SPM and CPQ: From Humble Back Office Beginnings, to Front Office Stars

4 min read

This week, renowned industry influencer Denis Pombriant penned a great piece on the evolution of the SPM and CPQ spaces. For anyone unfamiliar, CPQ (or configure, price, quote) is a fast growing-category of software that helps sales create accurate, professional sales quotes for prospects. As Denis noted, CPQ – much like SPM (sales performance management) got its humble beginnings as a necessary back office function. Both started off as mostly manual, but necessary processes needed to get price information, calculate a commission expenses, etc. But the trail of tears left behind was countless hours integrating data that was largely siloed and added little value to the front lines. Enter, the cloud. The emergence of the cloud gave way for a new wave of automated solutions that entirely changed the landscape of these technologies. For starters, gone was the need for disparate spreadsheets that were not only time consuming, but also highly prone to errors. Or, as Pombriant put it, “Often coincided, but rarely agreed.” With more accurate data all in one location, for the first time the front office – sales managers, CEOs, CFOs, etc. had a clear view into their sales performance, what products were being sold to whom, at what margin and what overall cost, what reps were over or under performing, etc. As Pombraint adds on the CPQ side, the metamorphosis, “opened up new avenues in the front office, while keeping the back office better informed about revenue and deal flows. At once, CPQ could help to prevent errors of omission that produced misquotes that businesses often had to eat.” Used in isolation, both these technologies make sales teams more efficient. But the ability to connect them together in the cloud made them infinitely more effective. By integrating these technologies, the partnership of the CIO with the CRO (chief revenue officer) and the CFO is realized in tools that provide complete analysis and reporting on every stage of the sales funnel – from the first customer touch, to the quote to the contract and the commission check. Shortening the timeline for each deal makes it possible for more deals to get done faster - a win-win for the sales rep and company, alike. Moreover, companies now have the information they need to truly understand and service their customers – improving the buying experience by selling the right products, at the right price, to the right customer, at the right time. We just hope their rise to front-end stardom won’t go to their heads. If you want to see how all these applications come together on the big screen: