Episode 27 Mar 25, 2021

Optimizing Quote-to-Cash with Salesforce’s Erwan Kerebel

Today we are joined by Salesforce Sr. Director of Product Management, Quote-to-Cash Solutions Erwan Kerebel for a breakdown of challenges, opportunities and reimagined solutions within the Configure, Price, Quote (CPQ) space.

Kerebel outlined three focus areas for manufacturers: faster quote turnaround times, accurate pricing, and precise payment terms and product selection at the time of quote. Historically, manufacturers have relied on silos of people, processes and systems to manage the quoting process. The systems tend to be “duct-taped” together over time, with point solutions and spreadsheets falling short of achieving these three aims.

Listen to learn how Salesforce CPQ and Zilliant pricing solutions combine to provide the backbone for faster, more accurate and more relevant price quotes, while at the same time knocking down silos within an organization.

Download the joint Salesforce-Zilliant whitepaper referenced in the episode here: The Importance of Faster, Smarter Pricing in CPQ

Featuring
Erwan Kerebel

Erwan Kerebel

We need to optimize the user experience in order to help the salespeople produce quotes fast. And the other element, along with user experience as well, is the adoption. Quote-to-cash implementation only becomes best-in-class when you have all of the salespeople actually using the system.
- Erwan Kerebel, Salesforce

Episode Transcript

Erwan Kerebel: Within Revenue Cloud, we typically focus on the salesperson. What we focus on is the execution, right? What you guys focus on, what Zilliant focuses on is on the pricing person. Allowing the pricing person to define the best pricing strategy that will be executed then in Revenue Cloud.

Lindsay Duran: Welcome to B2B Reimagined. My name is Lindsay Duran, and I'll be your host for this episode. I'm joined by Erwan Kerebel, Senior Director of Product Management, quote to cash solutions at Salesforce. Erwan, thanks so much for joining us.

Erwan Kerebel: Hey, Lindsey. Thank you for having me. It's great to be here.

Lindsay Duran: Before we get started, why don't you tell us a little bit about yourself?

Erwan Kerebel: I'll be glad to. So, my name is Erwan Kerebel. I work at Salesforce within the Revenue Cloud Product Management team. My role within this team is a really be the outbound facing side of product management.

And I have a focus on manufacturing. I have been with Salesforce for about a couple of years, but I've been in the revenue space for more than 20 years now. I've spent some time with a values vendors in that space. I started my career back in France, at a company called Chameleon. That was a CPQ vendor that got acquired by PROs a few years [00:02:00] ago.

And then I spent a few years at Apptus. And this is how I started working in the Salesforce ecosystem. And then joined Salesforce just a couple of years ago. So, I’ve always been working in CPQ and then revenue space for all of my career.

Lindsay Duran: Excellent. Given your long history in the space, can you talk through some of the primary challenges that you typically see what the quote to cash process?

Erwan Kerebel: Sure. When we talk to companies here are some of the challenges that they express. The first is probably the most obvious one. They need to produce quotes quickly. When they get requests from customers. In today's world, we all have expectations that are set by what we see on the internet.

We can get a price very quickly on the internet. So, in many businesses, the faster you can get a quote out the door, the more likely you'll get the deal. The other challenge is getting the price right. [00:03:00] It's oftentimes hard to find the right balance between optimizing the chance of winning a deal and optimizing the profit margin for your company.

So, we need to find a way to find that balance and make it repeatable. It should not be based on a single person's single cell swept experience. Not be based on hindsight from a single person. But it should be based on data. Based on science. And the third aspect I would say is cash. Oftentimes, the impact of the quoting process, the cash operation solve. It’s not just a matter of proposing the right payment terms at the time of quoting, but it's also a matter of making sure that we, for example, deliver the right product for the customer.

And if you make a mistake at the time of quoting and you did it for the wrong product, then you start getting issues collecting your invoices. Your margins are going to go down because you have to fix those issues and that the DSO KPI, the days sales that's done in KPI is going to go way up. [00:04:00] So those are the high-level main challenges that companies try to address when they want to optimize their quote to cash processes.

Lindsay Duran: Erwan, how have companies historically addressed those particular challenges?

Erwan Kerebel: We see a variety of solutions that have been implemented by companies, but if we try to summarize, as almost always, I just say a combination of siloed people, processes, and systems. And oftentimes what we see is there's an emphasis on people, rather than processes, and the systems are held together with what we call, duct-tape solutions.

