CPQ - Configurator

Choosing a Product Configurator (CPQ-System): Don’t make safe decisions!

In diesem Beitrag
Table of Content

Product or variant configurators generate technical and commercial specifications according to requirements for offers or orders and contracts. The term CPQ (Configure-Price-Quote) is often used to lead to the generation of a product as a sales proposal for companies offering complex products and/ or services. Other terms used for this purpose are “Quote-to-Cash” (QTC) and “Sales Configuration”.

The goal of CPQ software for companies is to configure complex products and offers so that product details (such as technical drawings, parts lists, work plans, matching accessories, and prices and discounts) are displayed and calculated in the right way. They are ultimately resulting in faster and more accurate offers based on this data. CPQ software can thus ideally bridge the gap between lead and order.

Here is an example of Salesforce for the implementation of a custom configurator into the Salesforce CPQ environment:

Sie sehen gerade einen Platzhalterinhalt von Standard. Um auf den eigentlichen Inhalt zuzugreifen, klicken Sie auf den Button unten. Bitte beachten Sie, dass dabei Daten an Drittanbieter weitergegeben werden.

Weitere Informationen

My experience with CPQ

Over the years, I have accompanied a large number of procedures for selecting a CPQ solution. I have also witnessed many successful implementations and too many less successful or even failed strategies. There are several pitfalls, often due to fear or reluctance. That stand in the way of successfully selecting and implementing a system and achieving a real return on investment.

Pitfall 1: ERP system is crucial

Although this idea has been outdated for decades, many managers still believe that it is better to buy a complete solution from a single supplier. This may convey a sense of security, but it is precisely the reason why every primary ERP provider offers a solution for this. Fears of integration problems and double maintenance are fueled. While on the other hand, every halfway serious supplier claims to provide open software that can be easily coupled.

The CPQ process cannot be compared with the ERP process at all. An ERP supplier has in-depth knowledge of the structured processes that play a role in the development process. This also applies to the consultants of this supplier. However, CPQ is an entirely different area where utterly different knowledge and skills are required. You could roughly compare CAD and CRM.

However, it is easily accepted that the same supplier does not offer them. Nobody would think of replacing a CAD system if (once again) a new ERP system is introduced. It has repeatedly been shown that a successful CPQ implementation can easily survive multiple ERP systems in practice.

Pitfall 2: Thinking from the technology

The conviction that the complete elaboration and implementation of the sale’s technical possibilities is the ideal solution is an aberration. I see many companies fail because of the belief that the tool is the solution. If only all technical possibilities and limitations are combined in an intelligent system (configurator), one believes that the problem is solved. But the practice looks different.

First of all, it is a long road that all too often never ends since it takes an enormous amount of time and effort to work out all the possibilities in advance. And the development does not stand still: The market is moving, the technology is changing – so basically, it is a moving target. But the biggest problem is that you argue from the inside out.

The sales department is not interested in a technical system; too often, I have experienced that the use of such a system was simply refused. Apart from that, the complex system also needs to be maintained by someone.

What the sales department needs is support in implementing the customer’s wishes. What questions need to be asked to analyze the customer’s application. And, on this basis, to realize a solution within your own company’s technical and commercial limits. Whether already elaborated or not? In this way, the sales department fulfills a company’s control function. And all processes and systems for order processing become much more straightforward.

Pitfall 3: Short-term CPQ-concept

CPQ is an unknown and intangible matter for many. Therefore, one is often tempted to take the seemingly safe path and proceed in small steps. Companies often opt for simple solutions or start with a simple product.

Unfortunately, this limits the effect. And the product does not offer a complete solution. If the sales department cannot also compile and calculate offers for involved and not 100% standard projects with special conditions, but only a particular product or a few simple products, the system will not be accepted.

Especially not if other sales channels, such as dealers, agents, or end customers, are to put together their solutions now or in the future. The chances of success are only useful if the desired end state is already considered in the selection and introduction process.

Pitfall 4: Underestimating the investment

The introduction of a CPQ solution has far-reaching consequences. The selection of the system helps determine how successful a company becomes. While ERP systems are easy to compare because the required functionality is known, this is much less the case with CPQ systems. Also, because the complexity and implications are not understood, the decision is often made on a less rational basis, e.g., based on external features such as the graphical user interface or initial investment.

In such cases, it is not sufficiently investigated whether the system can handle the required complexity in a way that ensures trouble-free maintenance of the logic in the long run. Also, no consideration is given to how much support is needed during the introduction, but especially during the system’s daily use. A supposedly safe decision for a low investment all too often results in high implementation and maintenance costs. Even though the desired functionality is not even achieved.

Pitfall 5: Lack of vision and ambition

The pitfalls mentioned above could all be reduced to a common denominator. If management has no vision and does not have the ambition to create and realize a picture, they will always play it safe when making decisions; a CPQ implementation will then be expensive and generate little return.

Only if management has a clear goal in mind and also has the vision and ambition not to follow well-trodden paths but to keep an open mind and try to ensure an ideal process – much can actually be achieved. The return on the required investment will then be much higher than initially expected.


In summary, I recommend the following for your CPQ solution:

  • Think “outside-the-box,” and don’t be tempted to go for an ERP module that seems safe at first glance.
  • When making your selection, always start from the sales department’s perspective, not from engineering.
  • Dare to think ample and do not settle for less optimal solutions.
  • Reserve a sufficiently large budget.
  • Try to aim for a perfect future picture for your company.

Would you like to know more? My colleagues or I will be happy to inform you in a personal conversation!