INTEGRATED CPQ AND CLM

The Missing Link in an Optimized

Quote-to-Cash Process

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TABLE OF CONTENTS

03 Introduction

04 What are CPQ and CLM?

05 Why CPQ and CLM Need to Work in Harmony

09 Connected Quotes and Contracts

Accelerate Business Growth

12 What a Seamless Connection Looks Like

16 10 Reasons Top Businesses Need an

Integrated CPQ and CLM Solution from Apttus

18 Conclusion

19 About Apttus

INTRODUCTION

With the rise of Software as a Service (SaaS) and the subscription economy, the emphasis for many

companies has shifted to retention and renewals. Recognizing that effective revenue generation requires

a focus beyond the initial transaction, companies are re-evaluating their entire Quote-to-Cash process,

specifically around Configure Price Quote (CPQ) and Contract Lifecycle Management (CLM). After all,

these two Quote-to-Cash sub-processes are at the heart of every business deal.

It’s no wonder numerous companies across industries tap into CPQ and CLM solutions to streamline

and improve their processes. Unfortunately, these businesses are not reaping the full benefit of either

solution – or maximizing revenue generation – if they are using them as separate, standalone systems.

Businesses realize the true value of CPQ and CLM when these solutions are fully connected, share a

common platform and data model, and have integrated workflows that manage the end-to-end process.

This paper explores the value of each solution on its own, the exponential value when the two are

working seamlessly in concert, and what is required to unite CPQ and CLM.

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WHAT ARE CPQ & CLM?

Quotes are at the core of any business deal,

defining the products and/or services being

purchased and the agreed-upon price. CPQ is

a software solution designed to help companies

quickly and accurately produce highly

configured quotes. It does so by making all

complex product, pricing and business rules

centralized, automatic and available in real time.

This ensures that sales reps have everything

they need to rapidly produce accurate and

professional quotes and proposals, which helps

them close bigger deals faster.

Quoting continues until finalized quotes convert

into contracts — or in some cases, completed

orders. Once a buyer agrees to a quote, the

quote details – along with additional detail

around the purchase, price, and vendor-buyer

relationship – are captured in legally binding

contracts. Simply put, contracts add more

detail to the vendor-buyer relationship beyond

what was agreed to in the quote, defining critical

elements such as delivery terms, publicity rights,

procedures for settling disputes, and much more.

By bringing visibility and control to the contract

management process, CLM software helps

ensure these legal agreements become a

strategic advantage instead of a burdensome

cost center.

While CPQ and CLM are part of the Quote-to-

Cash process, they are often run as fixed,

separate sub-processes that run sequentially.

WHY CPQ AND CLM NEED TO WORK

IN HARMONY

On the surface, it would appear that the use of

separate CPQ and CLM solutions would serve

a business just fine. And for many years, this

approach worked. However, sales reps and

their companies are no longer focused solely

on transactions as they develop quotes and

contracts.

With the surge in new business models – such

as Software as a Service (SaaS) –

subscriptions and renewals are now far more

important than a single transaction. These

modern business models may require a

business to put several contracts in place with

its customer in order to complete the first sale,

and can have commercial terms that depend on

many variables. With many more potential

points of interaction between processes

traditionally handled by CPQ and CLM

separately, the limitations of using separate

systems are multiplied.

Moreover, as businesses see their networks

expand, they must integrate their processes with

those of their partners and suppliers. This

integration is needed so they can:

• Orchestrate all customer-focused activities

across multiple channels

• Maintain visibility and insight across all

channels and the entire value chain

• Ensure consistency of offers throughout the

Quote-to-Cash process

Pair this with today’s empowered buyers and the

need to satisfy higher customer expectations to

earn and cultivate loyalty, and it’s easy to see why

businesses must reconsider their approach to

CPQ and CLM processes.

Customers expect businesses will use information

from the pre-sales phase in the contracting phase.

Seeing errors or requests for the same

information frustrates them – and creates

questions in their minds about the vendor. To win

and keep a customer’s business, organizations

need to make the quoting and contract processes

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as fluid, simple, and appealing as possible. To do

so, they must make these processes seamless

and connected in a way that mirrors the sales

process.

