Sales leadership is planning a CPQ project to make quotes faster and more accurate. Meanwhile, inside sales is buried in BoQs with hundreds of line items that first have to be read and matched. CPQ software and AI quote automation solve two different problems here: CPQ helps configure and price a product according to the rules. AI reads the customer's inquiry and finds the matching articles. Which one you need depends on where your time is lost.

Key takeaways

• CPQ (Configure, Price, Quote) is software that creates quotes for configurable products based on stored rules. The starting point is the salesperson selecting options.

• AI quote automation starts with the customer's document: it reads BoQs, emails and Excel lists and matches line items to the catalog.

• CPQ is strong for products with many variants and fixed dependencies. It needs maintained product models and rules.

• AI is strong for unstructured inquiries and a large assortment. It needs review by your team.

• The two can be combined: AI reads the inquiry, CPQ or the ERP handles configuration and price.

What is CPQ software?

CPQ software creates quotes for configurable products and services by checking product options against rules, calculating prices automatically and generating a quote document. CPQ stands for Configure, Price, Quote. Infor describes CPQ as software “that creates fast and accurate quotes for configurable products and services” (Infor: What is CPQ?). CPQ stands for configure, price, quote. CPQ systems such as SAP CPQ, Salesforce CPQ or Tacton are usually tightly connected to CRM and ERP systems and part of the quote-to-cash process. The benefits of CPQ show mainly with complex products that have many variants. CPQ tools are strong when sales reps create quotes for a product that is already decided.

A CPQ solution typically has four building blocks:

• Configurator: The salesperson selects options, and the system checks whether the combination is valid. According to Infor, “embedded rules and conditional logic” validate the product combinations in the background.

• Price calculation: Prices adjust automatically to the selected configuration.

• Quote document: The configuration produces a quote, and in some solutions a bill of materials as well.

• Approvals: Discounts above a threshold go through an approval process.

The foundation is rules that someone has to define and maintain. Infor writes that the system uses “dependencies, rules and constraints defined by your engineering teams.”

What is AI quote automation?

AI quote automation is software that reads incoming inquiries, tenders and BoQs, matches each line item to your own product catalog and creates a quote draft from it. It replaces manual reading and searching. Configuration according to fixed rules is not its focus; understanding free-form text is.

In technical sales, an inquiry rarely looks like a configurator. It arrives as a GAEB file from the planner, as a PDF BoQ with long texts, as an Excel list or as an email saying “like on the last project.” The work consists of turning these texts into the right articles. That is exactly where AI comes in.

CPQ software vs. AI: where is the difference?

The most important difference is the starting point: CPQ starts with a salesperson who knows what the customer wants and configures it in the system. AI starts with the customer's document and figures out what the customer wants. Both create quotes, but they take different work off sales.

One BoQ line item in CPQ and with AI

A single BoQ line item makes the difference tangible. Take a typical case from the lighting industry: a recessed LED downlight with ceiling cutout, luminous flux, color temperature, glare rating, DALI control and protection rating, specified as a third-party brand "or equivalent".

With CPQ: An inside sales employee reads the line item, recognizes that a third-party brand is specified, looks for their own comparable luminaire family and selects cutout, luminous flux, color temperature, controls and protection rating in the configurator. The CPQ checks whether the combination is valid and calculates the price. Reading and translating remains manual work, for every one of the many line items in the BoQ.

With AI quote automation: The AI reads the line item, recognizes the third-party brand and the required attributes, suggests a matching variant from your own range and flags deviations, for example when your own luminaire only reaches IP20. The employee reviews the suggestion instead of working it out themselves.

When is CPQ software the right choice?

CPQ software is the right choice when your products are configured according to fixed rules, many options depend on each other and your sales team assembles quotes itself instead of responding to customer documents. Then CPQ ensures valid configurations, consistent prices and traceable approvals.

Vendors describe it this way: Tacton is “built for manufacturers with high product variance” and uses “constraint-based configuration” (tacton.com). Salesforce Revenue Cloud supports “both rule-based and constraint-based configuration” and controls discounts through “automated, cross-functional approval workflows” (Salesforce Revenue Cloud).

