ERP vs CPQ: Which system does your business need?

Understanding ERP systems  

Enterprise Resource Planning (ERP) systems act as the central hub for business operations, bringing together various departments on a single platform. These systems support processes from finance to inventory and production, ensuring smoother workflows and better coordination.

Main ERP features  

ERP systems offer a wide range of tools that simplify and organise business processes.

Financial management modules automate tasks like accounting, billing, and reporting. For production-focused companies, ERP systems help plan and schedule production to improve efficiency.

On the HR side, ERP simplifies employee management, and can cover payroll, performance tracking, and more. Supply chain tools ensure businesses maintain the right stock levels while minimising costs.

Here are some of the most notable features:

• Financial Management: Automated accounting, real-time reporting, and compliance tools
• Inventory Control: Real-time stock tracking and automated reordering
• Production Planning: Scheduling resources and managing capacity
• HR Administration: Employee data management and payroll processing
• Supply Chain Oversight: Vendor relationships and procurement automation

Signs you need an ERP  

If your departments operate in silos or when manual processes are holding you back, it’s time to consider an ERP system.

Here are some common red flags:

• Data management issues: Conflicting information across multiple systems
• Manual workflows: Excessive time spent on data entry and reconciliation
• Limited visibility: Difficulty tracking inventory or financial performance
• Scaling challenges: Struggles to manage growing operational complexity
• Reporting delays: Slow access to key performance metrics

What ERP Brings to the Table  

For most manufacturing companies, ERP isn’t just about bookkeeping. With the right setup, companies quickly see real results: fewer mistakes, faster processes, and more reliable deliveries.

Exact is one of those ERP solutions, showing up with real results for their clients.

With Exact, BONFIX delivers 99.8% of their orders on time and in full. This is something to be proud of knowing that orders placed before 16.30, are delivered the next day. Rush orders are delivered 4 hours later the same day. And errors? Almost non-existent, with an error rate of less than 0.05% across over 450,000 order lines.

At Balmain Hair Group, inventory accuracy sits at a rock-solid 99.7%, giving both staff and customers full confidence in stock levels. And Flowdrill? Their delivery reliability jumped from 93% to 97% in just six months thanks to better production planning.

The message is clear: a well-implemented ERP system unlocks real process potential.

Now what if you combine that with a smart CPQ software?

Understanding CPQ Systems  

Configure, Price, Quote (CPQ) systems are tools designed to simplify the sales process by streamlining product configurations and automating pricing and quote creation. Unlike ERP systems, which oversee overall business operations, CPQ focuses specifically on helping sales teams deliver accurate quotes quickly. When combined with ERP, CPQ ensures the smoother coordination from sales through to production.

Main CPQ Features  

CPQ systems make handling complex product configurations and pricing much easier. They automate the creation of intricate product combinations while adhering to technical and business rules. A built-in pricing engine calculates costs, applies discounts, and adjusts for volume-based pricing in real time.

Here’s what CPQ systems typically offer:

• Guided selling: Step-by-step assistance to ensure product configurations align with business rules.
• Dynamic pricing: Instant price updates based on current costs and preset pricing structures.
• Quote generation: Automated creation of professional, customer-ready quotes.
• Approval workflows: Automatic routing for special pricing or unique configurations.
• Integration capabilities: Direct connections to ERP systems for real-time inventory and pricing synchronisation.

Signs you need a CPQ  

If your sales process is bogged down by manual workflows or struggles with handling complex product setups, a robust CPQ system might be the solution. Common indicators include:

• Long quote-to-order cycles.
• Challenges managing intricate product configurations.
• Frequent errors from manual data entry during quoting.
• Struggles with managing high volumes of quotes and orders, especially when working with dealers (internationally).
• Manual interaction required to convert signed sales deals to execution

CPQ-ERP integration improves customer satisfaction by providing accurate and timely quotes, ensuring that orders are processed correctly and efficiently, and enabling businesses to deliver products on time.

When implemented effectively, CPQ systems can significantly boost business efficiency. The resulting revenue growth and cost savings usually result in a return-on-investment of 6 to 9 months only. For manufacturers offering customisable products, a CPQ system ensures that sales commitments align with production capabilities, reducing costly mistakes and enhancing customer satisfaction. 

Results vary depending on the company, goals, processes and many other factors. However, each company we’ve worked with, has been able to implement a fast and streamlined design-, sell- and or order processing system.

Rovero is a great example of big process changes. Thanks to using Merkato CPQ, they have gone from a time-to-quote of 2 weeks, to building quotes in merely 10 minutes.

Combining ERP and CPQ Systems  

Bringing ERP and CPQ systems together combines their strengths, aligning sales processes with backend operations. This integration simplifies workflows and ensures a smooth flow of data from the initial inquiry to product delivery.

Faster Sales-to-Delivery Process  

Integrating ERP and CPQ systems speeds up the entire quote-to-delivery process. Sales teams can create precise quotes while the system checks inventory and production capacity in real time, cutting out delays between departments.

Here’s how the integration helps:

• Simplifies internal approvals
• Where applicable: facilitate dealer management
• Converts quotes into orders while tracking fulfilment
• Automates order processing
• Updates production schedules instantly  

Improved Data Accuracy  

When ERP and CPQ systems share data in real time, they create a unified source of information for all teams. Details like product configurations, pricing, and customer data stay consistent, thereby eliminating costly mistakes.

Real-time syncing ensures:

• Product configurations match manufacturing capabilities
• Customer data is consistent across every touchpoint
• Accurate order details are sent directly to production
• Pricing data is synchronised

Smarter Inventory Management  

With better data and faster delivery, ERP-CPQ integration also sharpens inventory control. Real-time insights into stock levels allow sales teams to quote only available products, while production teams can better predict demand.

This integration helps businesses:

• Avoid quoting items that aren’t in stock
• Align inventory levels with sales pipeline forecasts
• Lower inventory costs with better demand predictions
• Automate reordering based on actual sales trends

The integration creates a feedback loop that aligns sales, production, and inventory. For custom product quotes, the ERP system calculates needed components and adjusts production schedules to avoid stock-outs and to keep inventory at optimal levels.

Conclusion  

ERP systems handle backend operations, while CPQ systems focus on sales configurations. When combined, these tools streamline processes and improve overall efficiency.

By integrating ERP and CPQ, businesses can break down data silos and reduce manual work.

• Improved Operations: Real-time syncing between sales and production ensures orders are fulfilled accurately.
• Consistent Data: A unified source for product configurations and pricing eliminates discrepancies.
• Increased Efficiency: Automation cuts down on manual tasks and reduces errors.

CPQ and ERP systems aren’t just about technology – they’re about creating data-driven processes that support the growth and adaptability of your business.