Myths, Pitfalls and Realities of Configure Price Quote Software
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1 Myths, Pitfalls and Realities of Configure Price Quote Software. Salesforce.com User Edition Buyers We all know that enterprise software is difficult to select and deploy. CPQ however has an equally bad, if not worse, reputation for failed deployments. The CPQ market: 1. Is littered with failed CPQ deployments 2. Total final costs for implementing solutions are far more than projected 3. Implementation is far more difficult than is portrayed in vendor demos Why? The single largest reason for failed deployments is outdated software architectures. Read this invaluable guide for salesforce.com customers who want to buy Configure Price Quote (CPQ) Software. This paper highlights commonly held market myths and advises how to expose the pitfalls before you buy your CPQ software. APTTUS Corporation apttus.com US: +1 (650) EMEA: +44 (0)
2 Avoiding Outdated Software Architectures Many CPQ products were architected and designed for old software models. Today s demand for increased functionality requires the original architecture of the products to be capable of facilitating these additions. Just like remodeling on an old house, if you neglect the fundamental infrastructure, and choose not to upgrade foundations, pipes and take care of unseen termites not visible to the homeowner, the final remodel may be cosmetically appealing with its bright new paint, but the structures and critical components beneath this polished surface will let the house down and result in costly re- pairs. Building an entirely new house ground up with a modern architecture and addressing all of today s code needs will ensure an environment that is efficient, flexible and dependable. Old architectures result in a need to have custom code workarounds for insufficient functionality, often using up time and resources when implementations are done. This results in extended timeframes and additional costs. Old architectures typically require substantially more IT infrastructure to make the product work which becomes expensive. Tool sets to administer the products are outdated and therefore difficult to use and result in extended timeframes. These limitations ultimately render the tool useless to the user and implementation becomes abandoned. The Myths Summarized Myth Reality CPQ applications are easy use and simple to set Most CPQ applications were not architected to deal with the required complexity, and the administration of the applications is a nightmare. Automating the quoting cess alone is sufficient achieving your Quotes usually end in a contract. Quotes and Con- tracts are intertwined and you need both solutions to have a successful overall deployment. There are no additional other than what the quoted CPQ applications can have many hidden costs. Know them APTTUS 2
3 AppExchange CPQ tions all work the same with They don t. Native salesforce.com applications be- have in a very different way and they should be your preferred option if you like the Salesforce platform. It is worth paying a for CPQ Most systems can provide you with what you need. As long as the system can deliver your requirements and are architected well, go low cost. Implementations are and time to value is As a result of flawed architectures and the need for custom code, implementations can be long and ex- pensive. CPQ applications are easy to use and simple to setup Most CPQ applications were not architected to deal with the complexity of today s quoting requirements. The result: difficult ad- ministration and unintuitive functionality. Often CPQ applications look easy to set up and use. Unfortunately this is not the reality. The tools may look easy to use, but end up taking many more clicks, introduce user interface complexities and are kluged. Set-up is even worse. Tools are not architected properly and most often custom code needs to be written, even just to set-up a document template. The fact is, most CPQ applications were designed many years ago for very different types of use cases. And as the vendors have realized that their tools had inadequate functionality, the functionality was added along the way without an architecture that was designed to facilitate the added functionality. The result: the application set-up is highly complex. Salesforce customers have come to expect administration tools that are accessible for non-technical users. The reality is that simple user interface tools for drag and drop are often not available, and some providers require engineers to write code in order to set-up the application. In fact, for one provider, three separate languages are required to set-up the application. This means you need to have engineers who must learn proprietary programming languages. The leading indicator for this deficiency is the implementation price and duration APTTUS 3
4 It s simple: if implementation costs are high and the implementation is long, the tool is a custom-coded solution that will be difficult to maintain and will not be flexible to your needs. Make sure the up tools are and drop Get the vendor to create a quote or proposal from scratch during the demo. No pre-configurations and no reuse of old templates. This will expose the fact that even to set-up a template, custom code is needed. Give them the quote template at the time of demo and ask them to model it. Make sure your team does need to learn new Ask about needing software languages C++, Java, Java Script, Perl, Python, HTML, SOAP, and WSDL or specifically proprietary languages unique to the tool which needs to be learned, eg. BML, BMQL. Ask about There are many failed deployments. Do a google search on the provider and type in lawsuit. Speak with tomers who If they will not volunteer one, do a google search and type in the provider s name and lawsuit. Automating the Quoting process alone is sufficient to achieving your objective Almost all quoting processes result in a contract or need to reference contract data. Make sure you have full contracting capability otherwise you will still end up with manual workarounds. Quotes, once accepted by your customer, require a contract to complete the process. Often the quotes themselves need to access contract data, especially if it is an installed base customer to whom you are selling further products or services APTTUS 4
