01. Challenges

How manufacturers can win in an age of disruption

Perhaps even Heraclitus, the Greek philosopher who is known for the idea that “the only constant in life is change,” would be surprised at the massive transformations unfolding before us. Manufacturers face disruptions from all sides – new business models, supply chain challenges, evolving customer expectations, and the need to operate more sustainably. Only the agile will survive.

 

As the global economy emerges from the worst of the pandemic, manufacturers in Sweden and beyond are realizing that the competitive landscape has changed forever.

 

Here are some of the most urgent factors driving disruption:
In a recent survey, 94% of executives said that their business models must change within the next three years1.

This puts tremendous pressure on manufacturers to shift to (and quickly make profitable) new ways of commercializing their products, including Servitization / Equipment-as-a-Service approaches.

Supply chain shockwaves continue to reverberate for a variety of reasons, including Russia’s invasion of Ukraine and China’s tough policies to fight COVID-19 outbreaks2. The war in Ukraine has caused further instability in the European economy, as manufacturers scramble to navigate its ripple effects3. Inflation and higher interest rates are causing widespread economic uncertainty, with recessionary concerns looming4.

Consumer tastes and buying patterns have shifted, with manufacturers constantly playing catchup. Customers want products faster and at a good value in spite of supply chain challenges. Long delays due to the global semiconductor shortage have shifted demand. Manufacturers need to respond to allieviate scarcity in some goods without overproducing in others, remaining agile.

The need to go faster while keeping costs in check has many firms accelerating their digital transformation efforts in pursuit of Industry 4.0. Many find that a lack of internal resources prevents them from achieving their digital goals. Legacy systems, complex processes and homegrown solutions like Excel hamper innovation and slow growth. As leading firms chase Industry 4.0, newer technologies like the Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning (ML), Digital Twins and on-demand manufacturing are all changing the game. As both a disruptor and enabler, these new technologies help manufacturers automate and digitize many of their processes.

 

While the outlook may appear gloomy on the surface, experienced leaders know that times of great disruption are also times of great opportunity. Manufacturers are reimagining many areas of their business as they seek to capitalize on emerging opportunities to deliver more value to customers.


The very idea of “business as usual” is obsolete—there is no usual. Rather, executives will increasingly need to lean into an economy of constant change. And the key skills required to do so successfully will be agility, responsiveness, and adaptability.

 

– AlixPartners

 

 

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02. Evolving Buyer’s Journey

Meeting buyers where they are: the new B2B buyer’s journey

In addition to macro-level disruptions, the way customers buy has changed dramatically. Today’s B2B buyers have sky-high digital expectations due to increasingly seamless B2C experiences. Additionally, buyers are spending less and less time with sales, so the time they do must count. Firms that fail to innovate in this area will quickly lose competitive ground.

B2B buyers are consumers of a wide variety of digital products and services. They shift rapidly from buying toilet paper on Amazon to listening to Spotify while researching a business challenge they’re hoping to solve with your products. There are no clear borders between B2B and B2C digital experiences in their mind.

 

This challenge is compounded by the increasingly digital B2B buying process. Research from Gartner underscores just how much things have changed:

 

 

Additionally, “buyers value suppliers that make it easier for them to navigate the purchase process.”7 Customers who perceived the information they received to be helpful were 2.8 times more likely to experience a high degree of purchase ease, and three times more likely to buy a bigger deal with less regret8.

 

Customers expect fast turnarounds and easy to understand proposals – provided to them through a seamless digital experience. The pressure is on to create better buying experiences that build trust and help customers realize value at every step.


The organizations that will succeed going forward will be those that materially simplify the purchase process for customers.”

 

- Brent Adamson / Distinguished VP, Advisory, Gartner

 

 

 

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03. Opportunities

Increasing competitiveness through innovative process digitalization
– in Sweden and beyond

In spite of - or even because of - the rapid pace of change, new opportunities are emerging. Manufacturers are free to take bold action to enhance the customer experience by improving operations. Leaders are taking control of key processes like quotation management to supercharge employee productivity and build trust with customers.

