How to Measure my CPQ Implementation Success?
In all industries, globalization and the internet has made it easier to compare and switch between providers. This is not only the case for B2C markets, but also for B2B. Therefore, many organizations, similar to yours, invest in new IT solutions to increase the support and guidance of their employees, providing them with more data and resources to increase the interaction and, as a consequence, the customer experience. But how do you measure the success of these new IT solutions?
In the below blog post, we’ll focus on the implementation of SAP CPQ (Configure Price Quote solution) and how to measure the success of this kind of implementation. Keep in mind that this can also be translated to all new IT solutions, as well as every project that is organized within your organization.
CPQ is a tool to help your salespeople with configuring complex products, making sure all options are priced correctly and, last but not least, generating a nice-looking quote. All from CPQ.
First, we will define success, then we’ll set a baseline and create tracking indicators, and finally we will measure success. Four simple steps that are often not put in practice.
Before you are able to measure the success of your CPQ solution, you need to define what success means for you. In the past, the focus has often solely been on financial returns, however this has shown not to be enough to capture the overall performance or success of an implementation. So let’s look at the goal of CPQ. There are multiple reasons why you would want to implement it. Why are you introducing CPQ in your organization? Is it because your products are complex, with a lot of options, and you want to help the sales build the best solution for your customers? And why do you want to help them? Or is there another reason? For example, do you want to create quotes faster? Do you want to ensure the communication between sales and production runs more smoothly? What is it that you want to achieve with your CPQ solution? The "5 Whys" approach (one that is used in root cause analysis) can be used to get to the root of what success means for your organization and immediately give you some indications of what to measure. Keep in mind that this exercise can be done from various perspectives.
Another approach to defining the success of your implementation can be by gathering input from your sales team. They often have ideas and insights on when the implementation of CPQ will be successful for them. If you combine this information with the definition of success from upper management, you can come to a balanced view on success.
Set a baseline
Imagine you decided to implement CPQ because you want to offer quotes faster to your customers. How are you going to know after your implementation that you are actually delivering your quotes faster? Make sure you have a baseline upfront regarding the creation of quotes. If you don’t have a baseline, create one before you start with your project. It doesn’t have to be perfect, it can also be a guesstimate from your salespeople. Ask them how long it approximately takes and trust their insights. The same is true for the different answers to the whys in the previous step.
Create tracking indicators
Keep in mind that implementing and adopting a new solution is a gradual process, it’s not on the day that you hit the ‘live’ button that the foreseen success is immediately there.
The success will build gradually. As soon as your employees get more accustomed to CPQ, the time needed to create and send offers will decrease.
Therefore, when creating tracking indicators, you can set in between goals for each of the defined measures to track this gradual process. For example, the speed of quote creation will decrease in the first month, it will go back to the previous level prior to the implementation in the second month and after 6 months the speed will increase, taking only 1 day instead of 3 to create the quote.
When creating tracking indicators, you need to make sure you have a balanced set. For example, if you are only going to track the increased speed of quote creation, your organization might suffer on the quality of the quotes created. Therefore, including customer satisfaction and/or first time right can counter the negative aspects of measuring increased speed.
Tracking indicators can be measured in various ways. You can measure the increase in speed by tracking how long it takes to create a quote. Another way of measuring this is with a survey. While a survey is less exact and asks for people’s estimates, you can include a multitude of questions, enabling you to combine different measurements.
Based upon your 5 whys, you’ll have a set of tracking indicators. Here are some ideas based upon the 5 whys of above:
You can check with engineering if they get less questions from the sales team. You can do satisfaction surveys or NPS surveys with your customers to track if there is an increase in their experience. Track how many products need to be altered or produced a second time. Last but not least, define for each tracking indicator how frequently you will be measuring it. You don’t want to bother your employees with a daily measurement, as that takes up too much time.
Start to measure
After you’ve done the analysis of what success means for your CPQ implementation, set a baseline and created tracking indicators, you will need to start actually measuring. Make sure to use the right tools to make the experience as easy as possible and your analysis afterwards. Once you’ve started measuring, don’t forget to share the results with your organization and define actions based upon the outcomes. For example, if the quote creation time keeps on increasing instead of decreasing after a CPQ implementation, check if your sales team needs additional training, coaching or if there is another reason why you aren’t reaching the expected results.
Want to learn more about implementing CPQ and how you can turn your project into a success? Download our Ultimate CPQ implementation guide here.