And let me explain what I call the duct-tape solutions. So it could be, for example, companies that are launching a price and quoting solution in an Excel spreadsheet. And while this might feed the need for immediate needs, it brings issues. Such as, not being the right UX, oftentimes for the needs of [00:05:00] quoting, not being the right tool for collaboration.

There's also the risk of having multiple versions of the Excel spreadsheet, updated pricing models, updated catalogs. And so, this becomes an issue with many companies that are trying to use spreadsheets for the needs of pricing and quoting. Oftentimes what we see as well is heavily use of people. Right?

So heavy reliance on manual processes. So, people doing some swivel chair types of processes, where they might capture a quote in Excel. They might recapture the amount in their CRM for a forecasting purposes. And then they might recapture again, manually at the time of capturing the orders. Then this is, again, a source of errors, wrong pricing getting out of the door, proofing issues and DSO issues because of those errors.

Lindsay Duran: And it strikes me that's both labor intensive and time intensive. And as you said, very [00:06:00] error prone with all of those manual processes, many which are overall disconnected.

Erwan Kerebel: Absolutely. In addition to that as well, those tools, those point solutions, those spreadsheets, they become hard to maintain. And there's a cost associated to that as well.

In addition to the cost of fixing all of those mistakes that are caused by those tools.

Lindsay Duran: How would you say that companies, let's say, in the business-to-business space, how far along are they in terms of addressing these challenges? Would you say that 50% or more companies in the space have started down the path of trying to get a more integrated and seamless solution in place?

Or is the market for these solutions so relatively nascent?

Erwan Kerebel: I think it depends on what industry and what the size of the company that you're talking to. We see some industries that have adopted with the cash solutions already a long time ago. And I'm thinking about, for example, complex [00:07:00] manufacturers that really don't have a choice.

They really had to adapt configurators because they sell complex products. Where I see there’s still a gap for adoption and room in some other industries, like simpler product manufacturers, for example. Other industries like service providers, for example, where we see that there's a room for improvement as well.

Lindsay Duran: What would you say that a best-in-class quote to cash process looks like? Certainly, every industry looks a little bit different, but what would you consider to be best-in-class? And do you have an example of a company that you think is doing this very well today?

Erwan Kerebel: Yeah, absolutely. And there are several elements that constitute a best-in-class, quote-to-cash, or revenue system. At the core of the best-in-class implementation in my mind lies a very solid foundation.

This is critical to being successful. [00:08:00] Implementing a quote to cash solution is making sure that we have the right foundation. And by that product catalog of the product that needs to be designed the right way. And by that, it needs to be customer-centric and not engineering-centric. Right?

So, it needs to make it easy for customers and salespeople to find the right product in the catalog. The goal should not make it easy to produce the product eventually, but to make it easy for the sales rep and the customer to find the right product and find the right combination of products.

The second aspect of that foundation is pricing ability. Again, questioning needs to be customer-centric and the pricing master should be designed in a way that makes it easy for pricing to be updated when we need to introduce a new pricing model, for example. Once we [00:09:00] have that solid foundation, then we can think about pricing catalog, pricing master, not only in CPQ for salespeople, but also deploy this for partners, our resellers and customers as well in a self-service portal. The next element that fully constitutes to me the best-in-class, quote-to-cash process is a user experience. Right?

We need to optimize the user experience in order to achieve the goal - one of the main goals oftentimes - which is to help the salespeople produce quotes fast. And the other element, along with user experience as well, is the adoption. Right? Quote-to-cash implementation only becomes best-in-class when you have all of the salespeople actually using the system.

Then in order for that to happen, you have to focus on the user experience. But you also have to focus on what I call relevancy. You have to make sure that the products that are being recommended, the prices that are getting calculated and recommended, [00:10:00] are relevant for the salespeople and the salespeople trust those numbers.

So that we can then avoid, and this is where your approvals, because salespeople trust the numbers that they get from the system. And therefore, they trust the fact that if they stay within those boundaries, they can propose that to the customers and avoid some approvals. And then therefore get quotes out the door fast.

You were asking about examples of companies that I think are all doing this the right way. We have many customers who have been very successful with Revenue Cloud. One of them that comes to mind is a construction material provider. In Europe, they’re called Lafarge. And prior to implementing Revenue Cloud, they were using legacy systems that their users hated. They were also using some spreadsheets in order to address some of the gaps that were not addressed by those systems. And since they have implemented Revenue Cloud, it now takes the sales reps about three minutes to produce a quote.

