How to Integrate CLM & Salesforce CPQ

How to Integrate CLM and Salesforce CPQ

ATG & DocuSign

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SEP 29, 2021

As a business grows, the sales contract process becomes increasingly complex, especially in a business-to-business (B2B) selling situation. Selling to business customers typically involves longer sales cycles, more scrutiny of deals, complex product and service offerings, and higher customer expectations. To efficiently and effectively sell today, businesses need to automate as much of the Quote to Cash process as possible in order to scale and meet customer expectations.

This is particularly important for businesses that have multiple product or service offerings requiring the use of quotes or estimates and order forms because these can further complicate the sales process. Even if the business is using a CRM system to manage customer data, a lack of automation in the Quote to Cash process can lead to errors, delays, poor customer experiences, and billing and collection issues.

In this blog, we explore a variety of technology solutions that can help automate Quote to Cash in conjunction with automating the sales contracting process.

What is the Quote to Cash process?

The Quote to Cash process describes the complete sales workflow, beginning when a sales rep creates a quote for a prospect, through the point at which a contract for purchase is completed, the company bills the customer for the purchase, and ultimately receives payment.

Steps in the Quote to Cash process include:

  • Quote/proposal: The quote allows a prospect to see the costs and specific line items that will be involved in any desired purchase.
  • Sales contract/MSA/framework: The contract includes the detailed terms and conditions that apply to a broad relationship across a few (sales contract) or many deals (MSA).
  • Order form/sales order: An order form outlines the specific list of products or services the seller will provide and the buyer agrees to pay once accepted. A purchase order is often initiated at this step.
  • Invoice/bill: An invoice is a request for payment with a description of the service(s) or product(s) provided, the amount owed, and the deadline for payment.
  • Payment received: The company records payment against the invoice.
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The Quote to Cash Tour

A Layperson's Guide to Quote to Cash

"Now, generally, you hear a lot about Quote to Cash with big service-provider, business-to-business companies in negotiated-selling environments. But let’s break the concept down to the lowest common denominator – McDonald’s. That’s right, McDonald’s."

READ MORE...

While this may seem like a straightforward process, each of these steps involves a number of stakeholders and variables that can introduce the possibility of errors. As pricing models become more complicated, especially in a software-as-a-service (SaaS) model, the sales rep must navigate upfront pricing, monthly subscription pricing, annual costs, customization, bundling, and potential discounts. The quote often has to be approved by multiple stakeholders to ensure any discounted pricing or modifications to standard commercial terms are acceptable to the business. There may be several rounds of negotiation of pricing and other commercial terms before the contract can be executed and signed.

How do I know if I need CPQ Software?

Recent research shows 53% of sales departments say their quoting process is fully or partially manual. Configure-Price-Quote software (CPQ) can help sales teams navigate the challenges of manual quoting by automating the process based on pricing and discounting policies, as well as approval routing workflows.

CPQ software can help streamline the sales process for organizations with a high volume of contracts, or contracts that are high in value and involve complex negotiations. If your business has a lot of conditionality in your pricing model–for example if product A is included, it triggers a specific discount or if two products are bundled, a different discount should be added–it will be almost impossible for sales reps to keep track of all the potential rules. If your organization is experiencing discrepancies between a discount offered by sales and what the billing system reflects, or if your reps are seeing differences between the data in Salesforce and what the customer sees on the quote document, it may be time to consider a CPQ solution.

There is also a competitive factor–up to 50% of sales go to the vendor who responds first. By automating the process, your sales team has a better chance of winning the opportunity.

How CLM can help with the Quote to Cash process

Implementing a CPQ solution is a great first step to streamlining the sales quoting process. But it’s important to remember that the sales contract isn’t just a financial or pricing document, it’s a legal document. Each product or service that is included might have specific language and terms and conditions that need to be referenced accurately in the contract. Without an automated contract system, there’s a process gap between specifying the commercial terms in quotes and including the relevant legal terms in contracts.

To fill that gap, sales reps create manual workarounds to help them get a contract to the customer as quickly as possible. A common shortcut taken by today’s B2B sellers to prepare a contract is to copy an existing document and replace the original content with details about a new deal. This process is a quick way to produce a contract, but it also opens the door for a range of errors - incorrect data entry, reuse of outdated language or terms, repetition of previous mistakes, etc. It’s vital that the contract is correct because it will serve as the document of record for all the commercial and legal terms agreed to by both parties, including being the “source of truth” for billing disputes that may arise.

