What’s the Total Economic Impact of FPX CPQ? Part 1

total economic impact fpx cpq

Forrester Consulting conducted a commissioned study on behalf of FPX to ascertain the total economic impact (TEI) of FPX CPQ.

Why?

Because next-level business case justifications are increasingly important for technology investments. What’s more, over 90% of IT decision makers find value in a business case (with 33% calling it somewhat important and 60% saying it’s very important).

Therefore, we aimed to evaluate all factors that affect an investment decision, including:

  • Benefits
  • Costs
  • Flexibility
  • Risks

These factors combined make up the total economic impact of an investment. This TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.

How?

Forrester Consulting took a multi-step approach to evaluate the impact of FPX CPQ, including:

  • Conducting due diligence: Interviewing FPX stakeholders and analysts.
  • Administering customer interviews: Interviewing three organizations using FPX.
  • Creating a composite: Designing a composite organization based on characteristics of the interviewed organizations.
  • Creating a financial model framework: Constructing a financial model representative of the interviews using the TEI methodology.
  • Writing a case study: Employing the four fundamental elements of TEI (see above) to model FPX CPQ’s impact and create the case study.
  • Reviewing and finalizing said case study: Reviewing the TEI methodology to provide a complete picture of the total economic impact of purchase decisions.

The ultimate goal of the study was to provide readers with a framework to evaluate the potential financial impact of FPX CPQ on their organizations.

Key Findings

What follows are some of the key findings of the study. We will dig into these more in the upcoming parts of the series.

These risk-adjusted present-value (PV) quantified benefits were representative of those experienced by the companies Forrester Consulting interviewed:

1. 4% Increase in Revenue by Year 3

Several factors contribute to this top-line growth, including an average 70% reduction in the overall sales cycle, improved sales efficiency (driving higher volume per sales person), improved average deal size, and improved customer satisfaction.

2. Increase Operating Margin by 1%

On average there was a 1% increase in operating margin for revenue transacted through FPX CPQ. Interviewed organizations use FPX CPQ to define and enforce pricing rules and discount approvals, and they use it to reduce the impact of concessions on margins by improving quote accuracy.

3.Cost Savings of up to $1.1 Million per Year

On average, improving order accuracy with FPX CPQ results in these savings. Interviewed organizations all saw an improvement in order accuracy with FPX, reducing the cost to the business of delivering inaccurate configurations.

4. Increase in ROI Customer Support Representative (CSR) Efficiency by 40% and Sales Engineer Efficiency by 60%

Organizations streamline the sales cycle with FPX CPQ through process automation and integration with enterprise systems, reducing the time spent on manual tasks and enabling staff to support a higher volume of deals.

5. Avoid an Average of $8.8 Million in Legacy System and Support Costs over 3 Years

By consolidating and standardizing with FPX CPQ, interviewed organizations were able to replace multiple tools and reduce both internal and third-party support costs.

And these are just the tip of the iceberg!

Stay with us for this series to take a deep dive into the findings and learn how we help organizations restructure their processes to obtain these benefits.

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Matt Noyes
ABOUT:

Matt Noyes

Matt is the Director of Product Marketing at FPX. He focuses on the evolution of CPQ from a traditional sales tool to one that delivers value across the enterprise.


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