Why is the sequencing of pricing steps important in a CPQ system?

The sequencing of pricing steps is crucial in a CPQ (Configure, Price, Quote) system because it directly impacts the accuracy and efficiency of price determination. In a CPQ system, pricing isn't just a one-step calculation; it involves various components such as list prices, discounts, surcharges, and potential promotions. The order in which these elements are processed can lead to significant variations in the final price presented to the customer.

For example, if discounts are applied before surcharges in the pricing sequence, the overall cost might be lower than if the surcharges were applied first. This can affect not only the quoted price but also the profit margins for the business. The correct sequencing ensures that all rules regarding pricing adjustments are followed logically, leading to a more precise calculation that reflects the true cost of the configured product or service.

Sequencing also plays a role in streamlining the pricing process, which enhances the overall speed of generating quotes. A well-structured sequence allows sales representatives to quickly and confidently provide accurate pricing to customers, improving the sales experience and increasing the likelihood of closing deals.

While considering aesthetic aspects, discount calculations, and product attributes are relevant, they do not capture the primary operational necessity that sequencing addresses — ensuring that prices are calculated correctly and efficiently