CPQ: Optimizing MedTech Operations and Sales to Accelerate Cash Flow

CPQ: Optimizing MedTech Operations and Sales to Accelerate Cash Flow
Chris Lekander, VP of Delivery, Wilco Source

The lead-to-cash process in most B-to-B organizations––particularly those operating in the medical device industry––is often complex and lengthy. This is even more apparent when operations, sales and customer success teams operate in manual and siloed environments. 

In this all-too-common scenario, not only does it slow cash flow velocity, it also leaves the organization vulnerable to inconsistencies, inaccuracies and more errors every time a handoff occurs between departments. 

When the organization lacks a single source of truth for product or service pricing quoting, and customer information, it not only extends the sales cycle, it can also compromise the order fulfillment process, and ultimately, the customer experience. This is where configure, price, quote (CPQ) software can bring greater efficiency and consistency to the quoting process and the organization overall, as well as provide visibility to all stakeholders involved in the process. 

Using CPQ to Configure Consistency

In many organizations where there’s little automation or interoperability between company systems, sales teams tend to operate from their own systems and spreadsheets––manually plugging in numbers using information that may not always reflect the most current product or pricing. When this occurs, it can create inconsistencies and inaccuracies in quoting, not to mention, add valuable time to the overall process. 

These inconsistencies and inaccuracies tend to compound in medical device and medical technology organizations where product portfolios are continually evolving, pricing fluctuates and quotes have to be configured to meet the specifications of each customer. This is where cloud-based CPQ solutions can be used to create standardized processes and automation to streamline every step from quoting to the order fulfillment handoff. 

Preprogrammed rules can also be defined within CPQ software to define customizations, discounts, product compatibility, etc. This puts swimlanes or parameters around the quoting process to ensure all sales reps and channel partners operate from the most current product information––and eliminate the potential of underbidding a contract. 

Improving Accuracy with CPQ 

Another common problem apparent in manual processes is achieving accuracy. When CPQ software is properly integrated with the organization’s customer relationship management (CRM) and enterprise resource planning (ERP) systems, it empowers sales teams to generate more accurate quotes in near real-time and deliver a more personalized experience. 

When all of these systems––ERP, CRM and CPQ–– talk to one another, it brings product, pricing and customer information into one single source of truth. CPQ then acts as a guided selling tool by aggregating all of that data to drive the quoting process, enabling salespeople to select the proper products and product bundles, and even upsell or cross-sell the right products to the right customer at the right time. 

Beyond the quote-generation process, once the quote is complete and the contract is signed, a cloud-based CPQ solution can then automatically feed that information directly to the ERP to begin the order fulfillment process. When these systems are integrated and automation is in place, it not only speeds the process and reduces the potential for things to slip through the cracks, it also ensures important data is accurate and replete. The most up-to-date customer and product order information is accessible to all the individuals who touch the process leading to more successful and efficient fulfillment. 

And greater efficiency and accuracy translate to an improved customer experience. But there are also some precautions to take with CPQ software. 

When CPQ Alone is Not The Right Fit 

Most medical device and medical technology companies are already heavily invested in a company-wide ERP that houses and tracks inventory for a large volume of products across the organization. These have likely been built up over numerous years and rebuilding everything into a new system to support the implementation of a CPQ module isn’t always the best solution.

Not only does this take a tremendous amount of time to do, but it can also introduce change management issues such as poor user adoption, which mitigates the intention behind the migration. Instead, building automation that allows the existing ERPs to communicate with CPQ software is often the better route to go. 

Additionally, this data should continue to originate in the ERP and feed to the CPQ software rather than attempt to rebuild the data in the new solution. In doing this, it creates another set of records, which then need to be maintained. Unless there is a team or individual dedicated to perpetually updating and duplicating new data, it can quickly become stale. This increases the potential for mismatched data records, incomplete data, more silos and ultimately, an inefficient quoting and fulfillment process. 

Every organization is unique and developing the right solution to bring efficiency and automation to the lead-to-cash process is not just about the technology. It’s about architecting a solution around the organization’s processes. Whether that means migrating to a new platform with CPQ capabilities or integrating a CPQ solution with an existing system, the goal is to eliminate manual processes and silos. 

CPQ can serve as an essential hub to help facilitate the flow of product, pricing and customer information to get products out the door faster and therefore revenue in the door, but you have to take into consideration the entire ecosystem and the various digital tools already in use.

About Chris Lekander

Chris Lekander is the VP of Delivery at Wilco Source, a Salesforce partner that specializes in digital transformation strategies for healthcare and life sciences organizations. In her role, she leads digital transformation efforts for some of the world’s largest specialty pharmaceutical and medical device companies.