Quoting Options for Cloud and Communications Services in Salesforce

Salesforce provides a wide range of quoting solutions, from basic built-in CRM quoting features to the Salesforce CPQ (Configure, Price, Quote) package, and specialized third-party apps available on the AppExchange.

When it comes to quoting subscription-based cloud and communication services — like virtual hosting, internet access, colocation services, and cloud applications — the process is far more complex than quoting traditional, one-time “widget” products.

These services require additional pricing dimensions, such as contract terms, service address, contract type, and more. Moreover, quoting must accommodate modifications to existing services, including adding or removing features, upgrades, relocations, and other adjustments.

Requirements

Quoting cloud and communications subscription services differs in many aspects from traditional ‘widget’ quoting and has the following additional requirements:

Requirement	Description
Quoting service changes and cancellations	The life cycle of a service starts with a new quote; however once live, a service can be changed, upgraded, moved to a new location, renewed, etc. Therefore, all operations other than quoting a new service require existing service selection and access to service inventory.
Recurring, non-recurring and usage-based charges	Services have recurring (typically monthly) as well as non-recurring charges, such as installation fee, cancellation fee, early termination liability and others.
Additional quoting parameters	These may range from simple items like service term (e.g., 12 vs. 24 months) to more advanced logic like distance from a wire-center. In general, subscription quoting will have more parameters than ‘widget’ quoting — the latter is usually just product, quantity, discount and price-book selection.
Dynamic pricing	Pricing based on static price-books (e.g., product X from the wholesale catalog) may need dynamic adjustment by rules based on additional quoting parameters.
Pricing obtained from third-parties	Important for resellers sourcing products form many vendors and applying markup on top of vendor pricing.
Capturing additional information	This may include items like connector types, billing & shipping addresses, etc. This information usually determines how a service is delivered and becomes important at the order-processing stage. Still, it must be present on the quote/order paperwork and requires customer signature.
Additional sales funnel details: new revenue, lost revenue, uptick, downtick, compression, etc.	For some service operations, such as replacing one service with another, some revenue is lost and is replaced with new revenue. The difference constitutes an uptick or downtick. Sometimes a service is renewed with lower recurring cost leading to revenue compression. These KPIs are typically measured on orders, however they can also be used on opportunities to obtain a very accurate financial forecasting. Click here for more information on Subscription Service KPIs.

Implementation Options

Option	Considerations
Customize standard Salesforce CRM quoting	Pros: No extra license cost Flexibility Ability to reuse standard Salesforce quotes a paperwork PDF generation Cons: Considerable customization effort Best fit for: Simple business requirements
Use Salesforce CPQ	Pros: Industry standard Robust functionality (guided process, approvals, markups & discounts, paperwork generation, etc.) Cons: Additional license fees Not ideally suited for cloud and communications Best fit for: Go-to solution if all requirements can be met out-of-the-box
Use a third party, industry-specific package available from AppExchange	Pros: Most likely a specialized package will closely meet business requirements Cons: Additional license fees Best fit for: Go-to solution if all requirements can be met out-of-the-box, pricing is right, and Salesforce CPQ is not a good fit
Integrate with an external quoting engine	Pros: Short time to market (quoting is already up & running) Cons: Building integration between two systems (cost, maintenance) All limitations of the existing quoting system will be kept (most likely there will be a problem with quoting operations other than new service) Best fit for: An established quoting system is already in place, staff is trained Quoting systems is used by multiple partners Very large price-books or other data required for quoting, such as location databases with millions of records

Nextian offers quoting for subscription services built as an extension of the standard Salesforce CRM quotes:

A screenshot of a Nextian quote in Salesforce showcasing new service requests alongside a re-term and re-rate of an existing service — A sample Nextian quote showcasing new service requests alongside a re-term and re-rate of an existing service.

Additional Considerations

So far, we’ve been focusing on opportunity management, quote generation and which implementation path to choose. However, quoting is only a part of quote-to-cash, and no decisions should be made without looking at the big picture:

How is current service information incorporated into quoting of service changes, cancellations and moves? Where is the service inventory stored?
How does an opportunity flow into an order?
Is quoting available on-line to customers and resellers?

Conclusions

Quoting of subscription-based services is way more complicated than the traditional ‘widget’ quoting model. Salesforce offers multiple quoting implementation options and choosing the right one may be a challenge.

Nextian has extensive experience in building comprehensive quoting solutions for cloud and communications providers, including CRM/CPQ systems, integration with third-party pricing engines, customer portal e-commerce for product pricing and ordering, and reseller partner portal solutions for supporting channel sales.

Contact us today to find out how we can help you!