Configure | Price | Quote (CPQ)

Configure-Price-Quote (CPQ) is a term commonly used for the process leading up to generating a sales proposal for companies offering complex products and/or services. CPQ software helps companies configure complicated product offerings, price them in such a way that the correct discounting and bundling rules apply to products or sets of products, and create fast, accurate quotes based on that information. CPQ software bridges the gap between front and back end systems, and assists companies in the lead-to-order and lead-to-cash processes.


The CPQ Acronym


The process of discovering, selecting, and combining product and service options to create a configured product while taking into consideration all rules and constraints. Examples may be configuration of a product that is available in many different configuration options, many of which are dependent on each other.


Deciding the amount required for payment while taking into consideration the configuration and additional conditions. Examples of additional conditions may be economic benefits, manufacturing costs and competition’s pricing.


Documentation describing the requested products and services, pricing, and associated terms and conditions.

When is packaged CPQ needed?

Below is a list of compelling areas that should be considered when evaluating if a packaged CPQ solution is necessary:

Company is operating in a B2B model, and operates in a negotiated selling environment.

Customized product offerings and pricing/discounting are crucial to success.

Multiple products, services, and bundles are in the mix.

Complex configuration and business rules are required.

Complex approval processes, such as credit check, engineering approval, pricing approval, and legal approval are necessary.

Segmentation of customer base for specific pricing and discounting rules is strategic.

Volume of users and quotes is significant enough to warrant increased automation, or the growth path is such that it will in the near future.



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Configure | Price | Quote Components

Configure Price Quote

Product Configuration

Products can have many aspects that make them configurable to a customer’s needs – size, color, materials, ingredients, capabilities, technologies, and more. In many cases, a single product to a customer is the compilation of a few products within the system products like automobiles, boats, pizza, and others.

Products can have limitations on what can be packages together. Dependencies may exist, like ‘cannot have one product without the other,’ and prices may vary depending on products when bundled together.

Standard Pricing

Standard prices are provided for each product or product attribute in a catalog. Standard prices for each product are key to keeping the available products (product catalog) from growing out of control. The available product variations create the need for additional pricing schemas.

Those schemas can be added to the core product, making these options available to other products within the product catalog. This structure ensures consistency and reduces the need to build customer specific products within the product catalog.


This process is the central method for increasing Average Revenue Per User (ARPU), which is an essential growth metric for most service providers.

Up-selling is the process of selling more of a particular service. For example, moving from 6 MB for $25/mo to 18 MB for $45/mo internet speed is a typical up-sell.

Cross-sell is when a customer purchases a separate product or service from what they had originally. For example, if the customer originally had internet service, but expanded to include phone and cable, that is an example of ‘cross-sell.’

The combination of up-sell and cross-sell is the primary method of driving more revenue within an existing customer base. Another common phrase is ‘wallet share.’ Many service providers have a goal of increasing the wallet share from their customer base, which is often done through up-sell/cross-sell measures. The concept of ‘bundling’ or ‘packaging’ is a method for accelerating up-sell/cross-sell.

Up-sell/cross-sell can be done at time of customer creation, or over the course of the life of the customer. In the context of a call center, many agents are compensated specifically for up-sell/cross-sell as they perform their typical customer care. “Thank you for you updating your credit card information, did you happen to notice that we have expanded our internet offerings in your neighborhood and are offering a special 3-month free during the summer?”


A proposal is typically the first step in putting to paper the customer’s wants and needs. Proposals are generally ballpark estimates for the product and services required because at this point in the process all of the technical aspects have not been fully fleshed out. The purpose of a proposal is to test the waters, both for the organization and the prospect to see if a deal can be worked out. Proposals may often be sketched out with pen and paper, or communicated via phone or email, but should always be denoted as informal, with a more formal quote to follow.


The quote is often the first commitment made by a business to new customers. Once the customer has selected the product or product feature set that meets their needs, a quote will be presented that clearly demonstrates the options selected, the prices, and discounts available to them. This ensures complete understanding of what is being purchased, the contract terms, and any additional service details.

Customers may not agree to the first version of the quote or seek to negotiate additional terms/services. Quotes should be easily changed and reconfigured to represent any additional changes at a near real time rate.

In another scenario, it may take time for a customer to return with an answer to the quote. In such a case, the quote can be stored for future reference without having to re-engineer the quote or take the customer back through the entire process again.


