We're on the cusp of the 4th industrial revolution. It's very not quite the same as the three Industrial Revolutions that went before it—steam and water force, power and sequential construction systems, and computerization—since it will even test our thoughts regarding being human.
What is the 4IR?
The fourth modern insurgency describes the striking changes to the way we relish, work and identify with each other because of the variety of digital actual frameworks, the Internet of Things, and the Internet of Systems. As we carry out brilliant shifts in our industrial equipment and work environments, associated machines will interact, envision the entire conception chain and settle on choices autonomously. This revolution is expected to affect all orders, ventures, and economies. While somehow or another it's an augmentation of the computerization of the third Industrial Revolution (Digital Revolution), because of the pace, extension, and frameworks effect of the improvements of the fourth unrest, it is being viewed as an unmistakable period. The 4th industrial revolution is pretty much every industry in each nation and making a huge change in a non-straight manner at remarkable speed.
What are the industry 4.0 technologies?
Here is the list of the industry 4.0 technologies
Additive Manufacturing. 3D printing is a perfect example of additive manufacturing. Instead of prototyping individual elements, companies can now create small lots of customized products. The resulting advantages include the fast manufacturing of complex, lightweight designs.
Augmented Reality. Augmented reality (AR) technology supports various services, such as selecting parts in a warehouse and sending patch instructions over mobile devices. With AR, businesses can provide associate teams with real-time information that enhances decision-making and work schemes.
Autonomous Robots. Autonomous robots can communicate with one another and work carefully side by side with humans. These robots will be cost-effective and have an ever-widening range of capacities over time.
Big Data and Analytics. In an industry 4.0 technologies context, the collection and comprehensive evaluation of data from many different roots—production machines and systems as well as enterprise- and customer-management systems—will become table stakes.
The Cloud. The added production-related actions a company offers, the more it needs to share data across sites. Meanwhile, cloud industry 4.0 technologies continue to get faster and more robust. Businesses will increasingly use machine data and analytics in the cloud, thus facilitating more data-driven services for production systems.
Cybersecurity. It’s no surprise that The 4th industrial revolution boosts increased connectivity and the use of standard communications protocols. As a result, the requirement to safeguard critical industrial systems and manufacturing models from cybersecurity threats increases dramatically. For this reason, protected, reliable communications, together with advanced access management for machines and identification verification of users, are necessary.
Horizontal and Vertical System Integration. The 4th industrial revolution allows companies, departments, functions, and capabilities to become much more cohesive. Cross-company, universal data-integration networks evolve and enable truly automated value chains.
The Industrial Internet of Things. The 4th industrial revolution means that more devices are interconnected with embedded computing. This process enables electronic devices to communicate both with one another and with more centralized controllers. This 4th industrial revolution also decentralizes analytics and decision-making, thus allowing responses in real-time.
Simulation. Simulations are a foundation of the digital transformation industry 4.0. They’re used widely in plant processes to leverage real-time data and to mirror the physical world. Done right, this 4th industrial revolution allows operators to test and optimize settings in various variations, thereby driving down machine setup times and improving quality.
What’s the promise of the Fourth Industrial Revolution?
For sure, perhaps the best promise of the 4th industrial revolution
Its potential is to work on the personal achievement of the total people and raise pay levels. For those in First World nations who as of now partake in a portion of the advantages of an associated world just as new items and organizations created to utilize the advancements, we like the efficiencies and accommodations given like booking a trip to getting film suggestions. Our working environments and associations are becoming "more brilliant" and more productive as machines, and people begin to cooperate, and we utilize associated gadgets to upgrade our inventory chains and distribution centers. The advances of the 4th industrial revolution may even help us with bettering catastrophic events and possibly likewise fix a portion of the harm fashioned by past mechanical upsets.
What’s the potential peril of the Fourth Industrial Revolution?
World governments need to appropriately plan for and manage the 4th industrial revolution to ensure our security. There might be increased social pressures as a result of the socioeconomic changes brought by the 4th industrial revolution that could produce a job market that’s separated into “low-skill/low-pay” and “high-skill/high-pay” segments. Typically, first adopters of digital transformation industry 4.0 are the ones with the financial means to secure it, and that technology can slingshot their continued success improving the economic breaks. Some jobs will become out-of-date.
Additionally, the changes of digital transformation industry 4.0 might develop so speedily. Even those who are ahead of the curve in terms of their knowledge and preparation, might not be able to keep up with the ripple consequences of the changes.
How best to prepare for the 4th industrial revolution?
Digital transformation industry 4.0 is shaping a future that goes for all by placing people first, empowering them, and continually reminding ourselves that all of these 4th industrial revolution technologies are the first and leading tools made by people for people.
Humans must be proactive in shaping this technology and disruption. This requires global collaboration and a shared view of how 4th industrial revolution technology reshaped our economic, social, cultural, and individual lives.
Companies should start focusing and investing in their technical infrastructure and data analyzing abilities. All businesses must be making a move to be smart, connected businesses or they will soon fall behind the competition.
We need to develop managers with the skills to manage organizations through these dramatic shifts. As professionals, we need to espouse change and understand that what our jobs are today might be dramatically modified in the not too distant future. Our education and training systems need to change to better prepare people for the flexibility and critical reasoning skills they will need in the future workplace.
In the unprecedented time of the pandemic, B2B manufacturing can not rely on the same old tactics to fulfill the customer requirements. The new shift has changed the whole reclaim of the B2B manufacturing industry and the way customers shop. Now they mostly shop online and are more mindful about their buying and what perks they will get after purchasing the product and services. The entire transformation brings some challenges to B2B manufacturing however thanks to advanced CPQ software that are specially designed B2B manufacturing that are helping businesses to easily adopt market changes.
