace Components
Application of engineering rules ensures customers are only presented with valid product configurations. By automating this process, CPQ minimizes manual effort and maximizes quote accuracy.
How Hexaware Supports Your Manufacturing CPQ Journey
Hexaware’s CPQ offering includes:
- Consulting and Strategy to assess current processes and define CPQ roadmaps
- Implementation and Configuration tailored to industry needs
- Managed Support and System Integration with ERP and CRM platforms
- Reporting and Analytics for performance insights and continuous improvement
Hexaware brings domain expertise that aligns CPQ implementation with your business goals and long-term digital transformation strategies.
Competitive pressures continue to force manufacturers to evolve their approach to quote-to-cash. CPQ solutions help manufacturers remain competitive by streamlining the configure-price-quote process, improving speed and accuracy, and enforcing pricing rules to help protect margins. Hexaware’s CPQ solution provides the features and functions your business needs to automate complex product configurations and offer customers a better experience. Transform your CPQ process with Hexaware today.
