The value add of CPQ over and above the out of the box Salesforce offering for Lead to Cash Processes – ‘A system perspective’

In this blog, I will explain the value additions which CPQ offers over and above the standard Salesforce salescloud offering. I will explain this keeping system as the focal point.

In order to learn CPQ, the knowledge of what CPQ offers in terms of systemic enhancements is vital and should be the starting point. Often clients ask a question – Why should CPQ be purchased on top of standard salesforce offering? The answer to this question can be explained from two different perspectives, process and system. In this blog we will consider the system aspect and try and answer this question.

To start with, I will explain what comes out of the box in Salesforce to execute Lead to Cash Processes.

Salesforce salescloud comes with Accounts, Products, Pricebook, Pricebook entry, Leads, Opportunity, Quotes, Quote Lines, Quote line editor, Quote templates, Contracts and Order. With these objects, out of the box many simple and complex lead to Order (Not lead to cash) processes can be executed including simple pricing, discounts and taxes. I mentioned ‘Not lead to cash’ in brackets because Billing is not included and hence no Lead to Cash. Billing is an add on to CPQ and comes in the billing to CPQ package.

Now, with the understanding of what comes out of the box, let’s analyze the value add of the Salesforce CPQ offering which comes as a separate managed package and is charged over and above Salesforce editions.

  • The ability to bundle a product. Bundling the product means to be able to configure a product. For example, you are buying readymade soups, salads, curries, yogurt and rice individually from a company. Now if this company wants to launch a Lunchbox at a fixed price with one particular variety of Soup, salad, rice and curry included in a lunchbox and gives options to the users to choose one from many soups, salads etc. to create the lunchbox then that is called as product bundling and configuration. This means that the Lunchbox bought by each individual customer looks different. This is a particularly important functionality and is at the core of CPQ and is not available in standard out of the box Salesforce Sales cloud.
    • The product bundling is achieved through many CPQ specific objects like Options, Features, Option Constraints, Product actions

Configuration rules, configuration attributes subscriptions etc.

  • Each CPQ object has a function and most important is the Option object which links the bundled product to the individual product choices. I will get into details of product configuration through an upcoming blog where I will take the lunchbox example and explain how it can be configured
    • Likewise features play a very important role in product configuration. All these CPQ objects are linked to the standard product object via look ups or master detail relationships.
    • Some enhancements are made through introduction of new fields on the standard objects for example, standard product object is

Enhanced with fields like ‘Configuration Type’, ‘Option Selection’, ‘Option Layout’ and Configuration Type’ which are related to requirement of configuration, when should the configuration trigger and how the choices will show themselves to the user and become available for selection

  •  Now, I will explain about pricing. So, with standard out of the box functionality of Sales cloud, simple pricing with discount along with taxes through orders is possible and executed. With the help of multiple variants of pricebooks and declarative methods pricing can be extended to execute some advance pricing scenarios like block, partner discounts etc. Let us see what CPQ does to pricing:
    • CPQ takes pricing to a different level and introduces multidimensional prices and comes with a price waterfall which comes with its own inbuilt system and rules.
    • Salesforce CPQ comes with functionality of maintaining the list price through pricebook and then applying various other types of prices on top of it
    • Various types of pricing CPQ offers is Block Pricing, Cost Plus Pricing, Option Pricing, Bundled Pricing, Percent of total pricing, contracted pricing and the option to manually override prices. If these prices are to be maintained by a simple price book object in standard out of the box salescloud then it is almost impossible to manage and execute these prices concurrently and simultaneously.
    • The way CPQ pricing waterfall is executed in the system is through the combination of CPQ pricing objects and enhancements of standard objects like product. For example, Price Blocks, Price dimensions, costs, Price rules are certain objects through which pricing is controlled
    • If we take an example of execution of subscription pricing, standard product object is enhanced with a subscription section which has fields like ‘Subscription pricing’, ‘%of Total’, ‘%Percentage of total category%, Subscription Type which control the subscription pricing. I will take an example of this in one of my upcoming blogs and explain.
  • There are advance order scenarios in CPQ like splitting of order from a quote and automatic splitting of orders from a quote based on rules. These are not available in Standard offering of salescloud offering.
  • Opportunity renewal process is an addendum to Lead to Cash process. It comes into play when a contract of sale is on the verge of expiry and the current opportunity related to it has to be renewed to get into another sub sales cycle process to affect the contract renewal. This process pretty much is absent in Salesforce standard salescloud despite availability of the required objects. CPQ as a value add brings in the required linkages and automation to fructify this process. This is a big value add in CPQ.
  • Billing is another process which is completely absent from standard Sales cloud. For billing there is a need for CPQ and billing add on which links the CPQ quote, order and invoice and provides automatic trigger to create an invoice based on rules.

I am confident that with the above information you can go ahead and explain the efficacy of CPQ to any client and provide value adds from a System and functionality perspective. We dealt with the process perspective a little bit in my last blog CPQ simplified.

I hope you enjoyed the blog. Your likes, comments and shares will motivate me to keep writing.



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