In my colleague’s recent post about the components of a CPQ system, a CPQ system was defined to include at least five fundamental modules: A front-end, a configurator, a visualization solution, a pricing engine, and a quotation generator.
The five fundamental modules of a CPQ system: Front-end, configurator, visualization, pricing, and quotation, form the core functions required for efficient and streamlined sales processes.
In my work, I frequently encounter companies with a CPQ solution that lacks the necessary capabilities or performance to support an effective sales process or efficient maintenance of the configuration model. The configurator is usually the problem from one of two aspects:
- The Configurator has inadequate performance
For complex products, the configuration problem may grow exponentially. This could lead to long response times at the front end of the CPQ system, which in turn hurts your win rate. A common solution is to simplify the logic by limiting the possible configurations or separating the configuration model into multiple product families.
- Time and effort needed to add new products and options
With complex logic, it may be extraordinarily complex to change the logic and validate the functionality. With sequential rule-based configurators, you may have to change many things just to add another option or choice to the CPQ system. The problem grows further if you have multiple models to maintain. Maintenance is often overseen by a specialist who writes the rules based on input from those requesting changes, which can quickly create a bottleneck.
Changing to a New CPQ Solution is a Big Task
Most businesses that sell configurable products at scale have a working solution with an end-to-end digital thread including configuration, pricing, quote generation, integrations to ERP, PIM, CRM etc.
Changing the CPQ solution is a big task requiring the company to set up the new system, integrate it into the system landscape, and transfer existing products to the new solution. From my experience, changing the pricing solution can be a daunting task on its own. Other important assets, like integrations to different visualization solutions, can also be hard to migrate.
Today, in the age of web applications and REST APIs, we can think of other ways to solve the end-to-end solution. The big task can be divided into smaller, manageable ones that take less effort and create less risk. What if we do not have to change the complete CPQ solution, if it is only the configurator that needs to be upgraded? This could let us overcome issues with performance and maintenance but let us keep the current sales experience and important integrations.
Upgrading the Configurator in your CPQ System
If we look at the definition of a CPQ system as having five fundamental modules, we could imagine shifting the realization of one of these modules to another one. With some care we could do this in a way so that the effect on the other modules is minimized.
Out with old, in with the new. Upgrading the configurator in your CPQ system
Upgrading the configurator is not only about the configuration engine, we also need to translate the existing configuration models to fit our new configuration engine. This translation or conversion of the configuration models and rules from your old CPQ system can often be automated allowing for a seamless transition to a new configurator. Once the conversion has been done the functionality can be enhanced using the new capabilities within your new configurator.
Implementing a High-Performance Scalable Headless Configurator Backend in your CPQ System
In this blog post I have explored the concept of upgrading the configurator in your CPQ system. For many businesses this will be a more compelling implementation than changing the complete CPQ system at once.
By taking the composable approach to CPQ, businesses can transition to better solutions one step at a time, without losing working and high-performing investments that are in production. This reduces the complexity of your IT project vastly, involving fewer parts of the organization.
In a future blog post we will dive deeper in this topic. If you're interested in discussing what is possible already today – give me a call!
AUTHOR
Henrik Flordal
Senior Specialist
+46 739 202 432
henrik.flordal@modularmanagement.com
