Should Businesses Create Their Own CPQ Solutions?
A company could hire employees to build it’s own buildings, make their own furniture, and fix their own air conditioners. They could – but they don’t. There are professional contractors, furniture manufacturers, service contractors, and other experts who can build, fix and support these things much faster, easier and more cost-effectively.
The choice to build or subscribe to a cloud quoting software application is another crucial point of consideration for decision makers. Some business decision makers think (or are convinced by others) that they should hire an internal staff to build software for the desired purposes. Some manufacturing professionals believe that they will have a competitive advantage if they build their own software as they expect to have a secret answer that will elevate them above the rest of the companies competing for their target customers.
However, there are software companies that have pre-built cloud software solutions that can be configured and customized to meet a company’s exact needs in much less time and money than designing, developing, and supporting in-house software. These manufacturing companies hire many experts to build software that is designed to solve specific sets of problems faced by their customers. The solutions generally are either:
- Horizontal – the solution solves common problem areas across many different types of industries
or
- Vertical – the solution solves problem areas specific to an particular type of industry.
What Does It Take to Build a Software Quoting System?
Just as building a home requires a fairly complex orchestration by a team of experts to complete, building a software quoting system necessitates much more than just hiring a programmer.
You need the following key people, each with specific skills:
Business Analyst
Specializes in gathering software requirements and preparing a detailed document for the software architect and programming team including plans for a graphical user interface and report design elements.
Software Architect
Select the appropriate technologies, development tools and third-party tools to use. The software architect also determines how the software will be layered into sections for future maintenance. He or she also decides the database objects, storage procedures and coding design for the programming team.
Programming Team
Developers who specialize in the technologies selected by the software architect. This team typically includes a UX designer, lead developer, and programmers. Just like carpenters framing walls, they will program what was designed by the business analyst and software architect. Expect a lot of re-do costs and schedule delays if the correct design decisions are not made up front.
Software QA Engineer
Performs manual and regression testing as the programming process unfolds. This is mandatory to meet the objectives.
For configuration pricing, it takes designing and developing a complex rules engine that can handle any pricing, discount, image, and proposal rules that sales comes up with now and in the future.
BCA Technologies has had customers who have shelved entire programs after one or more years of development because sales needs something that will require re-programming the pricing engine. One of our clients hired an India team and spent just under $500k – then had to abandon the solution because it could only price 75% of the products and was too slow to get a price. Another company spent over $20 million into their quoting solution – and abandoned it because their dream development team had no idea how complex the solution is – wasting 4 years in the process.
Software Roll-Out Is Critical
If the team programs perfect software, it takes experience to roll out quoting software to a sales channel that may be resistant to change. This takes experience and expertise that most software teams are not going to have.
Successful roll-outs require great software UX design because nobody has the time to read documentation anymore. Live and video training is a must and customer support is required to help those that don’t pick up software quickly.
Our experience is that if the sales reps cannot figure out what to do on the first or second try, and the solution requires more time to do a quote than what they are used to instead of saving them time, they are going to resist the change.
A software solution that is already been used by thousands of sales reps in the same industry has received the feedback necessary to avoid a bad roll-out.
Maintaining Software – It’s Not Over after Day One Roll-out
To properly support and maintain software effectively, you must also build a Helpdesk system to receive feedback from customers and quickly respond to bugs, problems, and new feature requests. Typically, maintaining software requires a team also:
- Software product manager
- Customer support trained on the software to support customer questions
- Programming team
- QA Person to program and run regression and manual testing as the software is changed and updated.
Budget for 3-5 full-time employees to adequately support a home-grown software CPQ system.
Don’t forget that programmers are typically more interested in keeping up with their technology knowledge and programming new code rather than supporting software bugs. Technology recruiters will tell you that the average time for a programmer to change jobs is every 1.5 to 3 years. So, companies considering building software themselves must plan to then have resources and money to hire, train, and manage these high-turnover positions.
Subscribing to cloud software is so popular now because it can be deployed in days, it works out of the box, and can be configured for your products and services quickly to return immediate results. IT, hardware, software, upgrades, and support is included in a price that is typically less cost than hiring even one software developer – let alone an entire team.
Cloud software can be deployed in days, works out of the box, and can be configured for your products and services quickly to return immediate results.
Bottom Line: Focus On What You Do Best
The bottom line is that manufacturing companies excel at producing products. They buy or finance machines like laser cutters, sheet metal and drill presses that help them make their products faster and more cost effective. Manufacturers should consider evaluating decisions about software building or buying the same way. Software development is not a manufacturing company’s core business. So, it makes solid business sense to rely on a company that specializes in developing manufacturing software dedicated to improving the quoting process.
eRep CPQ spreads its design, development, and support costs over many companies, providing million-dollar CPQ application features for less than the cost of a single developer. Plus, you get the benefit of a proven, well-liked software application rolled out in weeks, not years – without the risk of failure.