Disconnected systems are one of the biggest obstacles to operational efficiency. It’s easy for quoting tools and backend systems to operate in silos, inadvertently creating delays, pricing errors, and internal conflicts that can stall revenue.

That’s where CPQ (Configure, Price, Quote) and ERP (Enterprise Resource Planning) systems can have a huge impact. When properly integrated, these systems solve data gaps, streamline operations, and accelerate the cash-to-quote cycle.

However, CPQ and ERP systems are entirely separate from one another, and neither is a one-size-fits-all solution for every business.

In this guide, we’ll break down what CPQ and ERP systems do, how they differ, and why keeping them integrated is essential for modern sales and operations teams.

What is CPQ?

CPQ (Configure, Price, Quote) software helps sales teams close deals faster by automating the quote generation process. These solutions are built to handle complicated pricing, complex products, and layered discount structures without the need for spreadsheets or manual checks.

At its core, CPQ guides sales reps through a structured flow. Reps will select products, apply pricing rules, and generate customer-ready quotes from within the same interface. The level of automation and the incorporation of customer data from CRM (customer relationship management) software and similar tools reduce the chance for errors, speed up internal approvals, and ensure consistent pricing across deals.

CPQ is particularly useful for B2B companies with large product catalogs and service models. By standardizing how quotes are built and priced, CPQ ensures that sales teams move faster and stay focused on selling rather than chasing after approvals for fixing self-inflicted mistakes.

How CPQ works in modern sales processes

In modern businesses, sales processes rely on a tight integration between systems.

CPQ plays a central role in that ecosystem by consolidating product customization and quote generation into a single, end-to-end tool. Companies can frontload all related products and services into a unified product catalog, set rules around discounts and approvals, and then use guided selling processes to help reps with decision-making around order fulfillment.

These solutions become even more powerful when combined with other internal systems (CRM, ERP, etc.). When building a quote, CPQ systems can pull in both product and customer data from a CRM, apply pricing logic based on ERP inputs, and generate a quote based on a customer’s needs. This structured flow minimizes errors and eliminates the guesswork commonly found within manual processes.

Depending on your predetermined rules and workflows, quotes can be sent to customers or passed over to a supervisor or review team for additional scrutiny. This allows teams to maintain control over the quoting and review process while scaling business operations and keeping teams aligned during the order flow.

Core features of CPQ software

While all CPQ solutions vary slightly, most try to optimize the quoting process by eliminating the need for third-party spreadsheets, tribal knowledge, and disconnected tools.

Here’s what you’re likely to see in any CPQ tool:

• Product configuration tools allow reps to build orders based on preset product rules and dependencies. Using configurable rules, supervisors can ensure that only valid combinations are quoted, thereby reducing rework and eliminating seller confusion.
  
• Pricing and discount logic applies company-approved rates, tiered pricing, or customer-specific discounts automatically, without required manual lookup or managerial overrides. For brands with loyalty pricing and vendor agreements, this can dramatically accelerate the quoting process.
  
• Automated quote generation transforms product selections into polished quote documents by using pre-formatted templates often built to include specific branding, contract terms, and legal disclaimers.
  
• Approval workflows help mitigate risk by routing quotes that exceed certain rules and thresholds to managers or finance teams for additional review and approval before they reach the customer.

The level of flexibility that teams have over various aspects of the CPQ process will fluctuate between product solutions. For example, PandaDoc provides a built-in, drag-and-drop document builder for template design and generation, giving teams near-total control over the look and feel of any generated document.

However, this isn’t always the case. Many CPQ products offer limited control or require reps to configure products in a specific way for the system to function properly. How much flexibility and customization you need for certain aspects of your CPQ process (branding, rules, etc.) can greatly impact which platforms are a good fit for your sales orders.

What is ERP?

ERP (Enterprise Resource Planning) software enables businesses to manage essential functions such as finance, procurement, inventory management, and payroll within a centralized system. These systems serve as a single source of truth for internal operations, providing executives and back-office teams with enhanced visibility into performance across the entire organization.