Before highlighting the benefits that CPQ can offer you in the speed-Up B2B Manufacturing process, let's discuss what is B2B eCommerce?
What is B2B eCommerce?
Business-to-business eCommerce or B2B eCommerce means selling products and services between two online businesses. Business-to-business eCommerce includes online transactions between a manufacturer and wholesaler, or a wholesaler and a retailer.
B2B eCommerce is the fastest-growing sales model. B2B business traditionally included manual sales and marketing processes. The influx of digital commerce encourages businesses to reduce costs and increase B2B eCommerce Experience through eCommerce automation.
CPQ automation software helps in the B2B Manufacturing industry improving B2B eCommerce Experience and stimulating the quote-to-cash process to enable sales teams to real-time build and deliver quotes for all selling product outlines. With the rise, CPQ software is leading with sales automation to furnish sales teams with reliable insights such as customized product configurations, personalized product recommendations, and dynamic pricing options along with the B2B eCommerce Experience. These features not only let salespeople close deals quickly while increasing the potential revenue and profitability.
Way CPQ Help You Speed-Up B2B Manufacturing process
Delivering a unique B2B eCommerce Experience starts with focusing on customer demands and requirements, as well as an anticipation of intricacies that they might be facing. It's not easy to manage this as the desires and challenges of every individual customer are different. To solve this problem the CPQ system comes upfront in transforming the whole business to business eCommerce manufacturing industry. A customer-centric mindset and B2B eCommerce Experience are essential in the B2B space to design B2B manufacturing approaches with exceptional results.
The following are the essential areas where CPQ systems are transforming B2B manufacturing along with B2B eCommerce Experience.
Increase device capacity through cross-sells, up-sells
CPQ system helps B2B manufacturing organizations to conquer actual intricacy while figuring insight through strategic pitches, and up-sells. Decreasing the actual stipulations allow the business to lessen the unpredictable error that can impact the product recitals and productivity. CPQ for business-to-business eCommerce assists organizations with working, by and large, to make the communication streamline and eliminate confusion progressively. It likewise allows organizations to modify the product after buying too, advancing to clients' unique needs.
Speed up the purchase with real-time changes
CPQ gives deftness to various B2B purchases and accelerates complex deals by meeting up current client premises with 3d eCommerce. It helps in creating complex quotes right away and allows clients to propose changes that reduce the length of the product development cycle by implementing the changes in real-time. If a specific product specification doesn't work for the client, the sales team can create another in no time.
Provide precision in complex quote
CPQ in business-to-business eCommerce has resolved the most daunting challenge that blocked the development process i.e generation of precise product quotation. Previously with traditional systems, it was difficult for the sales team to generate complex quotes.
Mistakes in quotes can infringe the trust of customers and cause a bad consequence on the sales to funnel. Wrong quotes and configurations cause a bad B2B eCommerce Experience which leads customers to move to other service providers. CPQ eliminates that chance by outlining a precise quote for the product. If a customer is not satisfied with the quote it can create a new one promptly.
With accuracy in a quote, B2B eCommerce Experience also improves Contract Lifecycle Management by streamlining the process of the concluding contract negotiation so that the negotiation process doesn’t turn into an obnoxious customer experience.
Remodeling your selling capacities
CPQ helps B2B manufacturing deliberately change their selling abilities through assessing and changing the final offering interaction to make it more proficient. It additionally helps in assessing and redefining the organizations' portfolio to make it more appealing to clients by offering configurable products or solutions. CPQ system works with precise, fast deals which allow the sales team to take care of more deals simultaneously which ultimately brings more revenue to the organization. Its design suggestions that incorporate all significant data expand the cross-and upselling openings. The capacity to create quicker, more out-and-out, and precise quotes, completely increase sales.
Morden buyers need personalization therefore it's essential for b2b manufacturing organizations to adopt the latest technologies to design customized products. In the B2B world, CPQ allows personalization more profoundly and by offering what exactly the customer is asking, it improves the manufacturing process. For instance, if clients have explicit item needs, with CPQ in business-to-business eCommerce the sales team can without much of a stretch tailor lists only for them.
While making a hyper-personalized customer experience, B2B manufacturing organizations should place themselves in the shoes of their customers to measure if they are getting a significant speculation solution that addresses their issues, or if the organization's offerings are old-fashioned. A strong omnichannel experience incorporates a wide range of effort and innovation. To get it going, including customers before the process can assist you with getting a more definite perspective of customers and help create a cohesive experience with everyone on the same page.
AI-powered CPQ systems built directly into the product provides B2B manufacturing with optimal pricing and cross-sell and up-sell opportunities. It facilitates the rep with extensive insights, allowing them to contrive the deal more sharply. This improves the B2B eCommerce Experience, excluding the time needed in research that a sales team would otherwise have to complete separately. All that time saved can be used to create a deeper customer connection.
In short, in the B2B manufacturing world, CPQ can help you satisfy today's buyers' expectations by fastening the manufacturing process and following the customer’s buying journey.
The domain of B2B selling is not one that you can call simple and get away with. It’s the exact opposite of that. Yes, you figured it right
It’s a highly complex market, with intense competition from every side. As a result, sales teams are working outside of their work hours as well, most of the time. That’s not because they have added responsibilities, but because of the never-ending portfolios of complex products, bigger and more demanding quotes, and also satisfying their customers with an amazing experience.
