The manufacturing industry is in the midst of a dramatic transformation – the COVID-19 crisis had a profound impact on the demand for goods and disrupted global supply chains, resulting in high levels of business volatility and reduced margins. Against this backdrop, many manufacturers are looking to improve their business processes to meet the challenges posed by an uncertain business environment.
One of the key areas most manufacturing companies are focusing is enhancing the efficiency of their quote-to-order (Q2O) cycle. A vast majority of manufacturers are using powerful Configure, Price, Quote (CPQ) software applications to streamline and automate their Q2O processes.
One of the most popular tools used in the manufacturing world to enhance Q2O efficiencies is Salesforce CPQ. Today, we’ll see how Salesforce CPQ enables manufacturing firms to sell more, faster, in a highly effective manner.
What Will This Blog Contain?
- Brief explanation of the traditional Q2O process in the manufacturing sector and its drawbacks
- Comprehensive analysis of how Salesforce CPQ helps strengthen the manufacturing value chain
- Key benefits of using Salesforce CPQ for manufacturing companies
- A list of aspects manufacturers should focus on to implement Salesforce CPQ effectively
Let’s begin by examining the 5-step traditional Q2O process that sales reps typically relied upon to close deals.
The above-mentioned 5-step process is robust and helped manufacturing companies sell successfully for several decades. However, it is fraught with 3 major drawbacks that render it ineffective in the digital era.
3 Major Drawbacks of the Traditional Q2O Process
- Manual Execution of Tasks Consumes a Lot of Time and Effort
- Problems in Scaling the Process to Meet Dynamic Requirements
- Challenges with Disparate Processes and Data
Manual Execution of Tasks Consumes a Lot of Time and Effort
This is arguably the biggest limitation of the traditional execution of the Q2O process. Many organizations use MS-Excel workbooks to store product pricing information; reps need to painstakingly go through these workbooks to prepare a quote. As a result, a lot of time is needed to prepare quotes, which can be better utilized to find and acquire more clients.
Problems in Scaling Up the Process to Meet Dynamic Requirements
It’s well-known manufacturing companies must be able to scale up their processes to meet the ever-evolving needs of their business. Organizations using the traditional Q2O process find it hard to adopt new sales models, as it takes a lot of time to incorporate changes resulting in the inability to respond to constantly-changing requirements of their customers. Consider the following scenario.
A mid-sized manufacturer of batteries used in laptops experienced a sudden surge in the demand for its products, following the outbreak of the COVID-19 pandemic. The company wanted to adapt a new, more flexible pricing model that would enable it to offer higher discounts based on dynamic demand levels. However, it could not implement the model in time due to the cumbersome nature of its Q2O process, resulting in the loss of many opportunities.
Challenges with Disparate Processes and Data
The traditional Q2O process makes it hard for sales reps to use customer data effectively, and this badly affects their ability to provide the best value of their products and services. Often, a lot of time is lost as teams struggle to match up revenue figures to those in the business agreement, delaying the process of recognizing revenues considerably.
Having looked at the steps involved in the traditional Q2O process and its drawbacks, let us proceed to examine how Salesforce CPQ helps overcome the problems and make manufacturing value chains highly efficient.
Salesforce CPQ – Helping Manufacturers Meet the Needs of the New-age Customer
Salesforce CPQ is a smart, super-agile cloud-enabled solution that helps manufacturing organizations create the best value for the 21st-century customer – the novel Salesforce product helps make the best use of customer and marketing data to eliminate the risks involved in the Q2O cycle and shorten sales cycles in a big way. It enables manufacturers to do much more than configure complex products with ease, come up with the right pricing models and generate quotes in no time – it helps deliver the right solution to the right client at the right time for the right amount on the right channel. In short, it empowers manufacturers to provide comprehensive, delightful experiences across all channels and touchpoints.
We will now examine some of the major capabilities of Salesforce CPQ that manufacturers can leverage to achieve selling success.
