1Configurators – What You Needto KnowConfigurators have emerged as extremely powerful toolsfor capturing corporate knowledge regarding productsand services, their pricing/discounting and fulfillmentprocesses—and then deploying that knowledge to exactlywhoever needs it, wherever and whenever its needed.Lack of effective communication across the organizationhas been shown to result in a very chaotic and costlyoperation. Some estimates place the cost of errors inexcess of 5 percent revenue for suppliers of complexproducts and services due to incorrect interpretation ofcustomer needs and miscommunication of requirements.Figure 1 shows how easily costly errors can accumulate ina complex product and services environment.Of course, there are no magic wands in the real world, buta configurator can be a great catalyst to help redefineprocesses and reduce or eliminate sources of error ifproperly selected and well implemented.Many ERP and CRM software suppliers offer aconfigurator as a module of an overall product suite.However, it is important to note when evaluating aconfigurator that all aspects of the enterprise “frontoffice” sales activities and “back office” fulfillmentactivities are equally important.A configurator module offered as part of a softwareproduct suite may appear to be well integrated and have acomparatively low cost. However, many of the configuratormodules embedded in ERP software suites are inherentlyinadequate in supporting the sales and service functionsbeing mainly aimed at engineering and production. Similarly,many of the CRM or e-commerce-based configuratormodules offer effective guided selling and configurationof low-level complexity products─but with an inherentinability to handle any complex product specification orfulfillment requirements.The configurator is a key area in which any company dealingin complex products and services cannot cut corners—evenif this means that it needs to take a “best of breed”approach where it integrates the configurator from onesoftware supplier with the ERP, CRM or e-commercesolution of another.Figure 1. Communication channels and sources of error in a typical product environment
2Evaluation of Configurators –the Extended ChecklistWhen evaluating the broad market of configurators, it isimportant to fundamentally ask, “how do I want to dobusiness?” and “will this tool act as an enabler?”—ratherthan be constrained by current processes or IT objectionsregarding the integration of software from more than onesupplier. As we point out in the next section, the current trendis toward “interconnecting all of IT.” Today, the hardboundaries between off-the-shelf solutions by differentvendors, legacy software, proprietary in-house developmentand so on is becoming more fuzzy with the introduction ofstandard communication methods such as XML andservice-oriented architectures.This is particularly relevant in today’s global businesseswhere, in reality, the enterprise may have various legacyERP applications running in different geographiclocations. Today’s IT wisdom tends to be more pragmaticthan ideological. In the recent past, the enterpriseapproach would be “let’s implement a common ERPsystem across all of our companies!” This is a costly (andoften futile) attempt to standardize and stabilize aconstantly moving and evolving target. Nowadays, theapproach is more likely to be “if it isn’t broken, don’t fix it”fueled by the reality that emerging technologies andstandards are making new systems and legacy applicationseasier to combine and integrate than ever before.Suppliers of stand-alone configurator software (and alsosome configurator modules supplied with CRM softwaresuites) often have the ability to integrate with more thanone ERP system across a single enterprise.Many stand-alone configurator tools are also packagedwith additional functions and databases to enable theproduction, storage and management of sales quotations.The Gartner Group has labeled this superset of sales andconfiguration applications as Configure Price Quote(CPQ). These applications typically handle productconfiguration rules, pricing/discounting and quotationmanagement using role-based internet portals.Other configurator suppliers have taken a verticalapproach, providing template configurator applicationsfor specific industry segments such as telecommunicationequipment, PCs or insurance underwriting. However, here’sa word of warning regarding pre-defined, “out-of-the-box”configurator applications aimed at a specific verticalindustry: Just make sure that these are sufficiently flexibleto be easily customized and extended to meet yourspecific business requirements cost-effectively.Before searching the software market for configuratortools and being bombarded by supplier information, it isimportant for any enterprise to carefully consider somekey questions regarding business objectives and vision. Atthe strategic level, it is obviously important to identify theprimary objectives of the overall mass-customizationproject─for example, cost reduction, qualityimprovement, shorter lead times, faster new-productintroduction, building