How CPQ Delivers Growth Through Lean Sales

CPQ or Configuration, Pricing and Quotation automation, stands head and shoulders above the others as a tool to bring lean into the sales effort and achieve growth with lean.

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Lou WashingtonLou Washington

Business is all about growth and market expansion. There are a lot of things companies can do to foster growth. Some of these methods involve adding to the organization itself, some involve technology and others would add additional product to the company offerings.

Ultimately, we look to sales to lead the growth charge in any expansion plan because we measure growth in terms of increased sales. And right now, the best growth strategies involve some form of “lean” implementation. But how do we sell lean?

Luckily, there is some technological assistance available. ERP, CRM, Kanban and other technologies can help in operations, sales, marketing, IT as well as other areas. CPQ or Configuration, Pricing and Quotation automation, however, stands head and shoulders above the others as a tool to bring lean into the sales effort and achieve growth with lean.

When it comes to selling lean, the general consensus is there are eight areas of waste that businesses must address:

  1. Transportation or unnecessary movement of material, personnel or data
  2. Inventory and supplies on hand prior to demand
  3. Unnecessary motion or poor ergonomics
  4. Waiting or idle time
  5. Overproduction
  6. Overprocessing
  7. Defects
  8. Skill or knowledge deficits 

Let’s look at some of these classic lean wastes from a sales perspective and see how CPQ tackles each issue to drive growth through sales.

Transportation – CPQ mobilizes all manner of functionality and specialized knowledge that was restricted to the home office, the plant or the sales office. Laptop, tablet or phone-compliant CPQ apps literally allow the rep to bring the entire operation into the customer’s office. No more back and forth trips to double check this or that.

Defects – Sales reps of the past were only as accurate as the information they carried around in their heads or briefcases. Prices were frequently inaccurate, part combinations may or may not have complied with approved usage and delivery or availability information was many times guessed at and frequently guessed at incorrectly.

Skills/knowledge gap – Pricing, contracts, engineering, product management and regulatory compliance are just some of the esoteric and yet critical types of knowledge that come to bear in sales. No one can be expected to know it all in the world of complex products or applications. CPQ builds all of the critical information into the decision support that drives product configurations and pricing for each deal and each customer. The sales rep really is the expert onsite.

Waiting – It’s week one of your new fiscal year, and everyone knows that prices have changed. Everybody knows the product has been jazzed up with some new functionality, but the new price lists and product literature are still being printed. All of that is in the past with CPQ. There is no waiting waste because prices are globally updated in real time online. New product functionality is reflected as new options in your product configuration system. At 8:00 a.m., your reps are ready to go on day one of the new fiscal year.

Inventory and overproduction – Being demand-driven should eliminate the problems of excess inventory and producing stock prior to demand. But then there’s the problem of scheduling. CPQ interfacing with the order management system means your systems will know when demand is possible, when it is likely and when it is a firm order. Part and supply availability are queried upstream from the CPQ solution for purposes of accurate pricing and delivery specifications. Once the sales rep closes the deal, that quote turns directly into an order, demand signals are released, parts and supplies are allocated and production is scheduled.

Overprocessing – Sales reps come with all levels of education and technical knowledge. Highly engineered products may require sales reps with high levels of engineering knowledge. You can go to a respected engine school and hire a newly minted engineer, pay the person a salary commensurate with engineers and train them in sales, or your CPQ solution can do the technical heavy-lifting for your sales rep. The need for specialized knowledge is minimized if the CPQ system can handle those decisions based on Q and A choices in the product specification interaction. The same is true with legal knowledge, pricing knowledge and other more technical variables associated with the product and its use.

CPQ is lean selling. It increases the effectiveness and ability of each sales rep to move more business in less time by helping them concentrate on selling. If you want to make lean a part of your strategy in 2016, do your research and find out what tools and technology can help your sales reps reach their goals.

Lou Washington is a manufacturing industry veteran with Cincom Systems

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