Best Practices for Integrating CPQ Software with ERP Systems

CPQ (configure, price, quote) software streamlines the sales process by automating the creation of accurate product configurations, pricing, and quotes. ERP (enterprise resource planning) systems manage and integrate core business processes, including finance, supply chain, and operations, providing a unified view of business data activity.

To function properly, CPQ relies on accurate information about possible product configurations and bundles, pricing rules, inventory availability, deliverability, and customer data. The ERP system needs this information too, along with order data for fulfillment, pricing history, and approval workflows for invoices and payments.

TL;DR: They need to work together for a smooth sales and order fulfillment process.

In this article, I’ll break down my best practices for CPQ-ERP integration and how to optimize the process for maximum efficiency and accuracy.

Benefits of CPQ-ERP integration for optimizing the quote-to-order process

Functionally speaking, software integration works by exchanging data between two (or more) interrelated systems that serve different functions. The purpose is to create a single source of truth and make the handoff between information and processes seamless and efficient.

Integrating CPQ and ERP is no different. When CPQ and ERP systems communicate, they provide a centralized platform for capturing customer order details, managing product and pricing information, and ensuring accurate order fulfillment.

By integrating CPQ with ERP, you can achieve the following benefits for your business:

• Faster and more accurate quotes, with no duplicate data entry
• Improved order accuracy and sales efficiency
• Enhanced buyer experience with accurate pricing and error-free product configuration
• Real-time visibility into inventory levels and availability for better decision-making
• Better inventory management and forecasting with data synchronization between CPQ and ERP systems
• Streamlined order fulfillment process, from quote creation to invoicing to payment
• Faster quote-to-cash cycles by eliminating manual processes

If you integrate it with your website or customer portal, it also enables self-service ordering. Since the two can share order info without any sales rep input, there’s no need for manual order entry and processing. Customers can reorder when they need to through a seamless process. Considering around 87% of B2B buyers prefer self-service ordering, this gives you a competitive edge.

Best practices for CPQ-ERP integration

Whether you want to harness the power of CPQ for manufacturing, distribution, or any other industry, there are a few important rules of thumb to follow for successful CPQ-ERP integration.

Let’s dive in.

1. Planning and scoping

In the initial planning and scoping phase of the integration process, you need to set a solid foundation for the project.

Your first (and most important) step is to clearly outline the goals of the integration, such as improving data accuracy, reducing errors, and enhancing sales and order processing efficiency. Define what data elements will be integrated (e.g., products, pricing strategies, customers), the expected outcomes, a budget, and the timeline for completion.

Then, determine the internal and external stakeholders involved in the project. In general, a CPQ implementation team includes representatives from sales, finance, IT, and customer service departments. An ERP implementation team may also include representatives from other departments, such as supply chain and ops.

Before diving in, it’s also crucial to conduct a thorough analysis of your existing systems and processes to determine any potential roadblocks in the integration process. This will help you anticipate and address any compatibility issues before they become major problems.

2. System assessment

Once you’ve mapped out your goals and internal resources, you have to address the technical specifications of CPQ and ERP systems to ensure they can work together seamlessly. This includes evaluating the software versions, underlying technologies, and supported integration methods (e.g., APIs).

Check if the CPQ and ERP systems support common integration frameworks or tools. Look for built-in connectors or third-party integration platforms that facilitate smooth data exchange between the systems.

To spot data quality issues, conduct a comprehensive assessment with your current systems. Look for common data issues like duplicates, incomplete records, outdated information, and inconsistencies. Use data profiling tools to analyze the accuracy, completeness, and consistency of data.

3. Data mapping and integration strategy

Using your pre-prepared outline of all the data points you want to connect (namely product, pricing, and customer data), dreate a detailed map of data entities and fields used in both CPQ and ERP systems.

Identify overlapping data points such as customer information, product details, pricing models, and order data. When selecting a CPQ software and shopping for an ERP system, compare the data models of both systems to understand their structures and relationships. This way, you know of any differences that need to be reconciled during integration.

Then, develop detailed data mapping rules that specify how data fields in the CPQ system correspond to those in the ERP system. Include transformation rules for any data conversions needed, such as unit conversions, date formats, or code mappings.

Finally, assess your company’s data volume and complexity. For high-volume data or complex integration scenarios, robust methods like middleware might be necessary. For most situations, APIs provide the advantages of real-time data exchange, flexibility, and scalability.

Important note: Choose integration methods and tools that will scale with increased demands. That way, you won’t need to overhaul your current tech stack for something more capable when you grow your business beyond a certain point.