All of this is a little too overwhelming, even for a team of the most dedicated sales reps. This is when something like configure price quote solutions make lives for everyone easier- for the sales reps as well the customers.
CPQ software solutions have been nothing short of a game-changer for B2B manufacturing companies. Configure price quote solutions provide an accelerated path for sales reps to put the quotes in a customer’s hands as quickly as possible. The right CPQ tool easily enhances an organization’s existing CRM systems, bringing to the fore a heightened degree of flexibility
As far as CPQ customer experience is concerned, things become too simple for them. Making a purchase is a very pleasant experience, as they get bragging rights to give a final design to their product before they purchase it.
But a question arises- how to choose the best among many configure price quote solutions?
We have the answer for you! Keep reading on for more.
Factors to Consider When Choosing the Right CPQ Solution
CPQ implementation is a tricky business, and it works both ways. While the right CPQ tool can turn productivity on its head, landing on the wrong one can have the opposite effect. This is why it’s important to watch out for the right attributes for your choice of configure price quote solutions-
There’s no use for a CPQ system that is so costly that you spend years recovering the cost itself. By striking the right balance between affordability and feasibility, you ensure that Return on Investment starts right away with the very first product sold.
While some CPQ software solutions have a one-time flat fee, some offer a fixed monthly tariff. You should be able to make the right choice in terms of the financial model that suits your organization.
Native and hybrid are two crucial CPQ architectures that differ on the grounds of their usability. Configure price quote solutions with native architecture is tailor-made for particular CRM systems, and cannot be integrated with other CRM systems.
However, in the case of a hybrid architecture, the CPQ system can easily work with any type of CRM or ERP system. Keep in mind that your regional teams might make use of different ERP or CRM platforms, and you will have to consider the kind of flexibility you are looking at.
A CPQ software revolves around major points of reducing costs, increasing productivity, and making quote generation a super-smooth process. Moreover, everything is trackable and guided selling is a genuine process.
All of this is done to foster better collaboration for both the sales teams as well as the customers. If your current list of CPQ software solutions does not include a tool that eases communication, then you need to keep looking.
Try to get a CPQ tool that’s simple to use. Applying too many brains to just navigate through is not what you should invest in. Smooth navigation also translates to efficiency in production elements like contracts, quotes, and other related aspects.
Clutter-free CPQ implementation leads to complete adoption within the organization as a whole, which is why it’s even surprising to find companies that have complicated platforms in the time of Agile methodologies.
In the present scenario, many CPQ solution providers boast of including AI on their platform, but this is limited to a few aspects in most of them. Such configure price quote solutions struggle when the customer base changes, market changes, and AI needs to implement changes to adapt and function with the changes.
Get yourself a CPQ solution that can work in sync with Machine Learning feedbacks. This will ensure that none of your recommended products go out of relevance, thanks to constant upgrades in the store.
As an experienced sales manager, you may opt to recommend a popular CPQ without considering its merits and demerits to the management. This can take your organization to the opposite of progress at a pace where you won’t even realize what happened.
Invest a good amount of time to finalize a suitable CPQ platform and consider every option of every possible scale. A CPQ should be a one-time decision, and regrets will only lead to more damage.
In The End
Configure Price Quote solutions have a lot of styles and scales. These are just a few of those factors that you should surely consider, while the other ones can depend on the kind of operations your business has. If you think progress is something you deeply strive for, KBMax offers a lot of features that will tick a lot of the right boxes for you.
Deloitte estimates that 36 percent of all consumers wish for customized products from their favorite brands. One in five can also pay a premium for it, and most will wait a few days more for it.
The 2020s have given a new degree of accessibility to customization – with that has come huge demand. Providing accurate quotes on customized products can be a headache. But with quoting software, it’s easy.
Sales quoting software enables businesses to quickly deliver customized products and quotes even when product options are in the dozens or hundreds. That’s critical for the manufacturing industry, as it needs immense accuracy in the said configurations.
Here’s a closer look at what quoting software is and why you should use it for your business.
Quoting software – often referred to as CPQ or configure-price-quote – is a tool for accurate pricing for complex products to your customers quickly.
It works like this:
A customer calls your sales rep and tells what they need. The sales rep enters the features into the configurator, automatically calculating the price on the given variables. This number goes back to the client. The entire process takes a few minutes.
It can also work like this:
A customer visits your website and plays with your 3D configurator. The price updates in real-time when they select different options. When they’ve settled on the best combination of features and addons, they add it to their shopping cart and check out like a usual e-commerce transaction.
If you’ve ever selected options like colors, custom text, fabrics, or other preferences, then you’ve interacted with a brand powering its customer experience with CPQ. Today’s visual CPQ solutions are so advanced that they can do the same for buyers of highly technical, configurable products in the biotech space.
Imagine what your company could achieve if your sales reps spent more than 36 percent of their time selling, as that is the average time reps give to revenue-generating activities.
Even if your company uses a CRM, there’s a big chance that CPQ gives an opportunity to streamline the manual business processes. This is exactly where 60 percent of your sales reps’ time gets compromised.
Sales automation software, or a CPQ, that integrates with your CRM, takes a huge burden off your sales team by taking over those mundane processes that would otherwise be done by hand. In the process, it also:
Do you use Excel to track your current pricing and product options? You’re not alone. If hundreds of those Excel templates for such purposes are an indication, it’s one of the popular uses for this program.
If you’re producing complex products though, it’s a bad solution.
