Avoid Excel as Complex Product Configurator and for Quotations

Whitepapers and Research

Product Configurator as alternative to Excel and Word

I had a look at Louis Columbus’ blog which discusses reasons why quoting strategies fail.  One point I find very relevant for small and medium sized businesses is :

6.    Get to know the cost per order in your company and figure out how much ineffective quoting contributes to it

Point 6 is a key reason why many companies still run with an Excel and Word based quoting tools for complex product configuration.  Few have or take the time to look at their cost of quoting or at the repercussions of inaccurate quotes.  What looks like a satisfactory solution using already installed software with minimal cash outlays, ends up costing companies more than they dreamed.

Excel is not an environment you want to be creating complex dependencies.

  1. You create and distribute your price list.
  2. Everyone “knows” how to cut and paste cells and create formulas, so
  3. Soon each sales person has created a custom version for themselves.

The best thing that can happen is that the Excel tables break.  They all fail and no one can create a calculation or generate customer quotes. The worst thing that can happen is that it doesn’t break. That it keeps working.  Day for day pumping out product quotes with wrong pricing and products.

Even if the original Excel table is protected from changes, Excel is being tolerated less and less for corporate financial functions.  Quantrix has a nice whitepaper about the true costs of spreedsheets.  Unfortunately, selling undeliverable, unbuildable products or component combinations result in customer dissatisfaction and strains customers relationships. You may get away with this once. But mid and long term this rots your customer base and damages any expert reputation you have while hampering new customer acquisitions.

If you don’t consider customer satisfaction very highly, then maybe some real cash penalties will open your eyes.  Delivery penalties are quite common in some industries.  Inappropriate product selection resulting in a failure in the field can lead to massive penalties for companies found at fault in others.  Rest assured, when an assembly line goes down unplanned, there will be a supplier review with the contract manager.

Take Louis’ advice and detail the cost of your quotes and misquotes and you’ll soon realize that the hidden costs of an Excel based product configurator exceed anything saved on a few software or service licenses.

1 Comment

  1. Avatar
    17 November 10, 4:22am

    Thanks very much for the generous mention of my blog, I am honored you chose to base your analysis on my latest post.

    You make many excellent points, including how figuring out the cost per order in any company makes the inaccuracies of quoting and if in manufacturing, product configuration, become clear. Inevitably, the quoting applications built on personal productivity applications, like Microsoft Excel, end up being the cause of much confusion, pricing and product configuration errors. Enterprise-wide quoting systems can and do pay for themselves in error reduction alone.

    Sales teams, product managers, sales operations, and senior management all need to decide that having a complete view of quoting is essential for growing a profitable business. Your blog makes that point excellently all the time. You are welcome to guest post on my blog anytime you would like.

    You can contact me at lcolumbus at cincom dot com.

    Best Regards and keep up the great blogging!


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