The quote should provide an area for the customer to easily agree to the terms provided in order to facilitate the provisioning, activation, shipping, etc. necessary to provide goods and services quickly and easily to the customer. The approvals are retained for future reference.

Internally, an approval may be required to provide a quote to a customer. In any case requiring approvals for quotes, the process should be as efficient as possible. Approvals often ensure that quotes are accurate, meet internal revenue standards/margins, and terms are sufficient. The approval process should involve the appropriate level staff and be clearly communicated as quickly as possible. Approvals are retained for future reference.

Certain customers require special care. These customers may receive appropriate discounts added to their quotes, special services, or renegotiated price rates outside of what is available to the sales team at that time. These require even more speed and efficiency as well as thorough review at the appropriate levels.


Key Benefits of CPQ

Sales Effectiveness

Feature: Guided selling

Benefit: Sell more deals, able to have junior or inexperienced salespeople effective more quickly.

Bigger Deals

Feature: CPQ typically allows bundles to be quoted.
Feature: CPQ typically has ‘up-sell and cross-sell’ capability.

Benefit: Sell bigger deals by presenting targeted offers to customers during the selling process.

Sales Productivity

Feature: All quotes – and quote users and approvers – are using the same tool, eliminating the need to search for status.

Benefit: Salespeople have more time to sell.

Efficient Risk Management

Feature: Approval steps for key access like Design, Inventory, Price Discount, Credit Worthiness, and Legal Review.

: Reduced risk, enforcement of company policy, ‘the will of the business.’

Key Requirements for CPQ Tools

Product Catalog

Ability to interact with typical Service Provider Product Catalog environment.

Selling, Billing, Provisioning Catalogs

Multi-Channel Selling

Ability to operate efficiently in a Multi-Channel Selling model with multiple quote entry points.

Salesforce CRM, Call Center, eCommerce, Partners, API

Pricing Types

Ability to support pricing for Usage, Recurring, and Non-Recurring charges for a single product.

Discount Types

Ability to support Discounts at each level of charge.

Monetary, Percentage, Void


Ability to support Bundling of multiple products and services into a standardized offering.

Customer Lifecycle

Abillity to support the Lifecycle of the Customer throughout their tenure with the company. New, Add, Renew, Up-Sell, Cross-Sell

Assets & Inventory

Ability to quote off of existing Assets or Inventory

Pricing Environments

Ability to work effectively in standard, customer, and customer-specific Pricing Environments.

Exceptions Process

Ability to manage Exceptions Process efficiently. Need fine-grained level of precision for conditional branching, full visibility to quote regardless of stage, and intelligent routing and queuing.

Quote Quality

Ability to present professional, easy-to-digest Quotes and Proposals.

Downstream Integration

Ability for Downstream Integration with ordering, contracting, and fulfillment applications.


Subscription CPQ & Recurring Revenue

The era of Customer Success Platform-Based Quote to Cash has joined the fray, and for many of ATG’s clients and prospects, the timing is perfect. Business agility is the name of the game now, and our clients are faced with numerous technological, economic, financial, and societal trends that are dramatically changing the way they need to do business.

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What’s in a CPQ Tool?


FACT Framework

ATG recommends that the quoting process follow the FACT framework – Fast, Accurate, Clean, and Transactable.

Every company is intentionally or unintentionally balancing the need for speed, quality, accuracy, and efficiency. For example, every sales rep will tell you that the fastest way to get a quote out the door is to eliminate any approvals, but typically business stakeholders accept that there are financial or legal or other risks that need to be mitigated, hence the need for at least some approval process to ensure quality and accuracy.

Are there too many approvals in the process? Too few? What about data? Should addresses be validated up front, or only at Order time? Should customer credit be checked? If yes, should it be early or late in the process? Each of these factors must be balanced to ensure an optimal selling environment.

FACT Framework Quoting CPQ

Quote process is as responsive as the customer requires.


Provisioning and Billing Information are complete and accurate.


Quotes and proposals are professional and add credibility to the selling process.


Opportunities, Quotes, Contracts, and Orders are integrated with limited need for redundant data entry.

Will of the Business

Effective implementation of a CPQ tool provides a company with the ability to fine tune their selling environment, speeding up (more risk) or slowing down (less risk), adding complexity (more product options or bundles) or reducing complexity (all you can eat pricing). It can be useful to think of this environment as a combination of gauges on a dashboard that reflect the balance of speed, quality, and risk.

