If you’re ready to implement a CPQ solution, it’s important to learn from the mistakes of others.
Investing in CPQ can come with great rewards, but, if you’re not prepared, it can cause challenging adjustments for your company when it comes to both technology and culture.
Recently, FPX commissioned a survey of 71 decision-makers in the purchasing of CPQ platforms, with the majority of respondents coming from sales and business development in the technology and manufacturing industries. 82% of respondents had evaluated CPQ software within the last two years.
Topics covered included the evaluations process, vendor selection, competitor differentiation, and systems implementation.
Let’s take a look at the most important findings.
The Evaluation Process
The biggest challenge decision makers had when sourcing a CPQ solution was not fully grasping the level of functionality needed. This was followed by not having the business process sorted out in advance, needing to include more stakeholders than originally thought, and dealing with competing interests between stakeholders.
In fact, 70% of CPQ buyers saw longer-than-expected delays in their CPQ buying process. The respondents identified a number of reasons for these delays ranging from internal challenges to a lack of understanding on the part of their chose CPQ vendor. Of course, each business is different, and the survey revealed some interesting trends when it comes to internal project preparations, consensus building, and overall understanding of what the CPQ project is intended to accomplish.
Vendor Selection & Systems Decision
During the decision-making and buying process, CPQ buyers most often believed they over-prioritized price, features, and functions, while under-prioritizing potential future business requirements.
In fact, level of customization was by far the most frequently noted criteria that should have had more emphasis during the decision-making process. When it came to future business strategies, respondents believed that the ability to support increased product/solution complexity and adjacent system replacements (CRM, ERP, CLM, etc.) should have been more closely considered.
What’s more, buyers most frequently wished that they had involved more stakeholders from a variety of departments. Although you're probably thinking IT, finance and maybe a few others, the study indicates that to be successful with CPQ, it's important to look beyond the usual suspects.
When it came to evaluating different CPQ providers, 39% of buyers believed it was difficult to differentiate between them. Why? The data reveals a few primary reasons, one of them being parity across features and functions.
With so many vendors in the CPQ space (well over 50), it's easy to understand how buyers may assume one vendor is as good as the next - particularly when many promote similar features and functions rather than actual value or differentiators. However, the onus isn't completely on the vendor. It's often up to the buyer to ask the right questions of the vendor, do the homework to understand the business requirements, and to properly align the right people internally to steer the project that all make a significant different in achieving a successful outcome.
When it came to properly supporting and implementing the chosen CPQ software, unanticipated organizational changes that were required included:
- How pricing and price books were managed (55%)
- How business rules and logic were managed (52%)
- How customer data was managed (38%)
- How product catalogs were stored and managed (28%)
One might correlate unanticipated changes would cause scope creep, prolonged deployments and other headaches. And those assumptions would be correct. In fact, many survey respondents acknowledged that their chosen CPQ vendor 'over-promised and under-delivered', mainly with the implementation timeline and ease of integration.
The data reveals some other compelling factors pertaining to preparation, understanding of the business requirements, and expectation setting related to scope.
Ultimately, if they could do it all over again, many buyers would have conducted more due diligence into CPQ vendors, formalized the evaluation process, and engaged more stakeholders during the process.
Our team would be happy to walk you through the comprehensive results of the survey, answer any questions you have, and help you gather the information you need to identify the CPQ solution that will suit your business.