 

B2B buyers are consumers of a wide variety of digital products and services. They shift rapidly from buying toilet paper on Amazon to listening to Spotify while researching a business challenge they’re hoping to solve with your products. There are no clear borders between B2B and B2C digital experiences in their mind.

It’s true: Swedish manufacturing companies have been accelerating their digital transformation efforts. But not equally across the business. In the race to realize Industry 4.0 and enable servitized business models, crucial internal processes like Configure, Price, Quote (CPQ) are ignored. For many, CPQ, a part of the quotation process, is too complex and burdensome, dragging down sales and causing the business to lose revenue.

Boosting productivity and reducing operational inefficiencies are key to protecting shrinking margins and improving the buyer experience. To achieve those ambitions, leading manufacturers are reimagining the quotation process.

As the world struggles to regain its footing after the pandemic in the midst of geopolitical conflict and widespread uncertainty, smart enterprises are seizing their differentiation by using technology to simplify and enhance their quotation process. Turning pricing and quotation into a strategic function vs. a tactical one isn’t easy, but the right approach can make all the difference.

 


70% of CxO respondents think that the increased use of digital technologies will be critical to their productivity-improvement efforts over the next three years.

 

- McKinsey

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04. CPQ – What is it and why so important?

Quotation management applications: Manufacturers’ new competitive edge

The quotation process is a critical component in manufacturing competitiveness.

 

CPQ, and the quotation process more generally, is so important because it’s where “the rubber meets the road” in commercial operations. Simply put, it’s how manufacturers sell and get paid. But even though it’s something so critical, the way quotations are managed has often been allowed to remain unoptimized.

One well-known aspect of quotation management is Configure, Price Quote (CPQ). According to Salesforce, CPQ can be defined as “a sales tool for companies to quickly and accurately generate quotes for orders.” Further, “Quotes produced with CPQ software are automated according to a preprogrammed set of rules, ensuring error-free pricing that takes into account quantities, discounts, customizations, optional features of products, multiple revenue types, and incompatibilities.”11

CPQ is a sub-process of Quote to Cash (QTC), and each organization may have a slightly different approach or use different terminology. Each term describes an aspect of what is generally known as the quotation process. Though not exact equivalents, we use CPQ, quotation process and quotation management somewhat interchangeably throughout this eBook. The flowchart in Figure 1 provides a look at a simplified version of the traditional quotation process. Note that there are many additional processes involved, including input and output from legal, compliance, finance, supply chain, and technical / engineering.

 

Quotation Process Overview

Figur 1

 


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05.CPQ – What happens when it goes wrong?

When CPQ goes wrong: pain points where productivity and customer experience suffer

There are good reasons why many manufacturers struggle to optimize their quotation process. The number of people and systems involved inevitably makes the process manual and complex.

CPQ is one of those problems that technology should have solved by now. And while we’ve come a long way since early product configurators of the 1980s12, most organizations are nowhere near ready to claim victory. Why is quotation management still so hard?

First, even if aided by technology in some way, CPQ at many organizations is still too manual, complex, time consuming, and error prone. Today’s products are more complex than ever, with ever-increasing opportunities for customization. This often causes salespeople to jump from system to system to pull together the right information – from PLM, CRM, and ERP – and even then, it’s still possible to build a quote for a product that could never be sold due to a configuration error.

Then there’s pricing, which is just as complex (if not more so) than product configuration. Taking into consideration master list prices, modifying them by local / regional pricing, then layering discounts on top (which often require approval) makes for a tangled mess. Pricing that isn’t adequately tailored results in lower margins – leaving money on the table.

And if only the salespeople themselves needed to see what was happening throughout, that would be difficult enough – but management also needs visibility to ensure proper approvals and reporting. Without a single system, quotes are in various states of partial visibility and accuracy, resulting in costly inefficiency and increased compliance risk.