Quote speed in CPQ beforeQuote speed in CPQ after
Quote Quality in CPQ beforeQuote Quality in CPQ after
Financial Risk in Quoting CPQ beforeFinancial Risk in Quoting CPQ after
Delivery Risk in Quoting CPQ beforeDelivery Risk in Quoting CPQ after

Detailed: People | Process | Technology

CPQ is ‘The Thing in the Middle,’ meaning it comes between Opportunity and Order and in typical larger B2B service-provider enterprises, you can’t get from here to there without it.

From a sales perspective, both Inside Sales and Field Sales – as the direct conduit to the potential customer, use CPQ extensively. But it’s not their realm exclusively.

The Customer Service, Product, and Operations groups are all intimately involved with CPQ as well, while the Finance group and Legal are key stops on the journey from prospect to sale. In many organizations, the executive team gets involved on large or potentially risky deals.






ATG maintains a set of 75 key business processes to support management of Customers and Revenue for Service Providers. Twenty-six of these processes originate, or are impacted by the CPQ function. Below are the key processes that are touched in CPQ, categorized by the Organizational Unit that owns the process:

Sales Organization

Quote: Product Configuration – configuration of feature and attributes of products and services prior to a sale.

Quote: Product and Service Pricing – configuration of product and service pricing available through the quoting tool.

Quote: Product and Service Discount – configuration of product and service discounts based on certain criteria (e.g., volume discounts, geography).

Up-Sell Processing: Initial Order – selling a customer a separate, better product or service from what they had originally expressed interest in during the needs assessment.

Cross-Sell Processing: Initial Order – selling a customer a separate product or service from what they had originally expressed interest in during the needs assessment.

Partner Transaction Management – oversight and integration of any third-party re-seller or partner transactions, including selling, licensing, and billing.

Renewal Processing – methods used to continue a customer’s services beyond the contract’s expiration period. May be an automated or manual process.

Customer Service Organization

Up-Sell Processing: Ongoing – the primary method for increasing Average Revenue per User (ARPU), and is the process of moving a customer to a better product or service at some point during their relationship with your company.

Cross-Sell Processing: Ongoing – the primary method for increasing Average Revenue per User (ARPU), and is the process of moving a customer to a similar product or service at some point during their relationship with your company.

Renewal Processing – methods used to renew customers’ services, either manually or utilizing automated processes.

Product Organization

New Product Introduction Process – configuring attributes and introducing new products or services to the product catalog.

New Product Introduction Process – Mobile – configure attributes and introduce new products and services made available on mobile devices.

New Product Monetization Process – the configuration of pricing for a new product or service.

Bundled Product Introduction Process – the configuration and introduction of grouped products and services to the product catalog.

Promotion and Discount Process – the configuration of promotions and discounts to new or current products and services.

Operations Organization

Quote: Product/Service Approval – configuration of required approvals for products, services, discounts, and pricing configurations prior to the sale.

Finance Organization

Credit Check Management – the oversight of processes surround checks to clients’ or customers’ credit history and worthiness.

Commissions Processing – the processing of tracking sales commissions and sales reward programs.

Revenue Recognition: Earned Trigger Processing – method for appropriately triggering revenue recognition events.

Revenue Recognition: Contract Line Item Segmentation – methods used to categorize contract items to ensure revenue is recognized properly.


Maintenance and Oversight of Monetization Ecosystem – processes around ensuring that all touch points and connections within the ecosystem are optimized to their fullest potential.

Vendor Management of Monetization Ecosystem – oversight and communication duties of ecosystem software components and their vendors, including management of vendor road map and change logs and general relationship nurturing.

Monitoring & Testing of Vendor Functional Releases – as ecosystem components release updates and patches, each is checked and tested to confirm all systems are working together as required by the business’ requirements.

Cross-Training of Monetization Ecosystem Components – process for training organizational resources on the appropriate software systems.

Security Oversight of Monetization Ecosystem – process for maintaining and controlling access and permissions to ecosystem components.

Data Stewardship Across Monetization Ecosystem – process of assigning ownership and sources of truth for data within the organization.

As more and more companies look for ways to capitalize on recurring revenue sources and utilize usage data to create new revenue streams, CPQ will continue to grow at an accelerated pace.

CPQ has been around a long time, notably in the communications and I.T. arenas. Today, it permeates most verticals and is delivered via the following means:

  • Multi-Tenant Cloud
  • Single-Tenant Cloud
  • Native Platform
  • On-Premise Software

Key Vendors

Below are the key CPQ technology providers for the service provider community:

Founded: 2010
HQ: Palo Alto, CA
Company Type: Public
Cloud/On-Premise: Cloud

Acquired by Salesforce in early 2016, SteelBrick helps companies accelerate growth by automating quoting, contracting, and ordering processes. The company’s flagship product, SteelBrick CPQ, is built 100% on the Salesforce1 cloud and mobile platform.

