Five reasons why CLM and CPQ are a match made in heaven

Posted On by Jani Van Hecke

Do you experience inefficiencies while closing business in your organisation? Does friction exist between departments during the process? Are processes across business units not as streamlined as they should be? Between identifying an opportunity in the market and financially recognising the revenue, a lot of people and complex processes are involved. Digitally transforming the Quote-to-Cash process is a challenge a lot of businesses have embarked on in recent years. Contract Lifecycle Management (CLM) and Configure Price Quote (CPQ) are two key components in the overall transformation of a Quote-to-Cash process.

CLM and CPQ share a lot of similarities: the impact they have on an entire organisation, the way they are introduced into companies and the results they bring, but it is the synergy between both that makes the magic happen. Let’s explore why CLM and CPQ are a match made in heaven.


Since a lot of different parts of a business are involved in getting a sale over the line, it means that CLM and CPQ are never restricted to just one department in a company. A solution will always be cross-functional. With CPQ, a lot needs to happen before Sales can deliver a quote. And with CLM, a lot needs to happen before a contract gets signed. CPQ is just as important for Operations and Finance as it is for Sales. CLM is just as important for Sales and Finance as it is for Legal, but that doesn’t mean they share the same interests. Sales and Legal for instance, take a different angle towards CLM: Sales want to sell, the more, the quicker, the better, while Legal is mainly interested in managing the exposure to risk and increasing the compliance by the company. The key to a successful transformation is to find the appropriate balance between those opposing interests.

A strong focus on data and policies

With both CLM and in CPQ, data and the quality of data play a key role. In a CPQ project, the product catalogue is the main building block that will drive your quoting process: what are you selling, at what price, how products can be bundled, how can they be discounted, etc. These are rules and basic principles that you need to lay down before you can start automating them. The same applies to CLM. As an organisation, you need internal commercial policies and agreements between Legal and other parts of the business involved in contracting. What are the rules Sales needs to play by? What are the preferred standard templates and legal language, but also what fallback clauses can Sales rely on without legal involvement to speed up the ease of negotiating? A very simple example is: if a sales representative can negotiate 30 or 60 days payment terms, what happens when a customer requires 90 days? Can Sales then propose other conditions to balance out the longer payment term? Or must Sales seek permission from Legal? With CPQ, the product catalogue is that source of truth, in CLM it’s the legal playbook. The quality of data plays a key role and is important to have right before implementing, but also the implementation of CLM and CPQ raises the quality of data to a higher level.

Maturity required

As these policies are so important to allow CPQ and CLM to automate existing processes, a certain level of maturity is needed before an organisation can embark on a project. We recommend performing a Quote-To-Cash organisational readiness assessment to see what gaps need to be filled, followed up with a solution design phase to fill that gap, prior to the start of an implementation. The readiness may vary from one industry to another. For example: companies in a highly regulated environment (pharma, financial services,…) will probably have well-documented processes that are easier to automate. Implementing a CPQ or CLM solution is an important reality check for an organisation that requires the appropriate preparation and design. By combining both, the maturity level of your entire organisation gets a boost to its professionalism.

Improving efficiency, saving money

An important KPI of both CLM and CPQ is higher efficiency at less cost. By eliminating manual tasks (automation) and by providing a single source of truth, massive efficiency gains can be achieved. If all the data needed to make quotes or contracts is correctly entered into Salesforce, it will take a lot less time to prepare and manage these documents. Experience from past customer implementations shows us that the time to get a contract off to a customer can be reduced from 48 hours to just a couple of minutes. The same time savings apply to making a quote provided all the correct data is available in the system. What’s more: by having pricing policies, using pre-approved templates and providing a legal playbook, the need for internal discussions and negotiations between business units is reduced, again saving time and speeding up the quote-to-cash process, both from a pricing and contracting perspective. So you can double your time and cost savings by implementing both CLM and CPQ.

Require change management

CLM and CPQ solutions may feel quite intrusive and a big shift in the way of working for anyone in Sales, Legal, Finance, Operations, … Sales may feel like they are less free in their pricing negotiations, while Legal may find they are losing influence. Implementing CLM and CPQ requires sound change management to ensure that everyone is using the new system to the fullest. Each department has grown attached to its professional freedom. The trick with effective change management is in showing every professional what’s in it for them. This will play at different levels: a CEO wants a holistic insight of his sales and contract portfolio with a few clicks to make the appropriate strategic decisions, middle management is looking for a way to better oversee their team’s performance to allow them to support where required, while the employees themselves are seeking convenience and ease of use that allows them to focus on doing business, rather than administration. Many businesses face resistance to change. Change Management is not about sending out a weekly update over email, it is about a clear process of identifying areas of concern and addressing them. Based on experience from CPQ and CLM projects alike, I’d recommend letting an external party advise and manage the change process.

While there is a lot more to say about CPQ and CLM, a successful implementation of QTC will lead to higher internal efficiency, increase a business’s compliance and provide customers and prospects with a better customer experience. To achieve this, three C’s are important to lay the appropriate foundation to allow a seamless QTC process: CRM as the foundation for the customer 360, augmented by CLM and CPQ. While each of these C’s hold their value, it’s the synergy of them that will underscore that the whole is greater than the sum of its parts. Add Change Management to that mix, and you get an even more powerful 4 C’s (no pun intended).