Selectica Joins NetSuite’s Configure-Price-Quote Fray




One impression from the recently held SuiteWorld 2013 conference was that NetSuite’s partner ecosystem is becoming extensive – Autodesk and ClickSoftware Technologies being only some of the company's novel high profile alliances. On the conference expo floor I was able to note several existing configure, price, quote (CPQ) or quote to order (Q2O) partners such as CallidusCloud (which acquired Webcom Inc. in late 2011), Experlogix, and Configure One.

Selectica, a public provider of software that both accelerates sales cycles of configured products and streamlines contract processes, announced at SuiteWorld 2013 the integration of Selectica CPQ with the NetSuite cloud computing platform. Selectica CPQ for NetSuite brings a constraint-modeling interface, patented product and sales configuration engine, and guided selling capabilities to NetSuite’s enterprise resource planning (ERP) solution. Built using NetSuite’s SuiteCloud development platform, the combined solution aims to give sales teams the power to configure more accurate product and service offerings and build faster and more intelligent quotes for customers. Epec Technologies was the first publicly announced joint customer, with many more in the works.

Using Selectica CPQ for NetSuite, customers can quickly and dynamically configure complex products and deals, using a solution that sifts through product catalogs with thousands of stock-keeping units (SKUs), recommends compatible products and services during configuration, and disseminates accurate product and pricing information in a timely manner across sales channels throughout the process. Companies can also use the tool to quickly discover up-sell and cross-sell opportunities, and protect margins by setting sales rules that control sales discounting, bundling, and other promotional pricing.

Selectica uses its own Web services team to integrate with NetSuite. The configuration engine is the same that the company has had since 1996 and it still supports marquee global manufacturing and high-tech customers. Needless to say, the engine has since received a number of updates and enhancements. The product’s front end is now in HTML5, so it is mobile ready and integrated with NetSuite. Selectica is a SuiteCloud Development Network (SDN) partner, and the idea is to democratize the CPQ technology by bringing it to the cloud ecosystem.

Selectica CPQ Differentiators
Of the three pioneer product configurator software providers from the 1990s, Firepond (now FPX) and Trilogy (now part of Versata) being the others, Selectica has managed to remain independently public and reinvent itself for the cloud computing era. FPX has done something similar under its new private owners, but it competes only in salesforce.com’s ecosystem against Apttus, Cincom Acquire, and BigMachines (in which ecosystem Selectica is active as well). For its part, Trilogy has hardly ever been heard about in new deals, let alone in the cloud conversation.

When it comes to NetSuite's tent of CPQ partners, Selectica touts its declarative constraint engine as the secret sauce. For the almost unlimited complexity of large global companies, the declarative constraint engine allows Selectica CPQ to handle more complexity than its traditional rule-based competitors. Constraints mean that you can configure more SKUs for more channels with less coding, so it is much easier to maintain performance and propagate changes in the face of complexity.

When demonstrating the power of constraints, Selectica likes to share the example of the largest networking company. Because of such a constraint-based approach, the customer is able to deal with the level of complexity it faces in its business rules. Selectica CPQ processes several million SKUs, nearly a billion million attributes, and $40 billion of revenue a year through a multi-channel global sales organization, and is able to turn changes around to the entire system within just 10 minutes. When one talks to clients who have worked with rule-based systems in the past, one can hear that it can take hours for these other CPQ solutions to process that much data, because the system is just not designed for this.

Another nifty capability is Playbook that was developed after years of working with some of the largest and most successful companies. Selectica’s patent-pending approach to system administration reduces system complexity by allowing customers to set up rule pattern templates that can be changed by regular business users in their user interface (UI). The template approach allows the complex modeling to be done by the business users and takes the burden off IT staffers.

Going back to the networking customer, its 300 or so weekly changes can be deployed to thousands of sales people and customers in minutes. And, in spite of the size and complexity of the business, Selectica was reportedly able to model the company’s entire CPQ business with just 24 rule patterns. This goes to show how much Playbook simplifies complex business rules, and makes them easy to understand. Unlike most other CPQ systems that require custom coding and additional services dollars to make admin changes, Selectica CPQ puts the power back in the hands of regular business users.

CPQ + CLM = CPQC
As mentioned earlier, another part of Selectica’s business is contract lifecycle management (CLM), which is the next step in NetSuite’s alliance (Selectica’s CPQ and CLM are both available in salesforce.com’s AppExchange marketplace). CPQ helps users sell complex products and services with multiple options and attributes. With the added integration of a CLM solution, management of the physical output of every deal is also possible, i.e., the contracts to achieve significant efficiency, revenue, and customer satisfaction gains.

With the combination of CPQ and CLM, companies can also take a more strategic approach to customer retention and renewals, and increase the lifetime value of every customer. Another benefit of the entire configure-price-quote-contract (CPQC) lifecycle is that the ability to track contracts gives companies a much more accurate indicator of bookings for forecasting purposes. CPQC goes beyond the sales cycle to automate the process of going from quote to signed contract management, enabling faster and more efficient approvals, and removing the risk of contract errors.

When a contract management tool ties back into a sales configuration, teams can be notified to act quickly on opportunities for upsell, cross-sell, and renewal. Conversely, unfavorable contractual relationships that would renew automatically without allowing an opportunity to renegotiate can be avoided. Apttus is the only other provider of both CPQ and CLM solutions, but it currently only competes in the salesforce.com realm. One should expect Selectica to try to capitalize on this currently vast opportunity.
 
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