Though many organizations refer to their sales

process as a “funnel,” it’s actually more of a cycle,

signaling a never-ending relationship with each

customer. The information captured in quotes and

contracts follows that same cycle. While

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information (including prices) from quotes feed

contracts, information from contracts feeds orders

and renewals. In fact, sometimes businesses need

to incorporate terms and conditions from existing

agreements into a new agreement. Put simply, the

CPQ process feeds the CLM process, which in

turn feeds the CPQ process. Moreover, the

uptake in SaaS and increase in renewals further

entwines quotes and contracts.

Quote

Contract

When their CPQ and CLM systems are not

connected, businesses often rely on paper-driven

processes involving a fair amount of manual data

transfer – a transfer that opens the door to data

errors and delays. If it takes weeks to negotiate

terms and conditions and execute a signed

contract, companies limit the advantages of a

CPQ solution. Instead, quotes should flow

seamlessly into contracts, so the company can

close deals and get them on the books as fast

as possible.

Even then, while the company might close a deal

with a customer, it may miss the chance to renew

or upsell the right products at the right time if the

CLM system is not feeding information to the

quoting engine. And it certainly couldn’t execute a

quote or contract on a mobile phone – a growing

necessity in today’s world.

A common mistake businesses make is to consider

a sent proposal the end of the quoting process. But

the sales cycle doesn’t stop there.

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“CPQ and CLM, in terms of automating for scale, are a good start. But it’s really important that we

still manage to retain that connection to the customer. Competing on customer intimacy is

what Citrix is all about, and we believe that Apttusgives us this bridge between the investments

we’ve made in our traditional technologies and the technologies that enable customer intimacy.”

Michael McKiernan, Vice President of IT, Citrix

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CONNECTED QUOTES AND CONTRACTS

ACCELERATE BUSINESS GROWTH

On the other hand, a single continuous data flow

between CPQ and CLM keeps all systems and

stakeholders updated with the latest information. This

enables faster time to initial revenue, along with

seamless cross-sells, up-sells and renewals, enabling a

better experience for all. In fact, a combined CPQ and

CLM system even enables this at the speed of today’s

business – on mobile devices.

Remember: renewals with add-ons, cross-sells and up-

sells supercharge enterprise growth. After all, sales to

existing customers lead to higher margins because the

organization can eliminate costly acquisition expenses.

To quickly and accurately process renewals, sales reps

and other involved parties need information around the

existing agreement, previous purchases, delivery

performance to date (i.e., scorecard), payment

performance, earn-out of incentives, rebates, and more.

They get that when all sub-processes and related

systems in the Quote-to-Cash process are connected.

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Source: Aberdeen Group, End-to-End Sales Automation: Turning Discrete Technologies into Far-Reaching Business Results, April 2016

Agile Leaders Bring CPQ and CLM Together

Most companies rely on a system such as ERP

(Enterprise Resource Planning) or CRM

(Customer Relationship Management) to handle

many of the elements and activities associated

with the customer relationship once the deal

closes. This extends to transaction compliance,

which is the process of confirming that both

parties are satisfying their contractual obligations,

including rate of orders, quality of fulfillment, and

adherence to agreed-upon pricing. When

organizations connect both their CPQ and CLM

systems to ERP, they can efficiently and

accurately capture the quote-related information

that is critical to ensuring compliance.

Consider these scenarios:

• A customer agrees to pay a higher price for

products if the cost of a key component rises

above a certain level, which occurs after the

customer has purchased a few of the units at

the original price

• A customer is entitled to a rebate after

fulfilling certain purchase obligations

• A contract will automatically renew at a

certain price, or will automatically be

cancelled if certain obligations are not

fulfilled by a certain time

When data in one system is shared with the other

systems, the ERP system will be aware of and

able to flag discrepancies and indicate an action,

such as that the customer needs to buy more

units or the company needs to charge a higher

price. Whatever the agreement, by connecting

their sales data in CPQ, their contract agreements

in CLM, and their customer interactions in ERP,

companies can manage these obligations, prevent

revenue leakage, and boost customer satisfaction.