All of this complexity and manual shuffling of information means that the customer gets a quote eventually. But, it might not look great or be 100% accurate. And most importantly, the delays could mean that by the time they receive it, they’ve already decided to work with a competitor. There has to be a better way, right?

 

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06. CPQ dream state

Creating the ultimate quotation process (that customers will love)

When you design your quotation process around what will create the best buying experience for customers, you’re playing a different game. A game where everyone wins.

 

As the research from Gartner we cited earlier suggests, it’s simply too hard for customers to buy from you. Much of the fault lies with the broken quotation process we just described. Let’s look at the problem, or opportunity, from a different angle: what do customers want and need from the quotation process?

 

  1. Speed.

    This is the most important factor in today’s marketplace. Since many manufactured goods are similar, customers will often choose the supplier who gets a quote back to them first. Time is money – both for you and the customer.

     

  2. Efficient, seamless interactions.

    If a customer knows that you already have their information on file, it is frustrating to ask for it again. Or if a particular configuration isn’t available, customers should know immediately so they can adjust their purchase. Leveraging integrations to streamline data and interactions for both sales and the customer is a huge competitive differentiator.

  3. Consistent, uniform experiences.

    Both the quote (as a digital asset) and the entire CPQ experience itself are experiences that influence brand perception. These touchpoints either build or erode trust. Everything should look and feel professional and consistent throughout the buyer’s journey.

  4. Tailored discounts.

    No salespeople like to give discounts, but most customers expect them. By ensuring that discounts automatically take custom factors into place, you can optimize margins for yourself while providing the customer something they should perceive to be fair based on their market and circumstances.


What happens when you create a customer-centric quotation process? You win too, of course. Here are the results you can expect:

  • An increased total number of quotes, which boosts orders
  • Increased revenue and market share
  • Sell more products with higher margins
  • Enjoy shorter sales cycles and higher sales quota achievement
  • Higher customer satisfaction and increased brand loyalty
  • Increased control over forecasting, cash-flow and profitability


Now let’s talk about how to get there.

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07. Low-code CPQ solutions

Why leading manufacturers choose low-code CPQ solutions

In the classic debate between “build vs. buy,” manufacturers are realizing there’s a powerful third option that offers the best of both worlds. Low-code development is revolutionizing the way businesses solve problems using technology and offers the key to the next generation of quotation management applications.

 

What if the way you harnessed technology to drive your business forward didn’t have anything to do with the size of your IT department? What if the needs of your customers and employees – real business needs – drove the development of unique applications, and not the myopic view of “what’s feasible” given budget and resource constraints, which will only intensify? Does this sound too good to be true?

More and more manufacturers are seizing their competitive edge through low-code app development. Low-code is especially effective for the quotation process because it makes it simple to integrate with all the relevant systems – without having to reconfigure those systems (great for organizations that don’t have a huge IT department or consulting budget). Low-code apps sit like an agile layer on top of the systems you already use every day, pushing and pulling data seamlessly without an army of software engineers needed to keep it running.

 

Low-code is the best of both “build vs. buy” worlds because, with the right platform, you get all the benefits of “buy” – scalability, user-friendly design, low maintenance, cloud hosting – with all the benefits of “build” – a perfectly tailored custom application that does exactly what you want it to without any compromises.

Low-code also smooths out the downsides of both sides of the “build vs. buy” coin. Choosing to “build” the traditional way – using developers to code an app from scratch – is very expensive and resource intensive, both up front and over time as needs evolve. Low-code is much lower cost, both initially and to update as the business grows. Low-code also sidesteps the negatives of “buy” – typically when you get something off-the-shelf, you end up paying for features you never use, and it’s never quite a perfect fit no matter how hard you try to customize it.

But don’t take our word for it. Learn why the biggest manufacturer in Europe decided to use a low-code approach for its quotation management application.

