What to Consider When Choosing a Product Configuration Platform

Today, delivering great customer experiences is not just a differentiator; it’s a fundamental requirement. Both B2C and B2B customers expect the ability to seamlessly customize products and service options across any sales channel. Meeting this customer expectation, though seemingly logical to them, is a significant challenge for businesses.

To support multi-channel sales, most product vendors and service providers already utilize systems like Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM). However, customization introduces the challenge of requiring key systems – ERP, CRM, and Product Lifecycle Management (PLM) – to handle configurable product variants.

Product variants are crucial for providing customers with choices and configurable parameters, enabling products to be adapted to specific requirements and local market expectations. A classic example is ensuring steering wheel placement is appropriate for the target market (e.g., right-hand drive in the UK, left-hand drive in the U.S.).

What appears to be a simple process at first glance quickly becomes complex. The sheer volume of variants, parameters, and rules governing configuration combinations soon surpasses human ability to remember and even the capabilities of an Excel workbook. This leads to significant issues: customers are shown incorrect choices, inconsistencies arise across sales channels and geographic regions, and ultimately, incorrect or undeliverable products are sent.

This is the point where product vendors and service providers must start thinking about how configurations are defined, validated, and managed across the entire lifecycle of their offerings. The complexity of configuration management becomes apparent here, as there are various ways to handle it:

• PLM systems – Since products are designed and engineered in PLM, it’s logical to consider it for product configurations. However, PLM’s variant and configuration management modules primarily focus on engineering needs (e.g., technical design choices). While some choices may be exposed to end-users, most are engineering-centric. Rules for market availability or localizations are typically excluded, as they are outside engineering’s scope.
• ERP systems – This is where product managers and product marketers often define market availability rules, pricing, and other commercial characteristics of the product. ERP systems do provide modules for managing product variants and configurations either as an add-on to the ERP system itself or through CPQ modules and third-party system integrations where customers can configure a product to their needs, see the price of the configuration options and get a quotation.
• CRM systems offer CPQ via add-ons or integrations, but performance is problematic due to extensive customer customization demands. This results in numerous product variants and configuration options, leading to lengthy quotations, often exceeding 100 pages.
• CPQ systems – Performance issues spurred the development of independent CPQ systems that manage configuration, pricing, and quotations by extracting data from PLM, ERP, and CRM. This allows the performance of the CPQ process to scale independently of PLM, ERP and CRM systems while meeting the increasing needs of customers.

While CPQ systems are increasing in sophistication with 3D visualization and AR, AI/ML predictive guided selling and more, they are still struggling to keep up with the need for customization and configurable product and service complexity.

While pricing and quotation can be complex, the real bottleneck to performance is product configuration management. This is why a separate system solution is needed to define and manage product configurations. With such a system, it is then possible to define product configurations once and then make them available to multiple systems and sales channels.

This approach ensures consistency by using reliable, up-to-date information across the multiple sales systems and channels. In essence, it is what enables product vendors to move from multi-channel sales to omni-channel sales where consistent user experiences need to be guaranteed.

This has led to the emergence of Composable Product Configurators, a new solution category defined by Gartner. These configurators focus on independent configuration management, separating it from traditional CPQ systems.

What makes a configurator ‘composable’ comes down to the principle of modular architectures where “best-of-breed” components or systems designed to address a specific part of the overall challenge are integrated to provide an end-to-end solution. As complexity and performance challenges can be very different for each part of the overall architecture, it makes sense to allow individual systems to scale according to the challenge they are facing.

However, the reference to “Product Configurators” in this new category can be misleading, as it suggests that the system provides the actual configurator, which may not be the case. There are some vendors who will take this approach, while others will provide web-based API services that allow bespoke product configurators to be created, or existing CPQ, ERP, CRM or even PLM systems to access, manipulate and validate configurations with high performance and response.

For almost two decades, Configit has championed the Configuration Lifecycle Management (CLM) approach. The Composable Product Configurator concept is a practical demonstration of CLM, fulfilling the need for scalable and high-performance omnichannel sales solutions.

The Composable Product Configurator approach is crucial for vendors of complex products and services, particularly asset-intensive manufacturers. It guarantees that performance scales with demand, eliminates inconsistencies, and ensures the delivery of error-free configurations to customers.

The trend towards Composable Product Configurators and the evolution of product configuration management underscore the expanding role of CLM solutions in driving customer satisfaction.

Daniel Joseph Barry is VP of Product Marketing at Configit. Dan Joe has more than 30 years of experience in engineering, sales, marketing, product management and strategy roles within IT and telecom companies.