A Comprehensive Guide to Smooth CPQ Implementation

November 28, 2023

If you asked every buyer what they cared about most when making a purchase, 9 out of 10 would say, “Convenience.”

72% of buyers say they want their purchase process to be entirely rep-free. Practically 100% of them say they want self-service. And nearly three-quarters say they’re willing to spend upwards of $50,000 in one remote transaction.

The future of B2B sales is hybrid. Thanks to dramatic shifts in buyer preferences and remote-first engagement, what was initially an adaptation to the COVID-19 pandemic will be the most dominant selling strategy in 2024.

In a lot of ways, CPQ software is the one tool that enables today’s complex inside sales environment. That’s why, when it’s deployed correctly, users report 10x faster quote generation, 2x quicker quote-to-cash cycles, 30% decrease in ramp time for new reps, and a 95% reduction in approval times.

The keyword here is ‘correctly.’ Setting up and deploying CPQ (or any software, really) requires additional IT infrastructure, training, integration, and data migration — all of which are time-consuming, complex, and costly.

In this guide, I’ll walk you through the key steps to ensure a smooth and successful CPQ implementation.

Understanding CPQ Implementation Requirements

What’s involved in implementing CPQ

The idea behind CPQ is simple: provide an automated, streamlined method for configuring products, calculating pricing, and generating quotes that are error-free.

CPQ implementation is a lot more complicated. To fully grasp its complexity, it helps to break down the entire CPQ vendor selection and purchase process.

Briefly, here’s the rundown on everything that goes into CPQ implementation:

  1. Select a CPQ vendor based on your current tech stack, team size, and feature requirements
  2. Prepare your team for the changes
  3. Document your product catalog and map out all the possible product configurations
  4. Set pricing and discounting rules
  5. Build review and approval workflows within the system
  6. Work with your vendor or implementation specialist on CRM/ERP/billing integration and data migration
  7. Train everyone so they actually adopt the product
  8. Test it all out to make sure it works smoothly

Since it’s such a complicated and time-consuming process, it’s also an expensive one. You’ll have to assemble a team of stakeholders who weigh in on things like pricing decisions, branding for proposal templates, and other key factors that influence the way your CPQ software works. And, you’ll have to pay an implementation fee or hire a third party, which costs many companies $50,000+.

Why it’s challenging for organizations

83% of sales professionals use CPQ every day. And, they use it for buyers in the most critical stages of the sales funnel — evaluation, proposal, negotiation, and closing.

But, because CPQ is a ‘must’ for most sales orgs, choosing a vendor is one of the most important business decisions.

  • CPQ software doesn’t work on its own. It wouldn’t make sense to use a standalone product that doesn’t integrate with your CRM or subscription management/billing.
  • Not all systems integrate easily. Some require additional customization or third-party software. This makes deployment more complex and time-consuming.
  • Data migration is cumbersome. Your CPQ system needs all your CRM and product data, plus your company’s specific pricing models and rules. Especially at the enterprise level, this means CPQ implementation could take several months.
  • Red tape always gets in the way. Even if it’s a number-one priority for your exec team, sign-offs on budgets and purchase decisions will take weeks on top of the process. Prepping your team also requires you to get buy-in from the side of IT, sales, and finance.
  • Implementation requires cross-functional teamwork. You’ll need members from IT, marketing, finance, sales, customer success, and legal involved. Getting them all to work together while they have busy schedules slows down the process.
  • User adoption isn’t guaranteed. If your sales force doesn’t find value in your new solution, engagement will drop (and take your sales numbers right along with it).

If anything goes wrong during implementation, the implications are huge. A few wrong numbers or missing product configurations means your sales team will end up sending inaccurate quotes. By adding friction on the buyer side and confusion on the seller side, using CPQ will create a bigger problem than the one you sought out to solve by implementing it.

Steps for Successful CPQ Implementation

To avoid losing money on a product that’s supposed to drive sales efficiency, you’ll want to follow these steps carefully:

1. Determine the scope of your implementation project.

First and foremost, you’ll want to know how major your implementation will be. That’s the biggest factor in how long it will take, how much it will cost, and how much infrastructure you’ll have to build around it.

