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Is SteelBrick CPQ on Salesforce a killer app?

The SteelBrick CPQ tool is now part of Salesforce. Expert Eric Borthwick offers best practices for using it, and looks at how this affects Apttus CPQ.

When Salesforce acquired SteelBrick, it signaled a new era in the company's expansion beyond CRM to become a platform player.

Salesforce acquired SteelBrick, a quote-to-cash vendor, for more than $300 million in December. SteelBrick offers what is known as configure, price, quote (CPQ) capability, which enables companies to automate their pricing processes. This is particularly important for companies with complex pricing structures, including bundling and discounting. CPQ applies the rules and logic to products and quotes, enabling automatic, standardized and easily documented pricing. Companies still need to streamline product pricing structures to remove complexity for customers.

The SteelBrick CPQ acquisition signaled change on a couple of levels: First, application development on top of Salesforce has become easier. Just two months after acquiring SteelBrick, Salesforce demoed the new CPQ application on top of Sales Cloud. Users can now configure pricing directly in Sales Cloud, which means greater efficiency because there's less toggling between apps. It also results in fewer errors because the data resides in the same app where CPQ resides.

The SteelBrick CPQ acquisition also has implications for Salesforce partners. Salesforce isn't afraid to choose a winning horse among its partners -- even if it's not the front-runner -- to build into its own platform. In the case of SteelBrick, other partners may have made more sense (read: Apttus), but Salesforce chose SteelBrick. The result is that this native CPQ capability will challenge other partners in the field. While Salesforce CEO Marc Benioff said that there is plenty of business to go around, Salesforce is encroaching on partners' territory.

SteelBrick CPQ vs. Apttus

The benefits of CPQ have been known for decades. Manufacturers saw the importance of enabling customers to choose from a specified set of options, warranty products, or maintenance plans. CPQ applications were developed to standardize the process across the sales teams. The apps served as a bridge between ERP technologies and CRM applications, allowing for organizations to manage pricing, contracts, renewals and approval processes.

While many CPQ offerings are available with integration to Salesforce and are widely highly reviewed on the App Exchange, SteelBrick and another Salesforce partner, Apttus, were both built entirely on the Salesforce platform. There are numerous advantages to this architecture beyond solving for integration challenges. Users trained in Salesforce administration see little learning curve, as the application essentially looks and feels the same as the installed Salesforce instance, products, price books and mobile options. Salesforce has invested heavily in both application manufacturers, which is a wise move given this would cover both smaller to midmarket customers with SteelBrick, and the larger, more complex organizations with Apttus.

The advantage of a SteelBrick CPQ installation is a significantly shorter time to implement and ongoing maintenance at a significantly reduced cost, as well. SteelBrick is often criticized for lacking customization that's readily available in Apttus installs, as well as lagging behind in implementations requiring quoting in multiple currencies. Apttus also has a clear advantage in contract management, with a ready-made tool built in, whereas SteelBrick points users to another application.

Best practices for using Salesforce CPQ

With either application, there is a serious undertaking in planning and preparation prior to implementation. Establishing a user roles and permissions hierarchy and subsequent approval processes is a good starting point. In many cases, a quote is subject to multiple levels of approval from stakeholders in multiple departments: Inside counsel may have to approve contractual terms, while a financial manager may be interested in only a bulk discount. So it's important to map out who will interact with a quote throughout its lifecycle.

CPQ applications were developed to standardize the process across the sales teams.

If channel partners use the CPQ tool, their visibility into all aspects of the process and how they interact should also be well-defined. A channel partner may be involved in a level of servicing an account that would preclude it from any, or all, of the interactions automated in the Salesforce instance for in-house sales reps. Channel partners may also require the ability to modify a quote, possibly with their own branding or logos. But some of these capabilities pose some configuration issues: Establishing reporting requirements and commission payment protocol for channel partners should also be considered in determining their profile access.

Updating your complete portfolio of products and services within Salesforce is a good practice, as well. Developed works or methods for hire, warranties and service packages may not always be fully loaded into an organization's standard products and price books. In some cases, how the bundling of these services comes together may cross business units or affect service providers in subcontracting environments for service-level agreements.

Both SteelBrick and Apttus are highly scalable, though pricing can always be problematic in the cloud, and each technology's scalability can easily become a question of affordability. Both applications offer tiered pricing schedules for licensing and various options for support. Standard support options are included in licensing costs, which offer access to online community knowledge bases, but do not allow for real human developer support. In general, these standard support options won't provide a dedicated resource to understand the underlying business that is supported by the application.

Ultimately, CPQ can help close deals faster, including larger ones, and enable greater accuracy in quoting. This also provides an opportunity to use the CPQ app to analyze internal metrics and other data on sales performance, so you can use CPQ to improve it. To that end, consider CPQ as a business intelligence reporting center. Evaluate why deals are closing faster, and why they're larger. Look at incorporating tools like Salesforce Chatter, the internal collaboration tool in Salesforce apps, to involve teams in understanding why specific groups or sales people are performing at a higher level. Build your own knowledge library, so you can understand from the data why bundling certain products and services is showing increased efficacy. The tools are powerful and information collected from, may be even a bit more.

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