Optimizing complex sales: Choosing between an ERP variant configurator and a CPQ configurator

Enterprise Resource Planning (ERP) systems have long been the backbone of organizations, streamlining internal processes, managing resources, and enhancing overall productivity. ERP variant configurators, embedded within ERP systems, play a vital role in managing complex product structures and configurations.

Advantages

• Global integration: Configurators integrated into ERP systems seamlessly integrate with other modules within the ERP software, allowing for closer connectivity with other operational processes such as inventory management and production planning.
• Cost: Opting for ERP configurator modules proves to be a cost-effective choice, particularly when the company is already using ERP for their operational needs.
• Simplicity for basic configurations: For easy configurations and basic customization needs, an ERP variant configurator provides a suitable solution without the intricacy of a CPQ system.

Disadvantages

• Steep learning curve: ERP systems, including their configurators, tend to have a steeper learning curve due to their complexity, requiring extensive training.
• Limited configurator options: ERP configurators often lack specialized features that are found in dedicated CPQ solutions, which is limiting for businesses requiring complex configurations.
• Limited external accessibility: While ERP systems are excellent for internal operations, their configurators are not user-friendly when it comes to external collaboration, making them less suitable for distributors and end customers.
• Limitations in dynamic pricing: ERP configurators can have limitations on dynamic pricing, which is a big disadvantage for businesses requiring complex pricing with specific real-time sales rules.

CPQ or Configure, Price, Quote solutions, on the other hand, prioritize user-friendly interfaces and external collaboration, catering to the needs of distributors and end customers.

Advantages

• User experience: CPQ configurators are designed to present the most complex products and projects in the easiest way, focusing on a user-friendly interface for both internal sales teams and external partners.
• Specialization: Unlike ERP configurators, CPQ is specialized in optimizing the intricacies of the sales journey by automating configuration, pricing, and quoting processes. The software and its features are perfect for businesses that rely heavily on complex and configurable sales.
• Independent accessibility: CPQ configurators can operate independently of ERP systems, providing distributors and end customers with direct access to configure products, generate quotes, and place orders.
• Designed to be integrated: CPQ solutions seamlessly integrate with other systems, facilitating data management and supporting sales processes.
• Dynamic pricing: CPQ configurators often incorporate dynamic pricing engines that take multiple variables into account to generate real-time pricing based on specific customer configurations.

Disadvantages

• Difficult internal integration: Since CPQ solutions are not embedded in an ERP system, they may lack the depth of integration with internal processes that ERP configurators do offer.
• Cost: Specialized CPQ solution can be costly, particularly for small and medium-sized businesses. Subscription, implementation, and maintenance costs may pose a hurdle.
• Complexity: For some businesses – especially those with less complex sales processes – the intricacy of a CPQ solution might be excessive. Over-specialization can make the system challenging. In this case, we’ll offer a Seeing Is Believing or SIB project so users can get a hang of the CPQ configurator before committing to a full implementation.

In today’s business environment, customer centricity is essential. That is why CPQ configurators emerge as the preferred solution. Their emphasis on user-friendly interfaces and external accessibility aligns with the needs of manufacturers, distributors, and end customers, facilitating seamless collaboration.

While ERP variant configurators excel in managing internal complexities, the competitive edge now lies in the agility and accessibility that CPQ solutions provide.