Emilia Dunaj
Emilia Dunaj
Head of Technology Insights
May 2024, 15 min. read

If you’re aiming to enrich the browsing experience of your B2B clients and streamline your sales process, quoting software for manufacturing, like CPQ, is essential. It helps to deliver quick and accurate quotes for your configurable products, boosting customer satisfaction and sales efficiency. 

However, manufacturers often face a dilemma: should they opt for off-the-shelf software or build a bespoke CPQ solution?

It’s important to note that every CPQ system, whether off-the-shelf or custom-built, involves a level of customization to meet specific business needs. Off-the-shelf SaaS solutions require adjustments and configurations to fit unique processes. Bespoke solutions are tailored from the ground up to match your exact requirements. 

This article provides a comprehensive comparison of both options, helping you make an informed decision whether to buy or build your CPQ. Keep reading as we’re busting all the myths around these solutions!

Let’s start with the basics.

What is CPQ and when do you need it?

CPQ stands for Configure, Price, Quote. It’s a type of software that helps manufacturers across various industries to sell their configurable products. CPQ software allows users to configure complex products, accurately price them, and quickly generate quotes. It ensures that all configurations are possible to assemble, prices are up-to-date, and quotes are professional and consistent.

Not sure if this software is for you? Here’s what you need to consider:

Do you offer complex products that require precise configurations? Are your sales teams spending too much time creating accurate quotes? Is pricing consistency a challenge across your organization? If you answered yes to any of these questions, CPQ software is essential for your business. 

CPQ software is especially beneficial for manufacturing companies dealing with mulivariant products. It reduces errors, speeds up the quoting process, and improves customer satisfaction by delivering accurate quotes quickly. 

📢 Learn more: Mastering Complex Sales With CPQ Software For Your B2B Ecommerce

What are common misconceptions about off-the-shelf CPQs? 

mytch about ready made cpq software

Off-the-shelf or boxed CPQs are popular, but misconceptions can mislead you about their true capabilities and limitations. Let’s clear the air:

Myth 1: Ready to use “out of the box” 

Not quite. Sure, they might offer pre-made templates, but to truly fit your business needs, you’ll probably need to customize them. This can add extra time and cost. Similarly, these solutions often need significant work from tech experts to match your specific processes and environment before they can go live.

Myth 2: Customizable to your business

To some degree, pre-built software allows customization. These customizations usually limit to superficial aspects such as branding elements and minor adjustments to the user interface (UI). However, for specific needs like complex workflows, performance calculations, they might not be enough.

Myth 3: Cheaper in the long run

Lower upfront costs can be deceiving. Hidden expenses often arise from the need for additional customization, integration with existing systems, and ongoing support and maintenance. We discuss this in detail in the “Hidden costs of pre-built CPQ solutions” section further down in this article. 

Myth 4: More reliable due to testing

People also stereotype boxed CPQs as thoroughly tested and thus more reliable. However, automated testing doesn’t guarantee a perfect fit for your unique processes. You often need to make adjustments, which leads to extra tests and costs.

Myth 5: Less complex to manage

Many assume that commercial quoting software for manufacturing is easier to handle. However, the reality is that managing a boxed solution with extensive customizations is a similar job to managing a bespoke solution. 

Debunking the myths of custom manufacturing quoting software

pros of tailor made cpq software

Studies show that 70% of top-performing companies use custom-developed software like CPQ. However, custom solutions get a bad PR for cost, time, and scalability. Let’s bust some myths:

Myth 1: Expensive & time-consuming

Yes, upfront costs are higher, but consider long-term savings. Custom CPQs are designed to fit your business perfectly, reducing the need for ongoing adjustments and modifications. This tailored fit also means a smoother deployment and better user adoption from the start.

Myth 2: Limited scalability

Custom CPQ is built to grow! Need more users, products, or markets? These solutions adapt to your changing needs. They are a flexible choice for your growing company.

