Meet the People at Tacton: Peter Hammerstein

Today we have a chat with Dr Peter Hammerstein from the Tacton Customer Support department. Peter has a very unique, and impressive, background with a doctor’s degree in Physics of Complex Systems and over 10 years of experience from different departments at Tacton’s office in Stockholm. It is safe to say he is not your average Customer Support person!
How did you find your way to Tacton?

I studied physics in Berlin and during my studies I met my wife, a Swedish woman, who eventually brought me to Uppsala and Sweden. I realized I did not want to pursue an academic career and when I heard about Tacton I was attracted by the challenge of solving complex problems with practical implications.

Why do you like working with Customer support?

After 10 years at Tacton I have worked with Project Management, Business Consulting and Technical Sales. I felt that Customer Support was a great way to apply my wide knowledge of the Tacton CPQ-solution and get a better view of the company as a whole. You are surrounded by highly intelligent people from many different cultures and backgrounds who all cooperate to solve complex problems together.

How is a typical day for you at Customer Support?

Some days I am on Ticket Surveillance duty and keep track of incoming Support Tickets in order to be able to reply within 30-60 minutes. We have a morning meeting where we meet with the team and discuss issues of relevance from which we all can learn from. This is also a good forum to ask for expertise from others since there are about 30 combined years of experience in our rather small team! During the day we receive errands (tickets) created by our customers, either Product Support or Managed Support. We have two levels of support: Product Support and Managed Support. Product Support is included in the maintenance service agreement and could be bugs in our software etc. Managed Support is a higher level of support for customers with very unique needs in terms of how they have implemented our CPQ solution.

 

I am surrounded by highly intelligent people from many different cultures and backgrounds who all cooperate to solve complex problems together.

 

What makes you good at your job?

I have a very long and wide experience from working at different departments at Tacton. I also truly like to understand and solve complex problems. My German background is also useful in terms of helping out our German customers.

What do you do when you are not working?

My family is my most important ”hobby” and I spend a lot of time with my 7 year old son. I also love spending time in the nature.

 
Dr Peter Hammerstein

Customer Support | Dr. in Physics of Complex Systems | Stockholm | 10 years at Tacton

Passionate about: My family, nature, Berlin

What if you didn’t want that extra anti-corrosion coating on your new car?

We all love our discounts. The hunt for a deal is a psychological trigger that makes us feel good buying an overpriced car for $45.000 because we got that last minute $1.000 cut. It does not really matter if it actually is a good deal, it just needs to feel like one. Giving discounts is of course a matter of trade-offs. If you are selling a complex product you probably have a certain top margin in order to be able to give a discount straight off for, let’s say, 5%. If the customer request more discount than that you may have to cut into your profit, which is not a viable option in the long run. Still, you have to sell your product to survive so you give that extra discount and hope to get it back on service agreements etc. That’s business, right? What you lose in the carousels you get back in the swings etc.

 

But, does it really have to be like that?

 

Let’s take the typical case of a car salesman who is selling a car with a pre-applied anti-corrosion coating. The production cost of it is $50 but can be sold at a ”value” of $200. If the customer is not interested in the anti-corrosion coating, the salesman could discount it to $100 or even $50 to go break-even on that extra feature. Still, if the customer doesn’t care for an anti-corrosion coating at all, it has a perceived value of $0, so they are both in a lose-lose situation. The salesman cannot remove the anti-corrosion, nor can he sell it. In order to sell the car, he has to discount the coating to $0 to match the customer’s $0 perception of value for it.

 

Many complex products often have this problem. You may have several amazing built-in features but some customers don’t care about them at all, and thus do not want to pay for them either.  Removing these features from your product will come at a cost, so you can either just include them at a juicy discount or remove them at a cost, in order to not simply give away the feature for free. Here is one of the major benefits of having a good CPQ tool (with a stress on the P in CPQ): If the customer wants a 20% discount of the original price, you can make it into her own trade-off. So, you want a $1.000 cut on the price? Let’s remove the automatic gear box then! Oh, you do want that included? How about not adding the anti-corrosion coating and replace the mahogany interior with plastic? Great! Let’s build that car!

