The document discusses how Apttus' Full Spectrum CPQ solution can help companies sell and fulfill complex products, subscriptions, aftermarket services, and professional services by providing capabilities for complex configuration, deals, and quote-to-cash processes and by driving desired sales behaviors through tools like a commission estimator. It also provides recommendations for building successful partner ecosystems and highlights the benefits of Apttus' solution for flexibility, continued innovation, and helping companies increase revenue and deal size.
In a previous session, Brion Schweers introduced our Full Spectrum CPQ solution. As he mentioned most Enterprise business provide products and services that represent one or more of these four types of CPQ solutions we see in the marketplace. <click>
In this session we will drill down into the Complex Products and walk through a couple “complex” use cases.
Complex Configuration
Complex Deal
Complex Process
Let’s continue…
As mentioned, this is the classic CPQ use case and we these customer typically need a powerful configurator, advanced pricing, integration to back office apps, guided selling and there seems to be an increased demand for visualization capabilities within the configurator and within the quote proposal document itself.
What is the point of having a configurator if it can’t do math? Complex configured products often need to calculate power needs, based on weight, or wall strength based on pressure. A CPQ tool must be able to dynamically perform advanced calculations while selection are being made, to ensure what is being configured will perform as expected….<click>
There is also a growing need for interactive 2D and 3D visualization that ensures what is being configured aligns with the customers needs. This can be especially important in self service mode where a customer or partner is configuring their solution.
Are you changing the way you want to sell your goods, what about your partners?
Flexible
Remove the complexity and enable high-value functions you want to enable for both your partners and internal sellers.
It’s not just about being able to configure the product anymore, it’s about configuring the solution or configuring the deal. We’re hearing from our customers
Customers are pushing for innovative business models for acquiring very expensive equipment. We often hear from our medical equipment customers that because their customers are dealing with budget constraints, they’re looking for options to buying the equipment outright. Therefore, they need the flexibility to be able to be able to provide the option of lease vs. buy. Even more interesting is where they may instead charge on a pay-per-user or pay-per-procedure model, but also after-sales service including maintenance and parts replacement. Apttus provides the capability for our customers such as GE and Olympus, the ability to set the product up once, but configure it such that depending on the purchase type would determine how the deal would be structured. Not to mention the ability to incorporate contract pricing and the ability to layer promotions on a deal. The Price Waterfall can help you understand what’s impacting the price down to the line item level.
Pricing
Structure
Remove barriers of complexity, if the system can handle it in an elegant way, you can start to expose this capability to external
High Level Explanation of Screen:
This medical device utilizes reagents and detectors for each test. We have configured the offering so that a customer can choose Capital (one time payment for the machine) or a Reagent Acquisition. If purchased as a Reagent Acquisition, the machine is purchased by paying an extra Instrument Reagent Acquisition fee for each test along with the fee for each Reagent.
Once you figure out the purchase type, in this Case Reagent Acquisition, there are several deal parameters that need to be entered. The first is the length of the agreement for this particular machine. Since it is a 5 year deal, Medical Device companies add in a yearly price increase but sometimes negotiate a year where the price increases stop and remain constant. If the sales rep tries to freeze the price after too few years, extra approvals may be required and therefore automatically triggered. The final deal parameter is to calculate the number of tests that will be run per year (which we will use to figure out how many tests to split the device purchase).
In this scenario the Instrument reagent acquisition price is calculated by taking the price of the machine divided by the contract length. The price increases each year by the yearly uplift until the prize freeze take affect. Finally that price is spread across the number of tests that the customer will do per year.
Finally the detection methods are configured. Depending on the percentages entered, the detection components are automatically added. One added detail is that based on the percentage of each test (and since all prices are done on per test basis) the unit price for each detection method is adjusted by the % of the time the detection method is utilized.
We talked about the ability to manage a complex configuration and put together a complex pricing structure for a deal, but what about the process itself? There could be any number of factors that could add another layer of complexity.
We talked about GE earlier. As an example, the same product can be sold in multiple countries, but the way they sell it is very different, based on regulations, based on partner and so on. As a matter of fact, for a certain set of countries, they needed the ability to allow for different people to participate in the overall configuration without having visibility into what the other was doing, so in the case of an MRI, one person could configure the bed, another the housing, another the cabling, and so on. With guidance and feedback from GE, Apttus built quote collaboration to enable this very complicated process which is now being leveraged by several other customers. We can go on with a long list of items that could affect the quoting process, but we need to continue.
Are you changing the way you want to sell your goods, what about your partners?
Now when you’re in the process of configuring a complex deal, you ultimately want to drive your users selling behavior. What better way to drive the behavior during the quoting process, but to have the rep see the commission impact as the move through the CPQ process.
Now we’ve talked about several customer examples where our customers have used Apttus to minimize the complexity and simplify the process for their users. <click> We’re thrilled to have John Yankowski, Head of Partner Digital Ecosystem at Nokia share the challenges faced at Nokia and the benefits received as they continue their Apttus journey. Please join me in welcoming John.
Thank you John.
Ensure business alignment
Incremental releases over major upgrades
The reality is, that some CPQ products do a great job of configuring complex products, others do a decent job of doing the deal, but not many can handle all three, Complex Configuration, Complex Deal and Complex Process. The point is that all of these use cases are supported from that same set of core building blocks which are able to evolve and expand as our customer use cases dictate, as John articulated with Nokia’s ability to Expand to the Partner Ecosystem. Simplify the complexity and expand your sales ecosystem, by enabling your partner network, grow your revenue with the same core building blocks used for internal sellers.
At Apttus we continue to innovate, please be sure to stay current to take advantage of those innovations. Once again, I’d like to thank John Yankowski from Nokia for sharing their journey.