I’ve written several times about how traditional, campus-based ERP is evaporating. CPQ – Configuration, Pricing and Quoting – are business processes that reflect the point.
First of all, let’s all agree that the enterprise resource plan is not going extinct because it has evaporated – it is very valuable – but it is getting a haircut. Many of the tasks leaving ERP are entering the back office, and for me it is exciting, because it brings back-office data closer to the processes it brings.
Naturally, back-office systems that are paired with the front office, even being native to the same platform, have a distinct advantage.
A platform for all
CPQ signifies the value of the new front-to-back office setup. While most front-office salespeople use CPQ, the data they use has a strong back-office flavor. This includes product listings, price lists and existing customer information that can drive things like cross-selling.
The CPQ therefore sits on a strategic position – an intersection – between the front and rear offices, and it presents its own set of challenges. For example, while salespeople want and need access to ERP data, very few businesses want to give them edit-and-delete privileges for back-office systems.
In addition, CPQ workflows include front-office workers – such as sales people and their managers – not back-office people. They need to ensure that the citations are correct, and to obtain approval for general irregularities in discounts and sales.
Take it off with the need for speed – getting a customer an accurate quote before a competitor – and you have a strong case, not only for CPQ, but to keep it near the front and back offices, so that CRM systems can receive data efficiently and safely to conduct their critical processes.
There are plenty of ways to pair, and there is no end to the vendors and APIs that vendors use to accomplish this. However, one of the best ways you can consider is building a CPQ system on a single platform, which the rest of the ERP and CRM apps use.
We learned in the geometry class that if A = B and B = C, then A = C. It is a logic of construction on a common platform. If all build the standards of the same platform, then when it comes time to collaborate, the systems have a lot of commonality. This will not completely eliminate integration issues, but it will significantly reduce them.
Organization-wide data access
For example, it shows its true benefits when needed to deploy a system on a mobile platform – on a standard platform or more than a standard desktop or laptop.
CPQ is fast becoming a mobile app that field representatives can use to issue quotes and ask for merchandise wherever they are. Managers and others can use mobile technology to achieve significant productivity gains inside the headquarters building, so it is not just area representatives who benefit from platform-focused strategies.
This is another reason to keep some distance between back-office systems and mobile devices that may be lost or stolen.
It is quite difficult to build for a hardware and operating system platform, but today you need to be able to define once – another platform advantage.
Incentive compensation is another example that consumes both front and back-office data. The CRM system, which includes sales and marketing, captures deal data, while back-end records and issues, and collects invoices.
A lot of deal-specific information should also be saved, which back-office systems typically don’t track, such as incentives, spiffs, and quotas. The compensation system can also access employee data from the HR system, which itself is close to the back office.
Together, these processes – and many more examples at the same point – are fine when they share a platform, because they must use data from across the organization.
CPQ and incentive compensation were good arrangements a few years ago, but many businesses still relied on their product catalogs and spreadsheets for compensation tracking, and were timid to get approval. However, this era is declining quickly, as the presence of many other technologies is rapidly accelerating the pace of trade.