Six reasons why CPQ projects fail

Six reasons why CPQ projects fail

Ida Hallmén, Content Manager
Ida Hallmén, Content Manager

To invest in a CPQ system gives your company a great competitive advantage. Before starting up a CPQ project there are a couple of things that are important to keep in mind. By becoming aware of the most common pitfalls, you give yourself a better starting point and the chances of having a good transition and a successful outcome increases significantly. In this article we list a couple of valuable tips you can take into account as you proceed with your journey.

Why CPQ projects fail

The most common mistake is to develop a CPQ-system for the company and not for the ones that are going to use the system – the end users.The CPQ system should be designed so that it is easy and satisfying to use for the end users. It is not meant for the product experts, since the product experts already know everything. The key is to shift the knowledge from the product experts to the customers.

Other key factors to succeeding with a CPQ project is to organize and structure all of your data. For fast growing companies it can be demanding to keep a good structure of all the product data, article numbers and price structures. Sometimes when you have to make quick decisions, release new products or get campaigns out fast, you might end up taking a lot of shortcuts.But when everything is to be standardized in a system, the data must be structured so that it becomes manageable. This might mean work that can be quite demanding, but if you as a company want to be able to scale up and grow even more, it is important that at some point during the development take time to structure your data. Otherwise, there is a risk that it will be difficult to handle, and that perhaps only one person in the company knows how the structure works. To succeed with a CPQ project, it’s also extremely important to have a good combination of experience and competence.

CPQ projects fails without support from business management

It is not uncommon to start a CPQ project within a department of a company, this can become a problem if not everyone is involved. It is important to get a good overview of all the data and if you are going to make a 3D configurator, you must keep track of all CAD files (blueprints of the models) and make sure that you have the latest material. This often requires that employees from all departments contribute with their time. If this is not anchored within the management and if not everyone in the management believes in it, it will be difficult to prioritize the employees’ time and get the results that are required for it to be good. This is a fairly common problem but something that we at Animech are very good at handling. We cannot make customer data appear magically but we can help our customers to make good decisions since we have the entire fauna of specialists required for a successful CPQ project. We are like a catalyst for our customers, and ensure that the right material is produced and that the right decisions are made.

The configurator does not focus on the end users

The configurator should not be built for the product experts, it should be built for the end users – the customers. Otherwise the configurator risks becoming too complex for customers to work with. It is highly important that the configurator is user friendly so that the customers want to interact with it.

Integration to peripheral systems is lacking

It is very common to think big at the beginning of the project with the ambition to build something that helps the entire business, both the sales department, the finance department and the production department. Once you have completed the system, there is a risk that both the energy and the budget will run out and you will not be able to take it further to the phase where automation and the real savings are possible – the phase when you start tying the systems together. If you have CPQ as a single satellite, it only helps certain customers and not the company because then the processes are not in place. However, it does not have to be a huge integration process. Animechs configurator, Aniconfigurator, spits out a JSON file (a file that stores text in the form of simple data structures) with configuration data and so far we have never encountered a system that can not receive a JSON file. If it is an business system or a CRM system, just make sure that the data structure in the JSON file is written in such a way that the business system or CRM system can receive it, ie it is important to ensure that the correct field is filled with the correct data from the configurator.

Lack of communication

Starting a CPQ project affects all departments at the company and therefore it is important that everyone is involved in both the planning and development of the project. Communication is important to get the whole business on the train so that everyone understands the vision before starting a project like this. A clear and good communication makes it easier because you need access to all the expertise in all the different departments at the company. There may also be fears. Perhaps the employees are worried that a computer system will replace them and take their jobs and therefore they do not want to disclose any data. But most often it’s not about replacing an employee but rather about freeing employees from the most tedious tasks so that they can instead focus on more important things.

The project is not properly defined

Another thing that is quite common is that you enter a project with good will and commitment without properly defining the goal and purpose. Maybe you are not quite sure what the end product should do or for whom it is created. Is it for the sellers? Is it for the customers? Is it for the product specialists? Is it for marketing? Is it a pure sales tool? It is therefore important to define the end goal, otherwise it is easy to do a little of each and so the project may not reach all the way. That is also something that Animech helps with in the start-up phase of all projects. The key is to be very clear and define what the ultimate goal is.

Complex data structure

It’s important to keep your data in order. You should be able to look at an article number and tell what kind of product it is, color, size and price, etc. It should be possible to read out as much information as possible from the article number.