REPORT: TREND The CRO’s Guide to Sales Acceleration with Configure Price Quote · 2018-01-08 · The CRO’s Guide to Sales Acceleration with Configure Price Quote Cloud-Based CPQ

REPORT: TREND

The CRO’s Guide to Sales Acceleration with Configure Price QuoteCloud-Based CPQ Solutions Deliver Strong ROI

and Sales Cycle Acceleration

Cindy ZhouVice President and Principal AnalystContent Editor: Courtney SatoCopy Editor: Maria ShaoLayout Editor: Aubrey Coggins

Produced exclusively for Constellation Research clients

June 22, 2017

© 2017 Constellation Research, Inc. All rights reserved. 2

TABLE OF CONTENTS

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

B2B SALES CYCLES ARE LENGTHENING AND GROWING IN COMPLEXIT Y . . . . . . . 4

CONFIGURE PRICE QUOTE BECOMES ACCESSIBLE THROUGH THE CLOUD . . . . . . 5

THE 10 BENEFITS OF CONFIGURE PRICE QUOTE . . . . . . . . . . . . . . . . . . . . . . . . . . 5

THE HIDDEN “COST” OF MANUAL QUOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

CPQ SUCCESS STORIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

FIVE KE Y QUESTIONS TO ASK WHEN E VALUATING CPQ PROVIDERS . . . . . . . . . 16

FOUR PITFALLS TO AVOID . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

WHAT’S NEX T FOR CPQ? AI BRINGS DE AL , PRICING AND

PERFORMANCE INTELLIGENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

REL ATED RE ADING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ENDNOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ANALYST BIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

ABOUT CONSTELL ATION RESE ARCH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

E X ECU TIV E SU MM ARY

This report examines how cloud Configure Price Quote (CPQ) software can help organizations

accelerate sales cycles, increase margins and streamline processes so sellers can focus on selling. CPQ

software automates the process of delivering price quotes to customers and prospects by using a

company’s product offering information, customer data, terms and business rules to generate accurate

quotes in minutes, compared to days or even weeks in some cases.

Constellation found that the process of formulating a quote manually can take upwards of 10 business

days, lengthening the sales cycle and introducing new risks to the deal. When a competitor can move

in an instant, the last thing sellers need is to be hindered by internal red tape that slows the delivery of

accurate quotes to prospects and customers.

Cloud-based software makes CPQ, previously a costly technology out of reach for many organizations,

a viable solution for many sales organizations large and small. As Business-to-Business (B2B) Chief

Revenue Officers (CROs) and sellers face longer sales cycles and an increasingly complex sales

environment, solutions such as CPQ that streamline the sales process can be a significant advantage

for organizations.

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Business ThemesDigital Marketing & Sales Effectiveness

Next-Generation Customer Experience


B2B SA LE S C YCLE S ARE

LEN G THENIN G A ND

GROWIN G IN CO MPLE XIT Y

Here is what happens in a typical Business-

to-Business (B2B) sales scenario: A sales

representative qualifies an opportunity,

assesses the prospect’s need and then must

provide a price quote. While the price quote

is being prepared, days can go by with nothing

sent to the prospect, allowing new variables

to threaten the deal. At the point of delivering

a price quote, the organization has already

been down selected, thus crossing one of the

toughest hurdles in the sales process. Sending

a price quote should be straightforward,

so why do organizations botch this critical

last mile?

Constellation sees the B2B sales quoting

process taking upwards of 10 business days.1

Reasons for this long delay involve the highly

manual process of coordinating with multiple

disparate systems and people for product

configuration, regional pricing and currency

type as well as the complexity of applying the

correct discounts and commercial terms before

presenting a quote. This manual quote delivery

process is error-prone, full of internal friction

and slows deal momentum. Compounding the

problem is the lengthening of the B2B sales

cycle driven by the buyer’s aversion to risk.

Today’s buying organizations are including

more individuals from other departments to

sign off on purchase decisions. Constellation’s

research indicates that over the past two

years, the average number of decision makers

involved in a B2B purchase has increased

from five to seven people.2 Add in other

complexities such as regional price lists,

stock keeping unit (SKU) proliferation (when

multiple SKUs exist for the same product)

and specialized contractual obligations, and

it becomes clear why the quote generation

process is so complicated.

Organizations must take every opportunity

to reduce the time it takes to produce an

accurate and professional quote for prospects.

