Part II – The Major Cost Influencers in the Business Development Lifecycle
The greatest cost Influencers are generally the ones shown below (in no particular order):Proposal Strategy Proposal Approach/Methodology RFP Requirements and Approach Pursuit strategy
Pursuit strategy has a direct influence on the overall cost. B&P costs rise alarmingly when there is no clearly defined plan to work to or to manage by. Most if not all of the companies that train proposal methodologies teach that the pursuit phase is the crucial step in the capture process, and as such, should receive the most attention. While I agree with this concept, if performed effectively, I also have seen companies shun this step completely (working from issuance of the solicitation, focusing entirely on the proposal effort) and still be quite successful. Because the initial pursuit (sales) process is a critical step does not mean it needs to be the most expensive part of the process. Careful account planning and positioning of the company can be accomplished while paying attention to costs. Client Account Plans are “Must Haves” and should be developed for each high-level customer base. Strategic sales, or Capture Plans should be developed below and within each account for each opportunity identified to outline the strategy to win that particular solicitation. The Miller and Movich website outlines requirements for Account Plan management and implementation. This is a good model to use for the client base, as the information contained within it stays constant for that particular agency (Corps of Engineers, for Example) but more and different information is required for each individual opportunity within the agency. To give an example, the Client Account Plan is used for placing all of the information for the Client; let’s say in this example the Air force. All of the information about Air Force as a client in general will remain accurate and true regardless of the opportunity (target) the company decides to bid on. But, within the Air Force, each Major Command (MAJCOM - ACC, AETC, AFLMA, AFMC, AFSPC, AFSOC, AFRES, AMC, PACAF, USAFE, 10 ABW, 11th CONS, etc) has individual procurement offices staffed with procurement officials who all do the same job with the same rules, but they do them slightly differently. If, for example, an O&M RFP is coming out of USAFE (US Air Forces in Europe) the client needs will be much different than the same type O&M job at Tinker AFB. For this reason, the information below the client Account Plan should be specific to capturing that particular project in order to ensure that time and effort is not wasted arranging travel, making contacts, or in having conversations with the wrong individuals, thus expending effort unproductively, and adding to the cost. The schedule for the pursuit phase should also be clearly defined and bounded with the information needs the sales team identifies that best qualifies the company’s offer. Too much time equates to too much cost. It needs to be balanced with what is not just the unknown, but what is essential to be known in order to be successful. Proposal Strategy
The proposal itself, of course, has the most influence on B&P. How the proposal is developed needs to be given careful consideration to mitigate cost “creep” and budget overrun. Below we discuss some of the leading contributors. ➢ Schedule Impact on Cost
Proposal Scheduling is an oft-debated subject…the question of when to start is always at hand. There are several choices, but schedule is still one of the largest cost contributors. Some prefer to wait until the solicitation is issued, others proceed based on Freedom of Information Act (FOIA) data or Agency issued draft. What is the right timing? One that gives you the greatest advantage over your competition is the easy answer, given your “need” to win, strategy, past performance, incumbency, and a hundred other variables. There simply is no “right” answer. Additionally, the schedule needs to be controlled through the different phases of the solicitation. If we are the incumbent contractor, there is a tendency to begin either too early or very late. Too early adds unnecessary cost to the Pursuit Phase and is often information already in the company’s possession. Too late results in throwing too many resources at the proposal, resulting again in additional unprogrammed costs. Remember the adage - “nine women cannot make a baby in one month”. Of course, the longer the proposal schedule, the higher the proposal cost. A 45-day proposal effort normally will be higher than a 30-day effort. Having said that, there are still some scheduling nuances to consider. Just because the government gives offerors 45 or more days to prepare a response does not mandate you take all of that time. Many times, companies simply continue to polish the same words without adding real substance. Another contributor to this is extensions and Q&A. Sometimes it is easy for the Proposal Manager to want to keep the team together working “just in case”, even though there are no real impacts or changes required on the proposal. Questions from the Government must be responded to in a timely manner, and usually come after the proposal team has started other projects, or, if consultants were used, have all disbanded and can add cost if they need to be reassembled to answer questions and revise the proposal. If the effort is longer, say 45 to 60 days, care must be taken to ensure that authors are available for the whole duration, and that the team can stay engaged without adding multiple trips to home locations, or be distracted by other business (or personal) reasons. Each trip away does more than just add the cost of the travel to the B&P. It also adds the time to ramp up back to where the author was before he stopped writing, plus any time to grasp what has occurred in other sections or with the solicitation itself since his leaving. In fact, I have seen proposal costs almost double from rotating multiple authors in and out during the proposal. This normally stems from using in-house resources that have a job other that proposal writer, who suddenly are pulled away to go do something else, leaving a void in the proposal team. By the time the new person is found, assigned, and gets up to speed, that person is essentially right where the other person was when he left off, but