Even after all parties have signed an agreement, some negotiated terms can be important for ongoing business. Entitlement, provisioning, professional services automation (PSA), billing, and ERP are just some examples of systems and tools that may rely on the results of negotiated terms. When the results of relevant negotiated terms can be provided to those tools via integration, not only is the risk of errors and manual tracking minimized, but the speed in which post-signature activities can begin is improved. Relying on manual workflows instead slows down the whole process, resulting in delayed revenue collection and decreased customer satisfaction.

Contract lifecycle management (CLM) software can help act as the connection between CPQ and the billing process. CLM manages the full agreement life cycle for complex contracts with automated document generation, real-time negotiation, drag-and-drop workflows, and powerful search. CLM can also be configured to trigger actions at important dates which can be extremely useful in renewal negotiations.

Integrate CLM with CRM and CPQ to generate contracts

Most of the data you need to prepare a document comes from other systems. Instead of requiring sales reps to copy information from a CRM into a sales agreement, a CLM tool integrates with your CRM to automatically populate sales contracts with customer details.

By combining preapproved templates with these integrations, sales teams can streamline agreement generation and approval to complete agreements in significantly less time with far fewer errors. With all agreement systems integrated on a single platform, sales reps can kick off contracts and maintain visibility throughout the process without ever leaving their CRM.

Accelerate legal review with a preapproved clause library

Whether the legal team gets involved in contracts at the generation, negotiation, or approval stage, those resources are generally in high demand and using their time efficiently benefits everyone. With a CLM solution, the legal team can build a library of preapproved clauses that can be inserted into agreements and empower sales reps with a self-service means of creating documents that meet the business’s legal standards without requiring additional effort from legal counsel.

Negotiate and collaborate in one place

It’s far easier and much faster for multiple parties to work together on an agreement if everyone has access to the same version of the document. No more disparate local files stored in emails or on desktops. When every individual party can access a single live file, accessible via a secure central repository, the process moves far more efficiently. This also allows the legal team to focus on the actual deal from a commercial perspective, rather than making the same edits to frequently requested changes within a document.

A detailed history of changes helps every party understand the progress of the document in case of an audit or another incident further down the road. When things have changed in the contract, CLM can do the writeback to update Salesforce to reflect what’s in the final contract.

Best practices for implementing CLM with CPQ

At ATG, we have helped hundreds of customers implement quoting, contract, commissions, and billing systems with the leading providers of cloud-based solutions. Here are some key recommendations to help your organization evaluate your current sales environment, identify key challenges and develop a successful Quote to Cash process.

  • Understand your existing Quote to Cash process.
  • Start with CPQ first. When we begin an engagement with a client, it is important for us to understand the variety of ways in which they sell, how they price their products and services, and how billing happens.
  • Focus on strategic business outcomes. The data in CPQ is the source of truth for products and pricing. Defining the products within CPQ and the configuration of the quoting system is an important prerequisite for generating reliable contract documents that reflect the approved quote content. Define measurable KPIs.
    • Decreased sales cycle times
    • Decreased billing disputes
    • Reduced internal costs per contract
    • Increased renewals
    • Identification of bottlenecks within the Contracting process

ATG has developed the Atlas® Delivery Framework, a proven implementation methodology to help clients successfully navigate CPQ, CLM, SPM, Commerce, and Billing solutions. This framework includes:

Rigorous gated-stage methodology

Our framework approach provides consistency across all phases of the project, including estimates, staffing, start-up, design/build/test iterations, QA, conversion / migration, deployment and adoption.

Accelerators

Augment the out-of-the-box product capability to speed the implementation of key business functions

Productivity tools

Facilitate debugging, testing, and providing environment comparisons

Domain-specific training

Ensures consultants are leveraging Quote to Cash best practices and monetization strategies

Project/Portfolio Oversight

Ensures consultants are leveraging Quote to Cash best practices and Monetization strategies

Vendor Oversight

Permits ATG to work with the software provider to ensure the client and project are closely aligned with the product roadmap


This blog was contributed by Hannah St. Peter and Adam Dessurne, practice leads at Advanced Technology Group (ATG), a DocuSign Platinum Partner, and the fine folks at DocuSign. Learn more about how ATG expertise in this area can help drive a successful implementation of DocuSign CLM.

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