Updated: Mar 23
Jan 14, 2021
For decades, “CPQ” (Configuration, Price, and Quote) has been the go-to acronym for any software or solution specifically intended for quoting configurable products. It is succinct and abides by the three-letter acronym norm, but it does not provide much depth or explanation for companies trying to capitalize on the growing demand for product variation and mass customization in the market.
So, I tried to come up with an acronym that better describes the full range of customers’ functional needs, and I came up OSSCPQSEFDIIS (pronounced oss SEE pee que SEF dis).
I will admit the chances of the marketplace adopting OSSCPQSEFDIIS are slim. It doesn’t sound quite like a business application. However, it certainly provides a much more complete map of all the areas influencing a company’s response to mass customization. The chart above gives you a breakdown of each letter as it flows through a comprehensive customer engagement.
The journey for a customer (or salesperson, reseller, or agent) doesn’t always start at Configuration. It often starts with an Opportunity followed by Product Catalog Selection and Application Sizing. These steps are focused on capturing the customer’s needs and pinpointing which product family, product, and/or product configuration are best suited to meet those needs.
Configuration and Pricing are the most well-known and intuitive parts of the journey. They become part of a Quote that can provide a comprehensive solution offering with various alternatives, accessories, value-added services, and discounting. A comprehensive Proposal can be generated to explain the details, terms, and advantages of the quote and hopefully increase the likelihood of winning the Sales Order.
The Sales Order is the watershed divide between frontend “Selling” and backend “Fulfillment” processing. Some products require Order Engineering to satisfy special requests and/or complete certain manufacturing details. Fulfillment consists of manufacturing, subcontracting, and/or purchasing to provide the ordered products. Distribution entails the picking, packaging, and/or transportation to deliver the ordered products. Installation may be required or requested for complex products that become part of industrial system.
Post-delivery or Installation, a detailed and understandable Invoice is important to avoid payment delays or disputes. Finally, Service contracts can be a significant recurring revenue generator for products that require continual maintenance. In addition, timely and effective repairs are important to maintain customer satisfaction and loyalty.
The four S’s in OSSCPQSEFDIIS are critical and interrelated. Customers rarely come with a specific product already in mind. Rather, they come with details about a problem they need solved. Whether it be a business problem, an application problem, or otherwise, Selection and Sizing to optimally solve that problem is the only way to get to the third S – the Sale. Finally, Service can be critical to ensuring that customers’ problems remain solved. For example, if you sold a product that was not well suited to solving the problem, the resulting service issues and warranty claims can cost you (and you should update your selection and sizing logic accordingly to avoid further issues).
When you evaluate your company against the spectrum of OSSCPQSEFDIIS, review each letter to determine if it entails a strength, weakness, opportunity, or threat in the marketplace. For example, if your company offers a sizable number of fixed products (SKUs), then you should focus on Opportunity, Selection, and Sizing aspects of your solution to assist your customers in navigating that mountain of SKUs to land upon the right fit. If your company specializes in complex engineering and specialty offerings, then your solution should enable or highlight your Configuration and Engineering strengths.
There’s no doubt that OSSCPQSEFDIIS is a mouthful, but it says a lot more about the realities of selling and fulfilling configurable products than “CPQ”. In future blogs, we will drill into various letters of this acronym and explain their nuances in greater detail. For now, OSSCPQSEFDIIS can serve as a high level “roadmap” for navigating the end-to-end journey of engaging your customers in the mass customization of your products and services.