Organizations that do not use technology to

automate the quote and pricing process are

at a significant disadvantage. With overall

B2B sales cycles trending longer, selling

organizations would do well to ensure their

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response times are as quick as possible.

Reducing the internal “red tape” for quotes

can mean the difference between winning and

losing deals.

CO NFIGURE PRICE QUOTE

BECO ME S ACCE S SIBLE

THROU G H THE CLOU D

A decade ago, quoting tools were only available

at a high cost to large enterprises through

their legacy on-premise Enterprise Resource

Planning (ERP) software or financial pricing

solution. The cloud changed the Configure

Price Quote (CPQ) market by both lowering

the costs and removing many implementation

barriers, thereby making cloud CPQ solutions

accessible to organizations of all sizes.

Constellation receives many inquiries from

organizations interested in either adopting or

moving to a cloud-based CPQ solution for its

flexibility, speed and cost-effectiveness. As the

world of sales becomes more complex with

global pricing, regional price lists, differing

product availability, various currencies and

regulations on commercial terms, automating

the process between opportunity and cash

moves from a “nice to have” to a “must have”

for sales success.

CPQ software automates and simplifies the

configuration, pricing and quoting process in

sales opportunities. With cloud CPQ, sellers

can easily pull relevant information from

product bundles, collateral assets, discounts,

commercial terms and visuals to present a

professional and accurately priced series of

solutions to prospects.

The implementation time frame is also up to

36 percent faster for cloud CPQ solutions with

native or integrated customer relationship

management (CRM) software. That is

because much of the role-level security and

basic workflow rules are already built into

the solution.3

THE 10 BENEFITS O F

CO NFIGURE PRICE QUOTE

Constellation’s research and interviews

with CPQ users and providers found 10

primary benefits the software can deliver to

organizations (see Figure 1):

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1. Accelerate the Sales Cycle

By reducing the amount of time spent to organize

and obtain quotes internally, organizations can

accelerate the overall sales cycle. Constellation sees

clients realizing time savings upwards of 300 percent

with CPQ.4 One client, a global design firm, stated

that its sales quote process went from three days

to less than one hour. CPQ workflow rules enable

sellers to quickly progress through each step of the

quote building process. Additionally, integrating

business rules into the CPQ workflow minimizes

the internal back-and-forth with product or finance

experts that traditionally has slowed down the quote

generation process.

CPQ streamlines and automates the approval

process with centralized business rules and

workflows that intelligently route approvals for

speed. Sellers can also save time on processing

existing customer renewals and reorders, with

the CPQ system saving the prior quotes as

reusable templates.

Figure 1. The 10 Benefits of Configure

Price Quote

Source: Constellation Research


2. Increase Deal Size and

Maximize Profit

CPQ fosters up-sell and cross-sell

opportunities to increase deal sizes and

maximize profits by influencing desirable

seller behavior. CPQ’s opportunity tracking

and management functionality enable sellers

to identify related products and optimum

pairings for up-sell and cross-sell scenarios.

Guided selling processes ensure that sellers

will not overlook available products and

solutions to bundle. Bundling software can

increase the overall deal size and improve

customer satisfaction by proactively offering

complementary solutions at a discount.

CPQ’s ability to automate pricing guidance

and place ceilings on discounts based

on seller profile can help organizations

preserve margins. Automated workflows

can speed discount approvals and eliminate

pricing mistakes. The system can also

automatically default to higher tiers of service

or maintenance packages, thus increasing

recurring revenue for the organization without

the seller having to remember to make

those selections.

3. Improve Customer Experience with a

Unified View of Activity

If organizations use a native CRM CPQ solution

or a CPQ solution that tightly integrates with

CRM, a unified view of all customer activity

can be obtained. With a few clicks, sellers can

access customer and prospect engagement

history, prior quotes delivered, and pricing data

as well as review discounts without having to

start from scratch. A unified view of customer

data can lead to better pricing decisions and

ensure the accuracy of quotes.

One Constellation client, a sales executive from

a manufacturing company stated, “Before CPQ,

one of our sales reps sent a prospect a quote

with last year’s pricing and the error wasn’t

discovered until we were in negotiations.

Unfortunately, the discrepancy was large

enough that we had to notify the prospect and

resend the quote. Needless to say, the prospect

was angry and we lost the business. Now with


our CPQ solution, business rules and approval workflows

prevent mistakes like this from happening again.”

