Avoiding another Point Solution
The spirit of the Business of Engineering is to focus on broader strategic issues. The steadily increasing complexity of product development fuels the need for coping with products developed across multiple disciplines while driving profitable outcomes. So when we received the question, “why not run CPQ as a standalone application?” it seemed like an ideal time to integrate CPQ considerations into the Business of Engineering theme.
As we argued earlier, we believe PLM is ideally suited as a platform for CPQ. As we have seen in many standalone solutions, existing parts are exported from the ERP environment. Of course, this makes sense if all the parts are released. As we discuss in the next section, this lifecycle status is viable for assemble-to-order (ATO) operations. It’s like ordering your sandwich at Subway. All the “parts” are “released” and sitting in front of you. There is no “engineering” going on.
Moreover, in the ATO environment, the CPQ solution builds a unique BOM. The sales person identifies the available released parts and sub-assemblies that are eventually assembled. Hence, leveraging data from the ERP platform makes great sense.
But, what happens when one or more of the parts for an order have yet to be designed and built? The part(s) aren’t released and may not even exist. Additional engineering, manufacturing planning, tooling, etc. still need to be done. That’s where there is no substitute for a product lifecycle management (PLM) platform.
CIMdata, the PLM industry analyst group, recently published an article, “The Business of Engineering.” You can read it here. They point out that, “We rarely see companies that have implemented a complete end-to-end solution that achieves their PLM vision.” Rather, companies get focused on bringing in specific vertical functionality without considering the broader impact to their product lifecycle management activities.
So what does CPQ have to do with the Business of Engineering? CPQ could be treated just like a CAD application that is looking for a way to control CAD drawings. But, therein is the potential Achilles heel. The Business of Engineering encourages that organizations look at the end-to-end product related activities. And, at one end of this spectrum is the sales and quoting process.
For organizations that allow one or more unreleased parts to exist in an order, a repeatable process is vital such that those parts can be evaluated, planned, engineered, ordered, manufactured, etc. This is the very heart of PLM.
If CPQ is not yet implemented in your organization, then this is a great opportunity to embrace the Business of Engineering and look beyond just acquiring another point solution.