NetSuite CPQ Implementation

In the fast paced world of complex product sales it is very important that  the sales team be efficient in configuring both products and pricing.  Now Oracle Netsuite offers NetSuite CPQ to help manage complex products with greater accuracy and higher reliability. Now you can quickly create quotes and orders using your complex product and pricing logic. 

NetSuite CPQ is the only native Configure, Price and Quote solution built on the NetSuite platform. This is a Built for NetSuite application which has a distinct advantage over other modes of applications like Hybrid or Integrated solution. To explain the difference among the three, Built for NetSuite solution resides in NetSuite and uses the same database as of NetSuite. Thus it is real time. Hybrid solutions are Web applications put into the native NetSuite. Because Hybrid applications add an extra layer between the source code and target platform, they may perform  slower than the native or the web version. The Integrated solution connects the third part application through middleware which may have delay in transmitting the data in batches.

All said, most importantly, for manufacturers, it goes beyond the Configuration, Pricing and Quoting features of some tools, to provide the additional functionality of dynamically building the Bill of Material of the configured product and creating a Manufacturing routing in NetSuite to streamline the process.

Plative has a lot of experience with CPQ implementations. We work on Salesforce CPQ and NetSuite CPQ and have done our own custom development in this area. What follows is our advice on how to have an effective NetSuite CPQ solution. We encourage you to  consider these 5 things when undertaking your next project.

  1. Defining Project Success 

Define performance metrics for meeting your business goals, such as: 

  • Pricing accuracy – What percentage of quotes you currently produce have pricing errors.  What is the value of reducing those to zero?
  • Faster Quote delivery – How long does it take to turn around a quote to a prospect currently?
  • Faster Configuration of product – Who needs to get involved in configuring a solution for client requirements. Can this knowledge be built into a system of rules?  Can we reduce the amount they need to spend on each quote or order?
  • Quicker time to production and material planning – How much time does the team spend converting spreadsheets to production ready work orders or POs? Can you reduce the time to start production
  • Increased ROI in quote -to cash. What do the above improvements mean to your bottom line? In this way you can measure the impact of your CPQ implementation. 
  • How many possibilities of quote line items and pricing your company might have and how is the company willing to maintain those parameters on a short and long run?
  • How will your quote results align to shipping, production and financial results?
  1. Identify Key pain points

Whatever the initial reason for the implementation may be , many times the list of requirements grows during the project, often losing sight of the primary CPQ goals. Create a list of the main pressing points that need to be addressed.

Identify current pain points both by functional area within the business, such as Sales, Procurement, Production, Support, and from the perspective of your end customer. 

  1. Assess business process and form a core CPQ implementation team

As the CPQ tool spans across multiple functions from Sales to Manufacturing it is important that all the business use cases are well documented along with the desired outcome. 

Build a steering committee of all the departments involved, as failing to do so will likely lead to gaps and inefficiencies in the configuration. For example the CPQ should not have a product configured and priced which doesn’t give the manufacturing team all the information it needs for its own processes. 

  1. Have data which is robust, and accurate.

As the CPQ is a data driven tool so it is extremely important that quality and accurate data is used for configuring the product. Start by identifying the data owners who will be responsible to maintain the data.  Part Numbers, Matrix Items, Engineering Rules, Pricing Rules, BOM incompatibilities, and more need to be captured. 

See that no obsolete or irrelevant data will be used as over a period of time this data will turn into a knowledge repository in the system for quickly providing configuration and pricing guidelines for similar products.  The over emphasis at solving for edge cases can stall an implementation. 

It’s very important that you focus your organization on what you should be building, and not on special or unprofitable use cases that shouldn’t be available to the sales team. 

  1. Configure Well defined Rules

Once you have gone through the above, you’ll be able to work through the process of building the configuration rules. 

The goal is to create well thought out rules to be configured in the system.  Fewer rules is always better.   The rules should offer the flexibility to create the desired product combinations and yet be simple for the user to manage in the system. 

Identify use cases to test for so that the rules will not lead to creation of impossible configurations to sell and produce. Then focus on use cases that ensure the rules can create already validated configurations.

Written by

Bhavesh Naidu

Business Analyst & Senior NetSuite Consultant

Let's Get Started