Unlike CPQ systems, which can often operate independently from the rest of your tech stack (but are improved through integrations), ERP solutions require connections to other sales tools and enterprise management software, as well as the data they provide. When configured properly, ERP systems become the operational backbone of the business, keeping track of orders and inventory levels while providing better forecasting and reporting across the entire organization.

ERPs are ideal for companies that have grown beyond the limits of spreadsheets and departmental silos. Using these tools can provide a level of structure, visibility, and control that can’t be achieved through disconnected systems.

How ERP systems help businesses succeed

Broadly speaking, ERPs are behind-the-scenes platforms that try to eliminate inefficiencies by using real-time data to align teams and optimize business processes. By connecting critical systems across departments, ERPs can ensure that all teams are working from the same set of information.

Typically, this requires access to multiple APIs or prebuilt integrations in order to facilitate data transfers between platforms. Once everything is connected, ERPs can assist with everything from automated data entry to records validation, data syncing, and beyond.

The result is better collaboration, cleaner reporting, and more predictable outcomes across the entire organization. Because ERPs help to eliminate the delays and inconsistencies that come from manual handoffs and independent departments, it’s much easier for leadership teams to locate and solve operational problems.

However, while ERP systems vary greatly in scope and scale, they’re largely data consolidation and reporting tools. Unlike CPQ and other systems, they’re less likely to have a direct impact on day-to-day operations. Instead, ERPs allow teams to spot problems and implement fixes by changing other workflows, processes, and software usage.

Core components of ERP software

A well-implemented ERP system brings together the tools that leaders need to run their business with greater clarity and control.

Here’s a look at what most ERP systems have to offer:

• Inventory and supply chain management tools keep product movement efficient and traceable so that businesses can maintain service levels, optimize carrying costs, and improve customer satisfaction.
  
• Finance and accounting modules provide real-time financial oversight and can even automate invoicing, reporting, and compliance tasks.
  
• Procurement modules allow teams to source vendors, track contracts, and manage approvals while reducing waste and improving supplier relationships.
  
• Human resources systems can support payroll, time tracking, benefits, and employee data management from a single interface.
  
• Order and billing capabilities can turn quotes into invoices and track payments through to completion.

It’s worth keeping in mind that, while ERP systems can handle many of these tasks, they often do so by triggering workflows or controls within connected software.

For example, PandaDoc can be used to create almost any kind of business document, including quotes and invoices. While an ERP system may be able to “create” an invoice, it may do so by triggering a workflow that sends all relevant data to another software (PandaDoc, in this example), where the invoice is actually created and sent.

Some larger ERPs (SAP, Oracle, etc.) can generate documents internally or allow users to control various aspects of the business from within the dashboard. However, most ERPs excel in providing the data needed for business growth. While your ERP may be able to execute a given task, it’s often not the best tool for the job, and teams may be better served by leveraging specialized software for a given use case.

ERP vs CPQ: What’s the difference?

Although CPQ and ERP systems are highly useful for efficient business operations, they serve very different purposes.

CPQ solutions primarily support front-end sales activity while ERPs are largely aimed at back-office operations. Even so, there are various exceptions for each platform. For example, the product catalog attached to a CPQ tool can be a great way to keep products and services organized and bundled for the sales team.

In the sections below, we’ll break down how these systems differ when integrated into a company workflow and how each handles various business needs.

Where CPQ and ERP fit within a business

One of the biggest distinctions between CPQ and ERP tools is where each system operates within a given business process.

CPQ tools are used at the front of the sales cycle and are designed to help customer-facing teams streamline the buying process. Teams equipped with these tools can create custom product configurations, apply pricing logic, and generate accurate quotes. This added speed and responsiveness means that reps can handle more customer orders without getting bogged down with time-consuming administrative tasks.

ERP platforms operate in the back office, where operations, finance, and logistics teams manage tasks like order fulfillment, vendor payments, and payroll. These systems can track what was sold, the order channel (various e-commerce sites, physical retail, direct-to-order, etc.), order delivery status, overall company performance, and more.

While CPQ focuses on delivering a great buying experience, ERP makes sure that internal processes run smoothly after a transaction is complete. Both provide powerful automation options across multiple departments, and when implemented correctly, can reduce internal friction while improving the overall customer experience.

