Anastasiya Bulykina
Anastasiya Bulykina
B2B Marketing Manager
December 2023, 10 min. read

Have you ever tried using Microsoft Excel to quote advanced manufacturing products, only to find that it isn’t up to the task? Well, fear not! This article will introduce Configure, Price, Quote (CPQ) software. We’ll explain why CPQ software is superior to spreadsheets like Excel when it comes to managing the complex quoting processes involved in advanced manufacturing. 

Can Excel be an efficient CPQ tool?

You can manage your quote creation in Excel, but in 2024, there are more effective ways to do this.

Depending on the product information type (simple or complex), setting up a pricing model in Excel could be challenging for a sales team. Complex products require more pricing formulas, components, options, or accessories configuration. Very often, Sales reps handle this process with complicated Excel sheets.

How hard is it to share updated Excel files through the whole network of internal or external users? You probably know it.

The standard spreadsheet calculator or pricing engine might be enough to generate simple quotations. However, more complex pricing models and large-scale industrial systems need a more comprehensive solution.

As a growing business, your search for sales automation solutions that make your business processes more efficient. So why managing extensive quotes in Excel is inefficient?

  1. Advanced pricing models are unavailable. Excel only covers basic pricing formulas and calculations. Therefore, it is hard to navigate attribute-based pricing, seasonal offerings, quantity-based pricing, and discount calculations.
  2. Lack of external data. Excel can only manage internal data inserted manually. There is a lack of archive of previous pricing models. That is why you can operate only in the current pricing system and can’t track changes. Thus, you may have hundreds of Excel sheets with different price versions and updates.
  3. Prone to mistakes. Inserting data manually leads to errors. Gathering data by one person exceeds the probability of making a mistake. Creating complex quotes requires manual work. This includes summarizing data from files, emails, storage, or the cloud. Above all, even a simple typo can cost you time spent on double-checking and finding an error.
  4. Limited database. Entering a massive amount of data into a spreadsheet slows down the program. Dividing it into smaller files leads to chaos. Comparing data and finding an error is tricky. You can only track file changes by losing the program’s effectiveness. Moreover, there is a risk of losing direct access to the location of files due to accidental overwriting or deletion of backups.
  5. It’s not an intuitive and user-friendly tool. If a new salesperson joins the team, operating advanced Excel sheets, finding multiple quote formulas, and navigating complex price configurations are difficult. Onboarding takes a lot of time, after all.
  6. Safety issues. Data can be easily stolen from an Excel sheet because it is unsecured. It’s incompatible with other business systems, and you cannot control the changes. There is no history of the previous version of the file and notification of who edited it. As a result, anyone can change pricing models, formulas, or data.
  7. Lack of collaboration capabilities. Excel doesn’t allow multiple employees to collaborate and contribute at different stages of the quotation process without creating conflicts. On the other hand, you can collaborate simultaneously in the online version of Excel. However, there may be problems saving work.

Therefore, an Excel sheet cannot be a pricing tool for complex product quoting.  As a growing business, you’re looking for solutions that make your business processes more efficient. One of them is CPQ (Configure, Price, Quote) software.

Excel vs. CPQ Software shown difference

What is CPQ software?

CPQ stands for Configure, Price, and Quote. It’s automation software that allows creating, customizing, and automatically generating offers for the products offered by the company. This sales tool supports sales departments by quickly presenting quotes and sales offers to customers.

The main goal behind the CPQ (Configure, Price, Quote) platform is to digitize the sales process for advanced products or services. The CPQ sales platform accelerates creating and processing orders from multiple markets and channels, minimizes manual work (e.g., work with spreadsheets), and eliminates human errors. Additionally, the offers standardization allows faster delivery of the necessary information such as prices, detailed technical documentation, or advanced calculation results.

(C) Configure

Find or configure the right products and services based on requirements and get comprehensive information with possible extensions. Product configuration involves defining the various features and options that can be selected for a product and any dependencies or constraints between those features and options.

(P) Price

Depending on the market, calculate prices based on the configured product with extensions and accessories. Additionally, quoting systems manage pricing for configurable products, considering discounts, promotions, or other factors affecting the final price.

(Q) Quote

Create and seamlessly deliver accurate quotes for a customer.  Once a customer has selected the desired product configuration, the CPQ app will automatically generate a sales quote based on configured product data and pricing rules.

CPQ system creates an automized process based on inserted data, such as configurations, customizations, promotions, and other values. In other words, It enables sales operations to automate and optimize the process of selecting or configuring the right product based on the requirements, up to pricing and creating quotes for B2C and B2B clients.

Configure, price, and quote system can serve as an internal and external guided selling tool. Firstly, customers can independently select the right product from the catalog. Secondly, configure it according to their needs and immediately see the price. For instance, read about an intuitive CPQ tool we created for Suzuki company.

Common CPQ software features

Product or service configurator

Configure, Price, and Quote software includes tools for personalizing products or services to meet customers’ needs. It may involve selecting options, features, and adding additional components or accessories. Visualization is a critical component of Configure, Price, Quote (CPQ) software. It is often the software’s most visible and interactive part, allowing users to see a visual representation of the product they are configuring.

Pricing calculation

Due to different pricing rules for discounting, most companies maintain multiple price lists based on location, quantity, or channel, complicating the pricing process. CPQ software helps quickly calculate prices based on the selected configurations, implement price control, eliminating pricing errors and thus not losing revenue or customers. In addition, quickly delivering high-quality quotations increases the probability of closing the deal.