Other organizations Constellation spoke with stated they

often chose to forge ahead with the erroneous quotes and

take the margin hit, resulting in unprofitable deals due to

the mistake.

4. Increase Seller Productivity

According to the members of the Sales Enablement

Society, one of the top hindrances to sales effectiveness is

the amount of time sellers spend on administrative tasks

compared to actual selling. Automating the repetitive

administrative steps in the sales process reduces the

headaches sellers experience with manual data entry,

quote formation and internal negotiations for pricing and

quote delivery.

Specifically, CPQ software can increase seller productivity

in the following areas:

• Guided Selling Eliminates Errors: Leading CPQ solutions

provide guided selling intelligence to assist sellers in

formulating accurate quotes. The step-by-step, question-

driven process helps sellers avoid mistakes caused

by product pairings or pricing due to regional or local

"Before CPQ, one of our

sales reps sent a prospect

a quote with last year’s

pricing and the error wasn’t

discovered until we were in

negotiations. Unfortunately,

the discrepancy was large

enough that we had to

notify the prospect and

resend the quote.

Needless to say, the prospect

was angry and we lost the

business. Now with our

CPQ solution, business rules

and approval workflows

prevent mistakes like this

from happening again.”

– Manufacturing company sales executive


nuances. The CPQ solution suggests the

right product based on the criteria entered,

thereby avoiding risks of incompatible

products or services. Once the quotes are

produced, CPQ solutions will retain the

information and provide templates for

future activity with the prospect.

• Collaborate on Quotes Dynamically:

When sellers need to collaborate with

other internal stakeholders such as solution

experts, sales engineers or legal personnel,

the CPQ solution serves as version control.

This eliminates the need for sellers to

manually collect and consolidate feedback

from others.

• Mobile Solutions for Field Seller Flexibility:

For organizations with highly mobile field

sellers, a CPQ provider with robust mobile

capabilities enables sellers to quickly

configure quotes, deliver proposals and

track quote status on-the-go. Integration

with e-signature providers can speed quote

approvals and contracts.

• Generate Professional Quote Documents:

Leading CPQ solutions include dynamic

document generation functionality to

produce branded professional quotes.

Organizations can pre-configure templates

with cover pages, company descriptions

and other standard elements while allowing

customer-specific elements such as

terms to dynamically populate into the

quote document.

• Easily Attach Sales Collateral: CPQ

solutions streamline the attachment of key

sales collateral, such as case studies, solution

briefs and ROI reports, to quotes for the

prospect’s reference. Having the collateral

readily available in the CPQ solution

ensures that sellers are using the most up-

to-date content.

5. Simplify Partner and

Reseller Management

Leading CPQ solutions support the creation

of quotes across multiple channels, including

distributors, resellers and other partners.


Providing these channel partners and resellers

access to CPQ through a portal/community

allows organizations to have a truly integrated

multi-layered sales teams. These extended

sales teams can, in turn, use the same

processes, business rules, discounting policies

and approvals, increasing their efficiency.

Organizations can also collaborate on quotes

with partners and resellers without worrying

about version control.

6. Improve Internal Sales Team

Commissioning and Quota

Management Process

By automating the Quote-to-Cash process,

CPQ software streamlines the task of

commission payments. Organizations can

refer to the data housed in the CPQ solution

to quickly and accurately calculate seller

commission payments and factor in margin

calculations by referring to CRM updates with

defined categories of products and solutions.

As growth occurs in product lines or solutions,

organizations can also use the data to make

decisions to increase or decrease selling

team coverage.

7. Ensure Regulatory Compliance

CPQ workflows can be established to help

organizations that conduct business with the

government comply with regulations such as

Sarbanes-Oxley auditing requirements and

ASC 606 revenue recognition rules.5 Product

documentation and standard commercial terms

can be stored in the CPQ solution to help trace

and identify problem areas in the event of

regulatory claims or litigation. This traceability

benefit can also help with compliance tracking,

assist in resolving customer complaints and

identify weak spots in the process.

8. Improve Financial Accounting

CPQ solutions can improve a company’s

financial accounting in three ways:

• Subscription Management: CPQ centralizes

pricing in one system. CPQ can manage

subscriptions, streamline the application

of pricing changes, help introduce

new solutions and manage customer

amendments, cancellations and renewals.


• Increase or Preserve Margins: CPQ’s

automated role-based discounting controls

ensure sellers offer correct discounts,

which in turn preserve margins. CPQ can

also suggest key bundling strategies or

opportunities to increase margins.