You’ll need to evaluate…

  • how much manpower you’ll need to get this done
  • what budget you have available
  • how many people will actually use the product and at what frequency
  • which teams, in addition to sales, need access to your CPQ system (like support or finance)
  • the complexity of your current tech stack (e.g., do you have a custom-built CRM?)
  • the regulations in your industry — healthcare and finance have specific documentation requirements, for example

A lot of companies make the mistake of mapping these things later in the process, which causes them to miss minor (yet impactful) details that limit the end product’s accuracy and usability.

2. Assemble your implementation team.

Larger companies will also have to outsource the implementation (at least in part). Besides that, you’ll need the input of a few key players throughout the CPQ implementation process.

  • A project manager will oversee everything and maintain active communication between internal/external members,
  • Your product leader will weigh in on product configuration and pricing rules, limitations, and exceptions.
  • The IT/ops manager will consider the companywide impact of implementing CPQ, including compatibility and integration concerns.
  • A sales or revenue leader will speak to the quoting issues your CPQ tool needs to solve. They’re generally the executive sponsor driving the implementation.
  • A finance/accounting expert sets up financial metrics, revenue recognition rules, and performance metrics you’ll track to see if your tool is successful.
  • Your marketing leader will help with branding and logos (e.g., for quotes).
  • Customer success team members will set up renewal management workflows.
  • A legal expert will have to provide counsel on all your contracting and proposal templates.
  • Last but not least, the end users. They’ll be the ones working with CPQ every day. Make sure they have a say in what their ideal solution looks like.

Assign specialized areas to team members to ensure comprehensive implementation without any gaps.

3. Map out your goals and implementation process.

The planning stage of CPQ implementation is where you’ll lay the groundwork. Use this opportunity to clearly outline everything you want to gain with CPQ (e.g., reduction in quotation turnaround time, increased accuracy), and work backward to plan for how your team will get there.

Some considerations here include:

  • Budget planning. Most organizations I come across underestimate the true cost of implementing a complex software product like CPQ. In addition to the per-user per-month cost, you need to account for training, IT support, and, in some cases, a full-on third-party project management team.
  • Timeline development. Use a Gantt chart or a project management tool with timeline features so everyone can see what’s happening. With your team, set milestones and critical deadlines.
  • Risk assessment. Work with your IT, finance, and legal teams to understand mitigation, integration, deployment, and long-term compliance risks.
  • Communication plan. Keep your team and stakeholders updated on progress and changes throughout the implementation process. Consider doing weekly meetings to keep everyone in the loop.

4. Configure products, pricing, and rules within CPQ.

Once you’re set up, you can get to the meat and potatoes of CPQ implementation…the actual tool setup.

As a product leader, you’ll define key product and price characteristics in your system. Usually, this means…

  • Rules configuration — Establish the tool’s rules and logic — including tiered pricing and discount structures — to align with the organization’s specific requirements.
  • User roles and permissions — Give each respective user the appropriate level of access to prevent your sensitive data and eliminate the risk of accidental conflicts.
  • Product selection — Upload your entire product catalog into the system, including all available options and customizations. That way, you’re sure any quote that goes out is for a valid item.
  • Workflow configuration — You can automate approval workflows, renewal processes, and other actions related to your product or service delivery to remove unnecessary friction from the sales process.
  • Templates — Quotes, proposals, contracts, and all your other customer-facing documentation you use will need to be built from scratch or uploaded into the system. In all likelihood, that’s going to get handed off to your marketing team for design and legal/finance/RevOps for the actual content.

Once you’ve set up your product pricing and rules, it’s time to move forward with integrating CPQ into your existing tech stack.

5. Integrate your software with other business systems.

CPQ doesn’t operate in a vacuum. You’ll need to make sure it’s seamlessly integrated with other systems like CRM, ERP, and billing before going live. Integrations are usually done using APIs, which can be simple or challenging depending on your tech stack’s complexity.

  • CRM integration — Your CPQ system needs access to customer information, including contact details and purchase history. And your CRM needs This integration will keep everything synced in real-time.
  • ERP integration — Your organization’s financial system is essential for CPQ, which needs it to calculate pricing and provide accurate quotes.
  • Billing system integration — This one may not be necessary if your billing process runs within CPQ. Still, you’ll need it if invoice generation happens in the ERP or accounting software.
  • Subscription management — Again, if your subscription management runs inside CPQ, you’re good. If it doesn’t, work with the customer success team to manage renewals through a third-party platform.