4. Testing and deployment

When evaluating the effectiveness of CPQ and ERP software together, use test scenarios that cover all aspects of the integrated systems, including data flow, functionality, and performance. Include typical use cases, edge cases, and failure scenarios throughout the quoting process and order fulfillment cycle.

Next:

• Allow end-users to test the integrated systems in a controlled environment. Gather feedback on usability, functionality, and performance to ensure that the integration meets business needs​.
• Use feedback from user acceptance testing to identify and resolve any issues or concerns raised by users.
• Evaluate how the integrated system performs under heavy loads (load testing). Test for system stability, response times, and performance bottlenecks to ensure the system can handle peak usage.

Before full-scale implementation, conduct pilot integrations with a subset of data to test compatibility and identify any issues. Test the complete integration flow from CPQ to ERP and vice versa. And make sure to use realistic data and scenarios to simulate actual business operations.

Consider deploying the integration in phases, starting with a pilot phase involving a small subset of users and data. Gradually expand to full deployment based on the success and feedback from the pilot phase. And schedule the deployment during periods of low business activity to minimize disruption.

5. Change management

User adoption is a critical success factor in CPQ-ERP integration. To facilitate smooth user adoption, create a transition plan and provide adequate training to users on how to use the integrated system.

Start by conducting a training needs assessment to identify the specific skills and knowledge gaps among employees. Use the results to develop training materials, and use those materials to demonstrate the benefits of the integration, such as time savings, error reduction, and enhanced data accuracy.

To drive success faster, you can offer hands-on training sessions where employees can practice using the new system in a controlled environment. You can also hold workshops and webinars to provide detailed demonstrations, answer any questions employees might have, and teach them how to get the most value out of the system.

Most CPQ and ERP vendors offer training programs and resources to help with the transition. Depending on how large an investment you’re making into these systems (i.e., how big your company is), this can include on-site training, online courses, and even dedicated support teams.

6. Monitoring and maintenance

Once the implementation process has run its course, deploy monitoring tools that can track the performance of the integration in real-time. Tools like Splunk, New Relic, or Dynatrace can provide detailed insights into system performance, data flows, and potential bottlenecks.

Create dashboards that display KPIs for the integration. Look at data transfer rates, error rates, system response times, and overall system health. Use this information to proactively identify and resolve any issues before they impact business operations.

For ongoing improvements and regular maintenance, you can’t overlook employee feedback. Since they’re the ones using the integrated system day-in and day-out, they should be the primary source of information on whether your implementation strategy was actually successful.

However, you should monitor data quality and perform periodic data reconciliations between CPQ and ERP systems on your own as well.

Examples of CPQ platforms with ERP integrations

While there are hundreds of different CPQ platforms out there, not all of them are designed to integrate with the ERP workflow. There are also CPQs designed specifically for certain industries, like high-tech and SaaS, healthcare and medical devices, or manufacturing.

Here’s a look at some of the best CPQ platforms that integrate with ERP, which ERPs they integrate with, and which type of businesses they’re best for:

Salesforce CPQ

Salesforce CPQ is one of the best-known product configuration and quoting tools out there. It’s a cloud-based SaaS tool developed by Salesforce, specifically for companies using Salesforce CRM.

Its top integrations are:

• SAP S/4HANA
• Oracle E-Business Suite
• Microsoft Dynamics 365
• Sage Intacct

Salesforce takes a traditional approach to the configuration and quoting processes, making it a fantastic option for teams already running on Salesforce Sales and Marketing Cloud. User adoption is generally faster, since they’re already familiar working within the same UI.

Oracle CPQ Cloud

As with many other areas of enterprise software, Oracle has a powerful tool in this space as well. Oracle CPQ Cloud is a SaaS product that’s built to work with virtually any ERP on the market, including 20 of the world’s most prominent.

Its best integrations include:

• Oracle E-Business Suite (for managing the entire sales cycle and quote-to-cash process)
• Oracle NetSuite (for managing sales, finance, and operations)
• JD Edwards EnterpriseOne (for manufacturing, distribution, and asset-intensive industries)
• SAP ERP
• Microsoft Dynamics 365

Beyond just ERP integration, Oracle CPQ also works well with various CRMs, pricing and billing solutions, and distribution systems (in addition to its own). This makes it a great choice for mid-to-large enterprises that want to consolidate their tech stack to just a few vendors.

SAP CPQ

SAP CPQ integrates tightly with SAP ERP systems, providing a unified platform for managing complex product configurations, pricing, and quoting processes.

The deep integration with SAP S/4HANA enables seamless data flow and real-time updates, making it easier to manage complex products and dynamic pricing strategies. And with SAP ERP ECC (Enterprise Central Component) integration, users can access comprehensive order management features, including accurate pricing, availability checks, and order processing.