 

The deal will not be a matter of you cutting into the profit in order to close the deal. It is a matter of matching the product to exactly what the customer wants to buy, to the exact price she wants to pay for it and, most importantly, for a price that is viable for you to sell at as well! With a CPQ-tool that can match these trade-offs you will keep your customers happy while maintaining a healthy profit margin. Sounds pretty good, huh? Great! So, let’s book a meeting where I can explain more about the Tacton CPQ-tool. In fact, I can probably give you a 5% discount right away, and present a solution that matches your specific need.

 

 

Visualizing successful business together

Following our announcement of the acquisition of Lumo Graphics, we’d like to welcome our new colleagues to the Tacton team. Actually, they’re more like old friends, since both companies have been partners and have served some of the same customers.

Headquartered in Karlsruhe, Germany, Lumo Graphics is a leading provider of real-time visualization for product configuration. Its product portfolio includes LumoLogic and LumoVis, which we know from experience are great products that enable users to instantly visualize the choices they make during configuration and easily explore product variants. But don’t just take our word for it – the company has many satisfied customers who are heavyweights in their industries, like Daimler Trucks, Mercedes-Benz Buses, Metrohm, Setra, Stryker and Karl Storz.

The company is a natural fit for Tacton. With similar company cultures and values as well as technology visions, we share a common view of integrated CPQ and visualization capabilities as key drivers of customer engagement. Together, we also bring an overall focus on helping enterprises identify value drivers for their businesses and calculate ROI using the capabilities of visual configuration.

Overwhelmed or overjoyed? From confusion to clarity

We believe that combined 3D visualization and CPQ play an essential role in the so-called “experience economy,” where even selling a complex product becomes a customized service experience tailored to each customer’s unique needs. Like author Joseph Pine II says when talking about mass customization:

“The most frequent mistake mass customizers make is overwhelming their customers with too much choice. Fundamentally, customers don’t want choice; they just want exactly what they want. Provide a design tool so you can figure out what they want at this moment in time, and then get that information back into operations to do something different for that customer.”

We couldn’t agree more.

More and more, customers want to interact with their suppliers during a sales cycle. With visualization, they can see exactly what they will buy and remain confident that they’re making the right choices.  Our modern, holistic 3D CPQ solutions do exactly that: bring clarity to the customer, while helping accelerate sales.

As we go forward after the acquisition, Tacton envisions better business for current and future customers. End customers clearly see their product, our own customers see business value, and we see a promising future for product configuration and 3D CPQ.

Meet the People at Tacton: Ida Sjöstedt

Meet Ida Sjöstedt, a senior Business Consultant and Model Lead at Tacton Systems. She recently celebrated 9 years at Tacton.
What is the key for Tacton to keep you around?
I have always liked the fact that I really get an intellectual challenge from working here. Many of the projects I do really keep me on my toes, which is fun and stimulating. I also like the fact that I get to work with complex solutions that integrate both ”nerdy” technical stuff with softer aspects like human communication. A customer problem is not solved solely with technical solutions but also by understanding how the people interact and work.

I have received several job offers from other companies during my career but nothing has been able to match this aspect.

What has been a highlight of your career at Tacton?
I spent a few years working on a project in Parma, Italy, during my first years at Tacton. That was an amazing experience. Not only was I working on an interesting project but I loved being in Parma. Parma is a very quaint town with incredible food and great people. I had a great time there!

What would you recommend someone who wants to become a Business Consultant at Tacton?
A lot of what I do on a daily basis revolves around processes so it is important to be able to understand complete processes. A CPQ-solution involves everything from understanding how the customer sells its products to the detailed technical aspects of how they are manufactured. In terms of discussing the technical aspects of manufacturing I have also had great benefit of my background as a Mechanical Engineer. It makes it easier to discuss with the customers and quickly understand their products.

 

“I like that I get to work with both technical stuff as well as softer aspects, 

like human communication.”

What has been the most beneficial learning from your years at Tacton?

Working as a Business Consultant at Tacton has given me deep insight in many different businesses. You need to understand the customers’ business in order to give them what they want.