And the other indicator that I think is [00:11:00] interesting as well is what I call the daily. Today they have 85% of their salespeople that are using a Revenue Cloud on a daily basis to produce quotes. And again, I think that the reason why they have been so successful with Revenue Cloud is that they focus on what matters.

They focused on optimizing the user experience, not cluttering it with features that might only be used once a month. Right? Focusing on the core use cases and making the UX, the user experience, efficient for those core use cases. And relevancy, as well as I was describing earlier, is something that they have focused on.

They sell in a very competitive market, very fragmented and localized market, where the competition is going to be very different from one zip code to another. So being able to offer the right price for the right product and the right place was critical for them, for the adoption of their salespeople as well.

Lindsay Duran: I think you touched on something that's really key; whether or not a [00:12:00] sales team will adopt and use the new technology is certainly always the biggest concern that any leadership team and a company has when they go to embark on deploying a new technology.

And you certainly know that well from being at Salesforce. But just broadly speaking, that's, I think, a primary concern and in most businesses and what holds companies back. You touched on something else that I want to come back to that is certainly near and dear to our hearts at Zilliant and that is the relevancy of the pricing. And do salespeople actually trust the prices that they see presented in CPQ, such that they're comfortable and confident, more importantly, presenting those to customers? Can you talk a little bit about how Zilliant’s pricing solutions and Salesforce CPQ come together to really make that relevancy a reality?

Erwan Kerebel: Yeah, absolutely. So, at the [00:13:00] foundation of it, and if I want to simplify things a minute, within Revenue Cloud, we typically focus on the salesperson. What we focus on is the execution. What do you guys focus on, what Zilliant focuses on, is on the pricing person. Right? Allowing the pricing person not to define the best pricing strategy that will be executed then in Revenue Cloud.

And there's a number of use cases where Zilliant complements very nicely Revenue Cloud. It's one, being able to manage all of the prices. Right? Many companies have very complex pricing strategies. Right? With complex tables, large number of rows, being able to do things like mass updates, being able to do things like ‘what if’ analysis before price changes, being able to do micro segmentation, to analyze customer behavior, all of this allows pricing managers to implement [00:14:00] price optimization models that would provide real-time pricing guidance within Revenue Cloud.

And when this then allows us to do is make sure that when the sales rep creates a quote, we have all the right context that he has captured. And then we have the right question, what all in order to make sure that the pricing that he's about to propose to his customer is the right price. And that he has the right confidence that this is actually the right price.

And the other benefit of that is that once we all have that level of confidence, then approvals become an accessory. Right? And this is another area where we're going to get a lot of value, combining a Revenue Cloud solution with a pricing solution is the fact that we can then skip approvals when unnecessary and then get that additional benefit as well as faster time to actually produce a quote and get a quote out the door.

Lindsay Duran: Thanks, Erwan. Can you talk a little bit about why being native on the Salesforce [00:15:00] platform creates such a great advantage for our joint customers? Zilliant is certainly native on Salesforce, and we use a lot of the technology components that you make available to your partner ecosystem. And what benefit does that have to our joint end customers?

Erwan Kerebel: Yeah, there are several benefits. There's one, which is your architecture benefit, which is being native on the Salesforce platform. That means that we have a single data model. That means that there are some use cases that we can uniquely address. I'll give a simple example. We are both on the Salesforce platform. That means that we both access the customer data from CRM.

And we can use and leverage that data in order to provide product and price recommendations, for example. The other aspect, as well as that, there are many end-to-end use cases that, because we offer so much on that platform, we can also uniquely address. The other aspect as well, is the extensibility of the platform. [00:16:00] I was sharing earlier that I've been in this space for about 20 years now.

And I can tell you that the perfect revenue system, the perfect pricing solution, oftentimes doesn't exist out-of-the-box. We have such a variety of use cases and such a variety of IT landscape that we see across companies, that whatever we do, we'll always have to extend the product. So being able to use platform techniques in order to extend the solution where we need to make it very relevant, especially for quote-to-cash solutions.

And the last element that you mentioned is the partner ecosystem. Developing our partner ecosystem, enabling a partner ecosystem, and I'm talking both about system integrators that are certified on Salesforce, but also software vendors that offer complimentary solutions. This adds real value to 3,000 to 4,000 customers as well for Revenue Cloud. [00:17:00]

Lindsay Duran: Absolutely. What advice would you give to companies that are just now considering embarking on looking at pricing and CPQ solutions?

