CPQ Software Selection: Why the Traditional Approach Costs You More Than You Think

Choosing CPQ software should not take months and cost tens of thousands of euros. Yet for many manufacturers, it does. Research indicates that the average software selection process for small to medium-sized enterprises costs between €20,000 and €40,000. Most of that cost comes from an approach that was designed for custom software development, not for modern SaaS solutions.

There is a better way. This guide explains the difference between the traditional approach to CPQ software selection and the approach that manufacturers who move faster and make better decisions actually use.

Why Does Traditional CPQ Software Selection Go Wrong?

The traditional selection process of CPQ software is built on fear. Fear of failed implementations, delayed projects, and software that does not live up to expectations. That fear is understandable. Most manufacturers have experienced it firsthand. The response is to make the process as thorough as possible:

1. Gather specific functional requirements and user stories per department, based on internal experience rather than external expertise

2. Summarize requirements in extensive Excel sheets, prioritized using MoSCoW or similar methods

3. Search online for all software vendors and create a longlist

4. Send out RFIs and RFPs to the longlist

5. Evaluate responses, create a shortlist, and schedule multiple rounds of meetings

6. Reach out to references based on feature similarities

7. Select a supplier, negotiate, sign, and start implementation

Between every step, internal meetings need to be prepared, evaluated, and followed up. Revised RFIs add scope. More requirements get added. The process stretches on. That is where the €20,000 to €40,000 goes.

The fundamental problem is that this approach was designed for selecting fully customized software built to your exact specifications. When you apply it to standardized SaaS software, it breaks down. No standard software vendor can deliver every functionality on your requirements list. Vendors who go through traditional selection processes know this, so they respond creatively to RFIs to stay on the shortlist. Features that technically exist only after significant customization get presented as standard. The result is another delayed or disappointing implementation.

What Is Wrong With Requirements-First CPQ Selection?

Requirements-first selection locks you into your current way of working. When you gather requirements based on internal experience, you document what you do today, not what you should be doing. The best SaaS software often challenges and improves your process rather than mirroring it. By the time you have written hundreds of requirements into an Excel sheet, you have already closed the door on that possibility.

It is also worth understanding what SaaS vendors are actually good at. They do not deliver fully customized solutions tailored to every company's unique needs, because that is not what they are built for. Their strength lies in deep industry expertise and software that is continuously refined to address common challenges across many manufacturers. That accumulated knowledge is exactly what you are buying. The more you try to bend it to your exact current process, the less of that value you actually get.

There is also the dependency risk. When a selection process is driven entirely by internal requirements, it tends to push toward heavy customization. That is how you end up with a CPQ system that consultants control, not your own team. Every change requires outside help. Every update breaks something. The competitive advantage you were trying to build becomes a dependency you cannot escape.

How Do Manufacturers Who Get CPQ Right Approach Selection?

Manufacturers who make better CPQ decisions focus on fewer, sharper criteria and move faster to hands-on evaluation. The process looks like this:

1. Define Fundamental and Technical Requirements
Start with your IT strategy, not your feature list. What kind of software do you need: cloud-based, API-first, built for integration? And critically: who should own the system after implementation? For manufacturers with evolving products and processes, the business needs to lead CPQ, not IT. A system that requires scarce IT resources to maintain every change is a system that will slow you down.

This question, IT or business ownership, is especially relevant for manufacturing companies dealing with ever-evolving product and process complexity. When product rules, pricing logic, and configuration models need to change regularly, those changes cannot be bottlenecked by IT capacity. The business needs to be in control from day one. Owning your own configuration should be a non-negotiable requirement.

2. Research Vendors Based on Expertise, Not Feature Lists
Look for vendors who understand your industry and your specific challenges. Read their business cases, blogs, and customer stories. Do they share relevant knowledge? Do their customers look like your business? Do you share the same values?

Also check whether you can start a trial. Hands-on access to the software tells you more than any RFI response. It gives you direct insight into the interface, self-service possibilities, and key functionalities before you have invested significant time or money.

3. Engage Actively With the Vendor
Good vendors do not wait for you to send them requirements. They organize deep-dives into their platform, ask about your current process and future vision, and show you demos built around your specific situation.

Beyond assessing features, pay close attention to usability, performance, and how well the system aligns with how your organization actually works. A system that looks good in a demo but is hard to maintain in practice will not deliver long-term value. Also ask about implementation support, training resources, and ongoing assistance. A smooth go-live matters, but what happens in year two and three, when your products and processes evolve, matters just as much.

4. Use a Proof of Value to Kick Off Implementation
A Proof of Value is one of the most valuable steps in CPQ software selection. It lets you see firsthand how the software handles your specific products and processes before you commit fully.

A well-structured PoV validates technical and functional fit, uncovers opportunities for improvement early, and ensures the software is not just a conceptual match but a functional tool ready to drive real results. It sets the foundation for a successful implementation and gives both sides the confidence to move forward. At Elfsquad, the Proof of Value is a standard part of our process because it is where real alignment is built.

What Should You Actually Look for in CPQ Software?

Beyond the selection process itself, a few criteria separate CPQ systems that deliver long-term value from those that create long-term dependency:

1. Your team manages it: Configuration logic, pricing rules, and product updates should be maintained by your own people, not consultants or developers

2. It connects with your existing systems: Integration with ERP, CAD, and CRM should be straightforward, not a custom project

3. It handles real complexity: If your products are highly configurable, the system needs constraint-based configuration, not just rule-based logic

4. It scales with your business: As your product range grows and your markets change, the system should grow with you without requiring a new implementation

The Right CPQ Software Selection Process Saves You Time and Money

The manufacturers who select CPQ software well are not the ones who write the longest requirements documents. They are the ones who ask the right questions, move quickly to hands-on evaluation, and choose a partner whose expertise matches their challenges. The goal is not a perfect selection process. The goal is a system your team controls, your business scales with, and your customers benefit from.

Curious how Elfsquad approaches this? See how our customers made the decision, or schedule a demo and we will show you what the process looks like in practice.

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