CPQ and PLM: Sell better with consistent product data

Many companies use software solutions such as CPQ and PLM to reduce manual work, free up scarce resources and work more efficiently. However, they often only use the IT applications as separate stand-alone solutions in sales and design. The result is isolated data silos, fragmented processes and investments that do not realize their full potential.

How can you better exploit the potential of a CPQ solution?

Create an end-to-end digital solution with your PLM system. In the following article, you will learn how you can use the integration of CPQ and PLM:

Table of contents

What is PLM software?

Product Lifecycle Management (PLM) plays a central role in the development and manufacture of products. A PLM system maps the entire life cycle of a product – from the concept and design phase through to production, sales and after sales – in one software solution. It helps companies to organize and centralize all data and processes related to their products.

PLM software includes tools for product design and development, the management of product data and processes for change and quality management as well as compliance with legal regulations. Functions for organizing supply chain and manufacturing processes and for analyzing product life cycle costs and risks are also frequently integrated into PLM solutions.

What advantages do PLM systems offer?

With PLM systems, companies can make the development of new products and their market launch more efficient and sustainable. Processes for every phase of the product life cycle are integrated into a PLM solution, from the initial draft through to design, production and the supply chain.

PLM software facilitates the tracking and exchange of data along the entire value chain. This makes it easier for teams to work together across locations and use a standardized database throughout the company. In combination with technologies such as IoT or AI, PLM solutions also provide valuable information on product performance, customer feedback and market trends.

What is CPQ?

The abbreviation CPQ stands for Configure Price Quote. It describes the process chain in sales with which variant-rich products can be quickly and easily configured, prices accurate and appealing offers can be created immediately. A CPQ solution reduces the complexity and time required to create quotations by supporting an intuitive configuration process across all sales channels. You can find more information on the topic of CPQ in our blog post “CPQ – What is it?”

What is the difference between CPQ and PLM?

With CPQ solutions, your sales teams, dealers or customers can find the right product for customer-specific requirements more quickly, determine correct prices and create quotations efficiently.

While CPQ software simplifies and automates the sale of multi-variant products, a PLM system ensures the consistency and conformity of product data for all phases of the product life cycle. This includes information on articles, components and products as well as documentation, requirements, technical change orders and workflows for quality assurance.

Why should you connect CPQ and PLM?

If you want to optimize your processes, improve product accuracy and speed up the time to market for your products, you should definitely combine a CPQ solution with a PLM system.

The combination of CPQ and PLM closes the gap between product development and sales. It creates a single source of truth for all product data in the company. Decentralized data silos and redundant product data are now a thing of the past. At the same time, it ensures that sales, dealers and customers always use the latest technical data from the PLM system for product configuration, price calculation and quotation preparation.

By seamlessly providing consistent and correct product data from development to sales, companies not only work more efficiently, but also ensure their long-term competitiveness.

What are the advantages of integrating CPQ and PLM?

Faster quotation generation

The integration of CPQ and PLM improves collaboration. It streamlines the flow of information between design, product management and sales. Time-consuming routine tasks are automated. At the same time, the administrative workload is significantly reduced in all areas.

The time-consuming search for data, drawings and documents of all kinds that are required for preparing a quotation is no longer necessary. Queries from the sales department and engineering work in the quotation process are reduced to a minimum. This allows you to create quotations for even complex products in a matter of seconds.

Shorter time-to-market

The central provision of product data and the automated design of components make it possible to offer new products immediately via the CPQ system linked to the PLM. This is because all relevant data required for offering product innovations is centrally available within a very short time.

Reduced error rate

The combination of CPQ and PLM ensures that the product configuration always contains the latest product specifications. Errors and inconsistencies that can occur when assembling products manually, e.g. due to the use of old, no longer supported components, are avoided.

The process of creating individual offers becomes easier. Transparency and information security also improve significantly. Your configuration results are more accurate. At the same time, you can calculate production costs and offer prices more accurately and reliably.

Higher level of standardization

Adapting existing products to specific customer requirements is part of everyday business for manufacturers in the mechanical and plant engineering sector. Separate data silos and manual transfer of information not only harbor a high risk of errors, but also cause an enormous amount of time to be spent on design.