• Automate the Billing Process for Faster

Receivables: CPQ enables organizations to

manage new one-time or recurring customer

billing processes, including freemium to

premium upgrades and setup charges and by

billing terms such as annual, quarterly

or monthly.

9. Make Contract

Management Efficient

The ability to add commercial terms to quotes

is a feature of leading cloud CPQ solutions. This

helps organizations speed through the contract

generation phase and reduce duplicate data

entry. Pairing contract management solutions

with CPQ enables a smooth transition from

the delivery of the quote to the signing of the

contract for faster completion of orders.

10. Gain Deal Intelligence

through Analytics

CPQ solutions enable organizations to

analyze sales data post-closure, which leads to

improvements in future deal size, margins and

more. Understanding the most/least profitable

opportunities, the most effective combination

of products and the correlation between

discounts and win rates provide valuable

insights on how to improve deal strategy in the

future. When combined with native or tightly

integrated CRM, data is captured across all

customer touchpoints, enabling a unified view

into customer and prospect engagement.

In addition, the emergence of Artificial

Intelligence (AI) embedded in CPQ solutions

enables organizations to process vast

amounts of data in order to generate insights

that organizations can use to improve deal

efficiency and profitability.

Advertising executive William T. Moran once

said, “Pricing strategy always has been more

of a poker game than a science.”6 Times have


changed and the advanced pricing intelligence

AI provides shatters this notion.

With AI, pricing strategies are driven by

science. This provides organizations a data-

driven method to correlate pricing with win

rates, recommend product bundles, find

patterns in customer engagement levels and

predict the likelihood of deal success.

THE HID D EN “COS T ” O F

M A N UA L QUOTE S

Organizations often have a false sense of

confidence in how well their existing process

works without automation or they feel their

sales teams are not large enough to warrant

a CPQ solution. The cloud reduces the

purchase and implementation costs of CPQ

solutions, making them much more accessible.

Organizations that do not use CPQ have

experienced missed opportunities, sent error-

prone quotes and wasted days of effort by

continuing with manual processes.

Here are few of the hidden “costs” of

manual quotes:

• Competitor Traction: Expect competitors to

use CPQ and other automation technologies

to encroach on deals. In this digital age

of instant response time, a competitor

providing a quote instantly or in hours

compared to days can gain a competitive

advantage. Prospects also equate a fast

response time to higher service levels and to

better post-sales responsiveness.

• Missed Opportunities: CPQ can

automatically surface cross-sell and up-

sell opportunities often missed by sellers.

Without CPQ, organizations could be

missing out on potential product bundles

and cross-sell, up-sell opportunities with

related services. In addition, the more

complex a deal, the more opportunities

exist to deliver an erroneous quote that

can potentially kill the deal. CPQ solutions

Constellation recommends that organizations with global complexity, multiple distribution channels or 25 or more sellers consider investment in a CPQ solution.


can reduce the complexity stemming from

pricing, reseller and partner discounts and

specialized commercial terms so that sellers

can deliver accurate quotes.

• Poor Customer Experience: Inaccurate

quotes can diminish the customer

experience and derail deal progress.

Upon discovering the presentation of an

inaccurate quote, organizations often

absorb the margin impact or contact the

customer with a mea-culpa before resending

a new quote.

These hidden costs are some of the factors

that led several CPQ users to comment that

they wished they had started sooner.

CP Q S U CCE S S S TORIE S

Highlighted below are case studies from three

organizations of different sizes with unique

business challenges. These customers used

their CPQ software to achieve business-

transforming results, including revenue

growth, profit increase, process time reduction,

elimination of errors and increased customer

and channel partner satisfaction.

High-Growth Technology Company

with More Than 150 Sellers Globally

The Problem: A rapidly-growing technology

company with over 150 sellers globally

generates more than 25,000 quotes per

quarter. The company quickly outgrew the

price book feature in its CRM software as

it expanded operations globally. Increased

complexity with local and regional pricing,

different currencies, discount policies, in-

country regulations and individualized

commercial terms were all contributing to

delays and frequent quote errors.

The Solution: After selecting a cloud CPQ

solution, the company took the opportunity

to re-evaluate its entire sales catalog to

streamline offerings and eliminate outdated

or unused SKUs. Working with the vendor’s

implementation team, the company created

business rules on product and service pairings,

standardized commercial terms, automated


approval routing and it designed templates

to create a professional presentation of the

quotes to prospects.

