Here are some of the challenges you’ll likely encounter when it comes to deploying, using, and managing legacy CPQ software:
High cost of ownership
And that price can drastically change depending on the volume of your product catalog, integrations, and customizations; established workflows, processes, and pricing rules; and total number of seats. Larger organizations will need to set up a CPQ solution that can address hundreds to thousands of dependencies, which can run up costs of $1 million or more.
Depending on the solution, you may need professional assistance implementing a traditional CPQ tool to ensure proper configuration and integration with other key systems, as well as consultation services to get the most out of your investment. If you’re purchasing a CPQ solution as an add-on to your existing Customer Relationship Management (CRM) or Enterprise Resource Planning (ERP) system, you may need to pay an additional 20-30% of your license cost. If you hire a third-party consultant, the fees vary widely and can be charged on an hourly basis.
In addition, some costs will arise as your business evolves and needs change. You may need to add more users, functionalities, integrations, data storage, and support, and these costs can add up significantly over time.
As Tom Murtaugh, Senior VP of Global Business Operations at BigID noted, when evaluating a CPQ tool, “it’s important to know if the CPQ solution can fulfill its promises. The vendor can say that it will save me a lot of money, but can it actually do it? And what’s the price for actually doing it? If you’re saving $700,000 a year, or generating an additional top of line $700,000 a year, but having to spend $300,000 on implementation fees and $100,000 on maintenance services, is it worth it?”
Being able to integrate a CPQ solution with your existing CRM and billing systems is essential to ensure that the data being used is current, accurate, and unified across different systems. The problem is that these different systems are not always interoperable. In other words, they can’t connect seamlessly to each other over APIs and perform bidirectional sync.
When there is a lack of technology integration, sales reps have to switch between tools to gather data or import existing data into their quotes, which is a manual and time-consuming process. And if you’re a large enterprise with complex customizations, third-party applications, and use cases, you’ll require custom integrations to get these disparate tools to work together, which can mean additional labor, cost, and varying degrees of support. Furthermore, any ongoing changes within the system will be more difficult to make once you’ve already built a variety of custom integrations.
Duplication and reduced pricing agility
Managing even a single product catalog or pricing engine can be difficult, particularly for complex products with hundreds or thousands of configurations. With multiple catalogs across CPQ and billing systems, maintaining consistency and changes becomes an even greater challenge.
Product offerings and pricing models change constantly, and sales reps need the latest and most up-to-date product information to create proposals quickly and accurately. If product catalogs are being managed independently with very little uniformity, sales reps may not have the latest information, which can lead to inconsistent decisions, replicated data, missed pricing and discount opportunities, and duplicated effort and costs.
In addition, if quotes generated by the sales team don’t reflect data that exists in your billing system, when it comes time to invoice customers, your finance team will inevitably need to manually reconcile any inconsistencies, resulting in wasted time and resources.
Complex to use and maintain
It’s critical for all teams involved in the sales process to embrace and adopt your CPQ workflows and system. This means you’ll have to train channel partners and sales operations on new capabilities and processes to perform their day-to-day responsibilities. You’ll need the buy-in of your finance teams, so sales quotes can seamlessly become invoices with no discrepancies in billing. And you’ll need your sales team to be extremely comfortable with the CPQ, in order to ensure efficient quote generation.
Many traditional CPQ systems, however, are not intuitive and may be difficult to customize and integrate into your current quote-to-cash process. Therefore, teams will need time to onboard and get trained, and, oftentimes, you’ll need to hire outside experts or consultants to help your team get up and running.
If you push to go live without sufficient training and onboarding, it can be a huge barrier to success. Users may feel overwhelmed and have a hard time transitioning, resulting in costly mistakes and resistance to using the system. In addition, if product and pricing rules are not set up correctly or if any integrations into existing systems are not fully vetted, it can lead to increased overhead and maintenance. As a result, the time to value and time to market gets exponentially longer, if not impossible to achieve.
Long time to go live
Getting a traditional CPQ solution off the ground is no easy feat and can require significant time, expertise, and resources. As mentioned before, some CPQ software can take months to successfully implement and integrate with your existing business technologies, as it plays such a crucial role in your company’s core revenue engine.
Furthermore, it needs to be automated and tested before the roll-out, and end users need to be onboarded and trained. When you take all of these steps into consideration, it can take anywhere between 6-25 months (or more) to deliver most traditional CPQ solutions.
This blog post is an excerpt from our eBook "The Definitive CPQ Buyer's Guide for SaaS." To read more, download the full guide here.