Why you should use a CPQ to optimize your ERP process

CPQs are new software applications that are becoming increasingly popular with companies that sell complex products and services.

Their mission is to simplify and automate the process of creating quotations, which are often time-consuming tasks that are prone to human error.

If you are not familiar with the term CPQ and would like to know more, you are invited take a look at our article on the subject.

CPQ - ERP, a complementary team

The first objective of most companies is to increase their sales.

As much as ERP contributes to the efficiency of the organization, and thus its operational profitability, ERP does not aim at boosting the sales volume.

One way to increase sales is to provide sales people with tools that allow them to prepare quotes and price offers more quickly. Responding to more customer requests and generating more quotes will mechanically lead to more sales, especially when you know that 50% of customers place orders with the supplier who responds first to their request.

In other words: CPQ helps generate the revenues that will finance the operation of your ERP.

Coordinated processes

Once the CPQ is integrated with the ERP system, the entire processes are harmonized.

Business processes such as sales, pipeline and quotation management are managed by your CPQ system, while internal processes such as inventory management, production, fulfillment and invoicing are managed by your ERP system.

The combination of the two software systems results in reduced data entry times and therefore lower operating costs. In addition, teams that only use ERP in their daily work (sales administration, purchasing, production) have access to up-to-date and error-free CPQ data.

However, it is possible to have a CPQ system and an ERP system coexisting without setting up connectors. Yet, transferring data from one system to the other leaves room for human error and takes time for teams to re-enter data, which is a low value-added task. With an integration, data movements in both directions are automated.

Traditionally, CPQ and ERP can be connected in both directions:

  • From the ERP to the CPQ: transfer of cost data, purchase prices and machine constraints ect.
  • From CPQ to ERP: transfer of sales data (quotes, orders)

CPQ & ERP integration benefits?

When done correctly, integrating your CPQ and ERP systems can provide key benefits, including:

Time saving:

Integration saves time for employees as they no longer have to perform redundant, manual tasks. Second, it saves time between the sale closing and the order going into production by eliminating the data transfer step. These savings allow customers to make purchases faster and employees to focus on what’s important: selling and producing.

Reduced human error:

CPQ has countless great features to ensure that the salesperson is selling a product that your company can and will deliver. Moreover, all information related to this sale will be automatically transformed in your ERP. This avoids any errors that could have been caused during the creation of a quote or during manual data entry in the ERP.

 

Full view of customer tracking:

If your salespeople can’t easily see where their customers’ orders are in the fulfillment process or if they have unpaid invoices, do they have a complete view? CPQ-ERP integration fills this gap.

 

Better alignment between teams and systems:

Selling a new product? Updating your purchase prices? Too often, unconnected systems have disparate data. Integration ensures that everyone is working from the same information to improve alignment and deliver better results, faster.

The ERP – CPQ combination is a great example of what technology can do for different industries. Given the benefits it provides, it’s a safe bet that it will become the norm in a few years.

You are a player in the packaging industry and you are looking to optimize your sales processes? HIPE is a CPQ specifically designed to meet your needs.

To know more about how we can help you :