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The Digital Transformation Imperative: Why CPQ is the Logical Starting Point on the Road to AI-Driven Monetization.

By: Greg Tilton, VP Product, CSG Quote & Order, CSG

Stagnant B2C revenues are pushing CSPs towards B2B opportunities. To capitalize on these and deliver enriched connectivity solutions, they need to be able to navigate complex partnerships and find ways to streamline processes to support current and emerging business needs. Disruptive technologies like AI further complicate the landscape, while declining margins necessitate resilient growth strategies for CSPs to remain competitive. All customers demand more choices, flexibility, and faster delivery.

However, enabling rapid customer choice and flexibility is challenging. It requires a move away from rigid, pre-defined offerings and towards a more dynamic approach—soft bundling – to meet the increasing demands on data volumes and bandwidth. A catalogue-driven architecture simplifies the way bundles are tailored to meet specific needs. The inclusion of partner products and services adds another layer and calls for a powerful configuration, price, quote (CPQ), and order management solution.

Soft bundling goes beyond offering various products or services from a CSP's portfolio. It empowers customers to create combinations and solutions that perfectly align with their needs and budgets. For example, small to medium businesses could create bundles in real-time that include dedicated internet access with guaranteed bandwidth, secure cloud storage for their data, cybersecurity software to protect against online threats, and a data backup and recovery service to ensure business continuity in emergencies.

The Added Complexity of Partnered Bundles

While bundling partner offers unlocks additional value for customers and additional revenues for CSPs, it adds complexity to soft bundling. Integration challenges arise when incorporating partner offerings into a CSP's product catalog and CPQ system. Data formats, pricing structures, and service activation processes must seamlessly integrate to ensure a smooth customer experience. The CPQ system must account for this complexity and accurately manage the quoting and billing processes. Successful bundled offerings with partners also depend on reliable partner service delivery. The final offers and pricing must be compelling for the customer while meeting the CSP's margin requirements. Effective communication and partner collaboration are crucial for timely service activation and ongoing customer support and satisfaction.

The Essential Role of the CPQ System

Traditional generic CPQ systems struggle with the complexities of soft bundling, especially when partner offers are involved. They cannot expand portfolios fast enough, manage multi-faceted requirements for complex offerings, or protect margins. With a CPQ system specifically designed for the telecommunications industry, CSPs can more effectively handle complexity and protect their profit margins. A few examples of what this dedicated system can do include but are not limited to:

  • Create different discount structures with a single data source for a CSP's services and partner services within a single bundle. Supports the entire product lifecycle and can help set minimum margins for products and ensure discounts on partner services maintain profitability.
  • Seamlessly integrate with partner systems to consider the actual cost of partner services when calculating the overall bundle price. This ensures a clear understanding of the profit potential for each bundled offering.
  • Gain real-time insights into margin levels for different bundle configurations. This allows sales teams to adjust discounts and pricing strategies to maintain profitability while offering competitive bundles with a reusable methodology.
  • Model different discount scenarios for owned and partner services with multi-dimensional relationships. This helps to identify the optimal pricing strategy for a specific bundle and maximize sales while safeguarding margins.

The Power of AI

AI can enhance the quote-to-cash process with smarter product discovery, dynamic pricing and promotions, automated content and upselling, and improved catalog and contract management. Overall, a catalog-driven architecture with AI creates a dynamic and intelligent system that personalizes the buyer journey, optimizes pricing, and maximizes sales to improve conversion rates.

Embracer Success

Customer expectations are driving transformation across B2B and B2C markets. Soft bundling, potentially including partner offerings, offers a strategic approach to cater to these demands. CSPs must have visibility and control over their costs and margins to maintain the commercial integrity of their bundles and contracts. To do this successfully hinges on having the right technology in place. By adopting a telco-specific CPQ solution with AI capabilities, CSPs can navigate the complexities of soft bundling, achieve greater customer satisfaction and market competitiveness, and protect margins across all segments. Ultimately, a telco-specific CPQ system is the logical starting point for AI-driven monetization.

CSG Quote & Order, the #1 industry-ranked CPQ and order management solution for telcos, empowers companies to close deals faster and ensure profitability. The streamlined catalogue-driven quote-to-cash process, best-of-breed interoperability, and unmatched self-service support make it the best solution for telcos. CSG Quote & Order ensures predictable profitability from bid to bill, thanks to our complex billing and revenue management expertise. Leveraging TM Forum APIs, ODA, and MEF standards, CSG Quote & Order manages and monetizes even the most intricate requirements with a real impact.

Sponsored by:

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