both people charge to the proposal and there is an additional schedule impact. (If the first person worked a week, and the second person worked a week learning what he did, then you have two weeks of charges but only the same week of schedule/proposal progress). Repeat this for five or six authors (and I have seen it happen more than that during a single proposal) and the costs add up quickly. Also if there is an oral presentation in addition to a written proposal effort the team configuration and schedules must be controlled so as not to begin too early or too late (resulting in throwing more resources at it, thus increasing Proposal cost). You will most likely need two teams working in parallel, so that all of the materials match. This will almost certainly add cost, so it is essential that you learn there will be orals early on during the pursuit phase so that you can plan and budget accordingly. The solution here is to craft a proposal schedule that accommodates the workload using only those resources needed at that point in the process where they have the most influence and are the most effective; and in knowing when the finish line has been crossed, regardless of time remaining. ➢ Proposal Team Contribution to Cost
Tied to the above subject, author assignment can be a leading cost contributor to the proposal. In a company that uses existing project resources as authors, proposals always cost more than in companies that use internal technical writers or paid consultants. This is because they do not have to learn how to do a proposal while on a proposal. Some companies also have team components that add to the cost and are questionable as to how effective they are or what they actually contribute. These sometimes are the Capture Manager or Executive Sponsor. I believe that these can be effective team members, but need to be limited to specific functions at specific times. Also refer to managing the effort, below. Proposal Approach / Methodology
This is where the bulk of the cost growth is incurred. Contributors are normally partly procedural, and partly the company policy that governs proposal cost. The leading causes of why proposals cost as much as they do are: The right people are not accountable for the cost Using the wrong approach to staffing a proposal Outsourcing the entire proposal to an expensive proposal house Responsibility for Managing the Effort
This is a problem in the fact that many companies have too many cooks. There is the Sales Lead, the “Capture Manager”, the Executive Sponsor, the Operations Lead, and the Proposal Manager, all of whom believe they have responsibility and authority for proposal decisions. There MUST be a clear division of responsibility in each of the five phases of business development (refer to my article of the same name), for the pipeline to remain full and robust. Once the Capture Manager or Sales lead makes the handoff to the Proposal Manager at the time of RFP release, his decision authority should be relinquished to the Proposal Manager, and he should return his attention to the next target in the Account Plan. Because companies do not often handoff primary ownership from phase to phase through the life cycle properly they incur more cost than needed as they hold meeting after meeting to coordinate with persons who actually are now out of touch with the requirement (which is contained in the RFP), and to make group decisions that one responsible and accountable person can make. Because these roles are not properly defined, companies waste money as many individuals try to do the same task.
Copyright secured by Digiprove © 2010 James Movich
http://www.azmo.org
http://businessdevelopment.co
The greatest cost Influencers are generally the ones shown below (in no particular order):
Pursuit strategy has a direct influence on the overall cost. B&P costs rise alarmingly when there is no clearly defined plan to work to or to manage by. Most if not all of the companies that train proposal methodologies teach that the pursuit phase is the crucial step in the capture process, and as such, should receive the most attention. While I agree with this concept, if performed effectively, I also have seen companies shun this step completely (working from issuance of the solicitation, focusing entirely on the proposal effort) and still be quite successful. Because the initial pursuit (sales) process is a critical step does not mean it needs to be the most expensive part of the process. Careful account planning and positioning of the company can be accomplished while paying attention to costs. Client Account Plans are “Must Haves” and should be developed for each high-level customer base. Strategic sales, or Capture Plans should be developed below and within each account for each opportunity identified to outline the strategy to win that particular solicitation. The Miller and Movich website outlines requirements for Account Plan management and implementation. This is a good model to use for the client base, as the information contained within it stays constant for that particular agency (Corps of Engineers, for Example) but more and different information is required for each individual opportunity within the agency. To give an example, the Client Account Plan is used for placing all of the information for the Client; let’s say in this example the Air force. All of the information about Air Force as a client in general will remain accurate and true regardless of the opportunity (target) the company decides to bid on. But, within the Air Force, each Major Command (MAJCOM - ACC, AETC, AFLMA, AFMC, AFSPC, AFSOC, AFRES, AMC, PACAF, USAFE, 10 ABW, 11th CONS, etc) has individual procurement offices staffed with procurement officials who all do the same job with the same rules, but they do them slightly differently. If, for example, an O&M RFP is coming out of USAFE (US Air Forces in Europe) the client needs will be much different than the same type O&M job at Tinker AFB. For this reason, the information below the client Account Plan should be specific to capturing that particular project in order to ensure that time and effort is not wasted arranging travel, making contacts, or in having conversations with the wrong individuals, thus expending effort unproductively, and adding to the cost. The schedule for the pursuit phase should also be clearly defined and bounded with the information needs the sales team identifies that best qualifies the company’s offer. Too much time equates to too much cost. It needs to be balanced with what is not just the unknown, but what is essential to be known in order to be successful. Proposal Strategy
