How to Unlock the Full Potential of CPQ
The incredible ROI potential of a CPQ project is undisputed, but too often companies fall short of realizing its full potential because they mistake the implementation phase for the finish line. Join this session to discover why only an “end-to-end journey” approach will unlock the desired commercial success and process efficiencies you are looking for. We will dive into the benefits of an end-to-end CPQ journey, discuss most common pitfalls and how you can avoid them. This session is not only for companies planning to implement a new CPQ software, but also for the ones interested in better leveraging the commercial potential of their existing solution.
About the Speakers
Anna-Katharina Schmidt is a passionate Senior Manager at Accenture Strategy in Germany. She specializes in developing international Pricing & Commercial Strategies, especially in the B2B environment.
Mohamed Beshir, Managing Director at Accenture, leads the Quote to Cash capability across Europe, and his team has implemented several Pricing Optimization and Commercial Operation initiatives across the globe. Beshir is based in Germany and brings more than 18 years experience in leading transformational business and Information Technology initiatives under complex matrixed and demanding environments.
Anna-Katharina Schmidt: Welcome, everybody to our session on end to end CPQ journey, so how to leverage the full potential of CPQ and to avoid the most common pitfalls. My name is Anna-Katharina Schmidt, Senior Manager for Accenture Strategy in Germany, mostly specialized on sales and pricing strategy development and that in the B2B environment. And now I'm handing over to you Mo for your introduction....
Mohamed Beshir: Thank you, Anna. And hello, everyone. Great to be here. Mohamed Beshir, you can call me Mo. I'm the Managing Director at Accenture and I lead the quote to cash capability for Accenture in Asia and Europe. Before joining Accenture, my journey was with CPQ started almost 12 years ago when there was nothing called CPQ, and I build it on my own, so I will share with you between me and Anna what we have done in the last four years within Accenture, with our client in there, in our implementation for CPQ also my personal experience from starting when there was no CPQ. And I look forward to our session together.
Mo Beshir: So to start with speaking about how do we realize or what could we expect from realizing from implementing a CPQ that has a lot of value that we should aim for so I could summarize them into 3 buckets. The first bucket is about efficiency with any implementation we should expect from efficiency. Second bucket is about efficacy and where can we improve our efficacy to sell? But the third bucket is all the other values that comes in with improving efficiency and efficacy. What else can we improve? So I start with the efficiency. With every CPQ implementation, you should aim for at least a quarter of improving your quotation turnaround time. That could come from either improvement of the or reducing the sales cycle time or reducing the number of iterations that the sales rep could go with the customer through these different quotation processes. But overall, of course, these numbers are depending on where your starting point is. But overall, you should aim for at least a 25% improvement in your sales cycle and selling faster. On the other side, the efficacy of selling with the CPQ. The first the easier one is getting a volume increase, so I sell a higher volume of quotation and I get more quotation out of the door. So volume increase, but the more difficult one that you should also focus on in the implementation is getting the P part of CPQ, the pricing optimization part. And that's where you should aim for about 20% on average of a higher margin would with the right CPQ implementation. And on the total, there is about potentially doubling the size of the deal. The deal value. But if we are improving the sales efficiency, the sales efficacy, then our salespeople will be happier because they're achieving their quotas. So their attrition rate is going to reduce because they're focusing on doing the things that they can to help and doing, which is driving value to their customers. So with this about 26% as well achieving their sales quota. That means a much better experience for the salespeople. One of the issues with was implementing without having a CPQ is that we cannot control compliance. We negotiated hard to get this price for this customer and we committed to a certain volume. But how can we ensure that the customer have reached a target of volume to achieve the certain price that we negotiated and committed together? And from my experience, this is one of the key value of achieving it to be achieved within the CPQ transformation. And about 50% of my customers have improved their compliance ratio. And of course, with all of that, there is a much better improvement in conversion rate. So there's lots of values that you can achieve with a CPQ transformation. It's making sure you do the right things on the efficiency, efficacy and ensuring the experience is better for the customer, for the employees and other people. And with that, I'm going to pause here to hand over to Anna to take you to the next part.
