Gartner defines configure, price and quote (CPQ) applications as software that enables sales organizations to automate and optimize the creation of quotes and capture of orders. A CPQ application is a sales tool that captures the new goods and services a customer wants to buy or the changes a customer wants to make to existing goods and services. While generally focused on assisted sales channels, CPQ capabilities such as product configuration and pricing must be shared with the self-service commerce channel. The new purchases and changes must be priced and a binding contract must be formed with the customer before sending an order to downstream fulfillment systems.
A “subscription” is a contract between a supplier and a customer for the supply of a product or service over an extended period of time. The price of the subscription may be fixed (for example, access to a digital newspaper for $199 per year), variable depending on the level of usage (for example, mobile phone usage or flight hours on an aircraft engine) or a mix of fixed and usage-based charges. One or more subscriptions are recorded on a “service contract.” “Recurring billing” is the periodic (for example, monthly or annual) invoicing of a customer to collect payment for one or more subscriptions. “Subscription management” is the process of selling new subscriptions and amending existing subscriptions over time.