Service-Aware Quoting: Benefits of Integrating Subscription Service Information with CPQ
The market offers a wide range of CPQ (Configure, Price, Quote) solutions that streamline the creation of complex quotes, including multiple products, add-ons, quantities, and discounts, while also producing great-looking paperwork.
However, most CPQ products are ‘horizontal’ — meaning they are not tailored to specific vertical markets — and primarily designed for new product sales.
This poses a challenge for cloud and communications service providers.
Services such as Internet access, virtual server or SaaS subscriptions have lifespans, measured in years. They begin with initial sale and are followed by a series of changes, such as upgrades, add-ons, relocations, and, eventually, service cancellations. Ideally, each of these events should start with a quote, receive customer approval, and seamlessly transition into fulfillment.
This is only possible when CPQ engine has access to the current subscription service inventory, in other words it must be (subscription) service aware.
Nextian CPQ & Sales is an example of service-aware quoting engine, built specifically for cloud and communications providers.
Service-aware quoting offers numerous benefits for both internal operations and customers, as outlined below.
Consistent Sales Experience
When quotes include line items such as Change, Move, Cancel, Re-Term/Re-Rate (along with existing target services), all customer requests can originate with CRM opportunity and quote.
This enables a consistent operational: prepare a quote, generate paperwork, approve internally and request customer signature.
Furthermore, the ability to mix line items allows larger transactions to be consolidated into a single quote. This reduces paperwork and signature-related hassles, enhancing the customer experience—particularly for large-volume wholesale or enterprise businesses.
Accurate Sales Forecasts
When quotes include line items such as Change, Move, Cancel and Re-Term/Re-Rate it is easy to forecast net numbers of each quote and obtain accurate overall forecast. For example, a service replacement is a composite operation consisting of new and cancel, involving two distinct services. The net impact of a replace quote can be determined as follows:
| Service | Service MRR | Net MRR | Net MRR | Service Charge |
|---|---|---|---|---|
| B-INTERNET-100-00001 | $199.00 | (199.00) | $51.00 | $15.00 |
| B-INTERNET-100-00002 | $250.00 | 250 | $51.00 | $10.00 |
| Total | $51.00 | $25.00 |
Individual quotes can then be aggregated into a more holistic funnel:
Seamless Flow into Orders
When CPQ is integrated with order management supporting Change, Move, Cancel and Re-Term/Re-Rate (in addition to New), the following flow is enabled:
Opportunity/Quote → Customer Signature → Order
For each quote item an order item can be created, ensuring 100% quote-to-order accuracy. The process can be also automated with:
- Order creation upon receiving a digital signature (e.g., DocuSign).
- Creation and starting delivery workflows for each order item.
Easy Financial Reporting
When the following flow is captured end-to-end in a single system:
Quotes → Orders → Subscription Services
Financial reporting is simplified because:
- Net numbers are available at the beginning of the process (in the sales funnel),
- It is easy to compare what was sold (quote), delivered (order) and billed (service),
- Numbers are updated and available in real time,
- Revenue realization can be easily determined based on individual workflows progress.
Enable Online Purchases
Creating opportunities for online purchases is superfluous (there is no paperwork and online transactions are excluded from the sales funnel). Therefore, for e-commerce portals and APIs it is best to begin the process with order creation.
The financial reporting will still work, and the order-to-service will flow the same way as for CPQ-originated orders.
Conclusions
Implementing a service-aware, integrated CPQ and ordering system that supports operations like service upgrades, add-ons, moves, and other changes helps cloud and communications providers:
- Provide best internal and customer experience with a consistent, uniform and error-free process for all operation types.
- Ensure 100% quote-to-order accuracy and seamless, automated flow to order delivery.
- Easily generate accurate sales forecasts and financial reports.
Nextian is a vendor of Quote-to-Cash (QTC) software for cloud and communications helping providers accelerate growth and increase customer lifetime value. Our CPQ & Sales module enables providers to:
- Quote subscription services, traditional ‘widget’ products and add-ons with recurring, one-time and usage-based charges,
- Create quotes and generate paperwork for service changes, replacements, re-terms, re-rates, cancellations and other line items,
- Determine pricing automatically based on contract term lengths, renewal types and other criteria,
- Automatically obtain pricing from third party vendors & marketplaces,
- Easily apply and approve markups and discounts,
- Create multiple quote variants and generate paperwork with a single click and more.
Contact us today to find out how we can help you!