Erwan Kerebel: The first thing that I would advise customers who are looking to embark into the journey of optimizing their quote to cash process is, first of all, think about the outcomes that they want to achieve.

There are many elements of ROI that quote-to-cash and pricing solutions bring. It could be faster, quick turnaround time. It could be optimizing revenue. It could be optimizing pricing. It could be helping them deploy new revenue models. For example, we see a lot of companies these days trying to develop new revenue models or recurring models.

For example, we see a lot of manufacturing customers that are launching subscription-based revenue models, for example. So, I think the first step that's critical [00:18:00] is understanding where you, as the company, wants to go. Understanding what your objectives are, whether it's optimizing the quote turnaround time or optimizing revenue or allowing you to address new sales channels, or allowing you to address any revenue models, for example. And this will give and provide the answers as to what should be the priorities when implementing the revenue solution.

Lindsay Duran: I think you make a great point about the new revenue models and we're certainly seeing more and more companies toying with the subscription model that are outside of the traditional software space. We're also seeing, and I'm sure you're seeing this quite a bit with your customers, a huge acceleration to e-commerce channels over the course of the past year.

I think companies were already embarking on e-commerce, but certainly the events of the pandemic have accelerated that shift. What's been the impact or the kind of key takeaways that you've [00:19:00] seen from your customers as they're looking to implement solutions like B2B commerce?

Erwan Kerebel: Yeah, absolutely. Obviously, nothing’s the same. And as you said, COVID has greatly emphasized the need for companies to go digital. Right? And offering it a self-service channel has become a priority for many companies. It allows them to serve their run rate business in that cost-effective manner. And redirect the sales resources to higher value deals.

The impact of that need is that more and more companies want to expose their revenue massive data. Right? The same thing as what we have in CPQ. Right? Catalog and pricing. They want to expose that externally to their dealers and their customers directly. So, this new need, or this emphasized need on ‘you've got omnichannel commerce’ had a great impact on both our roadmap.

So, this is something that we are taking into account when we are thinking about the future of our product. And [00:20:00] this is something that we are actively working on right now within our product team. But it has a great impact on current crypto cash implementations as well. And in order to address those needs, we have, last year I really used a connector between our two products which are CPQ and B2B commerce so that customers that want to be expose their CPQ master. Catalog in pricing externally. They can do that without having to manually synchronize those two products masters, for example.

Lindsay Duran: Absolutely. I think that connector and the CPQ connector provide tremendous value to customers just in terms of being able to make sure that their prices are consistent across channels, which is honestly one of the biggest challenges that companies see when they start going into a multi-channel route where it's not just a direct sales team anymore. And certainly, a huge driver of customer dissatisfaction is when they speak to a [00:21:00] sales rep and get one price but look online and see another price. And if those prices don't match up or aren't relevant, or aren't, I'll say contextually specific enough to that customer's relationship with the business and where the overall market is, then that can create a huge problem.

And I think that's one of the last things that companies often consider when they head down that path.

Erwan Kerebel: Yeah. That’s absolutely right.

Lindsay Duran: What would you say are some of the biggest challenges that you've seen to delivering an ROI when companies are heading down the quote-to-cash path? And how have you seen best-in-class company overcome or get ahead of those challenges at the outset?

Erwan Kerebel: When we talk about ROI, I think we have to look at both sides of the equation. Right? The cost and the return. The cost is something that companies have to make sure stays contained. Being able to [00:22:00] contain implementation cost and timeline is critical in a quote-to-cash project. Right?

There are so many things that you can do with a quote-to-cash solution that you can easily want to build that will satisfy all of your requirements, including tiny corner cases, but this will often lead to longer and costly project. So, companies need to stay pragmatic and first address the core use cases where we know we can deliver of the most value and then iterate on that. The second aspect of the equation obviously is the return. So, you have to implement your quote-to-cash solution. You have to implement your revenue system based on what do you want to improve. Right? Then, as I said earlier, it could be faster quoting.

That's the case then, focusing on the user experience and reducing the number of clicks is going to be critical. It could be [00:23:00] higher revenue. I'll make a point. I've always addressed it a bit earlier, but if you want to achieve that, if you want to achieve higher revenue, if that's a key objective for equity cash solution, then again, sales reps must be confident that there are getting the right recommendation. Right? Otherwise, they will always ask for special discounts and this will trigger approvals, and you'll fail on both goals, which are getting higher revenue and decreasing the quote on your own time. And the last aspect I think is oftentimes a key objective for CPQ solutions is getting better profitability.