5 Without a contract system, the user will manually be accessing contract data and the automation objectives of the project become mute. Many CPQ providers offer a screen with contract data, but these are not true contract management systems. Make sure there is a true contract management system available as a seamless, end-to-end tool. Ensure that CPQ tool also complete Lifecycle ment Without contracts you will not have a view into the installed base. Also for net new customers, you will make the quoting process more efficient, but leave the contracting process inefficient, defeating the purpose of the project. Make sure the provider has at least 30 contract management deployments so that the contract management product is mature. There are no additional costs other than what the provider has quoted me CPQ applications can have many hidden costs. Make sure you understand all of them. There can be many hidden costs for CPQ products and implementations. Often what you are seeing in a product demonstration is not what you are being quoted for. Implementations can be scoped very narrowly, and when you go through it, all the extras start appearing, greatly increasing deployment costs. And finally there can be many other options that you are unaware of, that become important later and will need to be paid for. Some of the hidden costs to watch for are highlighted below: Functionality Does the quoted license reflect what you saw in the demonstration? Vendors have dif ferent editions. A Basic Edition will have different functionality to a Professional or Enterprise Edition. Make sure you know what you want. If you want Mobile, you will probably need an Enterprise or Unlimited Edition APTTUS 5
6 Sandboxes Are sandboxes included? If not, how much are they? A very common extra. Upgrades Did you see how upgrades are applied? If a solution is not Salesforce native, upgrades will affect your Salesforce integration no matter what they tell you. Ask them to contractually commit to the upgrades for no cost. Data Consistency How do I keep my Salesforce and CPQ approvals synchronized? If they are in separate systems, special integration is needed another added cost. Implementations Make sure the scope is exactly what you need. Attach your requirements doc to the SOW so there is no uncertainty. Many systems are not multi-tenant, which means each application instance is maintained separately, versus a single application instance with multiple tenants (this is what salesforce.com does). Because these systems are not multi-tenant, multiple hardware infrastructures (application server, database server, web servers, etc.) must be maintained for each customer instance. When an upgrade is applied to a single-tenant solution, the upgrade process is time-consuming and laborious (for both the customer and vendor). Often, once an upgrade has been applied to every customer, typically it s time to start again. CPQ applications on the Salesforce AppExchange all work the same way with Salesforce Some are integrated applications and some are native applications. CPQ applications for salesforce.com customers work in very different ways. There are fundamentally two general types of applications that work with Salesforce. 1. AppExchange integrated applications 2. Salesforce.com NATIVE applications AppExchange integrated applications are not native and use their own infrastructure to run their applications. The data leaves salesforce.com and goes to that data center. This means: Integration must be developed and maintained 2013 APTTUS 6
7 Data movement routines can have multiple points of failure You can t use the salesforce.com UI for the entire process You can t use salesforce.com UI for administration You can t use salesforce.com security profiles You can t use salesforce.com approval processes Any customizations must be maintained by either the vendor and/or the customer. When Salesforce changes (new releases), customizations can become a nightmare. Synchronizing your approvals in Salesforce and the CPQ system is also a night- mare. The hosting infrastructure may not be the same quality as Salesforce, i.e. SAS 70 TypeII, etc. Conversely, salesforce.com NATIVE application means: You have the highest level of integration with salesforce.com available it sits inside your instance of Salesforce, never leaving the environment There is no data movement; your data stays inside salesforce.com You can use the salesforce.com UI for the entire CPQ process You can use the salesforce.com UI for administration You can use the salesforce.com security profiles You can use the salesforce.com approval process Any customizations are configured, not coded, and therefore maintained as any other Force.com application. Approvals are synchronized because they use the same approval engine. Use a NATIVE first if you have These solutions are the same as if Salesforce had written them. Same instance, same database and same everything. No risk APTTUS 7
