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Expert Advice for Medium and Midsize Businesses

What CPQ Can Really Do For You: #6 - Improve the Deal Approval Process

Andy Pieroux
Founder and Managing Director, Walpole Partnership

In many organizations, getting a deal approved can be a long and complex process. In the B2C world, we’ve become accustomed to instant decisions and fast turnaround. For example, I recently upgraded my iPhone to the latest model because I’m on the Apple iPhone Upgrade Program. If you haven’t seen it, you get a credit agreement for your phone, pay in installments, and then a year later can trade in the old phone for the latest and greatest.

In the course of the upgrade, I had to be credit-checked. While the Apple Business Team consultant who assisted me sent my contract through for authorization, I waited for what felt like forever. While I wondered what would happen if I was rejected, I started thinking whether I could afford to buy the phone outright. Or, should I switch to a different manufacturer? Then again, maybe I’d just keep my old phone.

Finally, the screen on the credit terminal lit up and a beautiful green tick appeared. I was approved and could upgrade my phone. Guess how much time had elapsed? Six…whole…seconds….

While I get excited about getting a new gadget, it made me realize just how much doubt and uncertainty a delay before approvals can cause. In a B2B sales environment, an approval delay can open the door for competition to get in. Or, it can be the excuse a customer needs to put off a buying decision. Often with these deals, the delay isn’t six seconds but it could be hours, days, weeks or even months.

Good news! CPQ reduce or eliminate these delays.

In Configure, Price, and Quote (CPQ), approvals generally mean one or more triggers (sometimes called ‘Reasons’), are conditions under which authorization must be sought by the salesperson to proceed. This could be approval for discount, for expedited shipping, or any other element of the deal that’s non-standard.

Approvals via CPQ can be faster than using manual approaches. With one system containing the quote or the deal and the set of integrated triggers, people who give their authorization to a deal can be notified electronically and can sign it off very simply. They either follow a link into the CPQ system, or reply to an email notification that can put the decision back into the system. Cutting down the lag on paper-based systems, or non-integrated email approval is a big step forward for many organizations.

Secondly, in order to make a decision, an approver generally needs both information about the specific item they’re being asked to consent to and contextual information about the deal itself. For example, a pricing manager is asked to agree to an extra discount, but doesn’t want to do this for public-sector clients. It’s clear they need to know the client sector to make a decision on price. CPQ approval systems can help provide this information by presenting a user/role-specific view of critical information on screen, or include key data elements in an email notification. Good CPQ implementation design will identify exactly what information approvers will need so they can find the facts out quickly and efficiently.

A third advantage applies to clients who have complex approval processes. With a manual system for handling approvals, a salesperson can feel like their deal has gone into a black hole when it’s been sent off for authorization. They could spend valuable hours chasing approvers to sign-off on the deal.

A good CPQ system handles parallel and serial approval chains, providing visibility of the deal’s progress to everyone involved, and updates when a deal is approved or rejected at any step to avoid wasting time.

But wait, there's more!

The beauty of this systemized approach to approvals extends to audit and compliance. A CPQ system gives a robust audit trail of who made what decision, when, and why. Having these records in a tight system can be the difference between passing or failing an audit. If your organization is subject to stringent requirements like Sarbanes-Oxley or recent accounting changes like IFRS15 for bundled contract revenue recognition, a rock-solid audit trail is invaluable.

Just because organizations can create complex approval chains in CPQ, it doesn’t always mean they should. When gathering requirements for a new system, it can be tempting for everyone to want a say in a deal. When people get nervous because they fear they won’t know what’s going on, the control freaks take hold. We’ve seen systems where this complexity wasn’t managed out of the design, and the result was a tangled web of approvals that slows the business down.

At least in CPQ, this complexity is visible. With the right techniques it’s possible to track and manage the bottlenecks in the process. Our own 'Future-Proof CPQ'  approach covers improvements in this area, and it can really help ‘un-stick’ the business when approvals are still taking too long.

Approvals form a vital part of the CPQ benefits story that we’ve been telling. If you want to get a big ‘green tick’ on your deals in the fastest and most compliant way possible, you probably need CPQ.

What does your organization have in place to provide error-free orders? Learn more in our our new ebook.

* Originally published on walpolepartnership.com.

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