What is Commercial Excellence?
Commercial excellence is the set of business processes that reside between your back-office ERP system and your front-office CRM. It requires the articulation of what should occur between engaging with the market to make your offer all the way through reaching a commercial agreement with a prospect, partner, or of course, a current customer, and optimizing that process for efficiency, accuracy, and profitability.
Today, most large enterprises wouldn’t dream of trying to function efficiently and profitably without their ERP backbone. ERP systems have been proven essential and more than capable of handling sales-related back office requirements related to order fulfillment. On the customer-facing front office side of the business, most large enterprises have also rolled out some sort of CRM solution – often for no other reason than to deal with contact/account management and the fact that the user experience of ERP for the sales organization just doesn’t cut it.
Over the long haul, ERP, CRM and other enterprise systems have played significant roles in the ongoing gains in productivity and efficiency for large companies. For that reason, SAP has been a successful company for over half a century and Salesforce has existed for almost over a quarter century. But let’s face it – while ERP systems can ‘handle’ pricing, they were never intended to manage or optimize pricing. Similarly: CRM systems can provide a wonderful experience tailored to the user who has to face a customer, and needs to keep track of roles and responsibilities over time. But when it comes to making sure the right product – at the right price – at the right time is presented during the quoting process that happens at a faster pace every day, most CRM solutions come up short. That is where CPQ systems thrive.
To address these types of challenges, you need digital middle office capabilities to link your front office with your back office. To address them well, you need to focus on the key components and capabilities of commercial excellence:
•Analytics Capabilities and Insights
One of the most critical components of your middle office – because of its leverage and impact on success and profitability – is pricing. The right price, in real time, placed in the hands of your sales team leads to maximum revenue and optimal margin. Optimized price with well-timed pricing guidance is your greatest profitability lever – much more so than cost cutting. When your pricing function is the recipient of commercial excellence focus, there’s no end to what it can do for your business.