July 25 by Protik Mukhopadhyay

Today, as more and more companies evolve their Go To Market strategies, a critical component of that strategy comes in the form of the Quote-to-Cash (QTC) process. Quote-to-Cash is a term that is used to describe a business process that covers product or service selection, pricing, quoting, contracting, invoicing, payment checking, and contract renewal.

In this post, I will walk you through what questions to ask while looking for the right QTC solution. We’ll examine the challenges faced by organizations that operate a manual QTC process or, potentially, no quote-to-cash process at all. This discussion will also serve as the precursor to our upcoming webinar, which will take an even deeper dive into the world of QTC selection.

Requirements Identification

At Standav, the first step in the process is to work with our clients to identify what is required; we can then translate those needs into the most efficient solution. I have been involved in numerous complex QTC implementations, and we have formalized a method that streamlines the selection process and guides the implementation.

The primary reason QTC vendor selection can fail lies in premature decision making and a lack of internal clarity. Organizations are too quick to jump straight to the vendors instead of first taking the time to understand what they need out of the solution. This critical first step should include identifying goals and value drivers.

While the primary users of your QTC platform may be sales or channel users, a QTC platform has implications across the entire organization. Cross functional leadership engagement is critical to the success of the project. It cannot just be sales, or operations, or finance or, IT – it should be truly cross-functional with a clear understanding of what the value proposition is. By having a complete team involved early on, you ensure that the proper attention is paid to optimizing the entire workflow.

Important Questions

Questions to help you and your organization discover and understand requirements are:

  1. What pain points exist in your organization’s process today?
  2. Where do you want to take your QTC strategy?
  3. Do you have a configuration problem, a pricing problem or both?
  4. What do your average quotes that cover ~80% of your requirements look like?
  5. What does a complex quote look like in your organization?

Expanding on this, next evaluate your approach to market:

  • Do you want to increase deal sizes? Or would it be more beneficial if you improve your margins?
  • What are the functionalities or use cases that matter to you most? As you make these considerations, remember that this undertaking is not just about tool enablement or system transformation, but it will also involve process transformation

Once your strategic goals are defined, the next steps are to focus on the actual QTC Technology platform. There are several considerations when evaluating demos and talking with vendors.

Quote-to-Cash Considerations

Master Data

Ask potential vendors to update master data products and prices and see how it gets reflected in the QTC data model. Typically, your master data (customer, product, etc.) resides within external systems, usually CRM or ERP. During the demo, ask them to make changes in the source system and see if the QTC solution can get the updated information in real-time. Ask if the interface is out of the box and included with the QTC solution or does it need to be developed and maintained by you?

SKU Proliferation

Find out how the QTC vendor supports the creation of a single SKU that is priced according to many variables. For instance, several usage-based components might make up the total price. Think about how Amazon Web Services is pricing their offering (storage, number of transactions, etc.) all with individual rates, which make up one single product SKU. SKU proliferation is a major issue in large organizations. Find out during your evaluation if the potential vendor can manage one-off price changes at either the customer, account or product levels without needing to create a new SKU.

Cart Performance

Add multiple items to the cart, such as lines, products, and configurations to find out what the maximum number of cart items that can be supported. Request a demo of a complex shopping cart that is close to their recommended limit. Then while you are on this page make some changes to the cart, such as modifying the discount percentage, to see how long the recalculation takes. Try to do this with different elements until you see a reduction in performance. This will give you an idea of potential pitfalls in the future.

Approval Process

When you get to the point of viewing the approval process, ask each vendor to show you use cases of how they support custom approval workflows based on discount type, price, the number of lines, terms, offerings, etc. Ask if they can change the criteria for the approval process in real time.

Quality Assurance

Test the renewal capabilities, as they are often missed in evaluations. What is the default behavior of the system in situations where a contract is up for renewal, and the prior agreement’s products are no longer active?

Final Thoughts

Statistics show that there is a 62% greater chance of closing a deal when the purchase process is easy. Understanding what your customers want to buy and how they want to buy is critical to your QTC product, and sales strategy. One size fits all doesn’t cut it.
Think about these final questions:

  • Do your customers prefer a one-time payment vs. a subscription model?
  • Are they considering a purchase vs. a lease?
  • Which parts of the buying process can be automated?

Start where your customers want you to be and then work backward. This will have an impact on your product offerings, marketing programs, sales strategy and route-to-market strategy. The selection, vetting, and implementation of a Quote-to-Cash platform is a complex undertaking that requires internal cooperation and decisions, as well as a thorough understanding of what to ask potential vendors and what to look for during demos.

Join us August 2, at 11AM PT / 2PM ET to continue this discussion. I will also be joined by Ruchika Chopra, who is a leading QTC expert.

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