But what I see in best-in-class implementations is customers who make a point of having costs calculated accurately so that they can actually measure that profitability. Oftentimes cost calculation is overlooked in many CPQ implementations, but I believe that's a strong use case that needs to be addressed so that [00:24:00] we can actually keep track of profitability and measure the impact of a quote-to-cash only profitability.

Lindsay Duran: I think that's a great point. And cost is certainly one of those things that many companies struggle to get accurate, even in their ERP or invoicing system. The other aspect to driving that profitability benefit that you talked about is certainly the pricing side of things. And we often talk about the P aspect in CPQ and how pricing and CPQ solutions come together.

How do you view the benefits of a pricing solution like Zilliant Price IQ or Price Manager to current Salesforce CPQ customers?

Erwan Kerebel: Yeah. So, it's twofold. Right? One is back to the point that we were making earlier on relevancy. It's making sure that the price that we propose to the sales rep is the right price given all of the context that we know; given who the customer [00:25:00] is, given the products, given the volume, given what we've sold before to that customer. And taking into account competition as well. And that's an area where Zilliant adds a lot of value to Revenue Cloud. And is making sure that again, the price, the recommendation that we propose, the threshold that we have, the boundaries we have, all the right numbers.

And this will lead to not only revenue optimization and also adoption of the solution because salespeople are going to trust those numbers. If those numbers are relevant. And the other aspect is on the management of Revenue Cloud. Again, companies have long and complex price lists. Making those is often times not easy because there's not enough data to maintain.

So that's another area where Zilliant adds a lot of value is helping price managers actually manage all of those price lists, manage all of those questions that we have in Revenue Cloud.

Lindsay Duran: I think you make a great point [00:26:00] there in terms of separating and making a distinction between the pricing persona and the sales persona, and that really the solutions are serving two different audiences, but at the end of the day, you need to come together in order to make sure that sales reps are equipped with the best possible prices to make good decisions, and that customers are getting very relevant, fair, targeted prices as they do business with the company.

So, thank you for that. So, this podcast is called B2B re-imagine. Let's just spend our last few minutes here, Erwan, talking about the future of quote-to-cash of CPQ and where you see that headed in the next 5-10 years.

Erwan Kerebel: Yeah, that's a great question. So, there are several elements really that shape the orientation of revenue operations.

One of them we've already addressed quickly earlier, which is omni-channel commerce. As we said earlier, we see a [00:27:00] trend of companies adopting self-service channel massively. This shaped or short-term roadmap, last year we've released that connector that we talked about. This is going to continue.

We see more and more companies who want to expose their catalog pricing. Initially he wants to propose a self-service channel for their customers and for their dealers and distributors. That's the first element. The second element that we see is companies need to adapt quickly. My companies are making radical strategic decisions.

One example is companies adopting new revenue models. Right? And this is across the board. I've talked to tire manufacturers, for example, that are launching a tire as a service model. Right? So, it's not only high-tech companies, not only software companies, but manufacturers are also offering more and more recurring based offerings or [00:28:00] consumption-based offerings. And this has a strong impact on how you manage the customer life cycle. And because now you not only have to manage the initial sale of an equipment, but you also have to manage it in manuals and amendments. It also has a strong impact on billing operations and revenue recognition.

And typically, these newer revenue models are not handled very well by legacy ERPs. So that also explains why a billing solution, which is part of Revenue Cloud is getting so much traction across every industry. And the third element, Lindsay, that I'd actually bring up is data. And as I say, companies have to adapt quickly.

They have to make big decisions quickly. And having the right data, being able to analyze it, using it in order to improve the revenue operations becomes top of mind for many companies.

Lindsay Duran: Excellent. Thank you for that insight into where you think [00:29:00] the market is going. I'm sure listeners will find that very fascinating.

Erwan is actually going to be speaking at our upcoming annual customer conference called Mindshare on May 20th.

If you are not currently registered, we encourage you to visit our website at zilliant.com. And Erwan, is there anything else that you'd like to share with our listeners?

Erwan Kerebel: No. I think we address a lot of topics today. I hope our listeners enjoyed the discussion. I did enjoy myself. So, thank you very much for having me.

Lindsay Duran: Thanks so much for joining and thank you all for joining us today. If you are interested in learning more about how Zilliant and Salesforce work together, please take a look at the show notes for a white paper about the importance of faster and smarter pricing in CPQ. Thank you. And we'll see you on the next episode of B2B Reimagined. [00:30:00] .

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