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Model N Predicts 2016: Cloud-based CPQ Hits Prime Time

Virtualization and Cloud executives share their predictions for 2016.  Read them in this 8th Annual series exclusive.

Contributed by Eric Carrasquilla, Senior Vice President of Products at Model N

Cloud-based CPQ Hits Prime Time

The Prize: Growth

Unless your company is the Department of Motor Vehicles, you're interested in growth, and a whole lot of it. Sales teams are at the tip of the spear in enabling this. Giving sales teams new products and services to sell - as well as creatively bundling different versions of these solutions for different markets - are great ways to increase average order prices and margins and differentiate their offering. Armed with these tools in their sales kits, along with a lack of red tape and freedom to focus on customer relationships and advancing sales strategy, the teams can do amazing things. Unfortunately, we rarely make it easy for them to do what they do best.

The Villain: Complexity and Red Tape

Yes, new products and services, creative pricing and bundles are great, but they come at a cost. That cost is the logjam that all this additional complexity puts on the sales reps and downstream department staff who need to do what it takes to close the deal. We don't make it easy for the sales teams because we want it both ways. We want them out in the field focusing on what it takes to grow. At the same time, we complicate their lives because in order to effectively sell the new "kit," myriad items need to be correct, such as pricing, discounting, quotes and the downstream contracts.

Lack of automation dooms them to getting mired in paperwork and back office activity, which gets even worse at quarter end. In a perfect world, deals get closed early in the quarter or have an even flow across the quarter. But any sales organization knows that despite its best efforts, this isn't the world we live in. In reality, more deals than we'd expect come in at the end of the quarter. This results in creating a frazzled bottleneck in sales operations, finance and legal in trying to get these through. If the sales teams are lucky enough to have mobile access, it's rarely connected back to the rest of the system components to get the deal closed. And when their efforts don't work, they default back to the old method: spreadsheets, emails and manual activity that stretches sales cycles out even longer. Translation: hurry up and wait.

The Solution: Configure, Price, Quote via the Cloud

The challenges aren't new. What's new is that we're finally seeing Configure, Price, Quote (CPQ) systems that are enterprise grade, meaning the system doesn't choke and sputter during the volumes associated with end-of-quarter crunch times. It also means that the process is a smooth flow across what it takes to configure, price, quote and get these opportunities into sales contracts in a way that provides much better speed and visibility. The benefit of speed is obvious, but better visibility means a greater ability to highlight and act on cross/upsell opportunities and maximize offerings that are going to give the biggest bang for the buck earlier on in the sales cycle. This leads to more profitable deals and a quicker closing time.

These systems now provide anytime, anywhere access via mobile devices, so there are no constraints on the sales teams to quickly move this through. Things like getting accurate price approvals and quotes that may have taken days or weeks through multiple revisions can now be done within minutes. Cloud deployment is giving much quicker time to value in getting these systems up and running and available to take advantage of new feature and function without long costly upgrade cycles.


CPQ solutions transform the revenue lifecycle from a series of disjointed operations into a strategic end-to-end process. In 2016 and beyond, we can expect to see automated CPQ growth in the market due to its flexibility and scalability.


About the Author

Eric Carrasquilla is Senior Vice President of Products at Model N, responsible for Product Management and User Experience. He's a "product" guy at heart that has spent the last 15+ years building and launching successful enterprise software products that deliver awesome customer experiences for companies like [24]7, Amdocs, Clarify and Baan. 

Published Wednesday, December 09, 2015 6:31 AM by David Marshall
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