Business proposal management and RFP response- Part 3

The Characters in a Proposal Management endeavor, and their responsibilities:

  • Leadership

—  Recommend / Approve pursuit team resources

—  Makes final call Bid/No Bid decision

  • Pursuit Lead (from Operational Vertical or Sales)

—  Owns the Business Opportunity

—  Determines sales strategy and win themes (working with Leadership)

—  Performs content review

—  Complete executive summary (working with Proposal Specialist)

—  Provide direction to pursuit team

—  Responsible for overall soundness of final proposal

  • Sales (The Sales representative could be chosen to be the Pursuit Lead in many cases)

—  Explains the client scenario and provides client viewpoint

—  Communicate key issues within client that affect win / loss

  • Solution Architect

—  Develop tie between prospect’s business and host organization’s capabilities and solutions

—  Develop delivery approach, service and technical solutions

—  Provide costing and pricing support

  • Proposal Manager (Sometimes the Proposal Manager doubles up as the Pursuit Lead)

—  Schedule internal governance checkpoints

—  Timelines and milestones management for RFP

—  Action items tracking and escalation to Practice Leads

—  Issue Management and escalation to Practice Leads

  • Proposal Writer

—  Provide presentation development support: to sub-teams and Solution architect; documentation edit – theme alignment

—  Analyze incoming client RFP requirements and ensured response is compliant

—  Coordinate research, editing, writing and production with designated staff (along with Proposal Manager)

—  Follow-up on missing information (along with Proposal Manager)

—  Manage content (along with Proposal Manager)

  • Other Stakeholders

—  Finance / Legal / Compliance etc.

 

 

*Previously on Business proposal management and RFP response: Expectation Setting. Introduction. When NOT to bid.

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How to know when NOT TO bid for an RFP

This comes as the response to a comment to a previous article: it makes sense to expand on the point.

The former Chief Commercial Officer at my previous organization, Rob, championed and created the template for a “Pond Map” which every practice / vertical leader had to create for his/her practice. The concept was about ‘which pond do you want to fish in?‘ i.e. who is your client? Parameters were created to define and drill deep into the identity of the client for each practice. And every new RFP and every new proposal was expected to go through this pre-defined pond map (note: pre-defined by the practice), and were rejected if the client requirement and the pond did not fit.

A Few observations:

  1. Everyone likes to throw a bowl of spaghetti on the wall, hoping that some will stick. Maybe some will… but the resources used up for this exercise is immense and eventually worthless, especially for an organization which does not have infinite resources.
  2. It trained me and many other strategy team members to ask a basic question to every practice leader, even at the business-case stage – ‘who is/are the client that you would DEFINITELY NOT go for”. Unsurprisingly, the most common response from almost every practice leader was – ‘you know, I don’t think anybody is out of our pond”.
    Well, if everybody is in your pond, you don’t even know what is your pond. And that would get us back to spaghetti throwing.
  3. One common refrain from Sales and Practices was that – There is sureshot money here, would you not go for this deal? While it was not openly said, I think answer is ‘Yes’. every deal is a sureshot win until the prospective client chooses someone else. The process has to be more important than a hunch.

This lets the organization rationally judge and say YES or NO to go for a project. That is: you have yourself defined your pond. This deal falls out of the pond. So this project is out, we are not bidding for it. Even if the tool is not used, the concept is certainly something that every organization should embrace.

Helps in way too many things too. Consider this: if you have defined the opnd you want to fish in, how easy does the initial market identification and market sizing become?

This was one smart, smart tool. The tool is copyrighted by Rob (link), thus I don’t think I can speak about the specifics (parameters and all) here. So decided to just share with you, reader of this blog, the concept.

*Previously on Business proposal management and RFP response: Expectation Setting. Introduction.

What is the Right Price for my product/ service?

“In spirit, pricing should ensure that you will survive”

There are multiple internal and external factors that need to be considered, and there is an important need to identify the pricing objective, before actually getting into finding the price.

Start asking yourself – What is my product/ service positioning (luxury product at low price could actually impact your image)? How will changes in price impact demand for my product/ service (do some market research)? How much are the COGS and the Fixed Overheads related to my product/ service (Gross margin should be sufficient to cover overheads)? What are other external factors that can impact my pricing (such as regulatory compliances, competition etc)?

Once the above stated questions are asked, identify the pricing objective – Short-term Profit Improvement (cash crunch situation), Short-term Revenue Improvement (expanding the market share now, and reaping the benefits in future through economies of scale and scope), Profit Margin Improvement (Low/ unpredictable Sales situation), Quantity Improvement (creating a future demand by making masses habitual to product/ service now || also, take advantage of economies of scale in future), Differentiation Creation (Low/ High Price Product/ Service), SURVIVAL (Intense competition).

As you know what exactly you want to achieve, now, choose the appropriate model (Cost-plus: Price equal to Cost plus Margin, Return Based: Price proportional to the ROI created for customer, Target Return: Price set to achieve target ROI, Perception Based: Price set at a level which is perceived as “fair price”).

“Remember, your price should always be higher than your cost, never be higher than market perception of “fair price”, and most importantly, definitely be enough higher to cover cost of normal variations in sales volume”