Danny Lim
Digital Solution Provider
An incorrect or late quotation is not only a slowdown in the sales process. It might impact profitability, erode customer trust, and cause operational problems after the sale. As companies are having more customised products, project pricing and customer-specific agreements, this issue is becoming more prevalent. However, numerous companies still rely on spreadsheets, manual quotations, and fragmented systems to create quotations.
A CPQ system that integrated with ERP will help to eradicate these inefficiencies by synchronising quotations with current operational and financial data.
Let’s explore how Synergix ERP Software can embed CPQ into a single ERP platform to enhance the accuracy of quotations, automate the process of approvals, and improve coordination between sales, finance, procurement, and operations teams.
Why Traditional Quotation Processes No Longer Work
The past 10 years have actually seen quotation processing grow significantly more complicated. Customers’ orders are getting more sophisticated: Sales Orders are tailored to each customer, customise project-based pricing models,…. Meanwhile, consumers are increasingly demanding quicker answers, clear pricing and predictable delivery schedules.
But many organisations are still using antiquated quotation workflows, which rely on spreadsheets, email approvals, and manual data entry. Their salespeople are signing agreements without proper insight into the actual business situation. These prices don’t represent the latest procurement costs. Stock may not be available when quoting. Other operational factors which the sales department may not be aware of can affect delivery lead-times.
These gaps are especially hard to handle manually as a business grows.
Quotation mistakes in industries like manufacturing, engineering, wholesale distribution or technology services can lead to a domino effect throughout the business. A sales sales mistake can ultimately impact procurement planning, production scheduling, project costing or customer satisfaction.
This is where ERP integrated CPQ systems offer great operational value.
Read more: How ERP in Sales Drives Revenue Growth for Businesses
What is a CPQ System?
CPQ is an acronym for “Configure, Price, Quote“. The system aims to streamline the process of automatic quotation generation and to standardise product configuration, pricing logic, discount controls and proposal generation for businesses.
The real power of CPQ comes into play when it’s embedded into ERP software.
A standalone CPQ solution may have to rely on manual updates or isolated databases. In many instances, the business still depends on finance teams to check pricing, or warehouse teams to check stock availability prior to an approved quotation.
A CPQ system that integrates with ERP will remove these silos by seamlessly linking up QA workflows to real-time operations and financial data.
The system captures accurate data automatically from the ERP database rather than having to validate the data from different departments. This enables sales people to create quotations that are based on the real-time stock level, approved customer pricing, procurement costs, tax calculations, and production lead times.
This not only generates quicker quotations, but, more importantly, more reliable business commitments.
Traditional vs Modern CPQ Quotation Process
How ERP-Integrated CPQ Benefits Businesses
Improved Quotation Accuracy
Businesses are challenged with ensuring that prices are consistent while protecting margins.
A lot of companies are still using spreadsheets created by specific departments or sales people to manage pricing. This leads to inconsistencies over time within the business. There may be variations in cost calculations, discounting, and/or cost calculations for similar sales.
ERP-integrated CPQ enables a centralised pricing model that brings standardisation and control to the quotation rules across the organisation.
If, for instance, supplier prices change because of currency fluctuations or other changes in procurement, the new pricing information is automatically applied to the quotation calculations. This will help businesses keep their margins at healthy levels without underquoting.
Most significantly, management is more effectively governed over approval and discount policies and without unnecessarily slowing down the sales process.
For instance, Synergix AI Invoice Processing feature can automatically extract, validate and process invoices, quotations,…with 95% accuracy. This is especially useful for companies that work with:
- Customised products
- Project-based quotations
- Multi-item sales proposals
- Customer-specific contract pricing
These quotation processes tend to rely on manual coordination and personal experience if a smart software is not being used.
Faster Quotation
In a lot of industries, speed is a crucial element in closing new deals. Customers are demanding same day quotes and quicker response time, particularly for repeat orders or on-going projects.
However, many companies remain stuck in a cycle of back-and-forth between business units to agree on quotes before completing the pricing.
Much of this administrative work can be automated with ERP-integrated CPQ.
Sales team do not have to ask the warehouse for any inventory anymore, cross-check pricing spreadsheets and wait for approval in a long email chain. The ERP system automatically validates operational data in real-time, and predefined approval workflows route quotations as needed.
This not only lower response times, but also lightens the load on finance, procurement and operations teams. According to a research by McKindsey, organisations that digitise sales processes can reap substantial productivity gains and eliminate process inefficiencies.
Better Visibility Across Departments
Many growing companies have sales pipelines, procurement planning, inventory forecasting and financial reporting processes which are not interlinked. This means that operational teams typically respond to the orders they have, rather than anticipating them during the quoting phase.
An integrated ERP system enables the consolidation of all sales, procurement, financial, inventory and operational planning in one place. This will increase the integration of departments and enhance decision making across the organisation.
For instance, procurement teams can predict demand in advance from the level of quotations, and finance teams can get a head start in margin visibility before deals are finalised.
The more transparent the operation is, the more valuable it is as the business grows and transactions increase.
Which Industries Benefits Most from ERP-Integrated CPQ
CPQ and ERP integration are most effective for businesses that have complex operational processes, has diversified business operations and pricing structures.
Integrated ERP systems are used by manufacturing & engineering companies to address the customised production plannings, material costing, and BOM-driven pricing. Wholesale distributors can enjoy live inventory tracking and personalised pricing arrangements. Tech companies can simplify bundled pricing models such as subscription, implementation and support contracts.
Project-based businesses, like building-construction and professional services companies, also benefit from greater accuracy in their quotations, by combining procurement, costing and project forecasting directly into the quotation process.
In all these industries, the shared goal is to cut down on manual labour and increase the precision of the work.
Read more: 6 Ways to Boost Wholesale and Distribution Sales
The Future of Quotation Management
The quotation management market continues to shift quickly and evolve with businesses investing in digital transformation efforts.
In modern AI-powered ERP software, automatic invoice processing, intelligent cashflow, AI reconcillation agent, and automated financial reporting are becoming more common. Customers’ self-service capabilities and real time operational visibility are also becoming more important to businesses.
Quotation management is not just a business administrative process anymore for many businesses. It has now become a strategic role that has a direct impact on profitability, customer experience, and operational efficiency.
Conclusion
A CPQ system integrated with ERP software can take companies beyond hundreds of spreadsheets, stand-alone systems, and manual quotation processes. Linking sales activities to real-time data of inventory, procurement, finance, and operations help to improve quotation accuracy, enhances internal coordination, and boosts customer satisfaction rate.
Synergix ERP Solutions assists businesses to streamline the process of quotation management and manage pricing more effectively within a single ERP system that have 35+ years of experience in Singapore ERP market.
