Lifecycle
CPQ (Configure, Price, Quote)
Assembling a valid deal, pricing it correctly and getting it approved: the front half of quote-to-cash, before an order exists.
CPQ stands for configure, price, quote, and it covers the work between “we want to buy something” and “here is a document you can sign”.
- Configure. Assemble a valid combination of products, plans, add-ons and quantities. Validity is the hard part: some options require others, some exclude others, and a configurator exists so a seller cannot quote a deal the business is unable to deliver.
- Price. Apply the right price for that customer: the list price from the catalog, the right currency and entity, contracted rates, volume breaks and discounts, with approval thresholds on the discounts that need one.
- Quote. Produce the document, keep every revision of it, and route it for signature.
CPQ earns its keep on deals that mix models: a per-seat platform fee, a metered component, a commitment with overage beyond it, and a one-off implementation charge, all on one quote. Three flat line items do not need a configurator.
Where CPQ ends is the point worth being precise about. A CPQ tool that produces a PDF and hands it to a billing system has moved the problem rather than solved it, because the terms now have to be entered a second time. See quote-to-cash for the span that closes that gap.