Myth 3: Complex & hard to use

Custom solutions can actually be easier for your team to adopt. Because it’s built for your specific processes, a custom solution is surprisingly easier to adopt.  A reliable development partner creates training tailored to your unique needs, not generic software instructions. This gets your team on board and up to speed faster.

Myth 4: Gets outdated quickly 

Any software can become outdated as you launch new products and expand your offerings. However, a bespoke CPQ solution is designed with flexibility in mind, allowing for easy updates and improvements. Your tool evolves with your business, incorporating new product ranges, features, and functionalities as needed.

Myth 5: Difficult to maintain

A custom-built solution aligns perfectly with your needs, making troubleshooting and updates more straightforward. Plus, you receive dedicated support and custom documentation, which ensures your team can handle ongoing maintenance efficiently.

Comparing off-the-shelf vs. bespoke CPQ software

You can compare these two solutions from various angles to determine which option best suits your business needs. 

For example, the level of customization you require is a critical factor. Interestingly, around half of a custom CPQ project’s cost goes towards designing the user interface to match your needs. Therefore, it’s important to consider how much customization you truly need.

Let’s explore key differences in detail.

Comparison in terms of customization level

Off-the-shelf CPQsCustom-built CPQs

Come with predefined templates that can be modified to some level. They may not fully represent your unique processes and branding.
Offer basic customization options such as changing fonts, logos, and margins. However, these may not be enough to align with your brand guidelines and sales process.
Allow for complete customization. You can tailor every aspect of the software to meet your specific needs, from branding and configuration UI to workflows.
For businesses with unique or complex products, bespoke solutions provide the flexibility to build configurations and pricing rules from scratch.

💡 Which one to choose? Assess the degree of customization you need. If your processes are highly unique, a commercial solution might not be worth the ongoing investment.

Comparison in terms of User Experience (UX)

Off-the-shelf CPQsCustom-built CPQs
Users might be forced to follow a predefined flow, which may not suit all business processes.Allow for designing UX that matches specific user roles and workflows. 
Choose a step-by-step process or allow users to enter the configuration at any stage.

💡 Which one to choose? Consider your target users’ needs and how they will interact with the software. Tailoring the UX leads to higher adoption rates and better productivity. On average, every dollar invested in UX brings $100 in return, yielding an ROI of 9,900%!

Comparison in terms of industry fit

Off-the-shelf CPQsCustom-built CPQs
Designed to cater to a wide range of industries, which can be a drawback if you have specific needs.Designed with your industry’s unique requirements in mind. All aspects of the estimating and quoting process align with your business practices.
If your products require complex configurations or performance calculations, a bespoke solution will handle these intricacies better.

💡 Which one to choose? Evaluate whether the CPQ solution can handle the specific needs of your industry niche. If your products and processes are highly specialized, a bespoke solution might be necessary.

Comparison in terms of flexibility

Off-the-shelf CPQsCustom-built CPQs

Often come with restrictions on how much you can modify or update the software. Updates are controlled by the vendor, and you may need to wait for new features or fixes.
In many cases, the features you need won’t be available and will need to be developed from scratch anyway.
Businesses might need to adapt their processes to fit the software, which can lead to inefficiencies.

Adapt to your existing standards and technologies. With custom software developed for you–you own the code.
Flexible in terms of making updates and modifications as needed. You have control over the development timeline and can prioritize features based on your needs.
The software can be continuously improved and adapted to fit your changing business processes and market demands.

💡 Which one to choose? Consider how often your business processes change and whether the CPQ software needs to adapt quickly. Bespoke solutions offer greater flexibility for feature selection for your evolving needs.

Comparison in terms of scalability

Off-the-shelf CPQsCustom-built CPQs
Often scale by increasing the number of configurations or user licenses, which can become costly as your business grows.
There might be limitations on how well the software can handle increased data and users without performance issues.
Designed to scale according to your specific requirements. You can optimize performance and expand capacity as needed.
Since you control the infrastructure, scaling is more cost-effective compared to purchasing additional licenses for off-the-shelf solutions.