Product Configuration Is Made Easy
You can use Salesforce CPQ to configure products of any complexity without hassles. The tool allows you to automate configuration rules and create Bills of Materials (BoMs). You can also use the Salesforce product to analyze various configuration options and facilitate guided selling based on specific client requirements, besides identifying opportunities to upsell and cross-sell, thanks to its seamless integration with various other Salesforce solutions.
Develop Pricing Models Seamlessly
Manufacturers can use Salesforce CPQ to specify automated pricing rules and define custom parameters to make the best use of attribute-pricing mechanisms. They can also itemize prices and provide discounts on the basis of client, channel of purchase, quantity and product.
Generation of Quotes Is Smooth and Efficient
Salesforce CPQ helps manufacturers simplify the creation of quotes and orders; the companies can use the application to generate sales documentation of various types, including dynamic quote templates. The Salesforce tool also enables channel partners to use data effectively to generate quotes.
Manufacturers can integrate Salesforce CPQ with a wide variety of enterprise business tools such as Enterprise Resource Planning (ERP), accounting and Customer Relationship Management (CRM) applications.
We will now move on to examine how Salesforce CPQ enables manufacturing firms to execute various production strategies with high efficacy.
Facilitating Hassle-free Implementation of Production Strategies Using Salesforce CPQ
Manufacturers use various production strategies to come up with solutions that meet the needs of their customers. Some of the popular production strategies include the following.
- Configure-to-Order (CTO)
- Assembly-to-Oder (ATO)
- Engineer-to-Order (ETO)
Salesforce CPQ helps manufacturing companies implement these strategies very effectively.
Enabling Smooth Completion of CTO
In a typical CTO framework, companies assemble items and configure them based on specific needs of their clients. Salesforce CPQ enables manufacturers to come up with the right definitions of item configurations in the early ordering stages and come up with those configurations upon receiving confirmation of the order from the client. Once the configurations are completed, the Salesforce product can be used to price the configured items. This is followed by creation of quotes and generation of proposals.
Facilitating Effective Execution of ATO
The ATO model is a widely-used production strategy, where products are rapidly assembled from their component items. A classic example of organizations employing ATO are manufacturers of Personal Computers (PCs), who assemble different parts of a PC to complete the manufacture of the product. As with organizations using the CTO approach, companies following the ATO approach can define the configuration of items in the initial phases of the ordering cycle. Once the order is finalized, the configured items are procured for assembly in a workshop, and this is followed by the creation of a quote and a proposal.
Helping Implement ETO Efficiently
The ETO model calls for manufacturers to start designing and engineering component items after an order is confirmed. Salesforce CPQ allows manufacturing organizations to configure the items based on the client order and dispatch the details of the configurations to their engineering departments for designing and producing the product. After this, the costing team obtains the information to calculate the price. Then, the price is updated in Salesforce CPQ and a proposal is generated.
Let us now look at how Salesforce CPQ helps enhance revenues of manufacturing companies.
Salesforce CPQ – Paving the Way for Improved Bottom Line of Manufacturing Companies
Salesforce CPQ helps manufacturing companies execute the Q2O process very effectively. Here’s how the novel application enables manufacturers to enjoy higher sales and improve their profits.
3 Ways Salesforce CPQ Helps Manufacturers Enjoy Higher Revenues
- Augment Quoting Efficiency Significantly
- Get the Right Insights into Customer Issues
- Enhance the Accuracy of Quotes Considerably
Augment Quoting Efficiency Significantly
It’s well-known manufacturers need to sell smartly to maximize their revenues. Most manufacturing organizations are implementing lean frameworks to eliminate wastes in their production processes. Over the last few years, many companies in the manufacturing sector have been applying the lean methodologies to their sales processes to make them more efficient and cost-effective.
Salesforce CPQ allows manufacturers to streamline Q2O cycles and make them lean; it helps the organizations ensure no time and resources are wasted in providing the wrong product or service, thereby enhancing efficiency levels considerably. This is possible as Salesforce CPQ enables manufacturers to clearly communicate about all available options with customers, leaving little room for ambiguity and confusion.