Configure Price Quote (CPQ) – Configure products and pricing, maximize cross-sells and up-sells, and deliver quotes quickly.

Propose & Contract
– Automate add-on orders and quickly generate proposals, contracts, and renewals.

Bill & Collect
– Easily process orders, invoices and payments, and recognize revenue promptly.

SteelBrick’s target market are companies operating within the software, manufacturing, networking/storage, high tech equipment, healthcare/medical devices, and business services industries.

Marketo – A leader in digital marketing software and solutions
Ametek – Manufacturer of precision detectors, nuclear instrumentation, analysis software, and systems
Nimble Storage – A provider of a flash storage platform
RAE Systems – Global provider of gas and radiation detection systems
Optivia Biotechnology – A leading provider of high quality transporter assay services

Founded: 2006
HQ: San Mateo, CA
Company Type: Privately held
Cloud/On-Premise: Cloud

Apttus develops cloud-based quote and renewals management software. Apttus provides Quote-to-Cash, Configure, Price, Quote (CPQ) and Contract and Revenue Management solutions using SaaS applications and modules. Apttus utilizes the Salesforce1 platform to automate business functions and drive the business process between the buyer’s interest in a purchase and the realization of revenue.

Applications include Quote-to-Cash Intelligence (Analytics), E-Commerce, Configure Price Quote (CPQ), Renewals, Contract Management and Revenue Management.

Configure Price Quote (CPQ) – Intelligently configure, price and quote new deals, sales and renewals within the Salesforce platform to realize bigger deals, shorter sales cycles and higher win rates.

Contract Management – Improve contracting responsiveness, efficiencies and oversight while reducing risk and cost.

Revenue Management – Track revenue from initial opportunity to recognized revenue, reduce leakage by managing rebates, revenue schedules and royalties.

Apttus’ target market consists of companies of any size across many industries looking to automate or streamline their billing process while using the Salesforce platform.

DocuSign – a digital transaction management network

CenturyLink – a global communications, hosting, cloud and IT service company

Salesforce – a global leader in CRM and cloud computing

Akamai Technologies – a leader in content delivery network services

Founded: 1996
HQ: Dublin, CA
Company Type: Public
Cloud/On-Premise: Cloud

CallidusCloud is a leading provider of cloud-based sales, marketing, and learning solutions. They enable organizations to accelerate and maximize their quote-to-cash process with a complete suite of solutions that identify the right leads, ensure proper territory and quota distribution, enable sales forces, automate CPQ, and streamline sales compensation — driving bigger deals, faster.

Their Cloud Computing platform enables customer access to:
• Rapid time to value
• High availability
• High performance
• Bullet-proof security
• Compliance
• Anytime, anywhere access

CallidusCloud tends to target small, medium and large enterprises across multiple industries globally that want to optimize the lead to money process to close more deals for more money quickly and efficiently.

ADT – supplier of security systems, home automation, alarms, and video surveillance
AVG – specialist in computer security software
DirecTV – provider of satellite-based digital television service
Siemens – engineering company with divisions in industry, energy, healthcare, and infrastructure & cities
Telefonica – global provider of broadband and telecommunications


Founded: 2009
HQ: London, UK
Company Type: Privately held
Cloud/On-Premise: Cloud

CloudSense is a global leader in industry platforms for Quote-to-Cash. The CloudSense platforms deliver transformational sales effectiveness for companies configuring, pricing, and quoting products and services from simple sales to sophisticated subscriptions.

Customers benefit from higher order values, reduced order errors, increased automation of sales processes, and quicker product launches. The customer purchase journey is optimized with a single product catalog across all sales channels giving customers one order and one bill. Integrating into CRM, ERP, and other systems; the CloudSense platforms provide companies with a powerful Configure Price Quote (CPQ) SaaS capability for e-commerce, mobile workforce, retail, reseller, and telephone sales. The CloudSense Commerce Platform includes:
• Pricing Management
• eCommerce
• Order Management
• Subscription Management
• Contract Management

CloudSense Commerce Platform markets to companies configuring, pricing and quoting products and services from simple sales to sophisticated subscriptions. The company’s other offerings are geared toward telecom and media companies with a need to increase sales and reduce overhead costs.

