The Digital Selling Journey – A Small Recap

  • Most Companies went digital with their back-office digitalizing their “Order-to-Cash” process in the ‘90s through the Implementation of ERPs
  • A decade later, with the rise of CRMs, several went beyond that and digitalized their front-office by extending their digital reach through the “Lead-to-Cash” process
  • Between then and now, a lot of effort and dollars have been invested in integrating the front-office with the back-office and harmonizing the processes and data end-to-end
  • However, a number of companies still have a gray area in their process, with a particular pocket of inefficiency that has been very difficult to digitalize and integrate properly: the “Configure, Price, Quote” area (CPQ)
  • The opportunity is simply this – to help B2B companies digitally transform their selling capabilities through two very closely related service offerings:
    • a) Assessing and changing the CPQ portion of the selling process itself to make it more efficient
    • b) Assessing and redefining the companies’ portfolio to make it more appealing to customers by offering configurable products or solutions and the underlying technology to enable this

The Digital Selling Journey – More Details

  • On the CPQ Process (The CPQ Gap):
    • Very often, this portion of the process is done outside of the front- or back-office tools, relying on manual documents, spreadsheets with obscure formulas (which are hard to maintain, and have security issues), email-based approval workflows, and in the best case in poorly integrated custom systems with limited scalability
    • More often than not, only the results of this process are entered in the systems of record as final quotes, but the whole process intelligence and data model on which it is based, as well as its audit trail, is missing
    • From a procedural perspective, this may seem a small part of the process, however it is a critical one since a mistake here can have a huge impact on the profitability of the operation, the customer satisfaction and your top and bottom lines
  • On the Offering Portfolio (Solution Selling):
    • The market trend over the past several years has shifted from a “product” sales portfolio model to a “solutions” sales portfolio model
    • This change of paradigm entails bundling products and services together to provide the customers with a full solution that covers all his needs, instead of piecemealing their purchase into multiple disconnected operations, and the bundling of these products and services oftentimes requires modeling those solutions, which is where inadequate technology can be a big hurdle for this internally, and a deterrent altogether externally
    • From a strategic standpoint, this can be a game-changer for your company (catching up on what the leaders are doing) or for your industry (breaking ground by offering a solutions-oriented portfolio no one else is offering)

The CPQ Gap – The Ugly Truth

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The CPQ Gap – Why You Need to Act

  • The odds are that by not having this portion of your Lead-to-Cash process properly automated and integrated, you are “leaving money on the table” or directly missing out on some business opportunities due to:
    • Lack of control, tracking, and visibility of the process; loose business and pricing rules; non-scalable tools; inability to properly assess profitability for each operation in a reliable way; overall inefficient, manually intensive process as everything is an exception
    • Customers abandoning the sales process due to taking too long to get a quote or it being too cumbersome, losing their appetite to buy or allowing other competitors in the process due to long wait times
    • Limiting yourself in making your product or services portfolio as broad and as appealing as it could be, and thus not becoming the partner of choice of your customers by differentiating from your competitors in this critical aspect

Solution Selling – The Portfolio Re-Definition

Standard Products or Services

– Normally pre-defined with a “what you see is what you get” approach

– No variants are offered for a product, but other similar products may have/offer the desired features

– One-to-one relationship between products and combination of characteristics

Configurable Products

– Normally a “top-down” hierarchical approach

– Customers select a product and make choices regarding variants of specific predetermined components

– Pre-Defined, finite number of variants

Configurable Solutions

– Normally a “bottom-up” or “outside-in” hierarchical or non-hierarchical approach

– Customers freely select a number of products or services that go together according to their unique needs and become a solution

– Almost infinite number of variants and combinations of products and services, only limited by the needs of the customer

Solution Selling – Why You Need To Act

  • The ability of your business to offer the customers what the they really need has become increasingly fundamental
  • With customers that have more access than ever to information and knowledge, their ability to be more precise and discerning is ever increasing to the point in which sometimes they know as much as you do about your industry and the products and capabilities offered by all competitors
  • In order to cater to those well-educated customers, you need to be able to offer a portfolio that combines and balance products with value-added services that your customers can freely choose from, in order to assemble a solution package that makes sense for them and their unique needs
  • Your ability to offer these kinds of solutions will heavily rely on being enabled by the right technology, which enhances the customer experience while allowing you to be in control of the selling process as well as the overall profitability, top and bottom-line impact of each deal

The Digital Selling Journey – Some Good News

  • As Business Suites have evolved, better and more robust features are available, and you can now properly integrate your front- and back-office end-to-end, INCLUDING the Configure, Price, Quote portion of the process, depending on your industry-specific business needs
  • Also, as you redefine your portfolio offering, the ability to allow the customers (on their own or through a guided process) to select the right solution for them can be notably enhanced by these tools
  • As an SAP customer, you have multiple alternatives depending on where you are today, and where you want to be tomorrow:
    • Traditional Variant Configuration (VC) à S/4 HANA (on-prem)
    • Advanced Variant Configuration (AVC) à S/4 HANA (cloud and on-prem)
    • Configure, Price, Quote (CPQ) à C/4 HANA Sales Cloud or C/4 HANA Commerce Cloud
    • Solution Selling Configuration (SSC) à Focused Business Solution
    • ConfigAir (Configuration Visualizer) à Third Party Software Partner
    • Best-of-Breed solution, integrated with your front- and back-ends

The Digital Selling Journey – Opportunities

  • As companies run the digital race, the requirements and needs can be very different based on a number of factors
  • You will need to determine whether your need is to catch up with your competitors, be a step ahead of them or dramatically change the industry landscape and complete outrun everyone in the marketplace
    • Offer product variations to your customers while keeping absolute control of the characteristics and combinations possible
    • Offer tailored solutions to your customers jointly designing those and advising them during the design process
    • Offer your customers the possibility of designing their own solution, without intervention on your end other than to validate the final solution validity (and check opportunities for up-selling/cross-selling) and approve the final price
  • You should create rules to automate the process to the furthest possible extent and define exception situations to focus your efforts on those cases

The Digital Selling Journey – The Right Fit for You

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The Digital Selling Journey – How Can We Help?

  • Echelon can partner with you to:
    • Assess your current process and identify efficiency opportunities
    • Assess your current portfolio and customer offerings and identify market/offering opportunities
    • Discuss with your which type of solution would work best based on your current needs, your industry’s trends, and your plans for the future
    • Support you during a software selection process
    • Reengineer your process or enhance/rethink your product portfolio offering
    • Implement the right SAP solution, or help you integrate any non-SAP solution into your SAP landscape
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