“What is CPQ?” The better question is “What can CPQ be?”

CPQ stands for configure, price, quote. But, while that answer sounds self-explanatory, it barely scratches the surface of what CPQ can help an organization achieve.

Today, we’d like to answer questions that dig a bit deeper, from the basics of CPQ to its various applications, down to the exciting potential it represents.

What is CPQ—really?

CPQ is a solution that guides sellers through the step-by-step process of creating a fully detailed purchase order containing the specific solution elements a customer needs. That’s the “configure” bit, which a seller then uses to accurately price out the solution and generate a quote noting that price, as well as every product or service the customer will receive in exchange for the quoted amount.

What does CPQ allow you to do?

No two customers are the same. Particularly for businesses with complex offerings, understanding a customer’s unique needs and matching them to a solution goes a long way toward building trust and loyalty. But as you can imagine, manually configuring, pricing out, and quoting a unique solution for every customer in your pipeline would be a time-consuming, tedious process.

A CPQ tool allows you to tailor offerings and provide customers with flexibility that helps get deals across the finish line, all while maintaining an efficient sales process. By streamlining and automating key steps in the pricing and quoting process, CPQ can help reduce errors, increase seller productivity, and boost sales performance. But perhaps most importantly, CPQ empowers sellers to deliver a better experience to customers, helping them get the specific solutions they need quickly.

Is CPQ part of CRM?

That’s a great question—and the answer should be “yes.” A CRM, or customer relationship management system, helps sales and marketing teams organize information about individual customers, including contact information and details of past interactions. If your CRM included CPQ capabilities, sellers could configure offers based on a customer’s order history or the needs they discussed in a past call. This would cut down on the back-and-forth and could also help streamline the renewal process.

Is it mostly front-office teams who benefit? Or is CPQ part of ERP that’s used by finance organizations?

CPQ sits in the middle of the value chain, spanning CRM in the front office and ERP in the back office. ERP, or enterprise resource planning, helps organizations manage day-to-day internal activities, the most relevant of which are accounting, supply chain operations, and financial performance reporting.

Sellers can create quotes more confidently if their CPQ system can communicate with the ERP system that knows exactly what supply you have on hand and how much it costs. This minimizes errors in pricing and helps sellers set accurate expectations for when customers will receive their orders.

Accounting teams can invoice faster if they know the size of each deal the moment the quote is produced. And financial projections will always be more accurate when they’re based on nearly real-time information, straight from your CPQ tool.

So, coming back to your first question, “What is CPQ?” It can be so much more than a tool for configuring, pricing, and quoting. It can be the bridge between your CRM and ERP systems, creating an end-to-end sales-to-order process.

Need a CPQ example from the real world? Read how Broadcom eliminated manual processes and streamlined customer relationship management and sales with Oracle CPQ.

Then, download your copy of the 2021 Gartner® Magic Quadrant™ for Configure, Price, and Quote Application Suites to see why Oracle was named a leader for five consecutive years.

Want to see Oracle Configure, Price, Quote in action? Take the self-guided tour below.