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WHAT A SEAMLESS

CONNECTION LOOKS LIKE

Accurate quotes, proposals, contracts and orders

enable a smooth flow of all revenue-related data

and processes. With a single process and data

stream, companies can easily and accurately

measure effectiveness across the entire process

and take steps to optimize.

On the other hand, organizations dealing with

disparate systems find themselves failing to

capture key data, and struggling to fulfill and

reconcile orders, contracts, invoices and more.

Perhaps worst of all, they are unable to deliver the

frictionless buying experience that customers

demand.

Rather than continually try to merge multiple data

sources using spreadsheets and other manual

tools, the key is to streamline the data flow. This

can be accomplished by calling upon CPQ and

CLM solutions that work from a unified data

model. Such a data model enables a single

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-25Unified Data Model

CLM and CPQ in a unified data model also

prevent breakdowns for the business process of a

deal in progress. During commercial review of a

deal, a quote can change when a contract is

already out to the customer, requiring a new

validation check. For example, a change in the

price may require a senior sales leader to sign off

on the quote again, or change the contract terms

that a seller will offer. Without a single data model

for both CLM and CPQ, the change in the quote

may not get proper sign-offs, and may not be

reflected correctly in both the system of record

and final documents. Getting the systems to work

together without one data model becomes

extremely difficult and creates multiple points of

failure, all of which can be avoided using a

seamless connection.

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workflow throughout the sales cycle, from CPQ

to ERP and CRM and back again. As such, quote

details are automatically pulled into a contract.

Once the contract is executed, all details

flow into the ERP system for fulfillment, shipping

and invoicing, and into the CRM system to track

customer interactions and satisfaction. When it’s

time for renewal or any other follow-on sales-

related activity, the relevant information captured

and managed in the ERP and CRM systems will

flow automatically back into the CPQ and CLM

systems. By eliminating manual data entry,

organizations reduce the chance of errors,

accelerate the entire sales process, and gain

clear insight into each customer engagement

at every stage.

When hundreds or thousands of sales reps

are striking deals, it’s nearly impossible to

match up deal details manually and figure out

which customers are or are not honoring

their commitments.

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Apttus enables this unified data flow and single

workflow connected to back-end systems. No

wonder a survey of Apttus customers shows that

Apttus Customers Report Measurable Business Outcomes

these organizations are realizing significant and

quantifiable benefits across numerous mission-

critical measures:

Let’s&Discuss&How&to&Achieve&Results&for&Your&Organization

Average&Percentage&Improvements&Reported&by&Apttus CustomersSource:(Apttus Quote.to.Cash( (QTC)( Impact(Study(conducted( June(2017(by(an(independent(third.party,(Satmetrix on(200+(Apttus customer(contacts(randomly(selected. Performance(metrics(are(intended(as(a(guideline(based(upon(historical(results(from(a(sample(set(of(customers.(Results(are(dependent(upon(many(different(factors( that(are(customer.specific.(Therefore,(actual(results(will(vary.(Response(size(per(question(varies.(

Compliance Sales&Effectiveness Customer&Satisfaction

Sales+7G25%

Faster(DealApproval

+44%

DealFlow(Visibility

+51%

Faster(AuditReports

+47%ContractCompliance

+43%

ReducedRogueDiscounting

+32%

FasterContractProcessing

+42%

ContractProcessingVolume

+42%FasterQTCCycle

+35%

Faster(Deal(Closure

+34%Win(Rate

+30%

FasterTime(toQuote

+38% QuoteVolume

+27%Deal(Size

+22%

ContractAccuracy

+45%

Quote(Quality

+51% ReducedAmendmentsAfterSignature

+23%

ContractsAuto.Renewed

+17%

Consider the case of Citrix, a multinational SaaS

company. Citrix’s ever-expanding product catalog

and fragmented quoting processes involved

multiple manual steps. Wanting a more modern

and innovative solution for its entire revenue-

generating team, it replaced its disparate quoting

and contract management tools with seamlessly

connected ones from Apttus. As a result, it was

able to streamline the entire sales process and

reduce exceptions and non-standard pricing, so

sales reps can spend more time building new

business and less time on each individual deal. At

the same time, it gained new levels of visibility and

control across multiple selling channels, making it

easier to cross-sell and up-sell to existing

customers.

