Integrating CPQ with PLM

Data Synchronization in Real Time is Critical

In part 1 of this series, we stressed leveraging PLM as the underpinning for CPQ.  In this last part of the series, we want to explore what this means and identify the related implications.

As a quick refresher, we have identified three primary categories of CPQ functionality.  They include:

  • Pricing engine
  • Product configuration (BOM configurator)
  • Design automation

A common need is to manage data and support processes.  The data portion includes product data, their rules/options/constraints and associated documents such as 3D CAD used in the design automation aspect of CPQ.  For processes, this implies mechanisms to move a quote through the various functional areas of the business such as engineering, finance, manufacturing, planning, purchasing, etc.  Together, managing data and facilitating processes are the very heart of PLM.

Then, why not just build out CPQ fully integrated into a PLM platform?  It turns out that CPQ functionality has matured over the past couple of decades and that vendors have developed significant vertical capabilities for their niche markets.  There are over 50 vendors playing in the three industry segments we noted above.  Also, there are strategic alignments such as relationships/integrations with Salesforce, the various ERP suppliers, CAD vendors and so on.

Hence, integration between PLM and CPQ amplifies their strengths and leverages what each does best.  So what does this mean?

What’s Being Done Today?

Most CPQ platforms are self-contained.  They have their own database structure and associated processes.  Yes, there are some that are built on an ERP platform, but most vendors want the ability to be independent and not to be reliant on somebody else’s stack.

To capture available and released part/product data, CPQ solutions rely primarily on one-way data import operations.  That is, product data are periodically kicked out of an ERP or PLM solution and imported into the CPQ environment.  Can this work?  Sure.  If product data doesn’t change very often, this approach can make a lot of sense.  In fact, this would be considered the simplest of the “integration” options.

Integration Options

We just identified a simple integration option – data import.  In many cases, this involves exporting data from an ERP or PLM solution into a spreadsheet.  A user might glance through the data to ensure some level of “quality” and then commit the data for import.

The import option is devoid of any real-time awareness of activities or changes that may be occurring on the data side.  The most notable is when a part is in the change process and should no longer be included in future orders.  The actual release may not be affected for days or weeks while orders are being placed that include a part soon to be obsoleted.

This later use case builds justification for a real-time integration.  The pre-released and released product data are simply an extension of the CPQ environment.

Fortunately, the ability to achieve a real-time integration is very doable with proven technology available now.