Meeting Configure One at PlanetPTC Live 2011

My recent attendance of the PlanetPTC Live 2011 event was a great learning experience. Look for an article with my impressions on the conference and on PTC’s strategy with regards to the novel PTC Creo suite of design applications leveraging both the direct and parametric modeling (and in the wake of the release of nine Creo 1.0 applications), embedded software lifecycle management (with the MKS Integrity acquisition), mobility, etc. coming soon.

This blog post, however, will discuss handling configurable products in both the back-end engineering/design & manufacturing departments and on the front-office/sales side (including direct sales, resellers and the indirect channel, and consumer self-service).

Namely, there has been a buoyant market for configure, price, and quote (CPQ) application suites that automate critical sales processes for customers’ needs assessments, guided selling, and quote-to-order (Q2O) capture for configurable products with multiple valid options, variants, etc. But these are mostly business-to-consumer (B2C) and business-to-business (B2B) e-commerce sales configuration systems that address strategies in achieving sustained profitable revenue growth via mass customization  capabilities. Decreasing sales cycle times, administrative work, and order capturing process errors represent the leading near-term objectives for the deployment of these systems.

More and more, however, enterprises are increasingly exploring CPQ/Q2O offerings to improve how sales channels manage opportunity qualification, quoting/bidding, and pre-deal-closing processes to increase win rates and transaction profitability. Some of the most advanced and cohesive Q2O/CPQ offerings involve consolidated pricing execution (with pricing analytics, and possibly pricing optimization), customer segmentation analytics, variant profitability analysis, standard vs. special parts consumption, and other value-add functionality, such as proposal and contract management systems (for example, those by Selectica and Apttus).

What Sales Force Can Promise…

But what “creative” (or simply uninformed, without necessarily having willful intentions) sales folks can promise frequently engineering folks cannot easily design while manufacturing folks cannot really manufacture. The primary purpose of CPQ application suites is to facilitate process flows in sales cycles for deal and transaction development, in contrast to the function of product configurators in ensuring execution of orders and bills of materials (BOMs) for production or fulfillment purposes.

A direct connection between sales configurators and engineering product configurators ensures consistent communications on valid product portfolios (e.g., new product introductions [NPI’s] and existing products discontinuations). Engineering configurators revolve around effective dates, phase in/phase out dates for components, engineering change orders (ECO’s), etc., not all of which are easily supported by sales configurators. Thus, within the upcoming Creo 2.0 set of applications, PTC plans to release a code-named “AnyBOM” application that will handle configurable items. For its part, via the Rulestream acquisition, Siemens PLM now has knowledge-based configuration capabilities.

Thus, it is often the case that the front-office (including the corporate Web site and catalogs) utilizes a CPQ/Q2O suite, while the engineering and manufacturing departments work off a product configurator, either from their enterprise resource planning (ERP) or product data management (PDM)/product lifecycle management (PLM) systems of record. Needless to say, these two configurators all too often work off different data sets and are hardly ever in sync.

Ironically, industry verticals that have taken the lead in evaluating and investing in CPQ suites tend to be manufacturing-oriented, spanning such sectors as industrial manufacturing, transportation equipment, industrial components and machinery, including equipment for the oil & gas and life sciences industries. The high-tech (hardware and software) and communications industries (equipment and services) have become increasingly prominent. Retail and business services (e.g., financial, insurance, media, etc.) represent an emerging segment.

Configure One: An Enterprise Configurator Concept

At PlanetPTC 2011’s expo floor I met one CPQ/Q2O vendor, Configure One, that claims to be an enterprise configurator (for both sales/front-office and engineering/manufacturing teams), whereas the offerings from BigMachines, Cameleon Software, FPX, Webcom, Cincom Acquire, and other CPQ/Q2O vendors are mostly sales configurators. To be fair, the latter vendors are not necessarily just sales configurators, however, the majority of their implementations focus on sales configuration.

Founded in 2000, Configure One is a privately held e-catalog and product configurator software company in Oak Brook, Illinois (near Chicago), United States (US), who targets manufacturers that produce configurable equipment. The vendor has gained traction in the trucking, medical, electrical, and construction industries, with 160 manufacturing customers. The company’s European operation, Configure One Europe, Ltd., is located in Essex County, near London, United Kingdom (UK).

According to its co-founder and current co-president Ron Mouw, Configure One is financially stable and has been debt-free, growing, and profitable since its second full year in existence. Configure One qualifies as a US veteran-owned business, and all of its founders are involved with the day-to-day business operations. In addition to being debt-free, the company has no venture capital (VC) or other third party investors.  Thus, Configure One’s executives can make decisions that are based solely on the needs of the company and its customers, rather than feel the pressure for quick returns from investors. The organization is still modest in size, with roughly 30 employees. One can do the math and estimate the company’s revenues, which is likely on par with those of its startup competitors.

