How can Quote-to-Cash solutions boost your bottom line?
3 minute read
More and more companies are improving their operational efficiency by streamlining their business processes with Quote-to-Cash (QTC) solutions. But what is QTC, why invest in it, and how to prepare for a QTC journey?
Are you struggling with long proposal lead times, high sales support costs, complicated and error probe sales-to-delivery processes, time consuming and costly invoicing or bad user experience? Or do you want to enable a new subscription based business model? Then Quote-to-Cash (QTC) is the answer.
CPQ has already become increasingly popular and QTC is gaining momentum. If you’re still not aboard the train, think twice before not boarding: the next station from CPQ is QTC, and transformation takes time. Do you have time to give your competition a head start?
What is Quote-to-Cash (QTC)?
Configure-Price-Quote (CPQ) means software solutions that are used to create and manage quotes, configure products, calculate prices and generate quote documents, but it doesn’t stop there. Quote-to-Cash is a concept relating to CPQ. QTC is the glue which connects product management and offering to sales (including e-commerce) with CPQ and further to orders, contracts and invoicing and even payments – therefore connecting quotes to cash.
Together CPQ and QTC processes form a continuum from product management to cash collection, helping numerous functions (product management, sales, service, invoicing, order management, account managers etc.) to deliver value to customers and bring in revenue.
Going even further, one can connect e-commerce solutions to the process, allowing customers to purchase and even get products through self-service.
Every CPQ and quote-to-cash implementation is different as you might have existing systems for pricing logic, invoicing, and other functions. By selecting the correct CPQ & QTC product combination, we can start fresh or build into the existing landscape, the latter being the most common alternative.
Why invest in QTC solutions?
You might think “what’s the difference, all can be made in existing applications?” That’s true, but the benefit of the CPQ is that all this information is located in the same system. And when CPQ is part of a CRM system like Salesforce, all the information is usable in reports and transferable through existing interfaces. On top, end-to-end QTC solutions offer better user experience for sales reps and other user groups.
CPQ (Configure, Price, Quote) solutions make quoting easy by:
- Helping sales to Configure complex products by a few clicks with the help of guided selling.
- Enabling sales to Price the configurations according to product configuration, customer specific prices and other business logic automatically.
- Generating corresponding Quote documents matching the product scope and price.
QTC (Quote-to-Cash) continues from CPQ and sold quote:
- Managing Orders as handover from sales to delivery organization.
- Enabling Contract management which is key for Subscription business and tracking customers current subscribed products no matter if they are goods or services.
- Automating Invoicing: generating invoices from order data automatically with the possibility to connect payment systems as well.
QTC solutions also increase quoting accuracy: practically no mistakes in offers and deals, which leads to higher margins and higher customer satisfaction. When connecting orders and invoicing, as purchase data is transferred from sales to delivery with minimal (if none) human touch, it also decreases workload and mistakes.
How to plan a successful QTC journey?
QTC projects set extensive requirements for many parts of an organization. A QTC project execution largely depends on the current state of process and product knowledge of the company as well as the level of productization.
Our recommended approach is to “think big, start small”. When building a system that will both be flexible and stand the test of time, one needs to consider all the required use cases and create a roadmap towards the desired state. However, when it comes to implementation, the most agile way is to start from the minimum viable product.
No matter how much and how well products and processes around it are specified, practice will always reveal new questions and needs. It’s usually more efficient to build a minimum viable product and learn while using the system rather than trying to analyze and define everything thoroughly before the implementation. Starting small and learning to do the things with the platform before expanding the use vertically across the product offering and horizontally across the sales and delivery process is one way to approach the change in pieces.
How can one benefit from a specialist expert when planning such a project? It is typical that a partner implements the CPQ core functionality and probably some of the product models and the customer can then continue with product modeling. Another possibility is to source all configurations to the partner: this requires deep product understanding and long commitment from the partner. Same can apply also for example to invoicing projects: partners can build the initial setup, but further invoicing rules and logic can be developed in-house.
Fluido has a dedicated CPQ & QTC team with deep knowledge and years of experience of product modeling, business processes and configuring industry-leading solutions to help you streamline your business process. Read more about our CPQ services here.
Business Consultant - CPQ Specialist