Configure, price, quote (CPQ) software is a term used in business to describe software systems that help sellers quote complex and configurable products.
An example could be a software as a service company. If the customer chooses a certain service tier (enterprise edition), the choice of features may be limited, because certain service tiers might not fit the cost of the service provided. Given a certain choice of service tiers, the choice of features may be limited (e.g. number of users, SLA of support, security assurance), and so on. If the product is highly configurable, the user may face combinatorial explosion, which means the rapid growth of the complexity of a problem. Thus a configuration engine is employed to alleviate this problem.
How to overcome the challenges of implementing CPQ?
Elaine Tsai has written in detail about how to think about facing challenges with CPQ implementations.