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Identify Common Configure, Price, Quote Challenges

Learning Objectives

After completing this unit, you’ll be able to:

  • Define the configure-price-quote function in the sales cycle.
  • Identify common configure, price, quote (CPQ) challenges in the sales cycle.

About CPQ

Meet Sophia Perez. She’s a sales manager at Infiwave, a communications service provider (CSP) that sells communications equipment and services to businesses and consumers.

Profile picture of Sophia

Sophia is worried. Like many businesses in the communications industry, Infiwave is struggling to keep up with competitors during a time of rapid change in the market. Sophia’s team uses an outdated, error-prone CPQ system to create quotes and orders for customers. However, there’s a light at the end of the tunnel. Infiwave employees are talking about a new CPQ system that’s in the works, and Sophia's keen to find out more.

What is CPQ? It’s short for configure, price, quote.

Term Common Tasks

Configure products, from simple to complex ones.

Configure product bundles.

Use the context of commercial eligibility.


Perform price calculations.

Apply discounts.

Perform price analytics.


Manage the quote lifecycle.

Create proposal documents.

Perform quote approval.

Convert quotes to orders.

CPQ software has been around for decades. Companies use CPQ systems to quickly and accurately configure and price products, generate quotes, and create orders. CPQ software usually integrates with other applications, such as customer relationship management (CRM) and order-management systems. CPQ systems also typically include some automation, using pre programmed rules to check that quotes and orders are accurate.

CPQ in the Sales and Delivery Cycle

Sales and delivery teams at Infiwave follow a common process, shown here. Let’s see how CPQ fits into this process by following an order from lead to billing.

The eight steps involved in the sales process are Lead, Opportunity, Quote, Contract, Order, Provisioning, Activation, and Billing.

The first part is the order-capture cycle, also called the sales cycle. The order-capture cycle starts with lead and opportunity creation, continues with quoting and contracting, and ends with order placement.

Leads and Opportunities

A potential customer phones the call center requesting information. The call center agent creates a lead record (1) in the CRM system. Sophia is notified and allocates the lead to a sales rep.

When the sales rep follows up on the lead, they discover the opportunity (2) for a sale. If the lead is a customer that’s not already an account, the sales rep converts the lead into an account. This creates a new opportunity record on the account. 


The customer tells the rep they want to buy a new digital streaming service with super-fast broadband and movies on demand. The sales rep has enough information from the customer to devise a potential solution for them. The rep uses the CPQ system to create a quote (3). The quote contains details of the offers configured to suit the customer, with associated pricing. 

The sales rep wants to avoid problems with the order, so they ensure the quote includes only offers that are available to the customer and those for which the customer is eligible. For example, the rep needs to make sure that super-fast broadband is available in the customer’s area. 

Let’s explore some examples of validation and approvals checks.

  • A customer credit check
  • A facility check to confirm the products are available in the customer location
  • Eligibility checks to establish whether the customer meets the criteria to receive the products
  • Pricing checks, for example, to ensure sufficient profit margins are achieved, particularly if promotions or discounts are applied

At Infiwave, teams must do these checks manually. For example, the sales rep emails the engineering and accounts departments to check customer eligibility and product availability. Advanced CPQ systems may perform these checks automatically.

Next, the sales rep discusses the quote with the customer or sends them a proposal with details of the quote so the customer can review it.

Contracts and Orders

If the customer is happy with the quote, the sales rep creates a contract (4). The contract may require legal approval before submission to the customer.

The customer signs the contract, and the sales rep creates an order (5). Additional details can be added to the order, such as technical resource specifications, before it’s submitted to the order-management system for fulfillment.

Provisioning, Activation, and Billing 

Next, the order-management and provisioning cycle starts. Infiwave uses systems to support this cycle, including order management, provisioning, inventory management, service management, and billing.

Provisioning an order (6) involves preparing all the products, services, and resources required by the customer for delivery and activation (7). At this point, the business may schedule a field visit, such as to the customer's premises.

The final step is billing (8), when Infiwave creates an invoice and the customer pays for the goods and services.

CPQ and Order Capture

Now that you understand the high-level sales and delivery cycle, let’s learn more about the importance of CPQ in the order-capture stages. 

CPQ processes require different input to configure, price, and quote offers, such as:

  • Customer account details from the CRM system
  • Information gathered by the sales rep
  • Customer context details

Some CPQ systems use this information to filter the products available from the product catalog and show only those appropriate for the customer. This way, sales reps can make informed decisions based on availability and eligibility to prepare the customer quote. 

Businesses and customers can negotiate pricing, including the application of promotions and discounts. Usually, CPQ systems support the audit of quotes and pricing to ensure profitability for the business.

CPQ systems can also support contract creation based on information from the quote. Once the contract is approved by the customer, the CPQ process creates and submits an order for the order-management and provisioning cycle to consume.

Common CPQ Challenges in the Sales Cycle

So the lead-to-cash cycle at Infiwave works like clockwork, right? Sophia knows this isn’t quite true. Last year, Sophia asked her team to write down the CPQ-related challenges they face at work, and here are some of their comments.

Sophia was surprised to learn how irritated and frustrated her team is with their current CPQ system. She knows that all these challenges lead to margin erosion, low customer satisfaction, and frustrated employees; and none of that is good. In her quest to support her team, Sophia’s been reading about the latest CPQ systems. She discovers several trends.

  • A move toward self-service and omnichannel support
  • Vertical specialization, with CPQ systems that are industry specific and subsegment specific
  • Built-in intelligence to drive personalized service for customers
  • A focus on the user experience: solutions must look good and be easy to use

Sophia’s fed up with the old-fashioned CPQ system at Infiwave. She believes a new CPQ application can work wonders. But how? 

What’s Next?

In the next unit, you learn how Industries CPQ incorporates these new trends and solves common industry challenges.


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