Quotation or proposal creation.

CPQ tool acts as a quote configurator software that quickly generates error-free, high-quality proposals. The quoting solution includes all relevant product or service information, including pricing, terms, and additional details. 

Knowledge transfer

When the product or service, process, and pricing policies are complex, the CPQ platform guides sales representatives and end customers with adequate support at every step.

Increased close rate

A quick and easy creation process of high-quality quotations can dramatically increase the probability of closing the deal fast. As a result, it leads to a higher close rate from the beginning.

Upselling and cross-selling

Upselling can be achieved by presenting customers with product configurations that offer additional features, functionality, or performance. While cross-selling can be achieved by providing customers with bundled packages or product add-ons that enhance the value of their initial purchase.

Read about industries that successfully implement CPQ Solutions in our dedicated article What is CPQ Software?

Comparison table: Excel Sheets vs. Configure, Price and Quote (CPQ) Software

AspectExcel SheetsCPQ Software
User InterfaceBasic spreadsheet interfaceUser-friendly and intuitive interface
Data ManagementManual data entry; prone to errorsAutomated data capture; high data integrity
Complex Pricing HandlingLimited; requires manual updatesHighly capable; supports dynamic pricing
CustomizationLimited customization optionsExtensive customization and scalability
IntegrationMinimal; requires manual effortSeamless integration with other systems
Speed and EfficiencyTime-consuming for complex tasksFast processing of complex configurations
AccessibilityTypically local or via shared drivesCloud-based, accessible from anywhere
CollaborationLimited real-time collaboration capabilitiesEnhanced collaboration features
Error HandlingHigh risk of human errorAutomated error checks and validations
Reporting and AnalyticsBasic; relies on manual compilationAdvanced; real-time analytics and reporting
CostGenerally low upfront costHigher upfront cost but more cost-effective in the long run
Comparative Analysis of Managing Complex Pricing and Quoting: Excel Sheets vs. Advanced CPQ Software

CPQ software advantages over traditional pricing in Excel

Accuracy. CPQ software reduces errors and improves the accuracy of quotes. This is done by automating the calculation of prices and ensuring that all relevant information is in the proposal.

Speed. CPQ software streamlines creating and sending quotes. As a result, sales teams generate proposals more swiftly.

Customization. CPQ software can be tailored to a business’s specific needs and processes. That is why using CPQ software allows for more flexible and customizable quotes and proposals.

Integration. CPQ software can be integrated with other systems like ERP and CRM software. Consequently, all product, pricing, and customer data is consistent and up-to-date across all systems.

Reporting and analytics. CPQ software can provide valuable insights into customer preferences and purchasing behavior. Thus, It can help sales reps tailor their proposals effectively and win more deals.

CPQ workflow for complex products

Standard solutions are insufficient for advanced products and systems where physical or mathematical calculations are required to select products and provide comprehensive data sheets. Typically, those processes are supported by experienced sales engineers or several applications that, during the sales process, are used to compose the final document provided to the customer.

To increase efficiency, reduce mistakes, and, most importantly, secure the scaling up of the sales pipeline, organizations and sales departments introduce integrated custom CPQ solutions as web-based applications.

To sell more advanced products, sets, or systems online, you need a solution where the engineering knowledge can be transferred, and users can be guided through the whole sales funnel.

Firstly, the typical outcome from this process is comprehensive product cards and technical data sheets (TDS). Secondly, quotations can contain not only basic information like an item number, SKU, EAN, description, images, drawings, technical parameters, or attributes but the complete information about the product. In many cases, calculations results or Bill of Materials (BOM) for production purposes.

Custom vs. off-the-shelf CPQ software

Offering customized products to customers requires a wide range of product features and configurations, as well as the ability to provide offers in a short time. Usually, Commercial Off-The-Shelf (COTS) solutions, like Salesforce CPQ, don’t cover all the needs of companies with advanced product portfolios. Like any software, it has its own set of limitations and potential drawbacks.

Hence, it is better to consider a tailor-made solution. A bespoke CPQ solution can be tailored to your business needs and developed based on your company’s domain knowledge.

Key takeaways

What you need the most in your business is a satisfied customer. CPQ provides 100% reliable quotes generated for every new query with high accuracy. Moreover, the software provides a more comprehensive and automated solution for creating and sending quotes and proposals than Excel, which can be time-consuming and error-prone.

Customers’ loyalty grows If cooperation with you goes smoothly and you can provide high-quality services. In short, professional-looking quotes are what your customers expect from you. Overall, implementing CPQ applications in your business is a good idea. The best CPQ software can offer a range of benefits for businesses, including:

  • Minimalizing the amount of handwork with price configuration
  • Allows users and customers to configure complex products and see the impact of their configuration choices in real-time
  • Sales support and assistance through knowledge transfer encapsulated in software
  • CPQ empowers the sales process
  • Access to up-to-date product and pricing information
  • Capacity for Engineer to Order calculations
  • Delivering accurate quotes
  • Configuring product, pricing, and quoting in one application 
  • Efficient quotation workflow
  • Support for many markets, languages, and different channels

In conclusion, it is worth saying that manufacturing companies should implement Configure, Price, Quote (CPQ) software to streamline the sales process and improve accuracy, efficiency, and customer experience. Therefore, implementing CPQ software for manufacturing can lead to increased sales, reduced costs, and a competitive advantage in the market.