Then there’s GLOBALFOUNDRIES, the first full-

service semiconductor foundry with a truly global

manufacturing footprint. As a custom

manufacturing company, GLOBALFOUNDRIES

uses customer requirements to configure tailored

products to be manufactured. Previously this

process took one to two weeks. The company

now uses both CLM and CPQ tools from Apttus,

reducing the time to generate a quote from weeks

to minutes while also making it easier to negotiate

the non-disclosure agreements required by both

sides at the outset of the sales process./15

10 REASONS TOP BUSINESSES NEED AN

INTEGRATED CONFIGURE PRICE QUOTE AND

CONTRACT SOLUTION FROM APTTUS

1. Improve customer satisfaction. Seventy percent of B2B

sales are to existing customers. If you quote to an existing

customer, you need to know all the agreed pricing in the

customer contract, along with special terms such as

rebates. Thus CPQ for current customers requires a

seamless connection to CLM, and also a two-way

communication with ERP that reports on the customer’s

performance against their contract to date. This type of

integration is virtually impossible using CLM and CPQ

systems from different vendors. With Apttus, this end-to-end

data flow is inherent in the single integrated CPQ and CLM

solution. You’ll issue the right quote without manual lookups

or mistakes.

2. Stay compliant across the sales process. Your business

has many policies to ensure correct selling procedures are

followed, and to comply with legal requirements. Policies

may be enforced in either the configure price quote stage of

the deal or the contracting stage of the deal—so if a change

is made in the CLM system that takes the deal out of a

policy that was enforced in the CPQ system, how will you

know? Only with Apttus, business rules are seamlessly

applied throughout the sales cycle, ensuring that your deals

meet all your guidelines and follow the law. With different

CPQ and CLM systems, any cross-system policy

enforcement will be manual, customized and hard to

maintain, or possibly ignored.

3. Avoid workflow fatigue. When using CPQ and CLM

systems from different vendors, you’ll need to develop

workflow and approvals processes twice—once for each

system. Workflow won’t flow between systems, doubling

the work of the staff who handle day-to-day activities. For

example, a sales leader will approve a price discount in a

quote, and may have to approve it again in the contract.

With Apttus, the approval follows the sale all the way

through CPQ and CLM, so the process is completed faster.

4. Add-on applications become possible. With all the

custom integration required to join CPQ and CLM from

different vendors, what happens when it’s time to add on a

new Quote-to-Cash application? Additional tools like billing,

revenue recognition, deal optimization, promotions,

incentives, rebates, renewals management, and machine

learning will become critical to your ability to win business

and grow—but each new integration is more difficult when

your core CPQ and CLM systems use different data

models. With Apttus, your add-on applications are once

again part of the single data model, making it easy to

expand your Quote-to-Cash power.

5. Enjoy faster speed. With all the ways that CLM and CPQ

interact, you need your systems to be in the same data

center for the fastest system performance. If you use tools

from different vendors, you’re virtually guaranteed a much

slower user experience, with painful load times and delays

to record updates, document generation, approvals, and

other functions. A unified CLM and CPQ solution from

Apttus offers the fastest user experience.

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6. Single experience leads to higher adoption. Even if you

succeed in pairing CPQ and CLM systems from different

vendors, your users will still have two tools to learn, with two

user experiences, creating twice as much training and

change management. You’ll end up with lower adoption and

lower user satisfaction than if you choose a combined CPQ

and CLM system from Apttus, which uses a common

interface across both tools.

7. Save IT time and resources. With Apttus, both CPQ and

CLM use a centralized data model and permissions model.

If you combine CPQ and CLM systems from different

vendors, you’ll have to manage two sets of permissions in

two different applications—and waste resources to build

custom code joining the two different data models.

8. No security holes. If you use CPQ and CLM systems with

different data models, you can create a security risk every

time the systems communicate with each other—possibly

hundreds of times for each sale managed in the system.

These communications are inherently insecure because they

have to be custom-developed and lack security validation.

