Use Case NKT - Achieving a globally harmonised offer process with CPQ
This use case demonstrates how the Danish NKT A/S, one of the world market leaders for cable systems, has standardised the worldwide offer process with camos CPQ in the field of high voltage systems. Straightforward and clear calculation and automatic workflows play a special role here.
- Uniform offer processes across all international NKT sites - from the configuration and pricing to order receipt
- Clearly presented cost calculation should display the costs, contribution margins and sales prices in different views at all times.
- Automatic, rule-based processes are designed to reduce the effort involved in preparing offers, improve coverage amounts and ensure short reaction times.
- Cross-location CPQ system which, in addition to calculation and offer preparation, also serves all the necessary interfaces with CRM and engineering systems. A connection to the ERP system is also planned in the future.
- Clearly arranged tables with costs, prices and contribution margins enable a quick and more comprehensible calculation.
- A uniform database and consistent processes replace data silos and avoid breaks in media.
About NKT A/S
When the Danish NKT A/S was founded in 1891, the electrification of the world was still in its infancy. NKT was a pioneer in this field. Today, the company is one of the world market leaders in cable systems for transporting energy. For example, NKT develops, manufactures and installs turnkey sea and land cable systems for energy infrastructures. The company is a major player in the field of submarine cables in particular and has its own cable ship, the NKT Victoria. The Victoria has great strategic importance as it makes it possible to offer offshore projects from a single source: from planning and production, cable laying and installation, through to commissioning, testing, operation and maintenance. Large projects such as these quickly reach volumes in the three-digit million range.
In 2017, NKT acquired ABB Group’s High Voltage Cables division with a business value of 712 million euros. This includes the production facility in southern Sweden. With this acquisition, the production sites in Sweden and Germany are the company’s two largest. Both managed to position themselves excellently in the growth market of the offshore wind industry and the expansion of the European integrated grid.
The configuration has great importance at NKT, as barely any standard solutions exist even when it comes to the mere cable technology. The electric voltage, the route length, the condition of the ocean floor as well as many other factors influence the composition of the individual projects. For example, NKT’s 623-kilometre submarine cable, which enables energy exchange between Norway and Germany (Nord Link project), has little in common with NKT overhead lines for rail transport. Not only the projects provide for great variance: ‘A project comprises up to 1,500 configuration elements, which aren’t simply product components, but also include project services such as construction services, insurance or logistics requirements for the project’s implementation,’ explains Sebastian Appel, process engineer and head of the CRM and CPQ project.
Reflecting on the start of the project: ‘In 2013, we already developed a company-wide Excellence Strategy, which became even more important with the ABB acquisition. The scattered product and project knowledge was to be centralised for the offer process. We wanted to standardise and optimise site-specific processes and IT systems in order to boost our competitive position. The goal was a completely digitalised offer process with a globally uniform basis for the configuration and calculation.’ To this end, it was necessary to replace numerous excel tables that had grown organically for cable variants, fittings, raw materials and services with a holistic solution. This was because they were prone to errors and cumbersome to maintain.
Selecting the solution
In selecting the cross-site offer and calculation solution, NKT limited itself to multilingual software that enables the integration of CRM, ERP and engineering systems. ‘We decided in favour of camos, because the CPQ solution already covers a large number of our requirements by default. For example, automated approval processes, the ability to audit and the traceability of configurations and calculations. We agreed that we could implement our Excellence Strategy with camos CPQ’, is how Sebastian Appel explains the reasons behind the provider choice. Furthermore, NKT has also been successfully using a further camos solution for 30 years.
Inside the project with camos
Throughout the project and in merging the data from the various ERP, CRM and engineering systems of the international sites, NKT benefited from the fact that camos already had extensive experience with merged companies and heterogeneous IT structures. An agile project approach was chosen for planning and controlling the project. As a result, it was not necessary to know all software requirements in all its detail beforehand. Based on the NKT project vision, these were instead implemented in short iterations of 2-4 weeks, step-by-step and directly within the software in order to manage the project’s complexity.
Sebastian Appel also sees a further factor for the project’s success in the close cooperation: ‘It was important to us to find a shared language with the camos project team. We are novices in the world of camos and had no real idea of the platform’s possibilities at the start.’ Working closely with weekly, set meetings and regular coaching, NKT employees managed to dive into this world quickly and also implement developmental topics on their own.
CPQ solution in use
The CPQ solution centralises the global NKT offer knowledge regarding products, prices and costs. Building on this foundation, NKT establishes a homogeneous offer process for an easier and more efficient cooperation between the international sites.
Speed is of the essence in lots of projects. When it comes to smaller cable projects with a project volume of less than two million euros, customers expect a binding offer, sometimes within two days. By using rule-based workflows of the CPQ system many steps in the offer process were automated. For example, the solution uses approved, standardised text modules to create offer documents. A review is thus limited to just a few lines deviating from the standard. ‘That means that we are already within the customer’s timeframe and will introduce further improvements with each new version. This will have a positive effect on our distribution costs,’ Sebastian Appel is pleased to say.
Concerning large projects with up to 1,500 configuration elements, even seemingly minor changes seriously impact the overall costs. Here it is highly advantageous that the CPQ software brings together all supply-relevant data and also documents any changes in a transparent way. Sebastian Appel: ‘We can see all adjustments for costs and prices at a glance in a tabular cost cockpit. This is vital in order to calculate complex projects, such as in the area of our land cables, in a way that covers costs and to offer these in a contractually reliable manner.’
Challenges of digital B2B sales for complex and multi-variant products
Only those companies that adapt their sales strategy to the future behaviour of B2B customers will be able to compete successfully. In this whitepaper, you will learn how to sell individualized B2B products successfully in the future.
- Why more and more B2B buyers make investment decisions based on information from the Internet
- Which 4 central challenges result from this new information behaviour
- How a CPQ system avoids the biggest stumbling blocks in the digitalization of B2B sales.