Is generative AI-powered CPQ the future of enterprise selling?

  • Posted on August 23, 2023
  • Estimated reading time 5 minutes
Is Gen AI-powered CPQ future of enterprise selling?

The day has finally come. The one your leadership team has been dreading.

The most experienced seller in the most profitable division in your company is retiring – a 40-year veteran who, based on tens of thousands of transactions over the years, knows every product, every part, every configuration and most of your customers. This is the person who can almost intuit what your key customers need as soon as they reach out.

How can you replace someone like that? Today’s sellers are enthusiastic, dedicated and ready to learn. But few are going to invest an entire career in one role and even if they did, the economic landscape is changing so fast that it is unrealistic to think anyone can know everything they need to from day to day.

Enter generative AI.

Many of us have experimented with generative AI, likely a program such as Chat GPT, which casts a net across publicly available online information to craft answers to a query. It’s a fascinating evolution of basic AI technology, which has been around since the 1960s. Many say it has the potential to transform how business is done.

I agree.

Avanade has been working with generative AI for quite some time. We have a good idea of what it can do and where it can make a tremendous impact on my area of expertise, CPQ (Consumer Price Quote) systems.

Fundamentally, CPQ software simplifies, optimizes and speeds the entire selling process by helping sellers select and propose the best combination of products and services to meet the needs of end customers. My team specializes in CPQ solutions that integrate seamlessly with SAP ERP systems to leverage the vast data and business rules that companies maintain there.

SAP offers the most comprehensive ERP system in the world, providing the operational backbone for most Fortune 5000 companies, and SAP CPQ is a giant leap forward for companies running SAP ERP. Using native integrations, these systems operate in concert and integrate seamlessly with CRM and other selling applications, such as subscription billing or contract lifecycle management. CPQ allows sellers to find and use complex information without the need to work in ERP.

Now imagine CPQ powered with generative AI. The potential blows my mind.

We are just at the beginning of the generative AI revolution, but here are three reasons I see exciting possibilities ahead.

Complexity? No problem. Today’s enterprise systems – from global operations, raw materials, manufacturing, supply chains, untold options for configurations, pricing, quoting, service and maintenance – involve countless pieces of information. A generative AI-powered CPQ system could handle that. It would absorb changes and updates. It would learn as it goes, incorporating everything it knows into a system that puts all that information in the hands of your sellers.

Privacy and security? Handled. SAP CPQ is designed to meet the strictest security standards. Unlike Chat GPT, which roams the world’s online information, a customized generative AI-powered SAP CPQ system would provide the additional benefits of generative AI from within your fire walls. As with today’s SAP CPQ, your proprietary data would be secure, reliable and meet all regulatory and compliance regulations for your industry, from manufacturing to healthcare and beyond.

Natural language capabilities. With today’s early generative AI applications, it can be tricky to create a query that will deliver the information you are seeking. In the future, CPQ systems could more naturally incorporate natural language, the way you and I speak to one another. Sellers – and depending on the application, customers – will be able to naturally ask for what they need. The system could respond in a conversational way with the most appropriate products, configurations and accessory bundles. Like talking with that 40-year sales veteran.

That’s not as easy as it sounds. For complex engineering requirements, companies may get a 300-400 item list of specifications for what an application must do, how it must work, which regulations it must comply with and more. Currently, a person must go through and interpret all that to determine what is the optimal acceptable solution. With an AI-powered CPQ system, much of the “heavy lifting” could be automated to suggest what the enterprise can offer and produce a proposal for the products and configurations that meet the specs and any regulatory requirements. This proposal (and the reasons for it) can then be reviewed and approved by human experts. Sellers would be able to provide answers to customers more quickly and accurately. They would reach the sell stage more efficiently, with greater customer satisfaction. And unlimited translation capabilities would make doing business globally easier, as well.

To be honest, this is only the beginning of what gen AI-powered CPQ systems could do. I can’t wait to see how they will continue to evolve.

I don’t expect generative AI to entirely replace industry veterans, but I do expect it to shorten the path to get there by shortcutting the need to learn and remember everything that their enterprise has done or can do. Imagine the possibilities when you combine humans having the right interpersonal and problem-solving skills with the total recall of generative AI.

When will SAP CPQ have generative AI capabilities? That is a good question for SAP. SAP has already developed some related machine learning applications, and I assume that generative AI will not be far behind. Plus, we could also integrate Avanade’s own generative AI solutions with SAP CPQ like we have with other enhanced integrations over the years.

We have a lot to thank our long-time seller veterans for. And we have the prospect of transformative advances ahead that will help the next generation of sellers meet the standards they have set.

Find out more information on Intelligent Selling and SAP CPQ.

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