How is the social aspect of working at Tacton?
There is a really friendly atmosphere here which I think is an important reason why so many I was working with 10 years ago still work here. Many also hang out during their spare time, playing sports etc. which I think is proof for a good work atmosphere.

 

 

Ida Sjöstedt
Business Consultant | Mechanical Engineer | Stockholm | 9 years at Tacton

Passionate about: Gardening & my family

Unexpected benefits of implementing a CPQ-solution

There are are many reasons why companies implement a CPQ-solution. The most common are usually the need for decreased quoting time and need for sales support while ensuring the quotes are still valid. Those are usually key factors in order to be more profitable, sell more in each deal and avoid costly order errors. This is also something you expect when you purchase a CPQ-system, and I feel quite confident that this is what we at Tacton deliver to our customers as well.

The interesting part though are those unexpected benefits you encounter when you implement a CPQ-solution. That is, those “Wow, that’s interesting!”-points you may experience but did not really bargain for!

For me, this is like when I bought my first smart phone with a camera. My main goal was to use the camera to take “normal” photos but I have ended up using it in 100 other ways as well: I photograph wine etiquettes to remember a great wine, I photograph my fridge to remember what (not) to buy in the grocery store, I use it as a mirror and I use it to look at what’s on that inaccessible top shelf in my wardrobe. I still use it mainly as a “normal” camera but the extended, and unexpected, benefits are amazing!

So, what will be the unexpected benefits you may experience when you invest in a CPQ-solution?

Below you will find a few examples of unexpected benefits our customers have experienced:

1. We expected the time to create a quote to be faster but we did not really foresee how much easier that would make negotiations about price and value. For example, when the customer requested a discount or wanted to remove a product they did not want to pay for.

Before CPQ, it was a tedious and costly process to create a new quote, get back to the customer and continue the negotiation. We had to re-schedule new meetings all the time! With the CPQ-solution we could have that negotiation and re-creation of the quote in real-time, during the meeting with the customer!

The result was that if the customer requested a lower price, we could have a value-based discussion instead. The discussions went from offering a profit-cutting last-minute discount (to avoid another time consuming quote-process) to discussions like: “If you want to cut the price any further, we could remove product X from the quote that you may not need anyway”.

2. Remarkable reduction in the range of standard products. Previously, each sales person often included parts of his or her favorite products into a deal, including rarely used products that had to be kept in the product range. This caused different customers to use slightly different solutions when there was not any real need for it. With the implementation of CPQ this was completely changed!

3. The amount of quotes we could offer was drastically increased. The renewed ease of creating an offer made it possible for us to have multiple different quotes in a deal when the competitors only had one.

4. We started seeing that our partner channels (and we have many!) started selecting new product features and new products to an extent that was beyond our expectations. Before CPQ, we had to constantly inform our partner channels about updates, new features and changes – which was a communication nightmare. For them to, in turn, actually discover these changes and implement them was a very slow process as well. After CPQ, the same partner channels would benefit AND use our new features automatically on the very first day! We did not even have to instruct them, it just came naturally.

5. The roll-out of new products and phase-out of outdated products could be done faster and more reliable. There was no risk that an obsolete product would be used in quotes which was very important especially when a product was replaced with another when they did not use the same interface.

These are all examples of benefits our customers experienced that they did not expect. Since you are now aware of them, you may probably include them as ”expected” benefits. This is, however, not the end of it. Your unique business (or industry) will most likely have other unexpected benefits. If you are curious and want to get a glimpse of those unexpected benefits feel free to contact us here and we will share our knowledge.

Dreamforce 2016 brings some big news for CPQ

Last week, a reported 170,000 people descended on San Francisco for the annual Dreamforce event. That’s an astounding 20% of the population of the city! This year was a record in terms of attendance, and it was also big one for CPQ. Not only did Salesforce officially launch its own CPQ solution at the event, but we were there with some very exciting news of our own!

The first announcement was that we’ve partnered with Salesforce to develop a CPQ solution that’s designed to meet the specific needs of the manufacturing industry.