While it also integrates with third-party vendors like NetSuite and Dynamics 365, features like real-time data visualization and advanced variant configuration make it a top choice for businesses using SAP systems.

Configure One CPQ

Configure One is a CPQ for enterprise and discrete manufacturers, large equipment companies, and engineers. It offers an extensive set of features for handling complex configurations, pricing, and quoting processes.

Product configuration details from Configure One CPQ flow into your ERP system, ensuring accurate BOMs that reflect customer requirements, every time. With the system’s integration API, it can connect to any ERP, PLM, and CRM system.

It also supports ecommerce and customer self-service — buyers can customize products according to your ERP’s and CPQ’s real-time product availability and pricing rules. They see an accurate price right away, so you increase sales and efficiency while giving your customers a more frictionless buying experience. 

Conga CPQ (formerly Apttus)

Conga CPQ is well-regarded for its seamless integration with a wide range of ERP systems, allowing businesses to automate pricing, quoting, and contract management while ensuring data consistency across various platforms.

If your team runs on Salesforce, you can purchase Conga CPQ from the AppExchange. Since it’s built on the Salesforce platform, it offers easy configuration and customization through clicks or code. By extension, it integrates well with ERP products that fit nicely into the Salesforce ecosystem.

Vendavo CPQ

Vendavo CPQ is a platform that integrates with ERP for large manufacturers and distributors, plus CRM integration with most top vendors. Guided selling and rule-based recommendations help your sales team offer the right products and services to the right customers at the right price.

Since Vendavo is a cloud-based solution, it integrates well with other software, like Salesforce CRM, Oracle EBS (and other ERP systems), Microsoft Dynamics 365/CRM, etc. It also supports direct integration with ecommerce platforms, which is a huge plus for businesses looking to expand their online sales channels.

Infor CPQ

Infor CPQ is a manufacturing CPQ that works perfectly alongside its own ERP platform. However, it also integrates with Dynamics and several other leading third-party products through API connectors and custom coding.

Its features — like 2D, 3D, and augmented reality configuration, specing, quoting, ordering, and BOM creation, CAD automation, and extensive customization options — streamline the handoff between engineering, marketing, sales, and manufacturing for vendors of customized products.

Experlogix CPQ

Experlogix CPQ enables sales reps to quote customers in Salesforce and Microsoft Dynamics CRM and 365 Sales. It then sends them to production through ERP integration for a completely streamlined quote-to-manufacture process.

Features like 2D and 3D image compositing, automated BOM generation, and real-time pricing and discounting make Experlogix a fantastic option for contract manufacturers and other businesses selling complex products.

Mitigating potential CPQ-ERP integration challenges

Let’s look at some of the challenges you might face when integrating their CPQ and ERP systems, and how to mitigate them.

Data inconsistencies

One of the main challenges in CPQ-ERP integration is ensuring data consistency between systems. Discrepancies in product data, pricing, and customer information can lead to errors and inefficiencies.

To avoid this, implement robust data validation and cleansing processes before and during integration. Establish clear data governance policies and use automated tools to synchronize and validate data in real-time.

2. Integration complexity

Especially if you’re considering a large-scale CPQ-ERP deployment, integrating the two is remarkably complicated. This is especially true if they use different data models and architectures. Of course, this complexity can lead to delays and increased costs.

It’s always recommended to choose integration tools and methods that align with your business needs, such as APIs or middleware solutions. Engage experienced integration partners to ensure a smooth and efficient process.

3. System downtime and disruption

During the integration process, there is a risk of system downtime which can disrupt ongoing business operations.

It’s best to develop a phased deployment plan to minimize disruption. Schedule integration tasks during off-peak hours and ensure a robust rollback plan is in place in case of issues​.

4. User adoption and training

Employees may resist adopting the new integrated system due to unfamiliarity or perceived complexity.

Create a comprehensive training program and involve end-users early in the process. And use change champions to promote the benefits of the new system and provide ongoing support and training resources.

5. Security and compliance

Integrating two systems can expose data to security vulnerabilities and compliance risks. For example, sensitive customer or pricing information may be shared between systems, increasing the risk of data breaches.

To mitigate this, ensure that both systems comply with industry security standards and regulatory requirements. Implement robust security protocols, such as encryption and access controls, to protect sensitive data.

Despite those challenges, integrating CPQ with ERP dramatically improves business efficiency and the customer experience. For more tips, check out my guide to smooth CPQ implementation, or read our reviews and comparisons to help you find the right platform for your business.