By linking CPQ and PLM, your sales and design departments can use templates, even for special requests, and thus make targeted use of solutions that have already been created for other orders. You do not have to design repetitive components again and again. Instead, the process is automated and rule-based using workflows. The result: The additional expense of unnecessary new designs is avoided, the variety of parts in the portfolio is reduced and your modular product system remains lean.

More efficient production processes

Thanks to consistent and verified product data and end-to-end processes, design and production can work much faster. Information is available at a central location, can be provided in real time for sales configuration and can also be used for subsequent order processing.

Your sales teams, as well as dealers and customers, configure pre-tested products in the shortest possible time. This ensures that ordered products can be produced and delivered quickly and without technical adjustments or time-consuming rescheduling.

Improved conformity

By connecting the two systems, you ensure that products configured in CPQ comply with the specifications and guidelines defined in the PLM system. At the same time, you can ensure that the legal standards of the respective sales market are complied with.

Improved customer retention

With the help of accurate and consistent product data, you can offer retailers and customers convenient and reliable self-service 24/7, even for highly customizable products. This improves your customer loyalty, strengthens trust and increases acceptance and satisfaction with the product configurators provided.

How do CPQ and PLM work together?

The PLM supplies the CPQ system with all relevant product data via an interface. This ensures that all areas – from sales and production to the supply chain – have access to the same database. If your standard portfolio is not sufficient to meet a customer’s requirements, your sales department adds a special item to the offer in the CPQ system.

This request is transferred from the CPQ to the PLM system via workflow. It is then evaluated by the design department according to the defined specifications. If something similar has already been developed, the designer can quickly find this out and use the corresponding data. This saves time, avoids duplicates and prevents unnecessary bloating of the modular product system.

After processing by the design department, the sales department receives the requested information, including the calculated costs, back in the CPQ system. Now your sales department can finalize the offer and send it to the customer. When an order is placed, the parts list is then simply transferred from the CPQ to the PLM. Im Auftragsfall wird die Stückliste dann ganz einfach aus dem CPQ an das PLM übergeben.

Specialist article

Becoming a modular manufacturer with PLM and CPQ

For companies in the mechanical and plant engineering sector, finding suitable solutions for individual customer requirements is a matter of course. However, customized products lead to high costs in the quotation and order processing process. The combination of CPQ and PLM enables you to streamline your internal processes and significantly reduce the variety of parts in your modular product system.

In our specialist article you will learn:

Why Siempelkamp, as an international technology supplier for machine and plant engineering as well as casting and nuclear technology, relies on the combination of encoway CPQ and the CIM Database PLM from Contact Software.

Download specialist article now (only available in German)

How relevant are CPQ and PLM for the future?

The combination of CPQ and PLM will continue to play an important role in the future. Global crises and rising energy costs are jeopardizing the profitability of many companies. Falling margins and the proliferation of modular products due to customized product adaptations are reinforcing this trend.

Manufacturers of multi-variant products in particular are already feeling the pressure to act. They are faced with the task of successfully offering and profitably selling their customized products in the future.

End-to-end business processes without system breaks, automated processes and networked data will be a decisive factor for these companies if they are to continue to bring their products to market profitably.

In addition, many companies are currently working on reducing the engineering-to-order (ETO) share of their orders and developing their product modules more strongly. However, this is only promising if standardized quotation and order processing processes can be combined with a consistent database.

And this is precisely where the integration of CPQ and PLM comes in. This is because it enables you to create standardized offers based on uniform, verified data.

Icon Information

Would you like to transfer your PLM data to sales at the touch of a button?

We would be happy to show you how you can connect a PLM system with the encoway CPQ solution in order to use your PLM data for sales purposes – simply arrange your personal appointment.

Nina Malaka
Nina Malaka

Strategic Marketing, encoway GmbH

More exciting topics:

Further links:

Digital Engineering Magazin – Technical article “Engineering-to-order: With CPQ and PLM to the modular manufacturer” (The magazine is only available in German.)

CIM Database PLM system from Contact Software