The Results: The technology company

achieved the following results within months of

implementing CPQ:

• Reduced quote development time by

50 percent, enabling more quotes to be

delivered with a 10 percent acceleration of

sales cycles.

• Increased average deal size by 15 percent

by pairing premium support with software

licenses as a standard default.

• Eliminated pricing errors with regional price

lists and commercial terms.

Global Manufacturer with Multi-

Layered Direct, Indirect and

E-Commerce Sales

The Problem: A manufacturer of building

materials with a large network of retail

partners and direct and indirect sellers, such as

dealers and resellers, wanted to streamline its

sales channel operations. With over 100,000

quotes generated each year (primarily through

phone calls), the company wanted to provide a

self-service quote solution for its large network

of sellers and offer consumers the

ability to directly request quotes for

customized products.

The Solution: The company selected a cloud

CPQ solution that integrated with both its

ERP and e-commerce systems. The company

structured a quote generation system that

could handle pricing and discounts by channel

to ensure margin protection for itself and

its network of dealers. The company also

provided consumers the ability to create

quotes and order products directly on its

website by integrating the CPQ software with

its e-commerce system.

The Results: The manufacturer achieved the

following results with its CPQ solution:

• Achieved a 20 percent increase in quote

volume and accelerated sales cycles due to

the self-service CPQ solution’s ease of use.

The company stated that with CPQ, close to

150,000 quotes were created in 2016. With

CPQ, sellers, dealers and consumers can

create quotes and complete orders in the


system themselves through the

e-commerce integration.

• Increased customer loyalty due to the self-

service features, enabling the customers

of the manufacturer’s customers (dealers,

reseller and partners) to receive product

quotes quickly. Reduced order errors with

visualization of the actual products and their

dimensions prior to ordering.

• Prior to CPQ implementation, a single quote

would require an average of two to three

phone calls between the dealer or customer

and the company’s inside sales team to

complete. After CPQ, the company saw

a substantial reduction of 80,000 calls to

inside sales last year.

Personal Security Products

Manufacturer Expands Business to

New Areas with CPQ

The Problem: This manufacturer of personal

security products was expanding its business

to new areas, including body and fleet cameras

requiring subscription services. As the

company serves law enforcement agencies and

the military, accurate and compliant quotes are

critical. The company was wasting many hours

manually producing quotes with spreadsheets

and experiencing frequent errors.

The Solution: The company selected a cloud

CPQ solution that integrated with its CRM,

ERP and contract lifecycle management

software. The quotes from CPQ automatically

create the contract, subscription terms and

related assets, then populates the information

into the CRM and ERP software.

The Results: The manufacturer, which

increasingly became a technology and

services provider, achieved the following

results with CPQ:

• It reduced the total amount of time spent

building lengthy quotes from nearly 10

hours to 10 minutes. The company routinely

configures complex quotes with up to 500

line items.

• It increased efficiency by using a CPQ

solution native to its CRM provider. With

standard data models, validation rules and

the familiar user interface, the company

significantly decreased the learning curve

for its sellers.


FIV E KE Y QU E S TIO NS TO

A S K W HEN E VA LUATIN G

CP Q PROVID ERS

Once the decision is made to evaluate

CPQ solutions, organizations can review

market and industry analyst reports such as

Constellation’s CPQ ShortList™ to narrow the

list of providers. Understanding the existing

technology stack compatibility, amount of

sales enablement, the provider’s customer

references, market reputation and the ongoing

investment required are all important factors

for organizations to consider. Constellation

recommends using the following key questions

when evaluating CPQ solution providers:

1. Is the solution native to your CRM software

or how tight is the integration? Your goal

is to find a solution that is either native

or tightly integrates with your company’s

CRM system to achieve a single view of the

customer. This also eliminates the need for

your sales team to do manual data entry

to track deal activity as the quote process

will auto-generate milestone activity and

provide a record of deal history.

2. What is the learning curve for sellers? With

any technology, adoption rate and usage are

the measurements of success. Evaluate the

user interface (UI) and assess how easy it

will be for your sales team to learn. The best

CPQ solutions have intuitive interfaces and

ask a few questions to guide sellers to the

right quote template. If the solution is native

or integrates with your CRM software, the

UI familiarity will help sellers.

