One of the challenges in describing CPQ to people unfamiliar with it is that its capabilities seem to shift depending on the role of the person you’re talking to. If it’s a salesperson, it’s a tool to increase selling productivity and shorten the sales cycle. If you’re a sales manager, it’s a tool for guiding up-selling and cross-selling. If you’re concerned about customer experience, it’s vital to wringing out mistakes from orders and making sure B2B customers are getting the products and services they need in a frictionless way.

cpq makes finance happy tooThe strengths are different for everyone – which is why CPQ can seem a little like a shape-shifting solution.

Throw one more group into the crowd of people who see CPQ through a unique set of lenses: finance. These people may seem like an afterthought to your front-line sales team, but they have a vested interest in making sure that sales is bringing in enough money to hit bottom-line goals.

Without CPQ, and without tight hands-on involvement from sales management, sales people can rely on discounts more than they should to close deals. This puts pressure on margins – especially when the discount offer turns the deal into something that’s not profitable. When that happens, it puts finance at odds with sales management, who should have applied the brakes to the deal. Then, sales management is at odds with the salespeople involved in the deal for relying so heavily on discounting to get the signature. Your company may have a signed contract, but no one ends up happy.

CPQ can avoid this scenario. It enforces approval guidelines and draws a line on discounting – go too low, and the automatic threshold configured into the solution prevents the proposal from being generated. These “guardrails” help sales stay within profit parameters and disrupts the chain of conflicts that happens when discounts are managed poorly.

That’s just one area where CPQ serves finance’s purposes. Noted analyst Denis Pombriant pointed out in an “Enterprise Irregulars” column last year another scenario in which finance benefits from CPQ. He writes:

“…Integrating CPQ with compensation provides the finance group a window into the pipeline that has not existed before. While the aggregate pipeline numbers can be developed from more traditional sales reports, linking CPQ with compensation provides an easy way to peer into the revenue mix in time to make any needed adjustments.”

The idea of connecting CPQ with other solutions within sales and marketing makes sense – but only if CPQ is there in the first place.

So, if you’re in sales, and you’re lobbying your bosses for a CPQ solution, you may want to talk to finance and help them understand that CPQ is a tool that can make their lives much easier as well. And if you’re in finance and the sales team isn’t clamoring doe a CPQ solution, it’s in your selfish interests to turn them into CPQ advocates to help bring the advantages CPQ bestows on finance to you while making them more efficient at selling. It’s a win for everyone.

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