💡 Which one to choose? Evaluate your growth projections and choose a CPQ solution that can scale efficiently with your business at minimum cost.

Comparison in terms of implementation

Off-the-shelf CPQsCustom-built CPQs

Commercial off-the-shelf solutions with only minimal customization can be deployed relatively quickly.
Any extra features like integration with existing systems (e-commerce, ERP, CRM) require additional work, leading to additional costs.

While the initial deployment might take longer, the implementation is tailored to fit your specific systems and processes.
Bespoke solutions can be designed to integrate seamlessly with your existing systems, reducing the need for extensive modifications.

💡 Which one to choose? Consider the complexity of your existing systems and how well the CPQ solution will integrate with them. Bespoke solutions can provide a smoother, more tailored integration.

Comparison in terms of user adoption

Off-the-shelf CPQsCustom-built CPQs
Typically comes with general training materials that may not cover specific business processes.
Users might face a steeper learning curve if the tool doesn’t align well with their existing workflows.
A reliable software development company will customize all training and documentation to reflect your specific business processes and user roles.
Users can adapt more quickly to software that is designed to fit their workflows.

💡 Which one to choose? Plan for comprehensive training tailored to your users’ needs to ensure smooth adoption and effective use of the CPQ software.

Hidden costs of pre-built manufacturing CPQ solutions

When considering commercial tools, manufacturing businesses often focus on the apparent benefits, such as lower initial costs and quicker deployment. However, hidden costs often arise, making these solutions more expensive and less efficient in the long run. 

Pre-built CPQ solutions often only offer ready engines, which roughly cover a maximum of 20% of the entire project. As the graph below illustrates, the remaining phases, such as UI (50%), management & communication (15%), and testing & deployment (15%), still require significant effort and resources.

quoting software for manufacturing implementation phases explained

Here are some of the common hidden expenses associated with off-the-shelf CPQ solutions:

Customization costs

Predefined features and templates seem like a good deal, but extensive customization is often needed to make them fit your business. This customization can involve changes to user interfaces, workflows, and branding–all at an additional cost. While the initial price tag might be lower, these customizations can quickly eat away at your savings.

Integration costs

Integrating off-the-shelf CPQ solutions with existing systems such as ERP, CRM, and e-commerce platforms can be challenging and costly. While they might advertise integrations, these often require extensive customization to work with your specific setup. This translates to additional costs and delays in getting your CPQ up and running.

Training costs

Standard training materials often fall short. They’re generic and don’t address your unique workflows. Creating custom programs to bridge the gap takes extra time and resources, especially if the software forces major changes to how your team works.

Maintenance and support costs

Vendor updates keep things secure, but they can also disrupt your workflow and cost you extra. You have no control over the timing or what changes, which can lead to scrambling to adjust and maintain smooth operations.

Scalability costs

As your company grows, you may find that the scalability of an off-the-shelf CPQ solution is limited by its licensing model. These solutions often charge based on the number of users, products, transactions, or configurations. As a result, the costs can increase dramatically as your business expands. Additionally, as you add more data and users, the software might struggle to keep up, leading to performance issues. You may need to invest in more hardware or additional licenses to handle these demands.

Compliance and regulatory costs

Pre-build CPQs might not always meet specific industry regulations or compliance requirements. Ensuring that the software adheres to these standards can involve significant customization (read: additional costs). For many industry niches with stringent regulatory requirements, these compliance-related expenses can be significant.

Why does custom quoting and estimating software pay off in the long run?

While off-the-shelf CPQ might seem tempting upfront, custom solutions offer unbeatable long-term advantages that make them a smarter investment. Here’s why:

Perfect fit, seamless workflow

A custom CPQ tool is built exactly for your business. Every aspect of the software, from UI and configuration rules to pricing engines, fits seamlessly with your existing workflows. For many manufacturing businesses with complex and unique products, this level of customization is essential. 

Long-term cost savings

While the upfront costs of tailor-made solutions may be higher, they often lead to significant long-term savings. Custom CPQ reduces the need for constant tweaks and training that often plague off-the-shelf options. It also eliminates hidden costs like expensive integrations and ongoing support fees.