3. Do you have similar organizations as

customer references? Ask for customer

references from organizations similar in

sales team size, sales channel structures,

geographical coverage, vertical markets

or target customer market. The goal is to

assess experiences in managing business

processes and nuances similar to those of

your organization.

4. What is your customer renewal rate? Your

Net Promoter Score? These questions

pertain to customer satisfaction and help

you understand the vendor’s post-sales

support. NPS or Net Promoter Score is an

industry standard for customer satisfaction


determined by asking customers on a scale

of 1-10 how likely they are to recommend

the solution/product to others.7 Also, track

the responsiveness of the CPQ provider. Are

its responses to questions complete? Similar

to providing quotes in a timely manner,

vendor response time can be viewed as

indicative of post-sales support levels.

5. How much ongoing configuration and

maintenance are required? Investment

in product research and development? As

organizations continuously incorporate

new products or solutions, update pricing,

adhere to new regulations and make other

changes, the CPQ solution needs to be

simple for administrators or sales operation

teams to update and maintain. Evaluate

CPQ solutions with an eye on how easy they

are to update and maintain. Alternately, if

you prefer to outsource, ask if the vendor

offers ongoing services packages directly

or through service partners. Continuous

investment by the CPQ provider into

research and development ensures the

solutions stays current.

FOUR PITFA LL S TO AVOID

CPQ can be a transformative technology

that speeds up sales cycles, improves deal

size and powers revenue growth. But to

ensure a successful implementation of CPQ,

organizations need to be open to changing

their business processes based on best

practice suggestions from CPQ providers and

services experts during the implementation

process. Missteps during implementation can

cause unnecessary delays and hurt ROI results.

Constellation recommends avoiding

the following four common CPQ

implementation pitfalls:

1. Communication Silos

The communication between sellers and

the various departments involved in the

quote, (including product, financial, legal and

sales operations) is critical to a successful

implementation. CPQ should not be viewed as

purely a technology implementation.


A Constellation client, vice president of sales

operations at a mid-sized technology company,

stated, “We did not view the CPQ project

as implementing software. We were re-

engineering our quote-to-cash process.”

Establish a steering committee to select the

CPQ provider and to facilitate decisions during

the implementation process. Committee

members can include individuals from the

following areas:

• CRO Office: Sales operations or an

individual representing the “voice of sellers”

• CFO Office: Senior finance team member to

guide financial processes

• CMO Office: Demand generation lead to

address lead-to-sales transition

• CIO Office: Technical implementation

project manager

• General Counsel’s Office: Sales contracts

approver or reviewer

• Head of Pricing: Typically the head of

product marketing

• Customer Success: Senior customer support

team member

The committee member representing the

sellers should have the final say on tie votes

or should hold the largest vote. If sellers

find the CPQ solution cumbersome to use, it

will jeopardize the entire project. A steering

committee can mitigate this risk.

2. Custom Processes Requiring Code Changes

Implementation success for cloud-based

solutions hinges on using the products as they

were designed. Leading cloud CPQ software

includes process configuration workflow

to customize processes with clicks rather

than code. Unique processes that require

code changes break down the integrity

of the software and can diminish system

performance. Constellation recommends

clients stay open minded to adapting existing

processes to fit the CPQ system workflow

design and avoid custom code development.

“We did not view the CPQ project as implementing software. We were re-engineering our quote-to-cash process.”

- Vice president of sales operations at a mid-sized technology company

.


3. Low Prioritization of Mobile

Do not resist providing sellers mobile access

to the CPQ solution. Today’s sellers are on-

the-go and providing them access to mobile

CPQ capabilities gives sellers the flexibility to

quickly generate, modify and approve quotes

on mobile devices. Also consider integrating

e-signature capabilities to the CPQ solution

for faster quote approvals. Mobile access can

provide organizations with an additional edge

in sales cycle acceleration and improve seller

productivity.

4. Garbage In, Garbage Out

Avoid importing outdated, unclean data into

your CPQ system. Before importing existing

business rules, pricing structures, SKUs,

commercial terms and other information, take

the opportunity to review pricing structures

and policies. Are these policies still relevant

and applicable? How clean is your product and

discounting data? Prioritize data cleanup as

part of the implementation process. The better

the data, the better the insights.

W H AT ’ S NE X T FOR CP Q?

AI BRIN G S D E A L , PRICIN G

A ND PERFORM A N CE

INTELLIG EN CE

The shift to data-driven decisions leads to

embedded analytics across the sales cycle to

drive insight on how to improve the selling

process and increase profit. With every

interaction captured, the solution learns and

brings to light recommendations, predicts

outcomes and prevents deal risks.