Excel has a number of uses. But using it for configurations, pricing, and quotes brings in risks your business doesn’t require. For example:
When it comes to the perfect software solutions, many options are available from well-known vendors like Salesforce, HubSpot, and IBM to smaller and more specialized vendors.
There’s no one-size-fits-all solution. However, there are much better or worse choices on your specific business needs and industry. That’s more true for companies in manufacturing. Here’s a look at what the best quoting software for manufacturing is all about.
You’re specifically looking for two things:
Most quote-to-cash and CPQ solutions out there are rich when it is about the features. Most integrate flawlessly with CRMs, and many take over most of all your backend operations.
These programs assume that if you are big enough to depend on a CRM solution, you need every single feature you can get.
On the flip side, heavily specialized solutions might lead in the opposite direction. They will give those tools needed to manage your backend or provide a sophisticated configurator but depend a little too heavily on your CRM for the product details.
When it comes to the right quoting software for manufacturing, you need to find the perfect fit. That means it:
Many CPQ solutions are just backend services, meaning that they don’t have any public or customer-facing component. The product configurator is then reserved for your sales rep, and there’s also no support to embed it on your website.
For today’s buyers, that’s not sufficient. Increasingly, they want to self-serve.
Therefore, you need to look for:
When your company gives out complex and customized products, using quoting software is a best practice. CPQ solutions like Salesforce CPQ, KBMax, and others streamline your entire sales cycle – from customer wish with the help of manufacturing and delivery.
We’ve covered what quoting software is, how it works, and the benefits that you can reap from deploying it in your business. We’ve even taken a look at a few tools for B2B and B2C companies of all sizes to give you a sense of what’s out there.
No matter what quoting software you choose, make sure it’s the sales automation software that makes you quicker, more efficient, and better to respond to your customers’ needs. That’s the only way forward in the era of mass customization at scale.
What is product configuration? What is a configurator? How will having one power up your integrated CPQ process? And what impact can visual product configuration have on the overall customer engagement, sales cycle duration, and manufacturing efficiency?
Unsure? Then this article is for you.
Before taking a look at the five best online product configurators out there, let’s get an idea of the present status of the configuration technology market and also discover the impact that an online product configurator has on your business.
A 3D product configurator is a software application to make the configuration of complex, customizable products easy, swift, and error-free.
In most traditional manufacturing setups, sales reps have to navigate extensive and technical product catalogs full of multiple options. Configuration of products is tough work. It needs sufficient training and is prone to human error and a number of other inefficiencies.
A visual product configurator facilitates the automation and streamlining of the configuration process. With a 3D product configurator, sales reps can then create complex products by just clicking, dragging, and then dropping in an intuitive 3D visual interface. They can switch colors, dimensions, parts, features, and a lot more with just a few clicks.
The 3D product configuration process is brought into effect by advanced product and pricing rules built into the software. These rules guarantee that every single configuration is completely free of errors. More than that though, they optimize every configuration for the overall engineering efficiency, profitability, and even customer satisfaction.
Product rules are the guard rails where sales reps need to operate. Sales reps no longer need such a huge amount of training for selecting products. New hires can then be made acquainted in a few days and then start performing even at the highest level.
Automation of the most simple and redundant sales tasks reduces sales cycles to a mere fraction of the industry averages. The quote responsiveness gets brought down to just seconds. This then leaves sales reps free to pay attention to newer business. They can also get themselves out of Excel and then begin with what they are really good at.
A 3D product configurator is a part of the broader CPQ (configure, price, and quote) solution, which further reduces those sales cycles. As sales reps cut and change their product options through their online product configurator, the CPQ then recalculates and updates prices in real-time. Once such a configuration gets finalized, the CPQ then automatically generates a huge amount of sales documents like quotes, proposals, and even estimates.
A visual CPQ solution like KBMax takes things up a notch by the automation of core engineering tasks. Other than the sales documents that all CPQ solutions produce, KBMax generates the technical drawings automatically through CAD (SolidWorks, AutoCAD, Autodesk Inventor, and PTC Creo), BOMs, CNC cut-sheets, and further. KBMax eliminates the engineering bottlenecks, making manufacturing more and more scalable.
The biggest benefit of an online product configurator is that anyone can use it–from sales reps, distributors, and even the final end-customers. Sellers can then include their configurators within their eCommerce website, and this is where they get an eCommerce configurator.
Through an eCommerce configurator, buyers can configure complex products pretty independently, at any time, anywhere, and also by any device. An online product configurator through an external, customer-end website, is the perfect solution when the new trend of remote work looks to be continued for a long time to come.
Millennials getting increasingly into decision-making buying roles show a transparent preference for autonomy in browsing and buying. They will deal with a sales rep if they have to, but not before evaluating the many different options online. Failure to providing an engaging online buying experience is a big turn-off.
Online product configurators have been a big feature of the B2C world for more than a decade now. Shoe manufacturers were much ahead here. In many ways, they still are though. Nike’s “Nike By You” online product configurator gives an amazing buying experience where the customers get to change colors, materials, laces and then also share the designs on social media. It’s a sales and marketing tool all in one.
The B2B world has been pretty slow in the adoption of sales technology. It’s related to personal selling and a highly uniform approach, with always in mind that increased customization will translate to more parts, increased complexity, more errors, and reduced profits. Rules-based CPQ has taken away these fears.
What’s also hard to ignore is the high demand for personalization among the many B2B buyers. Buyers want personalized goods, for which they are prepared to spend more. Today’s personalization leaders experience anywhere between 5-15% increases in revenue and 10-30% increases in the efficiency of their marketing spend. But that’s just a start, with AI getting better at providing personalized recommendations. KBMax users get an average 40% increase in online conversion rate.
