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Configure Price Quote (CPQ) software is a term used in the business-to-business industry to describe software systems that help sellers quote complex and configurable products. 'Configure, Price, Quote, or CPQ, is software that helps companies accurately define the price of goods across a huge and constantly changing spectrum of variables.
CPQ software aggregates these variables, which in turn allows companies to configure products or services in the most optimal way (i.e. Bundling, upsells, etc.), price them according to costs, competition and local economic factors, and quote a customer the absolute best price possible in accordance with all of the above factors.' An example could be a maker of heavy trucks.
If the customer chooses a certain (the base frame of a motor vehicle), the choice of engines may be limited, because certain engines might not fit a certain chassis. Given a certain choice of engine, the choice of trailer may be limited (e.g. A heavy trailer requires a stronger engine), and so on. If the product is highly configurable, the user may face, which means the rapid growth of the complexity of a problem. Thus a configuration engine is employed to alleviate this problem. Contents.
Configuration engines The 'Configure' in CPQ deals with the complex challenges of combining components and parts into a sellable product. There are three main approaches used to alleviate the problem of combinatorial explosion:. Rule-based truth-maintenance systems: These systems were the first generation of configuration engines, launched in the 1970s based on research results in going back to the 1960s.
Notable implementations are and 's Variant Configuration Module in and Oracle's Cloud CPQ integration with Salesforce.: These engines were developed in the 1980s and 1990s. They can handle the full set of configuration rules to alleviate the problem of combinatorial explosion but can be complex and difficult to maintain as rules have to be written to accommodate the intended use. Compile-based configurators: These configurators build upon constraint-based engines and research in. This approach compiles all possible combinations in a single distributable file and is agnostic to how rules are expressed by the author. This enables businesses to import rules from legacy systems and handle increasingly more complex sets of rules and constraints tied to increasingly more customizable products. The concept of, of which CPQ is a component, describes how compile-based configuration can further be leveraged to address most of the problems related to product configuration for business employing. Benefits of CPQ CPQ software simplifies & speeds up the configuration, pricing and quotation of complex & customized products.
The software helps sales teams come up with optimal product configurations based on customer requirements. The process of performing engineering calculations, evaluating suitable product alternatives & finally generating the necessary commercial documentation is fully automated in CPQ software. This process reduces errors & boosts sales productivity. The risk of missing opportunities due to insufficient time to respond is reduced. Quotes become more accurate. Knowledge about product configuration is captured in the form of rules assisting the retention of crucial product & process knowledge, mitigating the risk of knowledge drain.