The product, which will be generally available in November, is Tacton Extension for Salesforce CPQ. Tacton Extension is built on the Salesforce CPQ platform, and extends Salesforce with some very powerful capabilities that will be a game-changer for manufacturing companies – particularly those that manufacture complex or highly configured products. The launch means that manufacturers can now take full advantage of Salesforce’s Quote-To-Cash technology and accurately configure even the most complex products from within the Salesforce Lightening environment.

In another exciting move, we’re happy to announce our new partnership with CirrusCPQ to deliver Tacton Extension to customers across North America.

San Francisco based CirrusCPQ specializes in implementing and integrating CPQ solutions. The company provides a wealth of CPQ expertise, particularly in the Salesforce environment, and has a history of successful CPQ implementations.

Eric Rusch, the founder and managing partner at CirrusCPQ said of the solution, “Tacton Extension for Salesforce CPQ, provides a unique opportunity to put the configure-price-quote process at the heart of the engineering and manufacturing selling process. It enables manufacturers to significantly reduce the time it takes to price and sell complex products that require industrial design. We look forward to bringing our years of knowledge and experience to this exciting new product.”

We’ll be writing more about Tacton Extension and why it’s a game changer in an upcoming post. In the meantime, don’t hesitate to get in touch if you’d like to find out more about our partnership with CirrusCPQ, or Tacton Extension for Salesforce CPQ solution.

Create your own Sudoku puzzle from scratch using a configurator

Do you know the history behind Sudoku? I will admit, when I checked the Wikipedia page about Sudoku I thought I would read a story about Sudoku being a 2.000 year old numbers game invented by Japanese monks or the likes of it. It turns out the story behind Sudoku is, of course, far from that. Instead, this popular game is a fairly modern puzzle that first appeared in 1979 but was made popular by the Japanese puzzle company Nikoli (who named the game Sudoku, meaning “single digit”) and nowadays, you see people solving Sudoku puzzles virtually everywhere.

 

The CPQ nerd in me cannot help to think of the configuration aspects of this intriguing game – but is Sudoku really a good example of configuration? A genuine Sudoku game only has one solution and as such, it could not be considered a configuration problem per se, since a configuration problem usually has several solutions instead of just one. Creating a new Sudoku puzzle from scratch is, however, more of a configuration problem and not all that easy to do by hand. In fact, Wayne Gould who created a software to easily create new Sudoku puzzles, made a great impact in the popularization of the game. With it, every news paper in the world could easily offer their readers a new Sudoku every day.

 

Creating a new solvable Sudoku puzzle is something any configurator should be able to easily solve. A normal Sudoku has a given set of variables: 9×9 squares, each holding a number. Each square also belongs to a row, a column and one of the 9 quadrants of the game.

The rules are simple:

1. Each square must hold one single digit number between 1 and 9

2. The number in each square in a row must be different from the other in that row.

3. The number in each square in a column must be different from the other in that column.

4. The number in each square in a quadrant must be different from the other in that quadrant.

 

When you start creating a Sudoku game from scratch, there are millions of possible solutions. Every time you lock a number you subsequently limit the solutions (configurations) possible. The interesting thing here is that, from the configurator’s perspective, the puzzle is always “solved” during the creation process. When you lock the first number, the rules propagates throughout each square and create a new solution based on that lock. There is still not one unique solution – but it remains solved, from a configurator’s point of view.

 

From a human perspective it is of course very difficult to try to solve a puzzle with only one clue. Not only is it difficult but there are also several solutions which disqualifies it from being a genuine Sudoku game. At a certain point, which apparently is 17 clues, there is one unique solution to the puzzle. The locked numbers can now be used to create a puzzle for a magazine or the likes of it. At this point it goes from being a rather interesting configuration problem to a fun puzzle for humans to continue to solve. Every clue you add to the game after that will only be used to assist the player and make it easier to solve.

 

If you are ready for a challenge, we present to you: the Tacton Sudoku Solver where you can create your own Sudoku game from scratch. You lock your own number to create the “clue numbers” and can see how the full table continues to be solved while doing so. Feel free to play around, perhaps you can break the code and find a unique solution with only 16 clues!