Get the Right Insights into Customer Issues
Companies can deliver the best value to their customers only when they consult with the latter to resolve their challenges. Ideally, every sale must be handled by a Subject Matter Expert (SME), who is fully aware of the challenges and can suggest the right solution. Unfortunately, many manufacturers don’t include an SME in their sales team due to budgetary constraints.
This problem can be overcome using Salesforce CPQ. Sales teams can program product specifications and options into CPQ tool. This information goes a long way in empowering sales reps to ask the right questions to get the information that enables them to provide the perfectly-configured solution to customers’ needs.
Enhance the Accuracy of Quotes Considerably
As we’ve seen earlier, manufacturing companies that adopt manual Q2O processes often suffer from low quoting accuracy; errors in quotes often take time to be rectified, badly irritating customers, and in extreme cases, may put the deal at risk.
Salesforce CPQ helps resolve this problem with high efficacy. The novel CPQ solution enables you to anticipate and analyze the impact of all possible scenarios and formulate appropriate strategies for each. This allows you to complete the quoting process without delay, while ensuring high levels of accuracy.
So far, we’ve seen the steps involved in a typical manual Q2O process and learnt about the drawbacks of the process. We’ve also looked at how Salesforce CPQ helps streamline the quoting process and facilitates effective, hassle-free execution of various production strategies, besides examining how the innovative Salesforce solution enables companies to enhance their selling efficiency and maximize their revenues. We’ll now look at 5 key aspects manufacturing firms must focus on to ensure hassle-free implementation of Salesforce CPQ.
5 Factors Manufacturers Must Consider to Implement Salesforce CPQ Successfully
Salesforce CPQ is a robust application, and manufacturers must have a properly-defined lead-to-order process in place to make to make the best use of the tool. They also need to focus adequately on the 5 key aspects listed below to implement the CPQ system effectively.
Developing an Effective Plan to Manage Change
Implementation of Salesforce CPQ involves making several changes to a manufacturer’s Q2O process. The robust CPQ application enables the organization to fully automate quoting tasks and reduces efforts significantly. This necessitates changes to the way the manufacturing firm sells, and these changes can be managed only by implementing a well-formulated change management plan.
Identifying User Needs and Required CPQ Capabilities
Manufacturers must list the CPQ capabilities they need such as management of catalogs, guided selling, workflows related to approvals and data analysis. They should also clearly understand the requirements of their users and channel partners.
Integrating CPQ with Other IT Systems
Proper integration of Salesforce CPQ with other organizational IT systems such as ERP and CRM systems enables manufacturing organizations to reduce inefficiencies and enhance quoting accuracy. The business also needs to integrate customer and product master hubs with the CPQ system to ensure seamless, timely flow of product data.
Taking Steps to Ensure High Data Quality
Manufacturers must come up with a solid Master Data Management (MDM) framework to ensure successful implementation of Salesforce CPQ. A good MDM model plays a key role in facilitating the creation of a Single Source of Truth (SSOT).
Facilitating Hassle-free Cross Departmental Collaboration
A Salesforce CPQ implementation impacts multiple organizational functions such as product management, engineering, IT and finance. By ensuring proper coordination between different departments, manufacturing companies can enable the resolution of the challenges faced by each team involved in the implementation, thereby enabling its success.
As you can see, implementation of Salesforce CPQ goes a long way in helping manufacturing organizations streamline their Q2O processes and execute production strategies with high efficacy. At Solunus, we help you make the best use of the CPQ solution to enhance your selling efficiencies. Our strong focus on comprehending your unique business needs and unparalleled Salesforce expertise enable us to provide the best ROI on the CPQ platform.
Solunus is a dedicated Salesforce partner organization, headquartered in Dallas, Texas. Our unrelenting focus on comprehending the unique needs of our clients coupled with our unrivaled expertise of the Salesforce platform enables us to deliver the perfect solutions that create the best value for IT and business analytics firms.