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Fast Company: Accelerating Product-to-Market and Configure-to-Quote with CLMTimothy Baynes, EVP Global Marketing and Product Strategy

To use preformatted bullets and levels:

please use the “Increase/Decrease Indent”

buttons found in the“Paragraph” menu

My Background• Focused exclusively on product configuration since 1996• Over 150 product configurator / CPQ selections and implementations• Gartner CPQ research director prior to joining Configit• Industries: automotive, industrial, high-tech, medical devices, telecom, services

Especially challenging projects:• Cellular networks (e.g. Kuwait)• Automated material handling systems as at FedEx• Building HVAC and automation systems such as at One WTC• Diesel engines• High-performance media server solutions such as used by Disney Studios and

Ferrari




A Brief History of Product Configuration§ Gen 0: (80’s) DEC XCON

§ Gen 1: (90’s) Trilogy

§ Gen 2: (1995+)§ Graphical modeling environments

§ Client/server (mostly)

§ Gen 3: (2005+) Modern CPQ: SaaS over Cloud

§ Shift of “modeling” or rule authoring to an “administration” function

What’s changed? What hasn’t changed?




Changes in the market from 1908 to nowMass customization

Global marketsDigital controls

SystemsServices

1021 buildable combinations, 160+ markets…

User buying experienceCustomer satisfaction demandsMultiple sales channelsMultiples sourcing plants




A complex product

ASML -- EUVL (production extreme ultraviolet lithography system)




…result is an N-dimensional matrix




Speed.




Speed of innovation matters….




Speed and Configuration Lifecycle Management

Product Release• New products• Product

updates

Operations• Sales• Fulfillment• Service




What is CLM?CLM wiki graphic here




At a minimum CLM System should have:• A core data structure for representing product configuration models• A rule execution engine• An API to extract “views” of configuration feature stringsHelpful out-of-box applications:• Authoring environment• CPQ (Configure-price-quote)Integrations to master data sources:• PLM (product)• ERP (products, customers)• CRM (customer, opportunity)

CLM Software Products




Configit CLM is a partial implementation of the CLM vision• No one has yet fully implemented CLM across all business functions and common

enterprise software systems.• Most companies phase in CLM• Typical starting points: Authoring, CPQ

• Priorities for Configit include:• Cloud platform• Install base• Service contracts




Fully Realized CLMCLM is ---• Fully integrated• Controls variants

in all respects• Maintained in one

placeBenefits ---• Speed, Agility• Lower costs• Increased $$$• Better quality• Better CXSalesAuthoring




CPQ Requirements• Product types• Sales Channels• Integrations• User types• Configuration modes• Product items• Rules

CLM Sales: Configure-Price-Quote (CPQ)




Complex products…




The problem with selling…

Configuring the offer – as important as the the product.It must be competitive, and sharpened in every possible way.

Availability:• Product• Services• Capacity

Orders:• Production

• Delivery• Service

Orders are like:




Feature strings are the configuration DNA in CLM

Feature string = a configuration




Demanding CPQ requirements imply...

Sales rules

Market rules

Engineering & homologation rules

CPQ for internal sales

CPQ for resellers

Offline CPQ

E-commerce portal

Valid combinations

Package, shipping, svc rules

Manufacturing rules

… a powerful engine and an equally powerful rule authoring environment.




Product Development V-modelApplication

Requirements

Binary CodeRaw

Material

Design Basis

Physical Item

HierarchyDetailed Design /

ProcessesSource code

Material Spec

Installed System

System

Modules

Components

Development Operations




CLM V-modelSystem

Objectives

Config UI

VT files

Requirements

Model/feature taxonomy

Master item data

Views

Rules

Service Execution ops

Fulfillment ops

ERP / MES ops

CPQ ops

Rule authoring Runtime execution

QuotesOrders

mBOMsand routings

Packaging, shipping,

documentation

Service contract terms, as-used

configuration




Enable, then Execute

QuoteOpportunity Deal Optimization

Revenue Management

Typical CPQ

Master item data

Rules & views

Service Execution ops

Fulfillment ops

ERP / MES ops

Development

Operations

Configuration

lifecycle

management

Not just once, but over and over.




1. The systems often take longer to implement than expected. Project failures aren’t uncommon.

2. Defining, designing, building, and testing the rules can actually be quite hard.─ Knowledge-based systems─ Multiple sources of knowledge: engineering, manufacturing, sales, feedback from field

(installation, service, operation)3. Maintaining the system can be just as difficult as building it in the first place.

─ Most vendors (and CPQ implementers) do not have a process or system features for properly managing product change

4. Many vendors don’t actually know what it means to be complex. (The “no brainer rule”) (In fairness: there aren’t really any standards like >5000 options or 5000 rules is medium complexity.)

5. High product complexity can be a show-stopper for the compiler and the runtime engine.6. Many CPQ systems are not properly integrated with either PLM and/or ERP.

Some dirty secrets of CPQ




CLM Authoring• We consider authoring to be the centerpiece of CLM, not an afterthought.• So important to us, we have three different authoring products.




CLM Authoring

§ Market applicability management§ Effectivity management§ Global feature dictionary for consistency

across products and product families§ Integrated work pages supporting team

authoring, model branch/merge, versioning

CLM Authoring at Jaguar Land Rover

FaCT: Feature and Configuration Toolset

A single-source-of-truth with respect to configuration

Authored by different user groups and consumed widely in the extended enterprise

JLR FaCT Project: Enterprise-wide Perspective on Configuration

New vehicle platform setup:From 9 months to 3 weeks using Configit Ace!




Repository

Enterprise Authoring

Single source of truth… whose?Small-scale Authoring

Engineering

Marketing

Manufacturing

Fulfillment

Service

Global Configuration Mgmt

Large enterprises require a “Doctor of CLM”




CLM isn’t only technology

People----------

Have the vision and skill to

execute

Process----------

Implements the vision across

the entire enterprise

Technology----------

Enables the process




• Increasingly demanding market and business landscape is driving increasingly complex products.Complexity

• Demands speed to market, higher frequency of release• … and demands quote competitiveness (faster, sharper)• Customer satisfaction, KPIs demand more accuracy.

Competition

• CLM Authoring can drive ongoing speed to the market • CLM Sales can drive speed in the market.Speed

• Jointly addresses product and offer complexity.• Requires a powerful authoring environment and rule

technology (engine), integrated across the enterprise.CLM

Summary

Space Coast, Floridaclmsummit.com

$200 discount for IPE Symposium guests

Legal notes.This presentation is © Copyright Configit A/S and may not be distributed without permission from Configit.

This presentation is strictly confidential and only intended for those receiving it directly from Configit.

Configit, the Configit logo, Virtual Tabulation, Configit Product Modeler, Configit Runtime, Configit Quote for SAP, Configit Ace, Configit Model and other Configit product names are trademarks or registered trademarks of Configit A/S.

All other product and service names mentioned and associated logos displayed are the trademarks of their respective companies.

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