NewsDay – New York media publisher streamlines ad bookings on Salesforce
Ziggo – leading Netherlands communications and entertainment services provider
Factory Media – digital and print ad sales

Oracle CPQ

Founded: 1977
HQ: Redwood Shores, CA
Company Type: Public
Cloud/On-Premise: Cloud

Oracle CPQ Cloud, formerly known as BigMachines, is an Oracle product that enables sales teams, channels, and e-commerce sites to sell faster, more easily and more accurately. Oracle CPQ allows companies to:

Close deals faster – respond to customer inquiries faster, shorten sales cycle times, and reduce back-and-forth iterations
Improve customer experience – deliver a superior and consistent customer experience through all channels
Increase sales – use guided selling and product configurations to increase up-sell and cross-sell opportunities
Eliminate waste and maximize margins – ensure accuracy across all quotes and orders

Oracle CPQ Cloud’s target market consists of industries and companies of all sizes looking to increase sales efficiency and effectiveness, modernize sales processes and equip teams with tools, resources and intelligence to increase revenue.

Trimble Navigation Ltd. – a manufacturer of GPS receivers and other navigation systems
Carestream – a worldwide provider of dental and medical imaging systems and IT solutions
Red Hat – an enterprise software development company
AGCO – a global manufacturer of agricultural equipment
Kodak – an American multinational imaging and photographic equipment, materials and services company

IBM Sterling Commerce

Founded: 1955
HQ: Dublin, OH
Company Type: Public
Cloud/On-Premise: On-Premise

IBM Sterling CPQ offers CPQ solutions across multiple transaction channels. These solutions simplify and streamline sales processes for customers, sales teams, call center representatives, and partners. IBM Sterling CPQ offers CPQ solutions while delivering integration with, a major CRM system. Their key offering for configuration:

IBM Configurator – a guided selling tool used in on-site order placement.

IBM Sterling CPQ tends to target B2B organizations ranging from electronics and computing hardware companies to telecommunications businesses.

TELUS – a leading Canadian telecommunications company
Avnet, Inc. – global provider of products, services, and solutions in the computer service industry
LBD Group – a business advisory company specializing in a wide range of business processes
Cxense ASA – global provider of analytics and data management as well as search and personalization solutions in the computer service industry
Komsomolskaya Pravda – A Russian daily newspaper company

Founded: 1987
HQ: Houston, TX
Company Type: Public
Cloud/On-Premise: Cloud

PROS Holdings, Inc. acquired Cameleon in October of 2013. PROS Holdings, Inc. is a software provider for pricing and margin optimization, which provides customers insight into their pricing strategies and identifies detrimental pricing practices. PROS also aids in customer and market segmentation to optimize customers’ pricing decision-making and improve business processes and financial performance. Cameleon assists companies in streamlining the quote-to-order process, increases sales across various channels, and brings new products to the market faster. Cameleon Software solutions delivers functionality in several areas:
• Opportunity-to-Revenue Optimization
• Automation
• Data Science
• Analytics
• Pricing Guidance and Execution

In addition to its features, Cameleon Software solutions delivers integration with major CRM and ERP systems including Salesforce CRM, SAP, Microsoft, and Oracle.

PROS Cameleon CPQ targets a large sampling of companies including those in the telecommunications and software industries that range from mid-sized and large businesses to global enterprises.

Cable ONE – provides high-speed internet, cable television, and telephone services to residential and business customers
Sage – provides services and business management software for small and medium sized businesses
SFR – provides cable and phone-services
Technip – provides project management, engineering, and construction services for the energy sector around the globe

Founded: 1983
HQ: Dallas, TX
Company Type: Privately held
Cloud/On-Premise: Cloud

FPX offers CPQ (Configure Price Quote) solutions while delivering integration with major CRM systems including and Microsoft Dynamics. These solutions run across multiple platforms and are quick to implement. FPX’s key offering is FPX Predictive Applications, which combines structured database applications and predictive analytics tools to optimize complex business processes. FPX Predictive Applications offerings includes:

• Smart CPQ
• Smart Renewal Management
• Smart Contract Management

FPX tends to target high tech companies that range from mid-sized businesses to global enterprises. These companies vary from software providers to a global helicopter company.

Bell Helicopter – manufacturer and distributor of commercial, missions, and military helicopters
Genband – global provider of market-leading IP switching, application, networking, and service solutions
Interactive Intelligence – provider of cloud and software services for customer engagement and business collaboration



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