Primary users

CPQ and ERP systems are largely designed for different users, and that distinction is often reflected in the departments that they serve.

CPQ software is built for customer-facing teams. That includes sales reps, account managers, and solutions engineers, who rely on it to configure products, apply pricing, and generate quotes. Teams also use CPQ to enforce pricing policies and manage quote approval workflows.

ERP systems are used largely by back house teams like finance, operations, HR, logistics, and procurement. Here, ERPs manage common, day-to-day business activities like order processing, vendor management, and performance tracking.

Each system is optimized for the needs and workflows of its primary userbase. CPQ solutions tend to focus on speed, flexibility, and usability to help sales close deals even faster. ERP solutions prioritize structure, compliance, and accuracy to support business execution and planning.

Data flows

While ERP and CPQ serve different users, data is often shared and synced between them and with other software solutions in the company tech stack.

For example, information in a CPQ-generated order can be automatically sent to the ERP. This might include critical details like customer information, product selection, pricing, and delivery timelines. Teams can use this information to fulfill orders, generate invoices, and manage inventory without requiring separate, manual inputs.

In more sophisticated integrations, the ERP can also feed live data back into the CPQ. This could include current stock levels, relevant pricing adjustments, or estimated shipping timeframes. This additional information can help sales reps set accurate expectations with customers.

By automating how data moves between these systems, business can increase deal velocity while reducing risk and creating a more cohesive customer experience.

Scalability and system architecture

When it comes to scalability, CPQ and ERP systems take very different approaches.

The effectiveness and extendability of CPQ systems is largely limited to sales departments and RevOps teams. While it can be expanded by adding additional products, services, templates, and rules, CPQ architecture will never have a place in managing back-end operations. By deploying a CPQ solution across the entire organization, it’s possible to ensure that everyone is selling a broad variety of products in the same way.

ERP systems offer much greater scalability and modularity, but are more limited in niche functionality. These solutions are designed to consolidate data from a broad collection of internal systems and departments. Because ERPs are so vast, many come with modules and subsystems designed to assist certain teams or departments in their role. However, that scalability comes with increased complexity. ERP implementations often involve longer timelines, deeper IT involvement, and stricter controls.

From a structural standpoint, CPQ tools become more robust as more product information, templates, and rules are added — offering coverage for a growing variety of use cases — but the platform will always be a sales tool. ERPs grow by collecting data from more and more departments until they become an operational hub for the entire business, but they lack the functionality to actually handle most day-to-day operations by themselves.

How CPQ and ERP work together

On their own, CPQ and ERP systems solve different problems. Together, they can be used to support a seamless quote-to-cash process that aligns sales with the rest of the business.

The integration typically flows from CPQ to ERP. When a quote is finalized, the system passes structured data to the ERP. This includes everything needed for fulfillment, including product SKUs, pricing details, order information, and delivery details.

The ERP then uses that data to trigger backend processes across the rest of the organization. Inventory can be allocated, orders processed, vendors notified, and invoices generated. In tightly integrated systems, the ERP might also push updated stock levels or lead times back to the CPQ to improve accuracy when quoting.

The result is a much faster and more coordinated handoff between sales and operations. CPQ drives the sale while ERP ensures that businesses can fulfill orders in a timely manner. Working together, both systems reduce overall friction and improve order visibility across departments.

Benefits of integrating CPQ with ERP

Connecting CPQ and ERP systems offer measurable benefits across the entire organization. By combining these tools, businesses can move faster, reduce errors, and create better alignment across departments and teams.

Key benefits of an integrated system include each of the following:

• Faster quote-to-cash cycle. By automating the data flow between CPQ and ERP, brands can significantly reduce the time and headache required to move from quote creation to operational invoice. Reps don’t need to wait for operations to catch up. Instead, automated fulfillment processes can begin as soon as a deal is closed.
  
• Reduced manual work/data entry. Without integrations, critical data may need to be entered multiple times across various departments. For example, a rep may need to enter customer details into the CPQ (if no CRM integration is connected), but the fulfillment team might need to input that information into the ordering system manually if the CPQ doesn’t pass to them via the ERP. Connecting all systems removes these headaches and reduces the potential for errors along the way.
  
