Every consultant and software vendor learns the importance of that most ancient of mantras early – The 3 word code that rights all sales ills and defies modern manufacturing… Looking the customer in the eye, “People, Process, and Data” we say…. invoking in deep reverential tones, visages of ancient forces of software panacea.

For emphasis you might add, “It’s all about putting the people together with the data in the process”. In response, the business user will usually nod along while IT grimaces at the thought of a 100 integration projects waiting to go off the rails.

People, process, data. Truer words were never spoken, yet what do most mission critical projects miss and why does this particularly matter to the modern manufacturer?

Who are the people, what are the processes and where is the data? And what does it have to do with effective and efficient customer commerce?

Let’s walk through an example of a well-respected modern manufacturing company to elaborate. Our case study is a $10 billion dollar company in the business of distributed power generation and control systems. Through continuous innovation mechanically engineered technologies have evolved to a portfolio of next generation products including telemetric electronic components and microprocessors, software and 3rd party integrated systems as well as professional services. The company sells standard products and custom designed solutions for global OEMs. Applications range across a variety of localized industrial and automotive uses in industries ranging from construction and defense to automotive and moving equipment. Since modern manufacturing facilities do not exist in many countries, the company licenses technology to local contract manufacturing partners and also works extensively with distributors particularly for programmable control systems that allow for high configurability based on the customer’s needs. Further, since sales cycles for standard product lines are cyclical and competitive, the company uses a variety of performance-based incentives for which forecasting and payment processing is critical to get right.
modern manufacturing worker

Let’s deconstruct this paragraph into a few core concepts and analyze their impact on this company’s core customer, channel and financial processes.

  • Continuous innovation – Products and technologies with rapid lifecycles particularly those with 3rd party components that have to be managed across multi-divisional and multi-geography catalogs. Impacts on standing orders, contracts and billing agreements that have to be assessed and executed without causing pain to the customer
  • Telemetric electronic components – Machine to machine interfaces that drive collection of usage and consumption data that in turn drive billing and invoicing, automated maintenance schedules and other contract events based on ratable schedules
  • Software – Subscription order management, billing, entitlement tracking, provisioning and implementation, maintenance and upgrades
  • 3rd party integrated systems – Integration of 3rd party products, pricing, warranties, revenue & pricing adjustments and revenue pass through
  • and custom designed products – Engineering to order, design to order and implement to scope configuration, quoting and pricing
  • Licenses technology to local contract manufacturers and works extensively with Distributors – Contract manufacturing agreement, supplier registration, OEM contracting, supplier contract compliance and channel reconciliation
  • Performance-based incentives – Set up and management of complex channel and end customer incentives based on volume or revenue models introducing net revenue risk

Modern Manufacturing ProcessesTraditionally, this manufacturer may have had well over 80-100 people across manufacturing and engineering, marketing, sales and customer service with duplicated processes and re-keyed data. Employees, partners and customers alike became so accustomed to complex, slow and inefficient supply chains that it was ok to charge and pay a premium for even half solutions.

Well, in 2015 the modern customer is no longer willing to play by the old rules. Mass customization and personalization is still the order of the day, but bespoke quote to cash is not. Machines talk to each other, low cost competition has commoditized the most differentiated products and regulation and social commerce have forced greater scrutiny of pricing than ever before.

Modern Manufacturing factoryPlatforms like Saleforce1 drive tremendous leverage out of a shared data model and a customer engagement platform. Suddenly sellers, channels and buyers find their people talking to each other in a common language, data gets entered often at source and processes are shared or even unified. At Apttus we see Quote-to-Cash fundamentally transforming these aspects across the enterprise value chain. Improved communication begins almost immediately from configuration using shared catalogs, transparent pricing, cross channel goal-setting and incentive programs, and customer self-quoting and e-commerce. The benefits continue through exciting and innovative usage and consumption-based subscription and revenue models.

Modern manufacturers are well served to take heed of a new spin on the old saw… One that integrates people, process and data not
just internally, but across partner and customer enterprises for a
true win-win in cloud commerce.

DRIVING MANUFACTURING GROWTH WITH CPQ

This white paper examines the key challenges confronting manufacturers today, as well as CPQ’s impact in addressing those challenges. It reviews leading capabilities of modern CPQ solutions that support corporate growth strategies and highlight next steps for pursuing CPQ initiatives in manufacturing.
CPQ Manufacturing

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