Since the 1960s, basic Configure Price Quote (CPQ) tools have been a crucial part of the manufacturing industry. However, with the arrival of Industry 4.0 technologies, the manufacturing sector has experienced dramatic changes. 

Today, manufacturers are leveraging the Internet of Things, virtual and augmented reality, artificial intelligence, automation, and machine learning to stay ahead of the competition.

But that's not all that's changed. The way B2B buyers want to interact with suppliers and place orders has also evolved. Manufacturing is traditionally built on long-term relationships and trusted sales reps. However, knowledgeable sales reps are now hard to come by, and today's buyers want to self-serve.

B2B buyers want to educate themselves online. They're more comfortable buying big-ticket items through e-commerce. These changes have made it essential for manufacturers to adapt their CPQ solutions. 

While some CPQ solutions have failed to move with the times, others are driving digital transformation for manufacturers, revolutionizing how they configure, price, quote, engineer, and produce their products.

In this article, we’ll break down the anatomy of a best-in-class CPQ tool. Specifically, we’ll explore how extended reality and automation create industry-leading customer experiences and generate more revenue for manufacturers than ever.

Standout Features of Leading CPQ Solutions

Visual Product Configuration in 3D, AR, and VR

Traditional CPQ solutions used to rely on text to combine components and parts into viable products. However, this has all changed with the rise of visual product configuration. 

Visual product configuration enables manufacturers to display their products in lifelike 3D and embed their configurators into their websites, empowering potential buyers conducting internet research to experience and educate themselves on products. 

Now, visual product configuration has evolved again with the rise of augmented reality (AR) and virtual reality (VR).

With AR, prospects can take computer-generated products off the screen and into the real world by pointing their smartphone or tablet camera at the intended site of the finished product. It’s an interactive and informative experience, enabling buyers to make better, more confident decisions and get buy-in from management if needed.

Virtual reality is a less mature technology but is about to go gangbusters, with companies like Apple launching their new range of Apple VR headsets. Incorporating VR into your configuration experience lets you transport buyers to completely simulated environments, such as a showroom or factory floor, where they can interact with products as if they were in the room.

In these simulated environments, buyers can get "hands-on" with products, witnessing how they look, behave, and potentially even operate them. It's a profound experience that signals to buyers and the market that your brand and products are leading the way in digital transformation. 

The benefits of AR and VR are numerous. They provide a more immersive, engaging, and persuasive experience for buyers, which helps them to make better-informed decisions. They attract new buyers, strengthen relationships with existing ones, and increase the perceived value of your products, increasing your margins.

Automation

In today's fast-paced and highly competitive business environment, manufacturers must automate their processes and reduce costs wherever possible. One way to achieve this is through the implementation of industry-leading CPQ tools.

CPQ tools enable manufacturers to automate every stage in the engineer-to-order process from the shopping cart to the shop floor. By automating these processes, manufacturers can reduce the cost of their workforce, standardize processes, eliminate errors, accelerate sales cycles and lead times, and free employees to work on more strategic and less transactional work.

Let’s take a closer look at some vital automated processes:

Guided Selling

Guided selling is a powerful automation streamlining the product configuration and sales process. It can replace the sales rep entirely in self-serve situations or enhance reps' performance during in-person interactions. It works by prompting users with a series of questions and visuals that guide them smoothly and safely through the configuration process. 

Guided selling is governed by your companies engineering knowledge and pricing strategies. These are programmed into the CPQ as product and CPQ pricing rules. Collectively, these rules ensure every configuration, price, and quote is valid from an engineering and financial standpoint. 

Seamless integration with CRM can pull customer data into CPQ, parse it through artificial intelligence algorithms, and use it to personalize the guided selling experience and recommendations, increasing satisfaction and deal size. Thanks to machine learning, the guided selling process gets better with each transaction.

CAD and Design Automation

Your engineering team is one of your company's most valuable resources. They bring the creativity and technical expertise required to design innovative products that meet your customers' needs. However, many businesses find their engineers bogged down with transactional work related to the configure, price, and quote (CPQ) process.

Manufacturers selling complex, configurable products often have to accompany quotes with CAD files to make a sale. Creating these CAD files can take up a significant portion of an engineer's day, leaving little time for the more creative aspects of their job.

Luckily, modern CPQ tools with CAD automation functionality can help. These tools streamline the process of creating CAD files by automating their generation based on the product information selected during the configuration stage. 

Not only does this automation make your engineering team more productive, but it can also improve the customer experience. Rather than waiting for an engineer to create a CAD file manually, customers can receive a CAD file along with their quote in real-time. 

For more complex products, the automated CAD file can be sent to the engineering team for final tweaks and sign-off, ensuring products are designed and manufactured to the highest standards while allowing engineers to focus on more creative work.

Shop Floor Automation

Top CPQ tools aim to close the loop between the customer and the finished product, automating every process in between for low or no human touch. To do this, CPQ needs to automate sales and engineering and the shop floor.

The best CPQ tools can auto-generate various documents, including assembly guidance, BOMs, additive manufacturing files, CNC cut sheets, etc. Once a customer places an order, the CPQ tool can take care of the rest, ensuring that all the necessary documents are generated and routed to the correct machines for production.

Automating these processes reduces the potential for miscommunications and delays, leading to shorter lead times, lower resource use, less wastage, lower cost, and a more sustainable manufacturing operation overall.

Key Takeaways for CPQ Implementation

If you're considering implementing a new CPQ solution, there are three essential things to keep in mind:

Manufacturers are leveraging Industry 4.0 technologies and adapting their CPQ solutions to meet the evolving needs of B2B buyers who want to self-serve and educate themselves online.

Visual product configuration in 3D, AR, and VR supercharges the customer experience and conversion rate.

To optimize the engineer-to-order process, your CPQ tool should enable end-to-end automation, streamlining tasks from the shopping cart to the shop floor. This automation will enhance efficiency and speed while lowering costs and freeing employees to concentrate on strategic tasks.