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Expert Advice for Medium and Midsize Businesses

4 Lessons from CPQ Failures

At Oracle, we’ve seen nearly every big shift in the configure, price and quote (CPQ) landscape. Even though much has changed in this fast-paced ecosystem, we see several constants across the industry. Too often, a small-to-medium business (SMB) leader will try to repurpose existing tools to brute force their way through internal challenges or try to use CPQ to push their company up the maturity scale. This is quite common when a business brings on a new leader seeking to drive immediate change.

The desire for immediate change, while understandable, often leads to hasty decisions. When it comes to choosing a new CPQ vendor, “hasty” typically means searching for minimal licensing costs and rapid deployment, without thinking through the vital nuances of implementation. Many CPQ vendors compete on low cost or promised features without truly shaping a solution that meets the specific challenges of your organization. We know how painful that can be for SMBs, because we’ve had to step in with a proven CPQ solution after businesses have already wasted countless dollars, staff hours, and political capital on implementing the wrong CPQ solution.

Here are just a few examples:

1. The Real Costs of Scope Creep

A leading communication company spent $3 million for an initial build of a CPQ solution, yet later learned they needed additional functionality to support expanded product lines. Their CPQ vendor revised its development roadmap, but then later invoiced an additional $4.5 million for the costs of implementation and completing a single product over the course of three years!

After losing 36 months and spending $7.5 million, the business still did not have a CPQ solution that could support its full business. Vendors often use scope creep to vastly increase the hard costs of an implementation over years of development, rather than creating  a tailored solution from the start.

Don’t trust in promises to meet your needs. Choose a solution that offers the features you need from the start, backed by a track record of satisfied customers.

2. Niche Companies Can’t Scale

While it’s easy to assume a startup or niche CPQ vendor will provide excellent customer service or focus solely on your business because you’re an important customer, this rarely results in success. Startups often struggle with limited resources, and the natural scope creep of CPQ implementation can often overwhelm the small teams of niche vendors. Or if a small vendor tries to grow with additional clients, your business may lose priority.

An IT tech provider rushed through CPQ evaluation and selected a small vendor based on low costs and promised customer service. After three years and 200 months of employee effort, that project failed and the entire leadership team was fired. While they almost repeated that mistake by choosing another niche vendor, luckily someone in the organization realized the huge implications of choosing the wrong CPQ solution and approached Oracle.

You shouldn’t bet the transformational possibilities of a new CPQ solution on the development of a small vendor and their software. Too much is riding on the success of an implementation to rely on a small vendor tying their fortunes to your business.

3. Pilot Projects Mean a Lack of Planning

After 18 months of running a pilot project with a small, inexpensive vendor, we stepped in to help an industrial manufacturer build a tailored solution. Small vendors often pitch proof of concepts that use a limited feature set to solve a small problem for a minor division of a company. POCs aim to sell a full solution by proving they can solve one small piece of your complete business challenge.

But this vendor couldn’t even make the pilot work. A lack of planning and comprehensive strategy meant the chosen pilot didn’t function and couldn’t integrate with the organization’s software. Once the business rescoped the project for a global solution, they approached us to blueprint a solution based on a complete view of their requirements, data ecosystem, and engagements.

Ultimately, pilot projects waste valuable time and resources while failing to prove the actual capabilities of a vendor. Don’t trust in a proof of concept to demonstrate a vendor actually understands your business and can deliver a successful project. 

4. Quit While You’re Ahead

Businesses often try to extend the lifespan and functionality of their legacy enterprise resource planning (ERP) systems by augmenting configurator functionality. While this seems to make sense, it usually results in disconnected processes that don’t operate in concert, delivering a terrible user experience and exaggerating business inefficiencies.

The sales staff of a high-tech manufacturer developed more than 50 complicated product parameters that required extensive training and knowledge. This created huge efficiency problems and required heavy investment of both time and money.

When addressing a problem or trying to revamp systems, you can’t afford to ignore sales user experience. SMBs need to define and govern the full quote and sales process within an integrated system, not one that generates further inefficiency.

Oracle CPQ Cloud Sets a Roadmap Before You Start

Each of these four failed CPQ implementations had one thing in common: these businesses failed to select a vendor that worked to understand their comprehensive business needs and plan a CPQ solution tailored to solve their challenges. Many businesses have gone through the same pain of a CPQ failure and relied on Oracle to help them salvage the project and find success.

Through that work, we’ve developed a proven method to put SMBs on a healthy path to CPQ success called the Breakthrough Opportunity Analysis (BOA). It’s a comprehensive two-day workshop that gathers all business stakeholders to completely map out current processes and systems to deliver a holistic understanding of the quote and sales process.

After leading hundreds of these workshops, Oracle has helped businesses of all sizes identify opportunities for improvement and engage every function associated with the sales process. At the end of a BOA, your business has a sensible path to a CPQ solution designed to meet the exact needs of your business, not just the lowest impact to your balance sheet.

Let us help you find the path forward from a failed CPQ experience. Find more information below:

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