Anna-Katharina Schmidt: OK, so following now on what Mo explained, what return on invest we can get from a CPQ system. The question is now how do we get it and how do we really go through this end to end journey to ensure that we get the benefits that we want? So here on the page, you see basically in a typical CPQ journey from revenue strategy, definition, of journey mapping, to what capabilities, master data and last but not least, the implementation and deployment of a speaker system. However, where do we see the biggest challenges at the moment with our clients? We often see that the parts about the speaker system that focus around the implementation, the configuration, or the technical aspects are very well planned. However, a lot of times, the business part in the beginning. So actually, what do we want to get out with a CPQ? What are actually our revenue targets? What efficiencies do we actually want to leverage? So exactly what Mo explained before are often not, well, let's say, defined in the beginning. And then a vendor is selected. A CPQ journey starts, but the actual end goal has not yet been defined, which makes the implementation much harder and especially to leverage the potential at the end. Linking this back to the very left bottom part of the page, what we also often see is that after an implementation is done, and we are through the whole journey of all the difficult steps of implementing it, we see that the link sometimes back to the business just stops so that there is no continuous refinement and challenging of how well actually our price is improving. How can we better steer our prices? How do we actually measure the success of the CPQ system? This is often not linked back to the business part, which we believe CPQ shouldn't be just from one point to the implementation and then stop, but really be linked back to the business and continuously improve to make sure that the sales team, the service teams and so on in your business can really leverage the tool and improve not only the process efficiencies, but also really go for the higher revenue reached, the higher profits that you wanted to aim for with a CPQ. So then let us have a look at the most common pitfalls that we see during our project. On this page, you see a couple of very common pitfalls that we see during our client projects. However, since we haven't have not the time to talk through all of them, I would like to pick out four quite important ones which are often underestimated from my perspective and that often come up. So first one is a CPQ software itself will solve all pricing problems. So we often see that companies buy a CPQ software, implement it, and they think that this will solve all pricing issues they have. However, this is a very common pitfall, since the tool itself is only as good in the end as the rules and the logics and the strategy that you put in. So it goes much further than only implementing the software. From our perspective, it's rather an end to end story. Second, one that I would like to call out is the let's say, mystery about product and customer hierarchy data. So often it's it's, let's say, a common view that the customer product data doesn't need to be cleaned up, that the system can simply use what is there. This is true. However, cleaning up and making it easier helps the implementation and most of the time, product and customer data is not only used by CPQ, obviously, it also helps other parts of the business. And if this is not in line and product hierarchies, custom hierarchies are not, let's say, totally clear, then this causes a lot of implementation effort here to clean up the data. A third point very important from my perspective, is that in a lot of CPQ implementations, we see that the part about how to train the teams and the service and sales teams that actually use the software in the end, that the time to train them is often underestimated. However, we believe that it's very important because only if the people that actually use on a daily basis the software and the tool, if they really know not only to adapt to the software and but rather leverage the full potential of it and exactly know what they can do with it and how would how the system and they can learn from it, then CPQ will leverage the full value it can. Last but not least, I mentioned it before the part about success, success, measurement. Often we see that this is basically left out kind of. So after the implementation, it's unclear how to measure actually if CPQ was successful or not. How are we improving prices or not? This can often be done from two perspectives. First of all, KPIs around revenue or profit improvement can be clearly defined and measured on a frequent basis by the teams. And on the other hand, you have the process efficiencies, which can also be defined. So, for example, how many quotes are you able to process? How much is the quoting time for this and many more? So these are only a couple of pitfalls, and we hope that the session helps you for your CPQ implementation or after your implementation to leverage CPQ much better, handing back over to Mo.
Mo Beshir: So we spoke a lot and I about the value of CPQ and how the different pitfalls that you need to be aware of. So to summarize, to make sure you are successful, you need to think about the three dimension. First adapt your operating model. It is not about how many regression relationship that you can build between multiple variables that you can achieve a better value, simplify the operating model, simplify what you want to achieve because it becomes a lot easier for the salespeople to understand and make sure that you can implement that quickly. Refine your quotation process and improve the efficiency of the quotation capability that you want to achieve. So from a business side, the efficacy of the selling and the simplification of the adapter of the model, simplifying the quotation process and ensure that at the last parameter ensures that you have the appropriate quotation tool. If you're in the audience and you're still thinking, should I build my own CPQ or should I use an existing solution? I would say focus your energy on getting the right data model and the right operating model and refining the process right and use the quotation tools available in the market. The market has evolved significantly. The tools come up with lots of out-of-the-box capability that can actually help you achieve both efficacy and efficiency and use the right tool that will fit your need. There are lots of options out there to know which one is the right one for you. Anna and I, we do have a lot of design thinking sessions that we can take you through and help you on how you improve your conversion efficiency or what I call the efficacy of your selling, the quotation process optimization and the process improvement and the improvement of your customer and sales process and the experience that you will have with your customer. And after all today we are in the world of AI and how we can use technology to improve your operation, success rate and what will be the parameters that you should consider in your quotation process. 12 years ago, I used to have a big team in a shared service setting in doing number crunching and coming up with the right model that we should use for a certain deal. Now we can do this out of the box from most of the CPQ solution. And you can achieve that already without having a number of people to just do that part. So happy to talk to you more about all of these. Please leave us a comment in the chat during the meeting. Let us know which area you are most interested in learning more about, and I'm sure Anna and I will be more than happy to talk to you in detail. We're looking forward to hearing from you and potentially working with you. Our contact details are here. Please reach out to us, any one of us, and we'll be happy to have a further discussion. Thank you for joining us and looking forward to hearing from you.