new sales channels, increasing salesrevenue or improving market share. Related to the keyobjectives, it is imperative that clear measurements andtime scales for business benefits are established and thatthe configurator selection is sponsored at a senior levelwithin the enterprise.Having established a core business foundation for masscustomization and the configurator selection project,some basic internal questions should be asked to drivethe software evaluation process:1. Is the enterprise ready to select andimplement a configurator?Configurators should be seen as technical enablers formass customization.There’s a two-way synergy between state-of-the-artproduct structures and state-of-the-art configurators. Ifthe enterprise has not done the basic groundwork ofproduct/service component definition and modulardesign, then it may be too early to look at configuratortools, and it may be better for the enterprise to investits time, money and energy in a modularizationexercise.On the other hand, if the enterprise only has one ortwo product lines, or perhaps the “product” is a policydocument of configured paragraphs, implementing awell-structured configurator may actually help in thedefinition of the modular components.acquire.cincom.com
32. What is the desired sales and serviceprocess for the enterprise?This is a massively significant question that requires visionthat goes beyond the limitations of existing processes.The modern enterprise is faced with a multitude of salesand service channel possibilities driven by technologydevelopments relating to global social, economic andpolitical changes.Is global customer self-service or development throughthe internet an enterprise objective? And if so, to whatextent is this practical given the complexity of the product,its associated pricing and discounting calculations and theneed to partition and transmit data securely?Perhaps the major objective is to provide betterinternet-based sales support for agents, resellers ordistributor channels.Or maybe the enterprise is seeking to improve internalefficiency by cutting manpower costs and lead timeswithin their existing sales, fulfillment and supportprocesses, and if so, how can this be achieved practically?Often the objective is to implement a multichannel/multi-phase strategy where customers or agents can usethe internet for self-service product specification.However, this then needs to be fed through tosalespeople, technical support personnel or third-partychannels for follow-up activities such as pricing andcommercial negotiation.3. What knowledge needs to becaptured in the configurator anddeployed to support the desiredsales, service and fulfillment process?• Are the products and services highly technical withmany features, options and calculations?• Is there complexity in the commercial areas of pricingand discounting?• Are there regulatory compliance issues or industrystandards driving the need for standardization andquality management of documents such asspecifications and proposals?• Is there a mixture of products and services, and ifso, which should be included or excluded from themass-customization project?For most enterprises, the required configurationknowledge is likely to be combinations of technicalproduct rules, calculations, marketing rules, pricing anddiscounting policies, customer history and industrycompliance standards.
44. Who needs to maintain theconfigurator knowledge over time?This is likely to be some combination of personnel fromsales, marketing, engineering, manufacturing, customerservice and IT.The real knowledge owners for configuration, pricing,fulfillment and service rules are business experts andnot programmers. This is a key requirement for agilityand is important when looking at the knowledgemaintenance tools supplied by configurator suppliers.Are product, pricing, fulfillment and service ruleschanging by the minute, or are they released in acontrolled manner over weeks, months, quarters or years?In some instances, knowledge and rules may alreadybe defined and resident in other IT system applicationssuch as ERP, PDM, CAD or Sales Order Processing. Thismay raise questions of technical integration and also inestablishing which applications are the “masters” forspecific data.5. Who needs to use the corporateknowledge in the desired sales,service and fulfillment process?If sales, marketing, engineering, etc. define the productand service rules, then who are the “end-users” of thoserules in the desired sales, service and fulfillment process?The end-user may be any combination of the customer(self-service), agents, distributors, the internal sales force,sales support, engineering, manufacturing and distribution.6. What should the user experiencelook like, and is there a need formobile-device access?The physical location of the end-user and the venue forthe configuration process is an important consideration.Is it enough to provide a permanent internetconnection to a website or portal, or is there a realneed for downloadable “apps” to run on PCs, iPads,Androids and other mobile devices?Downloadable “apps” sound like an attractive idea formobile devices, but what are the implications forsensitive data such as prices? And how should data bepresented on a mobile device given that the screen issmall and navigation is by a finger and not a mouse?If the product is complex or if there is a need to keepsensitive data in-house, the configuration process mayneed to be done in steps with some work still done“back at base” before a fully priced offer can bepresented to the customer.7. How scalable and capable ofperforming is the configurator?Frequency and volume of use is a major consideration.For example, web-based, self-service configuration andthe purchase of PCs may result in thousands of customerspecifications generated in any one day. However, inother industries such as industrial machinery or capitalequipment, there may only be a handful of configurations,specifications and quotations performed in any givenday, although these are likely to be extremely complexand may involve numerous constraints and calculations.The combination of customer volume, the required salesand service channels, the product complexity and thenumber of configurations will have major implications forthe technical deployment and scalability requirements ofany configurator tool.acquire.cincom.com
58. Which other software applications mustintegrate with the configurator tool?The inherent capabilities of the configurator tool willbe determined in part based on whether it is an ERPmodule, a CRM module, a component of a CPQsolution or solely a stand-alone configurator.As a basic requirement, the configurator must be capableof handling the technical rules for specification andconfiguration of mass-customized products and services.Configurator tools within CPQ solution suites will alsodirectly handle pricing, discounting and sales quotations.However, in a streamlined and integrated sales, serviceand fulfillment process, the configurator will need tointegrate with other applications such as e-catalogs,CRM, ERP (perhaps more than one), CAD, PDM, wordprocessing and document management. In thisrespect, the technical integration capabilities of theconfigurator tool are extremely important to ensurethat the required two-way exchange of informationbetween applications can be achieved in a secure,flexible and cost-effective manner.Some configurator tool suppliers may provide“out-of-the-box” integration with popular applicationssuch as SAP, Oracle, Microsoft Dynamics® andSalesforce.com. But again, the buyer must be surethat these pre-defined interfaces are sufficientlyflexible to be easily customized and extended to meettheir specific business requirements cost-effectivelyover time.
6Configurator FunctionalCapabilitiesAs a starting point, it is important to clearly establish thenature of the configurator tool being evaluated:• Module of ERP suite – Can it be used with otherERP packages?• Module of CRM suite• Stand-alone configurator• Configure Price Quote (CPQ) solution• Pre-built vertical-industry applicationImportant core features required for configuration are:• Needs analysis – The ability for the customer to specifytheir requirements in their own terminology• Product/service recommendation – Guiding thecustomers to products or product lines based on theneeds analysis• Constraints – The selection of one feature or optionexcluding another• Dependencies – The selection of one featureautomatically selecting another• Calculations – Mathematical functions• Pricing configuration – The definition of pricing anddiscounting rules based on customers, geographiclocations, product lines, etc.• Module selection – Automatically matching customerrequirements to specific modular parts, productsand services• Structured output – The ability to generate structuredoutputs such as a configured bill of material based onlyon the modules selected while avoiding combinatorialexplosion of all possible permutations in advance• Document output – The ability to generate configuredreports and documents in a variety of formats such asWord, PDF or HTML• System configuration – The ability to share commonrequirements, calculations, etc. across multipleconfigurations to supply a complete systemOther useful features to explore are:• Process selection – The ability to configure processcomponents such as production routings, projectelements and Work Breakdown Structures• GUI screen builder – Is it easy to deploy customizedend-user screens within the configurator itself?• Visualization – Configurator links to drawings,schematics or interactive visual representations areimportant in many industries• Default configurations – The ability to have pre-definedconfigurations as starting points for specific customers,geographic territories, industries, etc.• Multi-language – The ability to easily deploymulti-language prompts and screens• User experience – Can different users have differentprocess paths and/or visual interfaces through the sameconfiguration process?• Mobility – Can the configurator run on mobile deviceseither with or without a permanent internet connection?• Security – Can different end-users be limited tocertain functions and data access within the sameconfiguration process?acquire.cincom.com