 

 

Meet the People at Tacton: Joel Persson

Meet one of the newest additions to the Tacton family: Joel Persson. Joel just finished a 1.5 year project in San Francisco working on self-driving cars to come back to Sweden and work for Tacton. At Tacton, Joel is currently attending the Tacton Talent program.

How come you chose to work for Tacton?

During my studies in Mechanic Engineering at the Royal Institute of Technology in Stockholm I was responsible for business contacts at the student work fair. Through that project I came in contact with Tacton for the first time. I was intrigued by the opportunity to not have the ”normal” job a Mechanical Engineer usually ends up with (create CAD-drawings) but rather get a good insight in many different business areas. Thus, when I came back from the USA, Tacton was on top of my short list.

You are currently attending the Tacton Talent Program. What is your impression so far?

It is intense but great! We are getting lectures from every single department of Tacton so we get insight of what, for example, the Sales Department does in detail

“The Tacton Talent Program is a great way of getting to know the people you will be working with, as well as meet in the coffee room. 

I believe it will make it easier to cooperate and help each other in the future.”

What are you doing at the Tacton Talent Program?

We are eight new employees at the Tacton Talent Program. We come from different backgrounds and with different skill sets but in terms of CPQ we all start from scratch. Throughout the training we implement the theory directly in the Tacton configurator by creating an advanced Bike Company. Everything we learn gradually gets integrated into that model as we proceed. I believe this training is a great way to familiarize yourself with all the products at Tacton, even those I will not work with directly in my role as Business Consultant.

What would be your recommendations for future Tacton job applicants?

I know it is a bit difficult to really wrap your head around the idea of CPQ, it took me some time before I really grasped it. I would recommend you to try to understand it before you apply to have a head start. Having said that, everyone starts from scratch in terms of learning CPQ since it is a very special niche.

Lastly, mention something your future co-workers may not know about you!

During my studies I was involved in a project of building a school in Kongo. I was on site for a few months during that project, it was an amazing experience!

 

 

Joel Persson

Business Consultant | Mechanical Engineer |

Stockholm | 51 days at Tacton

Passionate about: Making a better world, playing bass in my indie rock band, wind surfing

You make 10.000 decisions a day – make this one count!

 

I read somewhere that an average person in our time makes over 10.000 decisions a day. Most of them are micro decisions, such as whether you should have sugar in your coffee or not, which milk you should choose in the grocery store, whether you should wash your car today or later this weekend, or which TV-channel to watch. They may not be important decisions, but they add up.

Not only do we have our own set of issues to consider. Our commercial surrounding pushes decisions our way and asks us questions all the time. Have you, for example, ever wondered why there sometimes are chocolate bars by the magazine stand in the super market? Because you already made the decision to stand strong and avoid the isle with all the sweets – and now you have to decide again! Sooner or later, we all cave in and make a quick decision that may not be the best one.

 

The reason I bring this up with you is because your customers make several decisions (both big and small) when they consider the customization of your product. The decision you make when you choose a CPQ-solution will have millions of implications in terms of every choice your customers will make using your application, and how they feel about it. So, if I can give you only one advice, it would be:

 

Learn the difference between imperative and declarative rule engines.

The difference will definitely affect how your customers feel about customizing your product.

 

Imperative rules engine – sequential questions

I know, “imperative” and “declarative” are not the easiest words in the dictionary. So let me explain what they really mean. An imperative rules engine is a CPQ-solution that funnels the user through your application using a set of sequential questions, which means each question subsequently filters the next questions and answers available. You encounter this functionality everyday in very simple “configurators” and it may, or may not, be a source of frustration. Imperative rule engines are common, easy to create and usually cheap. However, you can find them in “advanced” CPQ solutions as well, and this is where you need to be aware.

A simple example of an imperative rules engine is a purchase of a customizable computer in an online shop, like Apple.com. You start by selecting a computer type, which is followed by a question about screen size you can choose for that computer. This question is in turn followed by a question on the size of hard drive you want, and so on. Each answer funnels and limits the amount of answers you have available for the subsequent questions. A problem arises if you, for example, want to have the fastest processor available on the market – an option towards the end of the configuration. If that configuration is not available based on your previous choices, the configurator will force you to start all over again.

