The Quote to Order processes used by most organisations are typically either based on the product, customer and market knowledge of a few key people or they rely on restrictive and outdated reporting methods based on historical sales data. Whilst this approach may be fine for financial analysis, they do not provide the high quality product, customer or market information that is needed for fast, informed decision making in the front office. Historic sales analysis, even if it does enable drill down detail of product options and permutations, is by definition out of date and only reports on successful sales. It does not provide qualitative information to show why orders were won or lost, sales trends or customer data to show which accounts are likely to generate the highest business volumes. It’s a little like attempting to drive somewhere by using the rear view mirror.
Organisations cannot really plan their strategies for growth purely based on what has happened in the past. Looking toward future sales, analysis of leads and enquiries can be a far more useful indicator of marketing performance. The management of opportunities, potential projects and sales team activity is equally helpful, but not quite real enough to add to the bottom line.
The problem with analysing leads and enquiries is that they are too distant and vague giving no real indication of potential sales. Forecasts from sales people can be equally unhelpful. At best they can be misleading, whilst at worst they can be a complete fabrication. For organisations to derive value from the Quote to Order process, it needs to be more “real” and provide high quality information to enable more informed decision making.
An effective way of doing this is to analyse the sales pipeline at the quotation stage. This can deliver huge benefits to organisations particularly if it is detailed enough to allow drill down into specific product options. This approach provides relevant, real and timely information at an early stage that enables clearer decisions to be made regarding the components that are likely to be required.
This may be an effective way to obtain more realistic information but it will only deliver the required level results if organisations operate direct sales models. The fact that many organisations sell through a variety of channels including direct sales, channel partners, distributors, resellers and sales agents changes the picture and makes the process of gathering data from quotations more difficult. However, with increasing product ranges and complexity, these remote channels now have a greater reliance on the manufacturer for expert technical support and advice at the pre-sales stage. This of course presents an ideal opportunity to gather the required information.
Some organisations are deploying CPQ applications that make it easier to empower their channel partners to be self-sufficient at this pre-sales stage. These systems have been enthusiastically received by channel partners, enabling them to rapidly obtain the support they need and provide suppliers with high levels of key sales data. These systems also enable manufacturers and suppliers to free up valuable internal technical resources to provide more personalised support to customers.
Product Configurators have been around for a while but it is only relatively recently that they have started being used in the selling environment. They provide the front office with high levels of knowledge, flexibility and scalability without the limitations traditionally associated with traditional Bills of Materials (BOM). These limitations become clear as soon as organisations need to add new product variations and options, a process that multiples the number of permutations available from which to select. Managing these lists and preparing detailed, accurate quotations becomes extremely time-consuming and resource sapping. Creating a BOM as products are ordered may at first glance appear to be a practical way to address this challenge. However, in practice it restricts a business to only sell products where a full BOM has been created.