86% of buyers are ready to pay a premium for a smooth customer experience. Personalization then plays a big part (according to 70% of respondents.) 91% of consumers are also more likely to shop from brands providing customized offer recommendations.
Online product configuration isn’t a mere gimmick–it’s actually the future of B2B sales. Let’s have a look at some of the examples of amazing product configurators (both B2C and B2B) and then see what we gain from them.
Merck Millipore collaborated with KBMax for the creation of a product configurator for seven engineer-to-order medical product lines. The end result was a 99% enhancement in quote generation and then a reduction of sales cycle duration from 3 weeks to just one hour!
The drag-and-drop, CAD-based configurator brought a massive efficiency boost at the engineering level. Sales can configure the products in real-time, and when they are finalized, CAD files get automatically generated without any kind of engineering input.
Takeaways: Engineer-to-order products are good candidates for the online product configurators. CAD and design automation governs their efficiency and innovation.
Timberlane creates a customized exterior with a lot of options. They also don’t have any decided sizes – every single product is custom-made and then manufactured tightly.
Timberlane’s sales reps make use of a visual product configurator for selecting options when setting up an order. The advanced product rules then ensure the validity of every product. The configurator then auto-generates 2D drawings to be used in various manufacturing operations. It also specifies the kind of machinery and workstations to be used.
Takeaways: Sometimes, it’s not the complexity of a product but also the number of options making sales highly challenging. Product rules make it pretty easy to design great products for every unique customer, even when there are a lot of potential permutations.
Xenith is a pretty good instance of a future-oriented company in a somewhat stagnant industry, taking the digital lead and then also engaging with the customers in an absolutely new way. By allowing the customers to configure products in 3D, Xenith has jumped ahead of the competition and consolidated its status as an innovator.
But it’s not just the customers that have benefited from Xenith’s investment in 3D product configuration. Sales reps can use the software internally, simplifying the complete sales process and reducing sales cycles as well.
Takeaways: A 3D online product configurator is a big differentiator. But it’s not just the customers that enjoy its benefits. Online product configuration also empowers sales reps, automating even the most time-consuming tasks and taking out errors.
NanaWall is a seller of operable glass wall systems that are highly advanced and also very complex to explain. Having an online product configurator has allowed NanaWall to lend a visual context and clarity that’s needed to bring down the purchase anxiety and sell their popular items.
NanaWall’s wall systems are animated and pretty interactive. Users can also change and preview the swing direction, maximum swing, handles, materials, and the like. Sales reps doo love it due to the fact that the product rules are built-in, so they don’t need to worry about compatibility.
Takeaways: It is said that "a picture is worth a thousand words", which is true. The human brain processes an image 60,000 times quicker than plain text. So, if you wish to convey complex product information clearly, then show it, but don’t tell.
Caterpillar always wished to do something different with their Cat® D6 dozer release. So they teamed up with visual CPQ provider, KBMax, for building a 3D product configurator that engaged, educated, and even entertained in equal proportions.
The result–“The Cat Dream Dozer”– an innovative, game-like configurator. Users can create their very own D6 dozer in 3D, bringing it out with real-life options and then personalizing it with “fantasy add-ons.”
Flexible and responsive, this configurator was pretty easily accessible via mobile and desktop. It gained huge visibility and leads. Caterpillar witnessed a 75% growth in new traffic visits, and 22% of click-throughs were marketing-qualified leads.
Takeaways: Entertainment should not be confined to B2C. Don’t be afraid for injecting some fun into your product configurator. Buyers get bombarded by technical information from all angles. Your 3D product configurator can be the differentiator they are looking for.
“Digital transformation provides industry with unparalleled opportunities for value creation. It used to take Fortune 500 companies an average of 20 years to reach a billion-dollar valuation; today’s digital startups are getting there in four.”
The World Economic Forum’s Digital Transformation of Industries (DTI) Initiative
Several business leaders do not have a full understanding of digital transformation. But it’s been the buzzword of every keynote for the last five years. Still, few fully understand how digital transformation impacts their ultimate motive, the economy, and the society as well. Hopefully, by the end of this article, you will too.
Digital transformation is the integration of digital technology into all aspects of the business. Other than digitizing existing processes, it also reshapes how the companies operate and then create value for customers.
Successful digital transformation employs lean thinking and also a culture of consistent improvement. Cloud-based solutions have lower switching barriers than the legacy on-premises solutions, making businesses adopt a test and learn approach, taking data-driven decisions, and hitting more than their capabilities.
Digital Transformation in the Manufacturing Sector
Blending operation technology with information technology–that’s what digital transformation is in manufacturing. The aim is to create an online-physical production system that delivers higher efficiency, more innovation, enhanced quality, and value for all customers.
We are now witnessing the rise of so-called “smart factories”–fully connected systems that are linked with continuous data flows, predicting and instantly adapting to new demands and conditions as they come.
Instances of digital transformation in manufacturing industry include:
Conditional Monitoring & IIoT (Industrial Internet of Things): Networked sensors inside the production equipment, instruments, and other devices provide live feedback to predict the quality issue products, improve machine lifespan, and reduce downtime in a process called conditional monitoring. It’s one of the most cost-effective benefits of digital transformation in the manufacturing process.
Big Data Analytics: In addition to condition monitoring, Big Data is used by manufacturers for making improvements across the board, from product quality to energy management, safety, and R&D. It can also bring improvements in customer journeys by creating customized experiences with reduced sales cycles.