Having to start all over again is a very common side effect of an imperative rules engine, but it is of course something we all hate doing! You invest time in your selections and you do not want to wait, or worse – eradicate, all that work when you realize an important feature is not available for who knows what reason!

 

The more decisions you need to make to purchase the product, the more time invested will be lost if you have to start all over again. I.e. the more options you have, the more time and effort is at stake. On the other hand, for simple solutions like booking a flight ticket where the time invested is not as much, you get a good trade-off between functionality and price with an imperative rules engine.

 

Declarative rules engine – choose whichever option, whenever

A declarative rules engine, on the other hand, is a more intelligent CPQ solution. It cannot typically be made in-house but rather needs to be purchased externally. A declarative rules engine always consider all data at all times. You create rules (sometimes referred to as constraints) that “cut” through the data and limits the selection no matter where you start.

Using the same example of a customizable computer, let’s say you are a photographer. You carry your computer with you at all times and the most important feature for you is that it is light weight, with a maximum weight of 1.5kg. Additionally, it should be fast enough to run Photoshop. You may not care about the brand, screen size, memory or anything, you just want your most important features included, and you want to find a computer that meets that need. If you decide you want a MacBook Pro, on top of that, the declarative rules engine will let you know which trade-off you face: “You cannot select a MacbookPro because it is heavier than the maximum weight option you selected.”. Then it is up to you to make an informed decision.

 

Which rules engine should you choose?

The computer example is of course a simple example for educational reasons. As a trade-off between price and functionality an imperative rules engine may actually be a better option for a simple computer configuration issue like this one.

If you are not just looking for a solution to a simple problem, however, you really should be looking into a declarative rules engine for your CPQ solution. The reason is that your customers will be making decisions you may not be able to foresee and in an order that does not follow the same “logical” path your engineers have created. We are all used to make decisions based on our own preferences and we all frown when a computer tells us: “This option is not available”, without letting you know why or what you need to do to make it available. The more complex your product configuration is, the more time it takes to configure it. And the more exceptions you have, the more you should consider a declarative rules based configurator. With products like this it also probably means your customers are more important and invest more money in your products. These are not customers you want to hand a ”Option not available” message to!

So, if you can take the time and effort to make an informed decision about a CPQ-solution that really helps and guides your customers, you are helping them in their everyday decision process. Hopefully you can reduce a good portion of the 10.000 decisions they make every day. The result is likely to be less frustration among your customers, and fewer calls to your customer support.

The Man with the Montblanc Pen

How to win B2B deals with configure-price-quote solutions

You have one and only one plan for today. This is the day when you close that deal you’ve been working on for the last two years. This is the day to finally get the ink on paper. It’s the final meeting with the man with the Montblanc pen. You sent the proposal three months ago. The last version, that is. It’s been a long journey with many pit-stops and different revisions.

“Okay,” says the man with the Montblanc pen. “Now we only need to make a minor adjustment. We’ve got a board decision to run the project, but with the current offer we’re actually 5% over budget.”

WTF?! We already negotiated this deal. Going back to expand the budget will in reality take half a year, and there is a risk the delivery will be down-prioritized during this period.

How to deal with the man with the Montblanc pen

So, why is the customer playing this game?
Because the customer knows that for most suppliers it’s way too difficult to change the proposed solution at this point. No sales rep wants to compromise their offer to meet the budget. A discount seems to provide the only way out.

But luckily for you, it isn’t. This is the moment when you really appreciate your configure-price-quote (CPQ) solution. This is when your CPQ software turns into a negotiation wrecking ball. With the mere click of a button, you can quickly remove a high-level requirement and find a new solution with a 5% lower price for your cost-conscious customer. With a smart product configuration tool integrated with your quoting, you’d be able to respond like this:

“Well … we’re flexible! Just let me quickly check how we can meet your budget. Either we change the service agreement to Silver or we change the automation from integrated to standalone.”

And just like that, you have ammunition to tackle this classic negotiation trick of the man with the Montblanc pen. This is why CPQ is much more than a way to specify your solution. In cases like this, it transforms into your magic wand for closing that deal. Without compromising your margins.