Depending on the amount of data you need to sync between these systems (and the size of your organization), integration can take anywhere from a couple of days to several months. And through it all, you’ll need to test and validate the integrations to make sure everything is working as intended.

6. Migrate existing quote and pricing data.

Although you’ve set your rules and configurations already, migration ensures data accuracy and consistency. With historical pricing and quote data, you can also perform analyses you wouldn’t otherwise be able to.

You’ll carry out the following processes:

  • Data assessment
  • Data mapping
  • Data cleansing
  • Data extraction
  • Data loading
  • Data validation

This stage is crucial to ensure your CPQ system starts with accurate data, which will make generating quotes and proposals a breeze.

7. Test the implementation.

Once you’re finished, you have a series of tests to run. These are to verify your product’s usability and efficiency. Before the tool goes live, this is the most critical step. If you missed something in implementation, you’ll discover it here.

  • Unit testing — Test the individual components of your CPQ system to ensure they’re functioning correctly.
  • Integration testing — This is to validate API integrations between CPQ and other systems to ensure fast, accurate, and complete data flow.
  • Scenario testing — Run through different use cases and workflows, including pricing scenarios, approval flows, and contracting processes.
  • User acceptance testing — Your team should test the CPQ system as if they were selling to a real customer. Let your sales reps provide feedback about the user experience after using it themselves.
  • Performance testing — Test different loads and conditions (e.g., a complex enterprise contract and a simple small business renewal) to ensure the system can handle your organization’s varied needs.
  • Security testing — Avoid compliance risks by checking your CPQ system’s security measures and addressing vulnerabilities.

8. Invest in training, deployment, and change management.

Regardless of how user-friendly your CPQ tool is (and that will vary from system to system, trust me), you’ll need training for your team.

  • End-user training — Your sales reps and other teams who will use the system need hands-on training on how to operate CPQ.
  • Admin training — You’ll want a few tech-savvy team members with deep knowledge of your organization’s products, pricing, and rules in charge of maintaining the CPQ system.
  • Change management — Any new technology implementation will require you to manage change, so your team adopts it with minimal disruption. This includes communicating what’s in it for them, how they can expect their day-to-day work to change, and support during and after deployment.
  • Deployment — Finally, get your system up and running. Make sure everything is working as expected.

After deployment, you’ll need maintenance, support, and training for new features or team members who join after the fact. Continuous learning and improvement is key here — you want your organization to use CPQ tools to their fullest potential.

Signs Your CPQ Implementation is Successful

When you successfully deploy CPQ across your organization, there will definitely be signs. You’ll see KPI boosts across revenue, sales productivity, and deal velocity metrics. You’ll also notice subjective improvements, like happier sales reps and customers.

Here’s a closer look at the telltale signs you’ve got your CPQ implementation down:

  • Streamlined quoting process. With CPQ automation, you’ll significantly reduce the time it takes to generate quotes. You’ll also ensure pricing accuracy and consistency across all quotes, which will eliminate errors and discrepancies.
  • Shorter sales cycle. You can track sales cycle length over time in your sales CRM dashboard. You can also work backward by tracking lead velocity over the same period. CPQ helps reps move deals across the finish line faster, so you should see a 20%+ reduction in sales cycle time.
  • Higher sales efficiency. Calculate sales efficiency by dividing your team’s total sales output by the resources it costs. With CPQ, you should see a significant boost here.
  • Higher renewal, upsell, and cross-sell rates. If your CPQ works natively with a billing/subscription management system, you should see an uptick in contract renewals, expansion, and revenue retention simply by putting the process on autopilot.
  • Increased data accuracy. No more manual data entry or errors in quotes and pricing! With CPQ integration to your ERP system, all data is synced in real time, ensuring accurate and consistent information across all systems.
  • Happier sales reps. You could survey them, or just pay attention to their conversion rates and overall engagement with their job. CPQ will free them up to focus on selling instead of administrative tasks.
  • Happier customers. With accurate quotes and speedy proposals, you’ll have happier customers and achieve faster time-to-value for both them and you.

Remember, KPIs should be aligned with your organization’s overall business objectives to measure success effectively. In reality, you’ll want to look at your performance before CPQ and after CPQ for more accurate data.

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