The company was built on the principals of creating Web-based product configurator and electronic (online) catalog software that is simple to use, yet powerful enough to offer flexibility in today's complex sales and manufacturing environments. Configure One’s Concept Enterprise Product Configurator, Concept E-Catalog, and Concept E-Commerce products enable its customers to increase sales while reducing costs by automating much of the sales, order entry, and engineering processes. The flagship product line is Concept Enterprise Product Configurator, an application composed of the following key modules:

  • Concept Core -- provides baseline configuration functionality, a rule engine, and model definition capabilities

  • Concept Pricing -- provides pricing engines and administrative capabilities (i.e., to build price books and price deals), as well as costing and estimation tools

  • Concept Quote -- delivers quoting and proposal generation functions

  • Concept Catalog -- provides functionality for developing and administering product catalogues for Websites

  • Concept Publisher -- defines, tests, and manages releases of rules and content for sales configuration and pricing models

  • Concept Compass -- supports offline quoting and configuration tasks by field sales forces that finds itself in remote areas with no Internet access

Configure One’s started out as an engineering configurator to enable computer-aided design (CAD) systems to design product variants and automate the role of a human engineer. Thus, in addition to TechniCon, Concept Enterprise Product Configurator offers differentiating visualization capabilities (e.g., natively generating two-dimensional drawings in real-time), functionality for managing special requests (product images, sales drawings, CNC production drawings, virtual lightweight 3D models) as well as BOMs and routing report features to support manufacturing clients.

Real-time standard integration to PTC’s Pro/Engineer (Pro/E), Dassault Systemes' SolidWorks, and Autodesk Inventor is impressive. Namely, these are not static PDF or JPG attachments, but users can rather see the live 3D CAD drawings changing dynamically as the options are selected on-the-fly. For 2D drawings, Configure One even has its own embedded CAD module so that customers do not have to acquire expensive and complex supplemental CAD products.

Concept Enterprise Configurator is written in Java, runs on Microsoft SQL Server and Oracle databases, and is mostly deployed on-premises. A hosted option is additionally available, with clients receiving their own (private) application instance, database, and hardware, as well as the ability to dictate the timing of upgrades.

Configure One staffers talk up the company product’s ease of use for administrators, but claims of ease of use are always subjective. Webcom or BigMachines would counterclaim that they have more flexibility in their respective “out of the box” admin platforms , since they are focused on software as a service (SaaS), which Configure One is not. For its part, Cameleon Software claims that its application goes beyond the traditional “admin” tool and requires no coding or specific language.

Configure One offers the Concept Connect module to manage integrations, with the option of using staging tables in a database, Web services, or file transfer protocol (FTP) functionality. In addition to the aforementioned prominent CAD systems, standard integrations have been established with customer relationship management (CRM) vendors such as Microsoft Dynamics CRM and, as well as various ERP vendors, including SAP, NetSuite, Microsoft Dynamics, Oracle E-Business Suite (EBS), and JD Edwards. As said earlier, Configure One has CAD integration out of the box while its competitors resell partners’ CAD functionality in the best-case scenario. More commonly, CAD integration is in an opportunistic, project-based mode, typically 2D CAD.

Competitors Chime In

Configure One functionality leans more towards engineering/manufacturing configuration, whereas BigMachines, Cameleon, and Webcom lean more towards sales configuration. As a result, ConfigureOne tends to promote those strengths that are primarily useful for the assemble-to-order (ATO) and engineer-to-order (ETO) manufacturers (i.e., its ability to produce manufacturing reports and documents, such as cut lists, product material roll-ups, mass property reports, weight reports, area reports, etc.).

Configure One’s aforementioned competitors’ diverse client base includes many vertical markets and use cases. While BigMachines, for example, has demonstrated strength and wide adoption in manufacturing companies, its configurator has also been deployed at the enterprise level in leading corporations in high-tech, software, medical, financial, services, and many other industries. The vendor offers a cross-industry selling platform that delivers results across sales channels. For more information on BigMachines, see my earlier blog post.

For its part, Cameleon has strong references in manufacturing, but it has made some strategic choices to address other verticals and more specifically “services” industries (telecoms, insurance & financial services, high-tech, media, etc.). These choices are the result of the company’s vision that CPQ/Q2O systems should bring benefits to a wider number of people in the organization: not only to sales and engineering departments, but also product marketing teams, pricing experts etc.

Moreover, CPQ/Q2O systems should address the “new” business challenges such as the “mobility” challenge. Cameleon believes that this is how companies will really get maximum ROI on their CPQ investment. For more information on Cameleon, see my earlier blog post on the company.

Most of Configure One’s competitors can handle product versioning that enables users to enter different versions of a product, apply changes, make them evolve during their lifecycle, and apply them on all different channels. For example, BigMachines supports effective dates in the platform. For some customer use cases, it uses data tables to accomplish what the customer desires. Yet, the true origin of such data should come from an engineering-oriented application (configurator).

I concur with the assertion by Gartner in its recent “MarketScope for Configuration, Price, Quote Application Suites” report, where Configure One receives a Promising rating for functional breadth, experience with ATO and ETO manufacturing operations, cost-competitiveness, and relatively rapid implementation cycles. The vendor likely comes short of the Positive rating due to lower market visibility, geographic presence, and limited consulting service and reseller partnerships, which might impact its ability to compete with the aforementioned CPQ vendors (some of which are larger with more aggressive marketing).

Dear readers, what are your comments, thoughts, suggestions or individual experiences with Configure One’s products? What do you think of the company’s strategy and related moves? Generally speaking, how do you bridge the gaps between your sales processes on one side and engineering & manufacturing processes on the other side? Manually? In an automated way? Somewhere in between?
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