Cloud Computing: Without cloud computing, Big Data has no existence. The amount of data needed for creating smart factory networks won’t fit on a server in the office cupboard. More than 59 zettabytes (ZB) of data (a zettabyte being 1021 or one sextillion bytes) was created, captured, copied, and utilized in 2020. There’s no limit on what can be done with your share when clubbed with smart algorithms.
Additive Manufacturing (3D Printing): The ability to print delicate 3D objects by using something more than a CAD model will surely change the face of manufacturing. It takes power out of the hands of massive factories and puts it into smaller localized facilities that provide shorter production runs to a huge base of the target audience.
AR (Augmented Reality) for Industries: The function of digital content on the real-world in a composite view without cutting the movement has several manufacturing applications that include assembly guidance, maintenance, and repair; quality control; and training. Unlike AR, VR cuts out the world and places the users in a simulated reality, which might be useful for training but lacks AR's broad range of applications.
Digital Transformation With Software- Ways to Succeed
While additive manufacturing, industrial AR, and condition monitoring might be outside the scope of different small and medium-sized businesses, choosing the right software will be all that’s needed to change your company. Most of the best solutions are pretty inexpensive with an incredibly short value time.
Those who take risks get on a path to victory when it comes to digital transformation. The overall impact of data collection and analysis can give an irreversible first-mover advantage. Those who use data-driven insights for making ambitious calls will surely get future growth and prosperity. Those taking a wait-and-see approach will get left behind the competition. Don’t hesitate on exploring the huge options of SaaS solutions available on the market.
3 Basic Motives of Digital Transformation Software:
To “win” at digital transformation, businesses should make use of digital technologies to provide:
Impeccable customer experiences
Personalization at scale
The specific assortment of technologies needed to achieve the mentioned aims will differ significantly as per each company’s budget and strategy. But as the users of solutions like Splunk (data), Slack (internal comms,) Zendesk (customer service,) Hubspot (marketing,) Shopify Plus (B2B eCommerce,) and Salesforce (CRM) know very well, there is a huge number of SaaS solutions that can provide digital transformation progress in a few weeks with only a pretty modest and scalable investment.
How Just One Solution Sorts All the 3 Aims:
Manufacturers giving out complicated products can deliver on all the three mentioned aims by investing in a visual CPQ (configure, price, quote) tool like KBMax. With KBMax, non-technical users can easily build-out custom products from scratch, devoid of errors and any engineering input pretty quickly. It does so in these ways:
A 3D product configurator with virtual and augmented reality capabilities gives a highly interactive customer experience.
Every buyer gets a personalized product catalog, prices, and even intelligent recommendations based on in-depth customer profiles and machine learning.
Including a visual product configurator within a B2B, eCommerce website allows the buyers to know your products in a lot of detail before actually configuring and purchasing independently.
It’s not all as smooth as it looks
Digital transformation is revolutionizing industries, providing businesses with amazing opportunities for generating a profit and also creating value for their customers. But digital transformation is not without its fair share of risks–both economic and social.
These are the risks that businesses themselves should be held partly responsible for assessing and addressing. Digital transformation promises global mobility such as we have never seen ever before, thanks to completely digital workforces and workplaces. It’s our responsibility for ensuring that digital transformation caters to more than just the chosen ones.
3 Major Risks of Digital Transformation Industry
The terms “automation” and “digital transformation” are often used interchangeably, but they are not the same. Digital transformation is about using this technology for the creation and deliver better value to customers. Automation is a means to an end.
Also, there’s no avoiding the fact that digital transformation will lead to a loss of some jobs, even if it is at the lower end of the spectrum.
Larger employers should take concrete steps to reskill and upskill their employees and make them digital savvy and also ready to adopt a high number of amazing career paths that the digital transformation industry brings to the table.
Since the dawn of the Industrial Revolution, economic growth has usually been correlated with carbon emissions and the use of natural resources. The result–we are now on the verge of a climatic disaster.
In China, we have watched this process in a very quick format. In the 1960s, the country emitted a small fraction of the fossil-fuel-generated carbon produced by the United States, but by the year 2006, it had become the world's largest carbon emitter.
Mercifully, China's green revolution seems to be tempering its fossil fuel consumption. Still, as digital transformation spreads more opportunities and prosperity worldwide, it's on to each company for ensuring that digital investments remain sustainable. Intel, SAP, and Apple are among those few tech companies that use 100% renewable energy in their operations.
This is a huge one. Concerns over data privacy and security have highly increased in recent years. Events like the Cambridge Analytica Scandal have highly affected the public consciousness and, in any which way, created a lot of mistrust and resentment on the exchange of data with third-parties–a practice that's crucial to digital transformation success.
In the wake of Covid, FOMO has left the companies in chaos to keep up, leading to the adoption of the latest and greatest in digital solutions without even adjusting their privacy policies to match. Businesses need to skip ahead of any future security fallout. This means over-investing in the safety measures and then communicating their credentials in layman's terms to prospective customers.
Governments and regulators should get involved too. Their main mission should be to bring regulations and policies that protect privacy without compromising on innovation: current privacy laws and industry self-regulation are short on transparency and coherence. A practical regulatory framework demands close collaboration with the private sector and compromises on both sides.
If you want to pay fixed prices, then you should go to the brick and mortar stores because the retail assistants could never get to change the little shelf edge tickets as quickly as the prices change online.
With dynamic pricing software, eCommerce prices can be tuned to change continuously, squeezing every bit of margin from the customers and then keep the sellers a step ahead of the competition.