Typical cases are plants, machines and systems where a wrong combination simply does not work technically. If you sell such products, a configurator generally makes sense, and AI does not replace it. Just plan for product models and rules to be maintained on an ongoing basis.

When does AI quote automation fit better?

AI quote automation fits better when the biggest effort is not in configuration but in reading incoming inquiries. This is typical for technical distributors with a broad assortment and for manufacturers that receive many BoQs with long texts and third-party brands.

How to recognize it:

• Your inside sales team spends hours reading BoQ line items and looking up articles.

• Inquiries get left behind because capacity is not enough.

• Many line items specify competitor products “or equivalent.”

• Your products are mostly catalog articles, not freely configurable.

• Orders also arrive unstructured by email.

Can CPQ and AI be combined?

Yes, CPQ and AI combine well because they work at different points in the process. The AI reads the inquiry and produces structured line items, and CPQ or the ERP handles configuration, price and document. This creates a continuous path from inquiry to order, often called “quote-to-order.”

Ask every vendor which data flows back into which system: just an export file or a finished document in the ERP. Mercura writes approved quotes directly into the ERP, in SAP for example in real time via OData.

What does Mercura do, and what does it not do?

Mercura, an AI software for quote and order automation in technical sales, reads inquiries, tenders and BoQs in any format, matches every line item, including long text, to your own catalog, checks the specification and sorts suitable options by margin. For non-stock items, Mercura creates price requests to suppliers. The approved quote goes to the ERP, to the customer as GAEB or PDF, and open quotes are followed up.

Mercura also covers the second part of quote-to-order: orders from the shared inbox are matched, supplemented with surcharge lines and, after approval, booked into the ERP. At REHAU, Mercura delivers product suggestions for up to 98 percent of BoQ line items, with up to 60 percent time savings on quotes.

What Mercura is not: Mercura is not a product configurator and not a price determination engine. Pricing and calculation stay in the ERP, and the ERP remains the leading system. If you configure products with many variants according to fixed rules, you still need CPQ or the variant configuration in your ERP for that. Your team remains the quality control, and uncertain line items are flagged.

Bring a real bill of quantities: in 30 minutes we show you how Mercura handles it in your process and where it hands over to your ERP or CPQ. Book a call

Conclusion

CPQ software and AI quote automation are not competitors but tools for different bottlenecks. CPQ makes sure configurable products are assembled and priced correctly. AI makes sure incoming BoQs and inquiries are read and matched quickly. Check where your inside sales team spends most of its time: configuring or reading. That determines the choice, and often the answer is a combination.

Further reading: Quoting software compared, Automating quote creation, AI for quotes at lighting manufacturers, Tendos, Scalera or Mercura?. More on Mercura: Quotes and tenders, Solutions for manufacturers, Integrations.

Further reading

• Quotes and tenders: turn every request into a quote

• Quoting Software Compared for Distributors and Manufacturers

• Quote Creation for Lighting Manufacturers: AI for BoQs

• Customer story: REHAU (building technology manufacturer)

• Mercura vs. Distro: AI Quoting for Distributors Compared

Frequently asked questions

What is CPQ?

CPQ stands for Configure, Price, Quote and refers to software that configures products according to rules, calculates prices automatically and creates quotes from them. It is mainly used for configurable products with many variants.

Which CPQ software is there?

Well-known vendors include Salesforce with Revenue Cloud, Tacton with a focus on manufacturers with high variant diversity, and Infor. Many ERP and CRM vendors have their own CPQ modules. Above all, compare configuration logic, ERP connection and maintenance effort.

What does CPQ software cost?

CPQ software is usually quoted individually. Costs depend on the number of users, modules and above all on the effort of building and maintaining product models and rules. Ask for license and implementation costs separately.

Is CPQ the same as a product configurator?

No. The product configurator is one part of CPQ. CPQ also includes price calculation, quote creation and often approval processes.

What does quote-to-order mean?

Quote-to-order refers to the process from creating the quote to creating the order. It covers inquiry, quote, follow-up and the conversion of the order into a sales order in the ERP.

Do I need CPQ if I use AI for quotes?

Only if you sell configurable products with fixed rules. AI reads and matches inquiries but does not replace a rule set for complex configuration. For catalog and standard articles, the combination of AI and ERP is usually enough.