Configure, price, quote (CPQ) software originally began – and is still often thought of – as simply a sales proposal solution, an application populated with proposal templates, product and pricing configurations, workflows, reports, contacts, and accounts.
But that has changed in recent years, and in a very big way. Because, for many companies, the meaning of CPQ is now enmeshed with their supply chains as the product and pricing configurations being “moved” (figuratively moved, as in “sold”) in every sale are:
A clear sign of what’s needed next in the supply chain (what needs to be restocked).
An indication of where the overall supply chain might be headed. I.e., are customers looking for add-ons to existing products, or buying new ones? Depending on what you’re selling, a trend in these choices could mean customers have serious concerns about supply.
An opportunity to improve inventory management as administrators can present products/services they need sold, and quickly, to the sales front-line while waiting for the supply chain to open up on the backend.
New supply chain crises, new inventory management techniques
SMB clients of ours that have leaned into our CPQ application for the past 10 years or so have recognized its potential as far more than simply a sales quote generator, though that is, and always will be, the core of its functionality.
They have, in many cases, been using their CPQ solutions as “mini CRMs” where they track the most crucial component of their customer relationships: sales (as well as using CPQ to store contacts and accounts, sales performance data, and more).
But now many of them are also using CPQ’s product and pricing configuration engine as a de facto front-line inventory management system. To be clear, however, it requires some data integration as CPQ is typically not natively connected to standard inventory management systems.
What it IS connected to are the sales people moving that inventory. The product and pricing configurations are, in most cases, determined by an administrator who knows what needs selling, and in what geographies, and to what market segments, etc.
Coordinating with backend inventory management systems gives a sales admin the insights required to populate sales people’s CPQ interface only with products for which there is a steady supply of foundational materials. In hardgoods markets, for example, this can help ensure fewer supply chain management issues on the manufacturing side.
Solving supply chain issues starts with sales data
When it comes to fixing the supply chain crisis and better managing overall inventory, every data set matters. And if there’s a more important set of data than what’s currently selling/not selling at the very end of your supply chain (where your goods and services meet actual end-users and consumers), we’d like to know what it is.
The role of CPQ in your supply chain and inventory management processes can not be understated. As we move forward fixing global market issues, knowing what is in demand and selling in our own markets will be more and more critical. And the source of that knowledge can be found in almost every signed sales proposal.
