Five Critical Insights for a Successful CPQ-Billing Transformation

The rise of CPQ tools has left no doubt—the age of recurring revenue is here. But the rise of subscription and usage models is only part of the story. A larger sales revolution has introduced a plethora of new discounting and pricing levers to secure higher win rates and improve your bottom line.  

Sellers are all in, leadership is cheering, but is your back office? Is your billing team able to quickly and accurately process new contracts, or do they spend hours unwinding complexities and consolidating data in order to invoice? With today’s ever changing selling models, getting your selling and billing systems in sync isn’t just important. It’s essential. 

Those who have implemented CPQ or Billing independently will tell you that it’s challenging; implementing both systems together as a larger transformation is no exception. Revenue management transformations require strategy, precision, and expertise to ensure on-target delivery and adoption. The effort is well worth it, because a proper implementation of CPQ and Billing unlocks unstoppable revenue growth and frictionless back-office operations to propel your business towards its goals.  

Although there are many CPQ and Billing systems that can be selected, the larger considerations and pain points of these transformations span all technologies. To this end, we at Ravus have put together a five-part series covering the top considerations as you begin your transformation journey, regardless of your CPQ and Billing software selections. Here are five things you need to know for a successful CPQ – Billing transformation project: 

1. Successful CPQ and Billing alignment starts with a well-structured product catalog that considers both systems’ needs, data flow, and ongoing synchronization to ensure seamless quoting, invoicing, and revenue management. 

2.  Ensuring accurate quoting, invoicing, and revenue recognition requires careful consideration of your billing system's needs when designing your pricing and discount structure. 

3. Data cleansing and mapping are vital to a successful CPQ and Billing data migration, along with extensive rounds of testing. 

4. A firm understanding of data models and transformation requirements is critical to ensure a well-designed and scalable CPQ-Billing integration.  

5. CPQ and Billing implementation teams must collaborate closely throughout requirements elicitation, design, and build to ensure a successful, cohesive program. 

We’ll expand on each of these areas in our upcoming deep dives. Each topic is equally important to the success of your transformation, so be sure to read all five! We’ll kick off our series with the foundation of CPQ and Billing: the Product Catalog. Keep reading to understand how you can lay the foundation for a successful implementation. 

We’ll kick off our series with the foundation of CPQ and Billing: the Product Catalog.

Part 1 of 5:  The Foundation of CPQ and Billing: Product and Bundle Design

Welcome to the first stop on the road to clean, error-free invoices that match exactly what was sold: product and bundle structure. Let’s sharpen our claws with part one of this five-part series with a breakdown of how to keep your product catalog working for you, not against you! 

Successful CPQ and Billing alignment begins with the product catalog. Although product definitions remain the same throughout the Revenue Management lifecycle, product attributes and behavior vary by system. Understanding not only these functional variations but also varying business needs is critical to ensure a cohesive, standardized catalog moving forward. Without these considerations, you could end up with a product catalog and structure that works perfectly in your CPQ tool but can’t properly supply data to your Billing system, restricting your ability to accurately invoice and collect.  

To avoid this, both CPQ and Billing teams must be involved when determining product and bundle structure. Together, selling and billing teams must determine where data should originate and where it needs to persist. Some product attributes are relevant solely to the sales process while others matter only for billing and recognition. Most impact both systems, such as attributes captured during quoting that serve as inputs for critical billing processes. A firm grasp of product data flow will enable your business to develop a product catalog that supports business needs across CPQ and Billing, meeting customer demand and removing back-office complexities to eliminate the need for workarounds and manual interventions. 

Understanding product attributes and data flow is only one piece of the puzzle, albeit a critical one, when determining your future product catalog. The design of your bundle structure is equally important. Optimal bundle structure depends on many factors, such as your selling process, selling rules, and/or customer incentives.  The determination of this structure must consider both the CPQ and Billing workstreams. Properly implemented bundles should not only streamline the selling process and enforce business rules but also provide a data structure that is easily consumed by the billing system to allow complex invoicing scenarios (minimums, overages, usage aggregations, etc.).  

Key Considerations for Bundle Structure: 

• Are billing processes impacted when a product is sold within a bundle vs. standalone? If so, what data will inform billing setup for standalone vs. child lines?  

• Will bundles be replicated in the billing system or will the catalog remain flat downstream? If bundles will not be replicated in the billing system, how will bundle inclusion data be captured and referenced?  

• Does Billing require any products to be sold together to enable proper invoicing (ex. minimum fees and overage)?  Can multiple usage lines contribute to a minimum or overage fee? What data does the billing system need to ensure proper aggregation of usage when determining minimums/overages? 

Loading a defined product catalog to your CPQ and Billing system is one thing, ensuring symmetry in both catalogs through product updates, introductions, and retirement is another matter entirely. Standardized processes should be developed to ensure continued alignment between your CPQ and Billing catalogs. Depending on your tech stack and architecture, duplicate efforts may be required in both systems for product updates/introductions. Alternatively, changes in one system may be able to automatically sync to the other system (preferred). Regardless of the approach, ensuring parity across systems allows faster introduction of new offerings and reduced overhead in maintaining an aging catalog. 

Building a well-structured product catalog will lay a foundation for deals to flow from quote to cash like gears in a Swiss watch – precise, synchronized, and flawless. But even then, you’re not out of the woods yet. Check out part two of this five-part series, coming soon, for key insights on revenue success: pricing to invoicing. 

We’re here if you have any questions or want to learn more about how Ravus can help take the bear out of your revenue transformation project. Reach out to us at info@ravusinc.com.