A digitally federated CPQ for streamlined architecture and harmonized sales
A digitally federated CPQ package can help to streamline the enterprise architecture ecosystem, as well as harmonize the ‘prospect to order’ sales process.
A digitally federated CPQ for streamlined architecture and harmonized sales
At Digital Transformation Asia this Week, Onkar Gosavi, Lead Consultant at Infosys will be part of a panel discussing how to create seamless experience for customers. Find some of his insights in the blog below before the panel on Thursday. Cloud-based commercial off-the-shelf (COTS) ‘configure price quote’ (CPQ) solutions are available, but the challenge for communications service providers (CSPs) is rolling these solutions out fast by retiring multiple legacy applications that perform destitute tasks. Since complex product rules and complacent stakeholders use legacy applications, it becomes difficult to retire them. This challenge is further exacerbated through and merger and acquisition activity. A digitally federated CPQ package can help to streamline the enterprise architecture ecosystem, as well as harmonize the ‘prospect to order’ sales process.
Digitally federated CPQ and a need for it
A digitally federated CPQ is a centralized solution that integrates with an enterprise’s product catalogues, multiple legacy CPQ applications, CRM, digital e-commerce portals, order orchestration, billing, reservation and inventory applications. It enables a unified quote on cross-product portfolio bundles by adhering to selling, eligibility, and compatibility rules. It also enables sales process harmonization via a 360-degree view of quotes and commercial subscriptions. CSPs have developed multiple in-house CPQ applications over the years, catering to: Integrating legacy CPQs with digital portal connected iOS/ Android apps is far-fetched because of how difficult it is to adapt to industry standard data model frameworks (such as TM Forum’s Information Framework - SID), as well as the complexities involved in creating mobile apps and micro-service based architecture from legacy CPQ applications. It results in an unwieldy sales process as well as an underwhelming customer experience because of the many sales touchpoints for the quote and proposal process.
- Different sales channels such as: web, direct sales, indirect, or partner sales.
- Multiple customer segments, such as: retail, wholesale, enterprise, or SOHO.
- Varied product portfolios such as: IP VPN/MPLS, mobile and fixed voice, white labelled, or third-party solutions.
- Mergers and acquisitions of telcos, mobile virtual network operators (MVNOs), OTTs in the same or different regions, having their own CPQ and master product catalogues.
Figure 1: Impact on sales effectiveness due to multiple CPQ applications
Figure 2: Impact on customer feelings due to multiple sales interactions
Common transformation hurdles
In this age of digital transformation, the CSP’s IT leadership undertakes sizable programs to replace multiple legacy CPQs with a strategic CPQ application. However, such programs are time consuming, or do not achieve business outcomes and are subsequently terminated. This undermines the efforts of the IT leadership as significant investments are made in vain.
Figure 3: Reasons for single CPQ transformation program failures from multiple legacy CPQ applications
Key elements of a digitally federated CPQ include: Federated CPQ business capabilities and interfacing services may vary based on the CSP’s enterprise architecture guidelines and business unit capabilities. TM Forum REST API specifications are recommended to govern interfaces around federated CPQ for prompt and standardized enablement of enterprise integration architecture.
- Integration with enterprise product catalog (EPC)
- Unified quote platform for converged telco solutions
- Dynamic and design-time bundling
- Microservice-based Integration complying with TM Forum open APIs
- Cross-sell / upsell based on custom 360-degree view
- Digital platform integrator to achieve end customer and partner self-service
- Contract-driven pricing to offload OSS from commercial view
- Shopping cart to order decomposition to act as lighter commercial order management (COM)
Figure 4: Conceptual federated CPQ architecture within enterprise with mapping of TM Forum REST APIs
TM Forum Open API references:
TMF 620: Product Catalog Management API TMF 637: Product Inventory Management API TMF 648: Quote Management API TMF 685: Resource Pool Management API TMF 629: Customer Management API TMF 651: Agreement Management API TMF 622: Product Ordering API TMF 679: Product Offering Qualification API
Quantifying federated CPQ
The reusability, componentization, modularity and flexibility index of the federated CPQ helps to figure out the effectiveness of the entire prospect to order cycle. It is important to define the effectiveness metrics of the CPQ design to assess the need for a dedicated CPQ solution in the IT ecosystem. Indicative federated CPQ metrics are shown below. The definition of above metrics can be found in this whitepaper.
- Increase in bundle offer creation %:
- Reduction in CPQ sales handling time %:
- Increase in lead creation %:
- Increase in lead to customer / account conversion %:
- Increase in automated digital interfaces %:
- Reduction in manual touchpoints in the CPQ process %:
- Reduction in OPEX %:
- Increase in NPS %:
Benefits
The primary benefits of using the federated CPQ are omnichannel sales with a faster rollout of bundled product offers interfacing digitally with direct sales, account executives, partners and customers.
Considerations
- Keeping tabs on capital expenditure (CapEx) is critical to success, particularly due to the co-existence of legacy CPQ applications. It should be balanced with significant reductions in operating expenses (OpEx) by reducing the number of employees working on existing legacy CPQ applications. Also by launching converged bundled solutions via federated CPQ for early revenue realization.
- There should be a business strategy to retire legacy CPQ applications in iterative phases, by uplifting product models, compatibility rules, order decomposition logic and all the interfaces on the federated CPQ to make it a strategic CPQ application.
- But using a COTS CPQ package, pre-integrated with customer relationship management (CRM) and hosted on a cloud platform, there will be a faster CPQ rollout and integration because of the out-of-the- box configuration and microservice features.