Customer Data


Bridging the Front and Back Offices

I’ve written many times about how conventional, premises-based ERP seems to be evaporating. CPQ — configuration, pricing and quoting — are business processes that illustrate the point.

First, let’s all agree that enterprise resource planning isn’t going extinct as it evaporates — it’s too valuable — but it is getting a haircut. Many of the functions leaving ERP are condensing back into the front office, and to me that’s what’s exciting, because it brings back-office data closer to processes that consume it.

Naturally, back-office systems that are coupled with the front office, even to the point of being native to the same platform, have a distinct advantage.

One Platform for All

CPQ embodies the value of the new front-to-back office setup. While mostly front-office sales people use CPQ, the data they access has a strong back-office flavor. It includes the product catalog, price lists, and existing customer information that can drive things like cross-selling.

So CPQ sits at a strategic position — a crossroads — between the front and back offices, and that presents its own set of challenges. For example, while sales people want and need access to ERP data, very few businesses would want to give them edit-and-delete privileges for the back-office systems.

Also, CPQ workflows involve front-office personnel — like sales people and their managers — not back-office folks. They need to ensure quotes are right, and to get approvals for discounts and other irregularities that are commonplace in sales.

Top this off with the need for speed — getting an accurate quote to a customer before a competitor does — and you have a strong case, not only for CPQ, but also for keeping it closely coupled to front and back offices, so that the CRM system can get data efficiently and safely to conduct its vital processes.

There are lots of ways to do the coupling, and no end of interfaces and APIs that vendors use to accomplish this. However, one of the best approaches you can consider is just building the CPQ system on the same platform that the rest of the ERP and CRM apps use.

We learned in geometry class that if A = B and B = C, then A = C. This is the logic of building on a common platform. If everyone builds to the standards of the same platform, then there’s great commonality among systems when the time comes to cooperate. This won’t completely eliminate integration issues, but it will significantly reduce them.

Organization-Wide Data Access

The common platform approach shows its true benefits when it becomes necessary to deploy systems on more than the standard desktop or laptop — on mobile devices, for instance.

CPQ increasingly is becoming a mobile app that field reps can use to issue quotes and ask for business on the spot, wherever that spot is. Managers and others also can use mobile technology to make significant productivity gains inside a headquarters building, so it’s not just the field reps who benefit from platform-centric strategies.

This is another reason to keep some distance between back-office systems and mobile devices that could get lost or stolen.

It’s hard enough to build for one hardware and operating system platform, but today you need to be able to define once and generate many times — another platform advantage.

Incentive compensation is another example that consumes both front- and back-office data. The CRM system, including sales and marketing, captures deal data, while the back end records deals and issues, and collects invoices.

There’s also a lot of deal-specific information that must be saved, which back-office systems usually don’t track, such as incentives, spiffs and quotas. Compensation systems also might access employee data from the HR system, which itself is tied closely to the back office.

Together, these processes — and there are many more illustrating the same points — thrive when they share a platform, precisely because they must access data from across the organization.

CPQ and incentive compensation were nice systems to have a few years ago, but many businesses still relied on spreadsheets for their product catalogs and compensation tracking, and sneakernet to get approvals. That era is quickly receding, though, because the appearance of many other technologies is accelerating the pace of business relentlessly. It’s best to keep up.

Denis Pombriant

Denis Pombriant is a well-known CRM industry researcher, writer and speaker. His new book, Solve for the Customer, is now available on Amazon. He can be reached at [email protected]. You can also connect with him on Google+.

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