8 It is worth paying a premium for CPQ software It is not most products have the functionality you need Surprisingly, there is a wide disparity between the pricing of solutions and yet most functionality is the same. Architectures will vary widely but functionality is parity. Price is based on two variables: the providers cost structure and competition. So why is there such a disparity between costs of solutions? Because of application architectures and delivery cost structures. The largest variables are the infrastructure needed to run the applications and the implementation (people time) to configure or code the system. Solutions that are multi-tenant are lower cost because the hardware and software required to support each instance (production/test/development) are used by multiple tenants, just like salesforce.com. This results in a much lower total computing cost and therefore a lower price to the customer. Solutions that are high priced have single ten- ant, high priced infrastructure. Solutions that don t have simple point-and-click administration tools like Salesforce are far more expensive to implement and maintain. Hard coding solutions are both time consuming and prone to error, which causes rework. Many solutions need code to be written in order to be implemented. Solutions that are not native salesforce.com require integration to salesforce.com. The vendor and/or customer have to maintain the integration, which increases the cost. solutions will Since you are already paying salesforce.com for hosting infrastructure, don t pay someone else for another computing infrastructure if you don t have to. Ask if Code is sary for Specifically to set-up templates from scratch, to set-up workflows or to set-up anything APTTUS 8
9 Make sure pre-built grations for Any integration to salesforce.com or other systems may not work for your specific scenario. The vendor may tell you that it will work for you, but you won t know until the implementation has begun. Best advice is to test the integration to make sure it works for your use case. Be careful a cheap mentation - can have change along the Some vendors provide implementation quotes that are far less than what is actually required. You should perform an apples-to-apples comparison in the work to be performed for multiple solutions. Go fixed bid if you can. Make sure can be sufficient Without simple-to-use administrative tools, you will be reliant on the vendor for ongoing changes. This adds significantly to costs over time. Avoid this scenario by thoroughly investigating the administrative tools and asking if support is included with the application. Implementations are rapid and time-to-value is fast Most implementations take months to years, and significantly overrun original budgets Most CPQ implementations take many months, if not years, and significantly overrun original budgets. Unfortunately, the CPQ space is very much a victim of the big system paradigm. Many CPQ providers promise rapid implementations and time to value. Unfortunately, this is far from the truth. Again, poor architectures result in complex system set-up and deficiencies in products result in custom code, and therefore implementations are costly and take a long time. Complex application administration that requires coding instead of point-and-click will increase implementation cycles. Systems also require integration to common systems like Single Signon, ERP, Document Management or legacy systems. Native salesforce.com applications may not require these integrations because they are typically in place already for salesforce.com CRM APTTUS 9
10 Check reference There are many independent sources for backdoor references like the AppExchange, blogs and salesforce.com users groups that will enable you to find more reliable references. Ask for a session in a This will expose many administrative items that can be covered up during administration demos, like coding for templates, approvals, etc. Ask to see how integrations are performed Most CPQ vendors don t have adaptors for major systems like salesforce.com. Integrations are typically one-offs because the vendor will likely charge for code that has been developed and used for other customers. Go Fixed Bid If a supplier is not prepared to offer a fixed bid, then they are not standing by their implementation numbers. The Devil is in the details Make sure you compare the line item deliverables from each vendor. Highlight the differences and ask why you are being charged more for each line item. Offline quoting is very important We live in a connected world and the incremental expense and complexity of offline quoting is most often not worth it. Some vendors will try to make this a killer feature, even though the feature is not practical for several reasons: We live in a connected society 2013 APTTUS 10
11 How does a user ensure they are using the latest pricing data? Maintaining a desktop strategy is costly and complex This feature is not relevant primarily because we live in a connected society. Users can even connect to the internet on planes. The reality is that very few companies are using this feature in any capacity today. Enabling this feature increases costs substantially by having to maintain a product and price catalog on the quoting device. Do you employ a push or pull strategy? How do you keep data synchronized? This would blow-up most cloud computing strategies. Weigh pros cons of offline really make sure is Survey your users. Weigh the trade-offs and benefits. Is it worth the cost? Is it practical? As long as you can edit the quote document offline, you should be good. Maintaining an entire product data set on each laptop often just does not make sense. Ask for three ences using Since this feature is not practical, you will find that most companies are not using it. For those companies that are using the feature, ask about the problems and costs to maintain. About Apttus Apttus, the category-defining Quote-to-Cash software company, drives the vital business process between the buyer s interest in a purchase and the realization of revenue. Apttus is delivered on the Salesforce1 Platform, the world s most trusted and comprehensive cloud delivery infrastructure. Applications include Configure- Price-Quote (CPQ), Renewals, Contract Management and Revenue Management. Additionally, Apttus patent pending X-Author technology enables Microsoft Office to be a user-interface with full interaction and control between Salesforce and Microsoft Office. Apttus is based in San Mateo, California, with additional offices in London, UK, Bozeman, Montana and Ahmedabad, India. For more information visit: apttus.com APTTUS 11
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