The Product Configurator or CPQ software is a technology category that exists as a peripheral to ERP systems. If you’re not already familiar with them, you may want to read my article, What is a Product Configurator?
This software sits in the same space as Manufacturing Execution Systems (MES), CAD Software, eCommerce, and many other peripheral products. What that means is that product configurators should be investigated and selected independently of the ERP system.
That said, a product configurator that doesn’t integrate with your ERP can cause a lot of issues.
In this article, we will explain the five most common mistakes to avoid when choosing a product configurator.
Today’s modern high end CPQ software is cloud based, generally includes its own CRM or eCommerce capabilities, and often has sophisticated proposal generation and even CAD file generation embedded into it.
Our Background
From 2008 to 2014 we worked extensively with product configurators. At the time, the technology was a bit limiting in that most ERP systems came with one choice that worked for them. As we began to focus on Microsoft Dynamics NAV in manufacturing environments, we de-emphasized looking at Configure to Order manufacturing.
Part of that was that we had fewer leads and opportunities in this industry. Another part was that the available CPQ or product configurator products were not capable of the complex product configuration needed by the customers we were working with.
Choosing a Product Configurator
In 2020 as the pandemic picked up, I restarted an investigation into the product configurator products available. The market had consolidated, and I could see movement towards a new generation of fully featured CPQ solutions that would work with Business Central. I also started to see more Configure to Order (CTO) manufacturers looking for CPQ solutions.
From this research I thought of all the mistakes customers had made choosing a product configurator and thought I could write them here to help you make your decision.
If you want to know, here are the three product configurators that I like to suggest for small to medium-sized manufacturers already using Microsoft Dynamics 365 Business Central:
- Elfsquad
- VividWorks
- InsightWorks
Common Mistakes Made When Choosing a Product Configurator
Now, let’s get into the common mistakes that people make when choosing a product configurator.
Here are the five most common mistakes and misconceptions to avoid when choosing a product configurator:
- A product configurator is not a “Module” of an ERP
- Integration is not always as easy as you think
- Not all product configurators are made the same
- A product configurator is a big investment for your business
- Your ERP vendor is not a CPQ vendor
Mistake 1 – A Product Configurator is not a “Module” of an ERP
Many people make the mistake of thinking that the product configurator is a module within their ERP.
I run into this all the time. Customers are looking for a new ERP system and ask me “what product configurator does your ERP have.” This is a terrible question. It would be like asking “what CAD software does your ERP have.”
Nobody should buy an ERP based on a specific CAD software that it is designed to work with. Similarly, you should not look at a product configurator as if it is just another equally important module of an ERP.
If an ERP takes 500 hours to implement, a CPQ for the same company could take 1000 hours. Would you decide to purchase something that you’ll invest 1000 hours in as just an afterthought of purchasing your ERP?
Treat the product configurator purchase as a decision AS IMPORTANT AS THE ERP PURCHASE. Research the options and what each product configurator brings to the table.
This is why Configure Price Quote 365 has several solutions that we carry in our portfolio – because they are the right size for your business needs.
Learn the five steps you should be aware of when preparing to implement a D365 product configurator.
Mistake 2 – Integration Is Easier Than You Think
Related to Mistake 1, most people think that integrating the product configurator into the ERP is a massive and risky undertaking. That might have been true in the “bad old days” when every ERP had a different API with different methods to use it. In today’s world, cloud ERP systems (like Microsoft Dynamics ERP, Acumatica, and NetSuite) all use similar web services API for integration.
The fact that this integration is a lot easier than it was in the past means that (in most cases) you can purchase the product configurator independently from the ERP.
Mistake 3 – Not All CPQ Are Made the Same
Another mistake customers make is thinking every CPQ system is essentially the same as every other. Small customers who are not tech savvy don’t really understand the market and the technology. They might be thinking about a “dealer portal” for their dealers to use to place orders. They might ask “can I use your configurator on our website” and get a positive answer.
Your website is probably not a Business to Business (B2B) eCommerce platform. And most Business to Consumer (B2C) eCommerce is very different than B2B. The CPQ you purchase might seem to be capable of doing what you want on the surface, but really you need to dig deep before you can tell 100%.
Mistake 4 – A CPQ is a BIG Investment for Your Business
Most customers don’t realize just how big CPQ projects can get. If you are purchasing an ERP system with CPQ, we recommend you allocate DOUBLE the resources to the CPQ project as to the ERP (at least in time). I recently spoke to a customer who had two full time resources working on their CPQ project for 18 months. That’s 3 “person years” of work to finish their rules designs.
Be sure you’re ready to invest the kind of effort you need to. Be aware of what you are getting into before you end up with a half-finished solution you can’t use because you didn’t realize what the real investment would be.
Mistake 5 – The ERP Vendor is Not a CPQ Vendor
I probably said this before, but the CPQ is not just a small add-on for the ERP. The ERP vendor is an expert in implementing an ERP system. They are NOT experts at reverse engineering product catalogs, configuration rules, data cleanup, CAD drawing integrations and the many other critical activities involved in CPQ setup. Many ERP vendors rely on the CPQ reseller to implement the system.
Likewise, most CPQ vendors are really bad at understanding ERP. They know their own product fantastically well. They don’t always understand how the ERP fits into the process.
I have seen customers who didn’t understand this and end up very frustrated as their ERP partner is unable to help at all with the product configurator. They also get frustrated when the CPQ partner pushes them to enter orders through their CRM – bypassing and losing valuable features in the ERP.
Finally, a lack of understanding by both means badly aligned CPQ and ERP activities.
Be sure to involve both the CPQ and ERP vendors together from the beginning, and make sure you select two such vendors with a record of working together.
Conclusion
Choosing a product configurator for your business is a critical decision that can have far-reaching impacts on your operations, especially if it’s not the best fit. While CPQ software can be a powerful tool for improving efficiency, streamlining processes, and enhancing customer experiences, it’s not a simple plug-and-play addition to your ERP system.
By avoiding the common mistakes outlined in this article—treating the configurator as just another ERP module, underestimating integration challenges, assuming all CPQs are the same, underestimating the investment required, and expecting your ERP vendor to double as a CPQ expert—you’ll be better prepared to make an informed decision.
If you enjoyed this article, you should also read my article, Avoid These 5 Pitfalls When Selecting a Product Configurator. It will give you an even better idea as to what to avoid when selecting a product configurator.
Remember, a product configurator is an investment in your business’s future. Take the time to research thoroughly, involve the right experts, and ensure both your ERP and CPQ solutions are aligned to support your business goals. By doing so, you’ll not only avoid costly missteps but also unlock the full potential of your CPQ and ERP systems working together.
Need Assistance?
If you’re ready to explore your options or need help choosing a product configurator solution that is best suited for your business, don’t hesitate to contact our experts. With over 25 years of experience in manufacturing and ERP implementation, we’re here to guide you every step of the way.
Contact us. Let us help you make the right choice for your business today!
