The quote-to-cash cycle is where the real money is made or lost in competitive enterprise. Not simply because of the prospect at the beginning and the payment at the end, although those are certainly crucial steps. It's because the Q2C cycle is where you find dozens of opportunities to create efficiencies, from finding the right part from the right warehouse to meet the customer's need today to securing the best possible credit terms. Configurators and order flow management systems are not glamorous, and the efficiencies they can create don't show up on President's Club scorecards. But they create—or hinder—the kind of customer value and seamless execution that can make or break a company over the long term. Companies which have discovered the power of a modern solution which delivers a pricing engine, configuration, inventory and collections in a tightly integrated suite with CRM and Ecommerce capabilities have made the Q2C improvements they need in order to stay competitive. The rest will bleed money at the margins when they could be using those integrated insights to make more on every deal.
That's why running a business with quote-to-cash systems designed 20 years ago is such a self-sabotaging tragedy. These systems assume a much slower pace of business. For example, in a popular legacy Q2C system, a purchasing agent cannot create a purchase order on the fly. The structure instead requires setting up a customer ID, then a customer profile, then having that customer profile approved before a PO can be issued. Those steps can take days, when today's business opportunities are often measured in hours, or less. When the market signals that you need to make a move—that your processes aren't as efficient as the competitive landscape demands—then your business needs to be able to move, without hesitation. That's nearly impossible to do when 10 different business systems run your most crucial customer-driven processes.
Watching some of the biggest names in brick-and-mortar retail struggle with competitive pressure makes this crystal-clear. Best Buy has earned the privilege of being the last man standing in its segment. But the only reward is to have its margins squeezed from all directions—from suppliers looking to protect their own interests, and from customers who have shown a willingness to order online and wait a few days in exchange for a better price. The market told them to move—but it still hasn't happened.
Other enterprises make the mistake of thinking that good CRM automatically translates into a superior quote-to-cash process. Good CRM can improve lead generation, prospect cultivation and create more visibility around the sales funnel, but the heavy lifting in the quote-to-cash cycle happens after the lead is established. Without pricing and negotiation models that are seamlessly linked to back-end financial realities, without order management that provides real-time inventory and fulfillment insights, hot prospects can quickly become frustrated customers. Entrusting your Q2C processes to an integrated, modern and flexible solution frees your business from managing a stack of software that can't move as fast as your opportunities demand.
K. David Fite - Vice President Global Enterprise Accounts