In Part 1 of this series, we looked at what commercial complexity actually costs manufacturers. These costs are often hidden across the commerce chain: slower deal cycles, margin erosion, reps who can't quote without an engineer in the room. This is a real problem known well to manufacturers.
The next question then becomes how to solve for that complexity.
Two solutions come up repeatedly in these conversations: CPQ (configure, price, quote) and CLM (contract lifecycle management). Both address commercial complexity and can deliver meaningful ROI. For commercial leaders trying to figure out where to invest first, the debate can feel circular. Should we fix quoting first, or contracting? Which will drive the biggest impact to the business?
The honest answer: it depends. But that doesn't mean the decision is arbitrary. There's a framework for thinking through it, and it starts with understanding where friction lives in your business.
The Quote isn’t the Only Source of Friction
Most manufacturers who come into this conversation are rightfully focused on pricing and quoting. Deals take too long to configure. Pricing errors slip through. Reps get stuck in an approval queue to get to the right price and discount level. But quoting is just one part of the overall commerce chain. Often, the friction manufacturers experience spans the entire commercial journey, and it compounds at every handoff. Here are a few examples:
- At pricing and configuration: Reps can’t build an accurate quote without engineering support. Wrong configurations reach customers. Discount requests disappear into approval queues. A quote that should take hours takes weeks.
- At negotiation: Non-standard terms trigger legal review on every deal. Redlines happen in email, but nobody has the definitive version of the contract. The customer's patience runs out before the deal closes.
- At contracting: Documents get built from scratch or from templates that haven't been updated in years. Executed contracts aren't searchable. Six months later, nobody can tell you what was actually agreed to.
- At invoicing and billing: What was quoted doesn't match what was contracted, which doesn't match what gets billed. Revenue recognition gets complicated, causing disputes. Finance spends time reconstructing deal history instead of closing the books.
- At renewal: The date lives in someone's calendar or isn’t known at all. Customers auto-renew at pricing that no longer reflects cost reality. Expansion opportunities get missed because nobody was watching.
Each of these points is a real cost center that causes a structural drag on revenue growth. The industry term for it is revenue leakage, and for manufacturers operating on thin margins under tariff and input cost pressure, it adds up fast. Unfortunately, your customers not only get caught in the middle of these internal processes, they also experience the negative outcomes from them.
World Commerce & Contracting research found that organizations lose an average of 9.2% of contract value due to poor contract management after signature. Quoting-side friction carries its own cost: configuration errors that reach customers, reps who can’t price without specialist support, and quote cycles that drag on while competitors close faster.
CPQ addresses the friction that happens before a contract exists. CLM addresses what comes after. Both matter, and the question of where to start is the most important commercial decision your team will make this year.
CLM or CPQ: Where Do You Start?
The CPQ vs. CLM debate is most useful when it stops being a debate and starts being a diagnostic tool. Here are three questions that cut through the noise.
Question 1: Where is the pain most acute right now?
Start with CPQ if:
- Quote cycle times consistently exceed two weeks
- Configuration errors are reaching customers
- Reps can't price new or complex products without pulling in engineering or product specialists
- Win rates vary significantly by rep, which is usually a tribal knowledge problem
- New product launches take 60 days or more to quote consistently across the sales team
- The business needs to handle complexity around renewals, changes, expansions, and upgrades without treating every transaction as a brand-new deal
Start with CLM if:
- Contracts sit in redline for weeks without resolution
- You can't quickly locate or report on what's in your active contract portfolio
- Renewal rates are declining or unpredictable
- Legal is a consistent bottleneck on deal closure
- Post-signature obligations (SLAs, delivery terms, pricing commitments) aren't being tracked or enforced
Be honest about this. If your CPQ-adjacent pain is a four out of ten and your CLM pain is an eight, start with contract lifecycle management (CLM). The temptation to fix quoting first because it's more visible to the sales team is real. It's also often wrong.
Question 2: Where are your data, systems, and processes most ready for change?
Another (sometimes overlooked) step is to dig into the health and quality of your current data and systems. This is often where implementations run into trouble.
Configuration, Pricing, and Quoting (CPQ) requires clean product catalog data, defined pricing rules, and CRM integration. If your product data is a mess, CPQ configuration becomes a data cleanup project first and a software project second. That extends timelines and increases cost. It doesn't mean you shouldn't start there, but you need to go in clear-eyed.
CLM is often an easier starting point because it can begin with existing contract templates and doesn't require deep ERP integration on day one. The data readiness bar is lower. For organizations that want faster time-to-value, that's a real consideration.
Question 3: What is your company trying to accomplish in the next 12 to 24 months?
Solution choice should follow strategic context, not just current pain. A few scenarios worth walking through:
- Launching a new product line or entering a new market: CPQ first. Quoting infrastructure needs to be ready before go-live, not after.
- Pursuing or preparing for an acquisition: CLM first. Contract visibility and compliance are due diligence requirements. Investors and acquirers want to know what's in the portfolio.
- Shifting to recurring revenue or service contracts: Both. Depending on the nature of renewals, CPQ can support price ramps and automating new quotes. CLM's renewal and obligation tracking is also critical in that you can't manage what you can't see.
- Accelerating sales headcount growth: CPQ first. New reps need guardrails. Tribal knowledge doesn't scale.
- Reducing legal costs or litigation exposure: CLM first.
Most manufacturers will recognize themselves in more than one of these use cases and that's fine. The goal isn't to find the perfect answer; it's to find the right starting point.
The Final Answer
There's no universal right sequence. CPQ and CLM address different stages of the same problem, and the choice of where to start isn't a product decision so much as an organizational one. It reflects where you are, what you can absorb, and what the business most needs to win right now.
What we do know is this: manufacturers who address only one side of the equation eventually feel the gap. Fast, accurate quoting doesn't help you if contracts take six weeks to close. Tight contract management doesn't matter if the quotes feeding into it are wrong.
The destination is a connected commerce chain where pricing, quoting, contracting, and renewal work as one system. In Part 3, we'll show what that connected system looks like in practice, and why the manufacturers building toward it are pulling away from the pack.
Learn more about how Conga CPQ and CLM solutions can support your business:
Your Guide to Conga Smart CPQ: Faster, Smarter, and More Accurate B2B Quoting
Ultimate Guide to Contract Management
