Integrated, End to End, Visibility and Control
Quote to Cash covers the business process for creating a quote for a prospect or customer, engaging and negotiating an agreement, order management and invoicing. Quote to Cash is a business process that is usually fragmented because it covers numerous departments inside organizations, and yet the data is common. In recent years, organizations prefer to be able to orchestrate the entire process in one single application.
The software industry has typically created a solution for each of the individual steps of the process. Other than the ERP integrated enterprise suites, each of these needs to be integrated which is messy and difficult from an IT perspective. Some market based research show some startling facts as shown below.
Every organization prepares quotes and/or takes orders
All 'for profit' companies that deliver goods or services provide some form of quote to their prospects and/or create orders to fulfill a commercial agreement.
9 out of 10 companies treat quoting separately from ordering
Most companies hold their sales teams accountable for preparing quotes while another group is responsible for processing the orders. There is not a consistent relationship between the responsibility of preparing quotes and processing orders. The majority of companies do not have a clearly defined process flow that articulates the various groups that impact the quotes.
Quote-to-order process is the least automated and least measured area of an enterprise
Those companies that have large investments in ERP systems typically manage their ordering functions within an entry system or directly in the ERP system. They may even attempt to manage quotes through the ERP system. It usually results in a cumbersome, slow process of preparing quotes and proposals as the ERP system may contain complete product and pricing information; however, it is typically incapable of generating a proposal or interfacing with sales-oriented systems.
A second typical solution is to prepare quotes through a Customer Relationship Management (CRM) system. However, CRM tools don’t have advanced enterprise capability in this area.
The third most common solution is to create a quote tool of some form. It may be a spreadsheet, database or custom-built quoting tool. The challenge becomes maintaining the integrity of the pricing and product tables, generating updated proposals and passing order data to back-end systems for processing. Many times companies will have multiple tools to accommodate different product lines or market segments.
Because of the disjointed methods of creating quotes, proposals and orders, the focus on measurement is non-existent. Seldom can companies create a measurement that would show the effectiveness of the process in quote conversions, average order size, cost of preparing quotes, proposals or orders.
Quote-to-order process impacts Revenue, Profitability and Customer Satisfaction
The quote-to-order process is the single link between top-line, bottom-line results and customer satisfaction. No other process is as critical for maximizing the value of capturing revenue in a profitable way and meeting the needs of customers. This process takes on the collective intelligence of the enterprise. The impacts of an accurate quote, proposal and ultimately an order makes the flow of all data and processes within an enterprise work smoothly that creates value for the customer.
Quoting and ordering is a critical process but seldom do companies take an enterprise view of their process. Imagine having a system to handle quotes, proposals and orders that are 100% accurate. Your sales channels can define customer requirements to easily provide a solution that meets customer needs. You can quickly produce an accurate quote that meets customer expectations and can be fulfilled by your company. You can empower your sales channels to push a quote to an order in seconds with one click of the mouse.
Your sales channels have more sales time, can increases quote and order volumes, can eliminate order errors and delivering on promises.
Quick Tips for Executing Quote to Cash Automation
- Quote-to-Cash Strategy
Is the process worthy of an enterprise strategy? How important is the protection of revenue, profit and customer satisfaction? The development of this strategy will define and give structure enabling consistent topline and bottom-line growth and dramatically increase customer retention and satisfaction. A key goal is to make it easier for customers to buy and buy again.
- Define a Roadmap
The plan to improve the process must be a strategic business initiative. Sponsorship of the plan resides with the executive team responsible for Sales and Marketing for the company.
- Set Goals
The goals need to be defined and the expectations set so that the project will generate increased revenue, reduced cost of sales and a repeatable sales process.
- Capture Current Process and Metrics
Document the ‘as is’ state to understand where the complexity, duplication and disconnected flows exist. Gain a complete picture of the existing processes.
Gather metrics.. Metrics provide the performance measurements of the current process. Evaluating the process, metrics and defining the requirements are key. Produce a meaningful requirements document and issues list. Decisions will be made regarding
the business rules for product configurations, discount programs, measurements that will give a view of process performance and delegation of authority.
- Develop Streamlined Process Flow with Metrics
The new process flow should take into consideration the prioritized issues from the analysis, resources and tools available, and the goals of the process improvement project. The overall objectives of streamlining the process should be to simplify the complex sale, reduce the activities that do not add value to the process, reduce the number of interactions to complete the process, delegate authority to the lowest level possible and employ tools that will provide consistent, highly accurate quotes and proposals.
- Implement New Process
The implementation of the new process will require focused effort on the part of all the process participants, a well planned project, role definitions and a process champion. The crossing of organizational boundaries will frequently require the cooperation of senior managers in each of the organizations, congruent priorities and appropriate goals defined to ensure success for the entire process.
- Measure Results
Monitoring the progress of the process can now be measured against the goals set out at the beginning of the strategic initiative. The metrics have been implemented and it is incumbent upon the executive sponsor to map the original goals to the results of the defined metrics over a period of time sufficient to extrapolate the projected benefits.