A few leading CPQ providers have started

to embed Artificial Intelligence (AI) into their

software to further automate and speed

the quote delivery process. The advanced

guidance generated by AI before, during

and after the sales process helps sellers

continuously improve their win rates. Natural

language commands help sellers save time in

recommending products, offering discounts,

creating pricing and providing the appropriate

commercial terms.

Some of the AI solutions Constellation

evaluated offer chatbot functionality for sellers


to start the quote or check the status of a

quote on-the-go. These solutions enable sellers

to use voice commands to ask key questions

about existing deals without having to dig

through reports or search the CRM or CPQ

solution for answers. The AI-enabled solutions

also suggest quote templates from the cache

of similar deal templates to help sellers speed

through the quote creation process. Pattern

recognition through machine learning enables

the analysis of quotes to spot areas where

sellers can improve. The same technology

collects insights about top-performing sales

representatives and delivers those insights

as suggestions to other reps across the sales

organization.

Constellation expects AI to become a core part

of CPQ over the next 12 months, leading to

improved opportunity, win rates and deal sizes.


REL ATED RE A DIN G

For a list of leading cloud CPQ providers, please see the Constellation ShortList™

for CPQ: http://bit.ly/2p36MsO.

ACKN OW LED G MENTS

Constellation thanks the many clients and members of the Sales Enablement Society who shared their

insights and experiences with CPQ solutions.

END N OTE S

1 Based on Constellation interviews of 100 B2B sellers and marketers from June 2016 to May 2017.

234 Ibid.

5 ASC 606 revenue recognition standard, https://www.aicpa.org/InterestAreas/FRC/AccountingFinancialReporting/RevenueRecognition/DownloadableDocuments/FRC_Brief_Revenue_Recognition.pdf.

6 Pricing Resources, http://pricing-hub.com/resources/quotes/#sthash.gcTvCq9P.dpbs.

7 Net Promoter Score introduction, http://www.netpromotersystem.com/about/measuring-your-net-promoter-score.aspx.


ANALYST BIO

Cindy ZhouVice President and Principal Analyst

Cindy Zhou is Vice President and Principal Analyst at Constellation Research covering Digital

Marketing Transformation and Sales Effectiveness. With over 18 years of practitioner experience

in corporate marketing, product marketing, product management, and sales operations, Zhou has

spearheaded marketing transformation at multiple technology companies. Her role is to advise

Constellation’s clients on strategies to light up demand generation, prove revenue contribution, and

maximize sales productivity.

Prior to joining Constellation, Zhou was Global Senior Vice President of Marketing and Sales

Operations at BackOffice Associates, a global provider of data quality and information governance

solutions to the Fortune 1000 and a SAP Solution Extension (SolEx) partner. Before BackOffice

Associates, Zhou led worldwide demand generation for the procurement, supply chain, commerce

and merchandising lines of business for IBM's Smarter Commerce initiative. She joined IBM from

the company's acquisition of Emptoris, Inc., where she led corporate marketing and global demand

programs. Prior to Emptoris, Zhou was the 25th employee of Rivermine and helped grow the company

into a telecom expense management industry leader with a successful exit to Emptoris. She’s also held

a variety of product marketing, product development and marketing roles at China Telecom and MCI

Telecommunications. A recognized revenue marketing executive, Zhou was recently honored as one of

four finalists for the 2016 “Marketing Executive of the Year” Marketo Revvie Award.

@cindy_zhou | www.constellationr.com/users/cindy-zhou | www.linkedin.com/in/CindyZhou


A BOU T CO NS TELL ATIO N RE S E ARCH

Constellation Research is an award-winning, Silicon Valley-based research and advisory firm that helps organizations

navigate the challenges of digital disruption through business models transformation and the judicious application of

disruptive technologies. Unlike the legacy analyst firms, Constellation Research is disrupting how research is accessed, what

topics are covered and how clients can partner with a research firm to achieve success. Over 350 clients have joined from an

ecosystem of buyers, partners, solution providers, C-suite, boards of directors and vendor clients. Our mission is to identify,

validate and share insights with our clients.

Organizational Highlights

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· Experienced research team with an average of 25 years of practitioner, management and industry experience.

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· Founders of Constellation Executive Network, a membership organization for digital leaders seeking to learn from market leaders and fast followers.

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