Build vs Buy CPQ Software

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.

Start Reducing Lead Time and Increase Your Sales Today

Does your Equipment make noise?

If a manufacturer’s equipment makes noise, then it is important to not only let customers know what that noise level is, but also predict the sound levels a customer can expect when the equipment is placed in a room.

BCA Technologies provides equipment selection software sound and acoustic calculation DLLs that can be incorporated into design tools, selection software, and eRep for use with any sound producing equipment such as HVAC, generators, copiers, engines, electrical, and rotating equipment located outside or inside.

Having acoustic calculators gives the manufacturers an edge over competitors who do not have sound calculation tools in their software.

Here is some information about Outdoor Equipment sound:

Acceptable sound levels for humans is defined by OSHA. Equipment located outdoors like generators, machinery, chillers, pumps, etc. generate noise that may exceed those acceptable levels. Equipment located outdoors can be attenuated using either Insertion losses (acoustic blankets, walls, enclosures) and by distance from the noise source. The resulting noise level is calculated by the BCA acoustic DLL, giving designers assurance that the right equipment is located and attenuated for acceptable use.

Here is some information about Indoor sound and acoustics:

Sound power levels represent the sound as it is produced by the source, with no regard to attenuation between the source and the space. Acoustical design goals are necessary to provide criteria for occupied spaces where people can be comfortable and communicate effectively over the background noise of the air-conditioning system and other background noise sources.

Acoustical design goals are desirable sound pressure levels within a given conditioned space and are represented by noise criteria (NC) curves. The NC curve levels represent a peak over a full spectrum of frequencies. A high value in a low frequency band has the same effect on NC level as a lower value in a high frequency band. It is important that sound levels be balanced over the entire spectrum relative to the NC curve. The lower the NC criteria curve, the more stringent the room acoustical design must be to meet the design goals.

It is important to know how to convert NC levels from the unit ratings in terms of sound power (Lw). This conversion depends on the specifics of the acoustical environment of the installation.

The resulting calculations are compared to the NC curve selected for the area to assess the acoustical design. Some of the factors that affect conversion of sound power to sound pressure and consequent NC level include:

• type of ceiling
• use of metal or flex duct
• absorption in the occupied space
• location in the occupied space
• open or closed layout plan
• use of open or ducted returns (if applicable)
• orientation of unit to occupant
• use of lined or unlined duct

Contact BCA to find out more about BCA’s engineering selection programs with acoustic calculators and how these tools give your company a competitive edge!

Make Customers Wait for a Quote, and Pay the Price

In the HVAC industry, making  your reps and distributors have to wait for a quote from the factory causes opportunities to not close to sales.  That is a fact I have heard over and over again in my 20 year experience from independent sales reps.

Last week, Tom, a VP of Sales for a very large independent manufacturer’s rep firm (they represent over 40 manufacturers products in 3 offices) shared with me that they picked up a new line of products with a manufacturer. They like the products and the manufacturer, but their sales reps have to call the manufacturer to get pricing and selections. They usually get the quotes within 2-3 days from the manufacturer.

Tom told me that if they have to wait even 24 hours for a quote from the manufacturer, that is too late.  Tom’s customers, typically contractors, expect a price the same day and sometimes the same hour – or they start asking others for pricing.

In the HVAC business and in other industries, time is critical because people have choices. And in today’s world, people don’t like to wait.

In Tom’s case, the sales rep’s quoting activity for this product line has diminished to minimal because they know they can’t respond timely. This one Rep firm could add 40% more sales to this manufacturer this year alone – and that is only one rep firm!

eRep CPQ solves this problem by putting the product selection, quoting and submittal tools in the hands of sales reps so selecting the right product and providing a quotes get done in minutes – not days.   This translates to win for the sales rep and huge wins for the manufacturer.

  See the video

Don’t Drive Your Customers to Competitors

Customers no longer have the patience for slow sales responses. They’ll seek out manufacturers and vendors who can meet their needs across all sales channels.

If you’ve got a complicated or slow response sales process, don’t offer online options, or are still using manual processes for pricing, you are probably driving your customers away. Learn what you could be doing to keep your customer base from shrinking.

The dynamics of B2B sales has changed and changed quickly.

Customers now demand to be served when and how they prefer. Any of these issues just might send them to your competition:

  • Have to call or email then wait to get pricing
  • Friction in the sales process, including limited buying options.
  • Prolonged, inefficient buying processes.
  • Lack of transparency in pricing.
  • Inability to control the buying experience.

According to Forrester, 93% of buyers prefer to buy online.

Why? Because its faster and easier.  The process can be done fast, and when and where the buyer is located.

Think of your own experience – would you rather search and buy something on Amazon, or call a salesman, tell them what you want, wait for a quote, then get an email quote, develop a PO, etc, etc.

eRep solves the problem by giving manufacturers a online platform that lets their customers (reps, distributors, and end users) log in from the manufacturer’s website and find and develop quotes themselves at the price discounts that are set up for that customer.  This platform can be set up and have customers placing orders in a couple of weeks – not years.