• Improved pricing accuracy. If a connected ERP is managing pricing data, it can pass that information directly to the CPQ. With real-time pricing and inventory data available during the quoting process, sales teams can build quotes based on the most current information, minimizing misquotes, pricing conflicts, and bad delivery estimates.
  
• Increased team efficiency. When data moves automatically between systems, teams spend less time following up, rechecking orders, and correcting mistakes. This leads to better internal collaboration, less administrative effort, and more reliable workflows.
  
• Better customer experience. Faster quotes, fewer errors, and improved communication means that customers will enjoy a smoother buying process from first contact all the way to final delivery. Integrated information helps to ensure that reps are working with the most accurate and updated information while automating backend processes for improved order management.

While these benefits are powerful, it’s also worth noting that the systems involved can require significant investment in both cost and time.

ERP systems are notoriously difficult to configure — especially for businesses using homegrown or outdated software systems — and may be out of reach for smaller businesses due to cost. Similarly, CPQ solutions are only effective as long as teams actively maintain them. Often, that requires constant inputs and adjustments from a variety of departments, which need to oversee everything from template design to product listings, bundles, and pricing.

However, for brands with the resources to maintain them, these systems can become powerful force multipliers that increase productivity across the organization.

Choosing CPQ software that integrates with your ERP

To get the most out of your CPQ and ERP systems, they need to work together as part of a unified solution. Choosing platforms that can connect with the rest of your tech stack is essential for improved data handling.

In this section, we’ll break down what to look for in a CPQ platform and how these systems can support your quote-to-cash process.

Key features to look for

When integrating CPQ software with your ERP system, you’ll need to find a system with a flexible workflow that doesn’t break every time your product catalog changes. The right CPQ will reduce manual effort, improve pricing accuracy, and keep sales teams focused on selling.

Here’s what to look for:

• Robust APIs or prebuilt ERP integrations for real-time data handoffs and syncing across multiple systems.
  
• Customizable templates for quotes, proposals, and contracts.
  
• Dynamic pricing tables tied to rules, discounts, or customer-specific rates.
  
• Bundling and product configuration logic to simplify complex quoting processes.
  
• Approval workflows to route quotes to supervisors based on deal criteria.
  
• CRM compatibility to ensure customer data flows easily into each quote or opportunity.
  
• Low-code or no-code document editing so teams can update templates or pricing logic without waiting for IT.

A platform with these capabilities gives teams the structure they need without slowing down the sales process after implementation is complete.

Document editing tools, built-in pricing tables, and added pricing logic allows for flexibility in quoting while leaving guardrails in place. That way, approved quotes go out faster and other departments can act quickly when a deal closes.

Aligning CPQ to your ERP-driven workflows

For ERP and CPQ systems to work effectively together, the quoting process needs to fit cleanly into your existing operational flow.

That means more than just pushing data between systems. Teams will also need to configure the CPQ so that it mirrors how the business handles order processing and fulfillment. During configuration and setup, users will need to map how orders move through the ERP and determine the triggers at each stage of the process.

Some questions to ask:

• What data fields are required before the ERP can accept an order?
• At what stage is inventory actually checked?
• When are invoices generated, and what information is required?
• What actually triggers the fulfillment process?
• What data format does the ERP expect for incoming orders?

These checkpoints should shape how the CPQ is configured. For example, if certain product bundles require special handling or approval within the ERP, those same rules should be enforced in the CPQ before a quote is ever sent. Taking these steps eliminates miscommunications between platforms where the CPQ offers a product or solution that the ERP isn’t equipped to fulfill.

Teams also need to be sure that any CPQ under consideration can align with the existing ERP data structure. This is critical for SKUs, pricing logic, customer records, and product hierarchies. If prebuilt integrations aren’t available, much of this data can be mapped and assigned via API by assessing endpoints within the documentation.

If these systems use different formats, field types, or naming conventions, syncing may not be available and getting the systems to talk to one another becomes far more challenging. The closer these elements match, the more reliable and accurate the integration will be.

