Magic Quadrant for Configure, Price and Quote Applications
Gartner defines configure, price and quote (CPQ) applications as software that enables sales organizations to automate and optimize the creation of quotes and capture of orders. A CPQ application is a sales tool that captures the new goods and services a customer wants to buy or the changes a customer wants to make to existing goods and services. While generally focused on assisted sales channels, CPQ capabilities such as product configuration and pricing must be shared with the self-service commerce channel. The new purchases and changes must be priced and a binding contract must be formed with the customer before sending an order to downstream fulfillment systems.
No strategic planning assumptions provided.
Vendors must, among other requirements:
A: This research covers the Configure, Price and Quote (CPQ) applications market, evaluating 16 cloud-based vendors. It assesses vendors' ability to execute and completeness of vision across multiple criteria including product capabilities, market presence, innovation, customer experience, and support for various sales channels (direct sales, reseller, and self-service digital commerce). The evaluation focuses on cloud/SaaS solutions that enable sales organizations to automate and optimize quote creation and order capture, including product configuration, pricing, proposal generation, and order placement capabilities.
A: This research should be used by Chief Sales Officers (CSOs), sales operations leaders, and IT decision-makers who are evaluating CPQ solutions for their organizations. It is particularly valuable for companies seeking to select a CPQ vendor that matches their specific requirements for product complexity (simple to complex tangible goods and services), scale (from small to enterprise-level deployments), industry focus, geographic coverage, and channel strategy (direct sales, reseller networks, or digital commerce). The report should be used in conjunction with the companion Critical Capabilities report and discussions with Gartner analysts as part of vendor selection due diligence, rather than as the sole tool for creating a vendor shortlist.
A: Vendors must provide out-of-the-box support for: (1) Support for sales users with CRM integration, (2) Product and service search and selection, (3) Product configuration (selecting options and features), (4) Automatic pricing, (5) Terms negotiation and proposal generation, (6) Order placement, and (7) An extensibility framework for customizing the application to specific processes, products, and services. Products must also score at least 1.5 out of 5 for Configuration and Pricing, and 2.0 out of 5 for Propose and Negotiate capabilities in live demonstrations.
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A: Ability to Execute focuses on current performance and delivery, evaluating vendors based on their product capabilities (highest weight), customer experience, overall viability, sales execution, and operations. Product capabilities are determined through a three-hour scripted demonstration. Completeness of Vision emphasizes future strategy and innovation, with the heaviest weightings on market understanding (understanding buyer needs), innovation (past execution of roadmap and current product innovation), and medium weightings on offering strategy, vertical/industry strategy, and geographic strategy. The 2023 Magic Quadrant places considerable weight on composable, omnichannel capabilities in response to B2B demand for solutions supporting all channels of user interaction.