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08. Siemens business case

Driving competitive edge at Siemens

One stunning example of how manufacturers are taking control of their quotation process using low-code is Siemens. A global leader who develops software themselves, they decided to use Flowfactory’s low-code platform to build their quotation management app – and the results are incredible.

 

Instead of starting the story of Siemens’ low-code journey at the beginning, let’s jump to the middle. As a digital transformation leader, Siemens didn’t just offer those services to customers, but lived it internally. In order to accurately measure the progress they were making on digital transformation within their own walls, they needed a standardized KPI to help them compare apples to apples. This would help them identify what was truly effective across their sprawling global organization.

This new KPI powered analysis uncovered some surprising results. One business unit in one country scored off the charts. Everyone was wondering: how did they achieve such high scores?

Now, back to the beginning. Siemens Digital Industries in Sweden knew their quotation process was holding them back from reaching greater heights of sales productivity – which impacted the customer experience. They examined their options and carefully considered the resources at their disposal, which were extensive. And then they did something surprising.

Siemens chose to work with Flowfactory, a leading low-code development platform provider, to build their quotation app. Business users kicked off the project without IT help, and before they knew it, over 1000 sales executives were using the application to send over 1000 customer quotes every day in 12 countries – increasing to 30 by 2024. Instead of jumping from system to system, salespeople have one streamlined application that perfectly suits their needs – turbocharging their productivity. Customers love getting quotes that look great and are ready fast.

If that was the end of the story, that would be enough of a reason for every manufacturer to use low-code to replicate Siemens’ success. But it gets even better.

 

Further analysis revealed that development projects using Flowfactory are 10 times faster and cost only 1/10 of similar projects.
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09. Siemens business case – before and after visualization

Before and After: how low-code revolutionized quotation management at Siemens

From a tangled, inefficient mess to pure speed and agility – that’s the Flowfactory difference.


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10. Organization role advantages

How a low-code quotation application empowers leaders across the business

Though salespeople are the daily users, top executives benefit as well:

CFO
  • Control costs while improving cash flow
  • Protect margins with visibility into quotes and the ability to reject discounts that are too high
  • Ensure compliance with rules that vary by jurisdiction and maintain audit trail
  • Ensure accurate pricing using rules you help establish
  • Real-time data allows for better insights and overall decision-making
CEO / LOB Head
  • Accelerate digital transformation and gain competitive advantage
  • Grow faster by becoming more agile with less cost
  • Enhance the customer and employee experience
  • Track and measure effectiveness across the organization in powerful ways
  • Smooth transition toward new business models
CIO
  • Speed up digital transformation across the enterprise
  • Innovate quickly by building on top of existing systems
  • One platform for all new and existing applications
  • Become leader that empowers organization to achieve digital success
Head of Sales
  • More quotes to more customers means higher revenue and quota attainment
  • Leave vulnerable spreadsheets behind for true enterprise system
  • Visibility into quotes with simple approval workflow
  • Automated pricing using pre-established rules yields discount optimization
  • Attract and retain top sales talent by offering excellent sales tools
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How Flowfactory can help

If you can dream it, you can build it


A
re you ready to supercharge your quotation process? Or are there other critical processes that you could transform using low-code to increase your speed to market, scalability and flexibility?


It’s clear – the old days of manufacturing are gone. You can’t simply rely on having the best product at the best price. You need to seize competitive advantage wherever you can find it – and Flowfactory can help.

 

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Here’s why leading organizations in Sweden and beyond choose Flowfactory’s low-code platform to take control and gain their competitive edge:

 

  • Achieve competitive advantage with perfectly tailored business applications

  • Continuously refine applications based on evolving needs

  • Empower business users to take an active role in the development process

  • Innovate faster by testing new ideas easily

  • Unleash creative power and foster collaboration throughout the organization



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Trusted by organizations 

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Want to learn more about how Flowfactory can revolutionize your quotation process and beyond?