Introduction by Tom Erdle
I’ve worked with Louis Columbus since the dot com era, as one of the preeminent thought leaders for sales and product configuration. As I read his recent blog on the true value of visualization in product configuration, I wanted to emphasize its value for manufacturers to enhance selling and end-user buying experiences. Although there are plenty of industries and applications where visual configuration has been highly leveraged, this has not been the case for manufacturing, where text/data configurators are still the norm. However, in the new digital economy, B2C experiences have driven B2B user expectations for self-service and ease of use. One of the keys to a fully capable user experience is the ability to VISUALIZE the results as users define their specific choices, options, features and related needs.
Simply put, visual configuration is becoming critical as the new generation of sales and customer user communities’ expectations have increased. As the software and infrastructure barriers have been lowered, Visual Configuration is now accessible and affordable in the B2B sales and customer configurations – so maybe it’s time to re-think the value equation to remain competitive and easy to work with.
As Louis states in his blog, it is critical for visual configuration to enable the collaboration of the Sales, Production and New Product Development processes for a company to fully leverage the benefits of visual configuration. Equally important are the benefits of visual configuration for the end user which will drive the use of visual configuration, including a seamless connection between user community and the manufacturer – improving several important metrics along the way:
- User Satisfaction – user community will demand it
- Product Accuracy – ability to see what you are getting
- Configuration Cycle Time – visual recognition vs. reading text
- Product Development Life Cycle – Alignment of Sales, Production and New Product Development
The use of visual configurators for manufacturing will expand as the maturing user community demands it! The time is right for ubiquitous use of visual configuration and the related benefits it offers both manufacturers and their user communities.
How To Make Complex CPQ Selling Simple With Visual Configurators
By Louis Columbus
Realizing visual configurators’ full potential starts by enabling engineering, production, and sales to become real-time collaborators in creating new products.
2D, 3D, Augmented Reality (AR), Mixed Reality (MR), and Virtual Reality (VR) visual configurators are proliferating across the Configure, Price, and Quote (CPQ) landscape today. Manufacturing marketing teams say they are the most effective lead generation technology they have, responsible for 40%+ growth in Marketing Qualified Leads (MQLs) this year alone. Sales VPs and Chief Revenue Officers (CROs) are seeing from 9% to 30% improvements in deal close rates and over 90% increases in quote accuracy. Visual configurators deliver shock-and-awe to prospects and drive more leads and deals.
Product Models Need To Scale, Driving Greater Collaboration
The good test of any product configurator is whether it can scale from assemble-to-order (ATO) to Engineer-To-Order (ETO) while enabling real-time collaboration between engineering, production, and sales. A given products’ many attributes and options defined by engineering in their PLM system need to be consistent with manufacturing’s work instructions and Bill of Materials (BOM) in their ERP system. And the visual configurator sales & marketing is using needs to reflect, in real-time, what engineering defined in PLM and what manufacturing’s ERP system can build. Product models serve as the master data that enables real-time collaboration between engineering, manufacturing, and sales.
Visual configurators need to push beyond the veneer of delivering shock-and-awe and enable real-time collaboration between PLM, ERP, and CRM & CPQ systems to achieve their full potential. Visual configuration providers need to pursue the goal of enabling engineering, manufacturing, and sales to be collaborators in creating accurate products and challenge themselves to deliver the following:
- Improve sales performance while increasing margin per deal by providing only the options that are the most buildable at the lowest cost.
- Eliminate disconnects between what engineering designed and what manufacturing can produce leads to more sales at higher gross margins.
- Close product configuration gaps and improving fulfillment speed and product quality, creating greater customer loyalty and follow-on sales.
- Automatically propagate product and design changes across all functional areas to accelerate new products to market while improving product quality.
- Real-time fine-tuning of new product features to the model level that specific customers want becomes possible when engineering, manufacturing, and sales are collaborating in real-time.
- Update work instructions and BOMs in real-time based on changes customers make in product visualizations.
- Improve the balance of revenue across configurable products to sell higher margin models based on real-time collaboration between PLM, ERP, CRM, and CPQ systems.
- See in real-time how changes in product design, Bill of Materials (BOM), and delivery dates impact the financial performance of a manufacturer.
Predicting Visual Configuration’s Future
Shortening cycle times from product concept to completed product is the secret to succeeding with visual configuration. And when each manufacturing cycle time has its cadence or speed depending on how little or much a customer wants a product customized, visual configurators need to flex and deliver what customers want when.
Companies defining the future of visual configuration today include CDS, DERWID, and SAP Visual Enterprise. These three companies are defining the future of visual configuration by enabling real-time integration between PLM, ERP, CRM, and CPQ systems. I recently spoke with John Major, CEO of CDS to get his insights into what’s driving visual configuration’s success today. “What we're seeing in the marketplace now are two things. One is the clients want to understand how our visual configuration solution is going to fit into their change management as it's rooted in PLM, because to any manufacturer, PLM reigns supreme,” he said. He continued, “The second is about staffing. When you're a manufacturing company, and you buy a visual configurator toolkit that requires you to create your app, a few things happen. You need to staff up a software team to now run that toolkit and write development. So your long-term cost is fairly significant versus a company that can deliver an entire solution at scale.”
CDS is partnering with eLogic to deliver next-generation visual configuration solutions for their shared clients. Examples of the work they are doing are shown below:
- Real-time model updates keep engineering, manufacturing, and sales in sync. When customers are designing a new product in a CPQ session, the model is updated in real-time and saved, so engineering, manufacturing, and sales can see how their changes affect the product. An example of this is shown below:
- When the product is configured “to scale,” 2D proposal drawings are automatically generated, and the product model is updated in real-time, making augmented reality visualizations possible. 3D models are also made available in a variety of CAD formats. Additionally, an Augmented Reality model is created that can be placed in any virtual environment. What’s noteworthy is that while the model’s appearance is changing, all relevant changes to the work instructions and BOM are happening in real-time using the SAP Visual Enterprise
- When product models are the catalyst enabling real-time collaboration between engineering, manufacturing, and sales, selling into the aftermarket becomes profitable. Aftermarket selling has a complexity all its own. Taking on the challenge of shortening cycle times from product concept to completed products in the market is what’s needed today. The example below shows a piece of equipment selected in CPQ, then rotated, zoomed in, and exploded to see the internal components. Internal parts can now be selected, quoted, ordered and delivered for replacement.
Visual configurators are capable of so much more than they are delivering today. It’s time to graduate beyond the shock-and-awe stage, which has been very successful in driving leads, generating MQLs, and closing deals. It’s time to get down to the hard work of making all those impressive models buildable at scale and profitable. And that comes by doubling down efforts at shortening cycle times from product concept to completed product. That’s the true north of this market and the secret to succeeding. Getting engineering, manufacturing, and sales collaborating using product models as a single source of truth is the best place to start.