Dynamic Pricing Software
eCommerce dynamic pricing software updates their prices automatically, on a repetitive basis, to ensure that each customer pays an appropriate price for the right product at the right time. Prices get adjusted according to different factors and market conditions like time of day, demand, location, competition, and even the customer buying patterns, maximizing their revenue and profit. It's an economic theory brought to life.
Don’t be satisfied with just Excel
If truth be told, if you are still using Excel for pricing, you are missing the bigger perspective. While it can just about handle the cost-plus pricing, dynamic pricing and Excel don't mix. It's not humanly possible to digest the data in every row of a vast spreadsheet, so we generally tend to focus on optimizing the top bit–the best sellers, the 20% and then ignore the long tail, the 80%–where the largest overall gains are found.
Excel is pretty slow. You need to download the prices from your website, manipulate them offline, and then re-upload them to your website one more time. Each manual stage wastes more time and then creates the potential for human error. Dynamic pricing software does it all for you, more effectively than any human pricing team could, and it also works weekends, holidays, and pandemics too!
It's working for Amazon…
Amazon is the prime example of dynamic pricing, reportedly changing its prices 2.5 million times a day, which means that the average product price changes once every 10 minutes. Prices can even change after items have been added to the cart. Yes, it might frustrate the odd customer, but Amazon's pretty cool with it - it’s a small price to pay for a strategy that has delivered global domination.
Amazon can use dynamic pricing to a devastating effect as it has such an insane volume of data. How much? Hard to say. But in a 2018 book, "Swipe to Unlock: A Primer on Technology and Business Strategy," co-authored by Google Product Manager Neel Mehta, the estimate was one billion gigabytes. Add it on 500GB hard drives and put them on top of each other, and the pile will then exceed eight times the height of Mt Everest. You can only imagine how tall that stack would be now that 2021 has also begun.
Thanks to Big Data, Amazon has a pretty firm grasp on its KVIs–known value items–the products that poorly drive the value perception among customers. In a grocery store, the KVIs are eggs and milk. For Amazon, these KVIs might be games consoles or TVs. These products tempt the customers in, create an overall sense of economical pricing, and also encourage them to spend more on the pricey peripherals and other things they never knew they needed. Strategically increasing the prices of low-demand items for making popular alternatives seem cheaper is one more strategy that Amazon has been accused of doing in the past.
Amazon’s dynamic pricing is so advanced that a mini-industry of the Amazon price tracker apps has sprung for helping consumers navigate the different terrains of the ever-changing pricing landscape. CamelCamelCamel is the best known and definitely the most perfectly named.
The 10 Benefits of Dynamic Pricing Software
Massive companies like Amazon have spent billions of their dollars in developing dynamic pricing software eCommerce and strategies that are available to small- and medium-sized businesses for a pretty modest investment. Companies get their best bang for the buck by implementing a CPQ (configure, price, quote) solution like KBMAx, which gives dynamic pricing alongside the product configuration, sales and engineering document generation and overall functionality. Benefits of dynamic pricing software include:
Just Because You Can, Doesn't Mean You Should
If (comp_price>cost) and (promo_flag = false) then set price = comp_price*0.90
There are two huge risks present in dynamic pricing that need to remain on top. The first one relates to the competitors, while the other one to the customers. If you happen to understand the standard pricing algorithm above, then it should be alarming enough. It means: “If the competitor’s price is greater than the cost of making the item, and the competitor isn’t running a promotion, then undercut the competitor by 10 percent.” While beating the competitors on price is no bad thing, how can you be so sure they don’t have the same algorithm that’s at you? They probably do! And that can only mean a race to the bottom with no clear winner.
The other factor to consider is consumer trust. Specifically, how to keep it when your prices differ all over the place and you could then be charging one customer 10% more than another. The perceived price gouging can trigger a customer backlash from which it can be hard to recover. In some jurisdictions though, the dynamic pricing strategies can be illegal. Companies walk a thin line between the improvement of margins, retaining the customer loyalty, and staying competitive. It's up to you to decide.
Dynamic pricing is one of those things that you feel your competitors are using against you but still feels something not achievable for your business. You are either too big or too small, the products you have are just too complicated, your product catalog is pretty diverse and extensive, or that your data is so chaotic that even thinking to sort and clean it gives you trouble.
The reality of the matter is that dynamic pricing is too good to ignore. We are not talking about a pretty little improvement: dynamic pricing can boost profitability by 25%, as per Forrester - that’s the difference between actually thriving and just surviving. Your company’s lack of bandwidth is absolutely no excuse to neglect dynamic pricing when there’s just so much at stake.
Choosing a manual approach to dynamic pricing is pretty tough. It’s highly time-consuming and prone to errors. Fortunately, there’s a huge number of dynamic pricing software on the market that can do it all for you. Combining Big Data with machine learning and intelligent algorithms, dynamic pricing software calculates and automatically optimizes intelligent prices, updating them to your price lists several times a day. It’s time to level up your company’s pricing. Here’s how.
What is dynamic pricing, and how it changes the game for competing companies?
Dynamic pricing is a kind of “price discrimination,” wherein companies charge different prices for the same product to different people. Price discrimination generally comes in three degrees:
First-degree price discrimination is where the company provides a different price for every unit it sells. It’s designed to clear up all of the consumer surplus that other transactions have left behind.
Second-degree price discrimination involves charging varying prices for the products sold in various quantities, i.e., bulk discounts.
Third-degree price discrimination involves the company breaking its customer base into different groups and then charging each group a different price.