Each communication opens a potential back door into your

critical systems that could be used by a malicious attacker

to hack your company. With Apttus, your system is

contained on one data model that has received numerous

security certifications.

9. Avoid upgrade nightmares. Because it is built on a

single data model, Apttus CPQ and CLM upgrade in

sync and without risk of losing functionality. If you use

different CPQ and CLM applications, any upgrade—

even a patch—could cause the integration between the

CLM and CPQ systems to break. You could end up

with frequent, frustrating repair projects to your custom

integration—or avoid all upgrades and end up with a

system that’s quickly out of date.

10. Pay once for infrastructure. Apttus built its CPQ and

CLM systems on a single platform. If you buy CPQ and

CLM systems from different vendors, you’ll pay each

vendor for their underlying platform. An end-to-end

CLM and CPQ solution from Apttus avoids this extra

hidden cost.

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CONCLUSION

Most companies base their Quote-to-Cash

process on a series of fixed, separate processes

(including CPQ and CLM) that – theoretically –

run sequentially. However, today’s customers

expect rapid response to their inquiries, a smooth

purchasing process, and fast delivery of products

and services.

The benefits of linking CPQ and CLM as part of

the larger Quote-to-Cash process are clear:

• Accelerates the entire sales process,

enabling faster time to initial revenue, along

with seamless cross-sells, up-sells and

renewals

• Provides clear insight into each customer

engagement at every stage

• Powers a better experience for all involved

parties at the speed of today’s business – on

mobile devices

• Enables organizations to easily and

accurately measure effectiveness across the

entire process and take steps to optimize

• Reduces errors caused by data entry

mistakes, syncing of quotes and contracts,

and discrepancies between documents and

systems of records, leading to lower risk

and greater compliance

When evaluating CPQ solutions, organizations

should make sure the CPQ software naturally

connects to a contract management system built

on the same data model and can extend into

order management capabilities. As the business

grows, the organization will need a single

system that connects all these parts of its

business.

Just as importantly, while many organizations

treat the various stages in the Quote-to-Cash

process as separate steps, it’s critical to view

and enable these in a holistic manner. Only in

this way can businesses handle the Quote-to-

Cash process as adeptly and accurately as

possible while enabling the utmost enterprise-

wide visibility and efficiency.

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ABOUT INTELLIGENT QUOTE-TO-CASH

Quote-to-Cashisthevitalbusinessprocessthatconnectsacustomer’sinterestinapurchasetotherealizationofrevenue.Itincludescreatingaquote,respondingtoRFXs,submittingaproposal,negotiatingandmanagingacontract,fulfillingorders,recognizingrevenue,ensuringcomplianceandtrackingpayments–allwithinvisibleandcontrolledworkflow.Quote-to-CashsolutionsincludeConfigure-Price-Quote(CPQ),ContractLifecycleManagement(CLM),andRevenueManagementapplications.

Quote-to-Cashisthesinglelinkbetweentop-lineresults,bottom-lineresultsandcustomersatisfaction.Nootherprocessisascriticalformaximizingthevalueofcapturingrevenueinaprofitablewayaswellasmeetingtheneedsofcustomersalesrequests.Thisprocessreliesonthecollectiveintelligenceoftheenterprise.Theimpactofaccuratequotes,proposals,contractsandordersmaketheflowofalldataandprocesseswithinanenterpriseworksmoothly,thuscreatingvalueforenterprisesandtheircustomers.

About Apttus

Apttus,thecategory-definingQuote-to-Cash softwarecompany,drivesthevitalbusinessprocessbetweenthebuyer’sinterestinapurchaseandtherealizationofrevenue.UtilizingapatentedcombinationofSaaS-basedapplications,theApttus IntelligentCloudmaximizestheentirerevenueoperationbydrivingbehaviorandprovidingprescriptivedatatocompanydecision-makers.ApttusoffersenhancedConfigurePriceQuote(CPQ),E- Commerce,ContractManagement,RenewalsandRevenueManagementsolutionsontheworld’smosttrustedcloudplatforms,includingSalesforceandMicrosoftAzure.Apttus isbasedinSanMateo,California,withadditionalofficeslocatedacrosstheglobe.Formoreinformationvisit:apttus.com.

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