Simplify quoting and contracts with PandaDoc

Integrating CPQ and ERP platforms can give teams the structure they need to operate with greater efficiency. However, document generation is often the missing link inside that workflow.

PandaDoc bridges that gap with a robust and flexible solution for creating, sending, and tracking all business documentation from start to finish. Combined with built-in CPQ tools, including a product catalog, pricing logic, approval workflows, and electronic signatures, PandaDoc makes it easier than ever to prepare orders and push them over the finish line.

Want to see if PandaDoc is the right CPQ and document solution for your team? Get in touch with a product expert today or sign up for a free 14-day trial and give our document creation workflow a try.

oc handles document design and creation while products and customer data are stored within your existing CPQ solution.

Using a two-way data sync, the CPQ passes relevant information to PandaDoc, where it is added to a template to generate a final quote. However, all customer and product data remain within the CPQ solution and aren’t retained by PandaDoc.

Disclaimer

PandaDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDoc services are governed by our Terms of Use and Privacy Policy.

Frequently asked questions

• What is CPQ in ERP?

  CPQ (Configure, Price, Quote) isn’t typically built into ERP systems, but it can integrate with ERP platforms to support order processing and fulfillment.

  In this context, CPQ handles front-end quote creation, including product configuration and applied pricing rules, while ERP manages inventory, billing, and backend operations.

• What is CPQ used for?

  CPQ software is used to help sales teams generate accurate, customized quotes with greater consistency and accuracy. Learn more about the benefits of CPQ tools. 

  This is accomplished by loading products and services into a catalog, assigning pricing rules and logic, and preparing a quote template to handle the information. For even greater efficiency, CPQs can be hooked up to a CRM (customer relationship management) software to import customer data.

  Reps will build quotes using items in the catalog. Pricing rules apply during product selection. If importing data from a CRM, customer information can be automatically added to the order. When the product selection is complete, all product, pricing, and customer information is loaded into the  prebuilt template, producing a detailed, branded quote in a matter of seconds.

• Is Salesforce both a CPQ and ERP?

  No. Salesforce is a CRM solution with an optional CPQ available as an add-on; it’s not an ERP. Learn more about the difference between CPQ and CRM

  By itself, Salesforce CPQ works primarily within CRM workflows. However, it can be integrated into an ERP to pass finalized quotes and order information into back-office systems for processing, invoicing, and fulfillment.

• How does CPQ enhance ERP functionality?

  Generally, CPQ enhances ERPs by feeding the systems accurate, structured data at the point of sale. This includes product configurations, pricing details, and customer information.

  On the backend, ERPs take this information and use it to manage inventory, initiate order fulfillment, and track billing without requiring manual data entry or correction.

  Overall, this strengthens the quote-to-cash process by creating a more reliable data flow between the front- and back-of-house systems.

• Can CPQ and ERP be used without a CRM?

  Sure, but it’s not ideal, as the two systems complement one another. A CRM connects customer data to the quoting and fulfillment process, making it easier to personalize quotes, manage deal stages, and maintain lifetime customer records.

  Without a CRM, sales teams must enter customer information manually into the CPQ, increasing the risk of errors and inefficiencies. Record keeping will also need to be handled manually, which often includes storing quotes and invoices in complex file structures that aren’t easily searchable.

• Is PandaDoc a CPQ or does it integrate with CPQ systems?

  Both! PandaDoc is a CPQ and document management solution rolled into one and integrates with leading CRM systems like HubSpot, Salesforce, and Pipedrive.

  How you choose to use PandaDoc will depend on your existing tech stack, but the platform is flexible enough to handle most document design tasks, as well as product design, quoting, and payments.

  On top of that, PandaDoc can also integrate with other CPQ platforms, including Salesforce CPQ, PipeDrive CPQ, and HubSpot CPQ. In this configuration, PandaDoc handles document design and creation while products and customer data are stored within your existing CPQ solution.

  Using a two-way data sync, the CPQ passes relevant information to PandaDoc, where it is added to a template to generate a final quote.  However, all customer and product data remain within the CPQ solution and aren’t retained by PandaDoc.