Consumer surplus is the difference between the price a company charges for a product and the price a consumer was actually willing to pay. When Apple released the iPhone 11 earlier this year, they priced it at $699. Some might argue that as an expensive phone. But the guy waiting in line at an Apple Store at 6 am on the morning of its release might have paid $2,000, or considerably even more, to be the first person to get it.
Price discrimination does not actually work for every company. Three conditions are needed to be fulfilled:
You have to be able to identify separate market segments, each with different price elasticities.
You need to be able to keep these segments separate. Otherwise, those in high-paying segments will go past your segmentation strategy and pay less. Or, those in the low-paying segments will sell their products to the ones in high-paying segments.
Your company needs to have a certain degree of monopoly. If not, competitors will just swoop in and also start luring your high-paying customers away with better and much cheaper deals.
What about dynamic pricing?
Dynamic pricing is a price discrimination strategy that’s designed to enhance revenue by changing their prices with dynamic market conditions. There are different kinds of dynamic pricing. On the basic level, you have the time-honored “cost-plus pricing” strategy, that’s practiced by retailers all over the world, where prices change according to changing costs. The cost of raw materials also shoots up, the price goes up, and vice versa. It’s a weak strategy as it ignores the consumer demand and what your competitors are trying to do.
On the slightly more involved side of the dynamic pricing scenario, you have: “competitor-based pricing,” where prices change as per what your competitors are charging; “conversion rate pricing” is where the prices vary according to the conversions you are currently experiencing on your B2B eCommerce site; and the ever-popular, and highly effective, “time-based pricing,” where the prices fluctuate at different times of the day/week/month/year. Dynamic pricing software combines a number of different factors to calculate the best prices for every customer.
Dynamic Pricing: The Good, The Bad & Also, The Ugly
Dynamic pricing can create or destroy the overall profitability of a company. For B2Bs selling big items, the ability to earn maximum on every transaction is huge. Dynamic pricing keeps these companies flexible and agile, allowing them to capitalize on the opportunities as they come into existence, protect themselves from shocks, and also nullify competition by matching or even beating their prices. Slow-moving items can be shifted quickly, product launches can be properly supercharged, and conversions can be maintained steadily, all by different prices.
Companies using dynamic pricing usually have a deeper and more nuanced understanding of their customer’s psychology. This intimate knowledge is critical at every level, informing product development, bringing in better marketing performance, and also improving the customer support. It can also be used to craft the behavioral change, moulding the customers to a company’s will, sometimes also for mutual benefit: Charging heavy prices for bus fares in peak hour, for instance, not only brings out the maximum value from commuters, it also serves to regulate the service, smooth out any of traffic spikes, and also improve the overall safety.
Dynamic pricing also has a dark side though. The very word “discrimination,” as in “price discrimination,” instills feelings of injustice and even a partial treatment, which is what exactly people feel when they discover that they have paid more for their thing than their friend did. There’s a risk of alienating buyers, creating a negative word of mouth, horrendous reviews, complaints, refunds, and even chargebacks. There’s also the possibility of triggering a price war, especially in crowded markets - a race to the bottom where profit margins get squeezed beyond their breaking point.
Implement Dynamic Pricing with a comprehensive Dynamic Pricing Software
Effective dynamic pricing needs processing of massive real-time data sets that are harvested from sources as diverse as internal sales figures (current and historical), competitors’ prices, business-specific targets, and also an assortment of market trends. Simply gathering such a huge amount of data is beyond the scope of any human pricing team, not to mention carrying out a detailed analysis needed to optimize prices at a customer level and then update thousands of prices multiple times each day.
Dynamic pricing software provides a pretty scalable solution that brings automation to all of the dynamic pricing processes. Prices get recalculated continuously and then rolled out automatically to multiple channels. It replaces slow, manual legacy systems like Excel (product pricing formula Excel) that are limited in function, have chances of human error, and are also responsible for a number of issues in the organizational structures. Dynamic pricing software resides in the cloud and also serves as a single source of pricing that’s accessible organization-wide, at any point of time and also from any device.
While there are a number of excellent dynamic pricing tools on the market, most of the businesses find that dynamic pricing software is the most impactful and generates the greatest ROI when it’s actually combined into an all-in-one CPQ (configure, price, quote) solution. CPQ streamlines the entire configuration of products before calculating dynamic prices and generating quotes in a smooth end-to-end process. CPQ is especially well-suited to manufacturers of complicated, engineer-to-order products. Still, for any business with a broad product catalog wishing to implement dynamic pricing software, CPQ will be the most powerful and cost-effective route.
Customers are increasingly demanding customized products on faster timelines. CPQ makes sure that you’re equipped to handle these new buying expectations.
CPQ stands for: Configure Price Quote
What Is CPQ Software?
What is CPQ software? CPQ software aims to reduce inefficiencies in the sales process and minimize errors and mistakes in quoting customers with complex product needs.
Why CPQ? It’s the quickest and easiest way to configure, visualize, price, and buy complex products within minutes.
Customers are able to configure your product based on their requirements from anywhere: your website, with a sales rep or with your dealers. Since your product rules are guiding the configuration process, anything that is configured can be manufactured. This leads to a streamlined and error-free sales and manufacturing process.
As the customer configures the product, the pricing is updated dynamically and accurately based on your company’s pricing rules. This allows them to change their requirements in order to stay within their ideal price.
With just a few clicks, a sales rep can create a professionally branded quote and send it in an email. A CPQ platform automatically pulls in the configured products and pricing, tying the whole process together to ensure consistency.