Business Rules for CPQ

MG

Mike Grucella

07/05/2016

I can pretty much go anywhere nowadays and find something where business rules come into play. Take, for example, my recent experience shopping for a new trimmer for the yard. I had seen commercials for garden tools with interchangeable attachments and thought it was a practical solution, allowing me to buy other attachments later on when I need them.

Unfortunately, here is where the problem starts: What should be a simple decision turns out to be anything but because there are a number of questions that should be answered. There’s nothing worse than buying what you thought you needed only to find out you forgot something.

So let’s walk through some of these questions I had to face:

  • Which is the higher quality brand and model?
  • Should it be cordless, gas or electric?
  • Which power accessories will I need?
  • Which attachments do I need?
  • Do I need replacements parts like spools or blades?
  • Do I need an extension pole for that pruning attachment?
  • Do I need a step ladder to go along with that hedging attachment?
  • Do I need safety equipment like goggles and gloves?
  • And what am I going to do with all that yard waste? Do I need bags for that or do I want to go all in a get a chipper too?

This problem is referred to as Configure Price Quote, or CPQ. In short, you sell a list of items that can be combined in multiple ways. That’s the configure part. Of course, each of those items has a price associated with it. Ultimately, the final selections will result in a quote, or how much the customer will need to cough up to buy all that stuff.

The last thing you’ll want is for the customer to suffer analysis paralysis or even worse, not make a decision at all because of the paradox of choice.

If your company has a catalog of thousands of items, your business rules should guide customers through the decision making experience so that they can quickly filter out the nonessentials as well as provide recommended product pairings that they may not even be aware of.

In terms of business rules, InRule makes it easy to organize these decisions. Like most business logic, it’s important to not try to do it all in one clump. It will quickly become unmanageable and impossible to maintain. Break it down into very discrete steps.

The following example demonstrates a very simple implementation where the selection of one product leads to the recommendation of a complementary item.

As the customer makes their choices, your business rules can guide them through the selection process. Here we have an example where multiple items have been selected and that combination now leads to another decision:

You may even want to consider genericizing some of the logic. In the following rule, we check to see if the customer has selected any safety accessories, which could be any number of items, not just one particular product.

And if you need to, you can embed more complex branching into a single rule as in the following:

CPQ is a pretty ubiquitous problem even if you don’t know it by that name. Whether it’s mundane purchases like garden tools or a laptop or something with more significant costs like a car, an HVAC system or software, managing this type logic with business rules can help maximize the user experience while positively impacting sales.