Both custom and off-the-shelf solutions require similar efforts in data structuring and collection. However, custom solutions can adapt to your data structure, optimizing software to fit your specific needs.

Future-proof flexibility

Your business grows, your CPQ grows with you! Custom solutions adapt to your changing needs, adding features, integrating with new systems, and scaling as you expand. Your software won’t be blocking your success. 

Faster quotes, happier customers

Optimized for your business, custom quoting software for manufacturing delivers speedy and accurate quotes. This translates to satisfied customers and more sales orders closed. Plus, your sales team saves time to focus on strategic work.

Easy to use, high adoption

Custom CPQ is designed with your users in mind. It’s intuitive and user-friendly, leading to higher adoption rates and a happier workforce. Custom training ensures everyone gets the most out of the system. Additionally, it improves visibility over your sales and stock, connecting different aspects of your business for better decision-making and efficiency.

Nail complex calculations for specialized products

Custom CPQ solutions handle complex calculations, such as performance metrics, mechanics, and thermodynamics, ensuring precise and reliable outputs. If you sell specialized products, demonstrating this accuracy in your product configurator module is crucial. Your clients make confident choices, knowing exactly what they’re getting for their projects.

The conclusion is clear: investing in a custom CPQ solution pays off significantly in the long run. The rules engine can be customized to simplify data management and optimize rule administration over time, ensuring cost-effective and efficient manufacturing operations.

📢 Further reading: Benefits of CPQ Software for Various Industries

Choosing buy vs. build CPQ manufacturer software

The best CPQ solution depends on your company’s unique needs. Here’s how to decide:

  • Identify problems:  Start by pinpointing issues in your current quoting process. Is it complex configurations or price inconsistencies? A custom solution can be tailored to address these specific challenges.
  • Consider future growth: Think about your business expanding. Will your CPQ keep up? Custom solutions can offer far bigger savings and flexibility in the long run, adapting to new users, products, and markets.
  • Get everyone involved: Talk to sales, production, IT, and finance to understand their needs and concerns. For instance, sales might prioritize ease of use, while IT focuses on integrations. Choosing a solution that works for everyone is key.
  • Read case studies: Read stories about other companies that have implemented the CPQ solutions you are considering. Such research can provide valuable insights into their experiences, challenges, and the support provided by the software vendor.
  • Look beyond the price: Consider all costs, including yearly license, maintenance, customization, integration, and training.

A good strategy is to avoid vendor lock-in and gain agility with a custom CPQ. Diversifying your software providers increases security and reduces dependency on one supplier. For instance, if you have an ERP and an off-the-shelf CPQ and want to replace one, you might have to replace both. Custom solutions allow more flexibility and independence, even if you use the same provider for both systems.

This approach ensures you can switch out or upgrade one system without being forced to replace the entire setup. 

Conclusion

Choosing the right CPQ software is crucial for your business. Making the wrong choice can lead to costly mistakes and inefficiencies. Off-the-shelf solutions might seem attractive because of their lower initial costs and quicker setup, but they often come with hidden costs for customization, integration, add-ons, and training. They may not fit your unique business needs perfectly and could require constant adjustments.

Opting for a custom-built CPQ solution typically involves higher initial costs and longer development times. However, they provide a tailored fit that meets your specific requirements. These custom solutions offer long-term benefits like scalability, flexibility, and better user adoption. Why? Because they are designed with your teams and end-users in mind from the start.

Ultimately, the choice depends on the complexity of your business and your long-term goals. For companies with complex manufacturing processes, a custom CPQ can provide the precise functionality needed for success. 

How we can help

Still not sure which solution would be best for your business? With over 20 years of developing product configurations and CPQ software solutions, we’ve seen it all. That means we understand the unique needs of businesses across industries. Our expert consulting services are here to help. Schedule a meeting with us, and we’ll advise you on the best CPQ fit for your business.