7Configurator MaintenanceEnvironmentGartner, an independent analyst, stresses that this is themost important aspect of any configurator tool. If youneed to employ a “C#” or “Java Programmer” (or anyprogrammer for that matter) to maintain the business rulesin a configurator, then you may be buying the wrongproduct. Worse still, if you have to go back to theconfigurator tool vendor to maintain your rules, you are infor an increasingly frustrating and expensive experience,as product complexity and the pace of change increase.The essential point is that your business rules must bemaintained by your business people, and anyconfigurator tool should make this as simple andinteractive as possible by providing graphical techniquesfor rule-building and simple methods to link to externaldata managed by other applications such as ERP, CRMand PDM systems.It is also important that there are levels of access securityand granularity in the rules maintenance environment. Theengineer who maintains the product rules that governengine selection is not necessarily the same person whomaintains the rules for gearboxes. Similarly, it may be salesand marketing people who maintain pricing rules—notproduct engineers.Reusability is an essential factor in modularization andconfiguration. Does the configurator maintenanceenvironment allow the same technical and business rulesto be easily reused across different products and productlines—without the need to define and maintain rules inmore than one place?Insulation of rules from data is another importantconsideration. Does the configurator rule need to berewritten every time a piece of data changes (for example,the weight property of a component), or can this be easilyabsorbed by the existing rule base?The maxim so far as possible should be build rulesthen maintain data, and the configurator tool shouldmake this possible.It is advisable to talk to and visit potential supplier-reference customers to determine exactly how much effortis required for configurator maintenance. Better still,conduct workshops with short-listed suppliers where theybuild your product in your environment giving you achance to explore the configurator tool and the suppliercapabilities directly.As a final word of warning, if the supplier is reluctant toshow the maintenance environment, they probably havesomething to hide.Figure 2.
In summary, there are a vast number of questions thatneed to be asked, some of which will be very specific toeach enterprise environment. The topics listed in thesections above are not exhaustive, but provide a guidelineor starting point for a more thorough list of questionstailored to specific needs.If there is one last point worth emphasizing, it is that“flashy” runtime demonstrations by configurator supplierscan be very seductive. The true test of any configurator isin the ease of building and maintaining the technical andbusiness rules over a lifetime of ownership.8Configurator Technical CapabilitiesThere are various technical aspects of the configuratortool that need to be investigated to determine anylimitations and calculate the total cost of ownership.• Which client and server platforms does the configuratorRules Developer Environment require? (Windows, UNIX,Linux, Macintosh, Citrix, AS/400, etc.)• Which client and server platforms support the end-userruntime environment? (Windows, UNIX, Linux,Macintosh, Citrix, etc.)• Can the end-user runtime environment be deployed viathe internet, client/server network, mobile?• How is internet deployment achieved?• Can the end-user runtime environment be accessed on amobile device?• Does mobile usage support disconnected usage—howis it supported?• Which mobile platforms are supported—iOS, Android™,Windows, etc.?• How is data and rule synchronization achieved fordisconnected usage?• Which web browsers and versions are supported forinternet and/or mobile connection?• Can the supplier provide benchmark performancefigures for client/server and web deployment?• Can the supplier provide benchmark performancefigures for internet access by an increasing number ofconcurrent users?• Does the supplier provide “out-of-the-box” integrationwith other applications? If so, which ones and how canthey be modified?• Which generic capabilities are supported by theconfigurator tool for input and output of data indevelopment and runtime? (e.g., Web Services, XML,ODBC, JDBC, etc.)• How are these generic capabilities definedand implemented?• Does the configurator end-user runtime support specificmiddleware for message-based application integration?If so, which ones and how are these capabilities definedand implemented?• Does the configurator tool provide integration with commondesktop applications such as Microsoft Office? If so, whichones and how are these capabilities implemented?acquire.cincom.comKey Capabilities• Hardware Platforms• End-User Deployment Capabilities• Mobile Usage• Performance• Scalability• Integration and Compliance toDeployment-Time Standards