The proposal itself, of course, has the most influence on B&P. How the proposal is developed needs to be given careful consideration to mitigate cost “creep” and budget overrun. Below we discuss some of the leading contributors. ➢ Schedule Impact on Cost
Proposal Scheduling is an oft-debated subject…the question of when to start is always at hand. There are several choices, but schedule is still one of the largest cost contributors. Some prefer to wait until the solicitation is issued, others proceed based on Freedom of Information Act (FOIA) data or Agency issued draft. What is the right timing? One that gives you the greatest advantage over your competition is the easy answer, given your “need” to win, strategy, past performance, incumbency, and a hundred other variables. There simply is no “right” answer. Additionally, the schedule needs to be controlled through the different phases of the solicitation. If we are the incumbent contractor, there is a tendency to begin either too early or very late. Too early adds unnecessary cost to the Pursuit Phase and is often information already in the company’s possession. Too late results in throwing too many resources at the proposal, resulting again in additional unprogrammed costs. Remember the adage - “nine women cannot make a baby in one month”. Of course, the longer the proposal schedule, the higher the proposal cost. A 45-day proposal effort normally will be higher than a 30-day effort. Having said that, there are still some scheduling nuances to consider. Just because the government gives offerors 45 or more days to prepare a response does not mandate you take all of that time. Many times, companies simply continue to polish the same words without adding real substance. Another contributor to this is extensions and Q&A. Sometimes it is easy for the Proposal Manager to want to keep the team together working “just in case”, even though there are no real impacts or changes required on the proposal. Questions from the Government must be responded to in a timely manner, and usually come after the proposal team has started other projects, or, if consultants were used, have all disbanded and can add cost if they need to be reassembled to answer questions and revise the proposal. If the effort is longer, say 45 to 60 days, care must be taken to ensure that authors are available for the whole duration, and that the team can stay engaged without adding multiple trips to home locations, or be distracted by other business (or personal) reasons. Each trip away does more than just add the cost of the travel to the B&P. It also adds the time to ramp up back to where the author was before he stopped writing, plus any time to grasp what has occurred in other sections or with the solicitation itself since his leaving. In fact, I have seen proposal costs almost double from rotating multiple authors in and out during the proposal. This normally stems from using in-house resources that have a job other that proposal writer, who suddenly are pulled away to go do something else, leaving a void in the proposal team. By the time the new person is found, assigned, and gets up to speed, that person is essentially right where the other person was when he left off, but both people charge to the proposal and there is an additional schedule impact. (If the first person worked a week, and the second person worked a week learning what he did, then you have two weeks of charges but only the same week of schedule/proposal progress). Repeat this for five or six authors (and I have seen it happen more than that during a single proposal) and the costs add up quickly. Also if there is an oral presentation in addition to a written proposal effort the team configuration and schedules must be controlled so as not to begin too early or too late (resulting in throwing more resources at it, thus increasing Proposal cost). You will most likely need two teams working in parallel, so that all of the materials match. This will almost certainly add cost, so it is essential that you learn there will be orals early on during the pursuit phase so that you can plan and budget accordingly. The solution here is to craft a proposal schedule that accommodates the workload using only those resources needed at that point in the process where they have the most influence and are the most effective; and in knowing when the finish line has been crossed, regardless of time remaining. ➢ Proposal Team Contribution to Cost
Tied to the above subject, author assignment can be a leading cost contributor to the proposal. In a company that uses existing project resources as authors, proposals always cost more than in companies that use internal technical writers or paid consultants. This is because they do not have to learn how to do a proposal while on a proposal. Some companies also have team components that add to the cost and are questionable as to how effective they are or what they actually contribute. These sometimes are the Capture Manager or Executive Sponsor. I believe that these can be effective team members, but need to be limited to specific functions at specific times. Also refer to managing the effort, below. Proposal Approach / Methodology
This is where the bulk of the cost growth is incurred. Contributors are normally partly procedural, and partly the company policy that governs proposal cost. The leading causes of why proposals cost as much as they do are:
This is a problem in the fact that many companies have too many cooks. There is the Sales Lead, the “Capture Manager”, the Executive Sponsor, the Operations Lead, and the Proposal Manager, all of whom believe they have responsibility and authority for proposal decisions. There MUST be a clear division of responsibility in each of the five phases of business development (refer to my article of the same name), for the pipeline to remain full and robust. Once the Capture Manager or Sales lead makes the handoff to the Proposal Manager at the time of RFP release, his decision authority should be relinquished to the Proposal Manager, and he should return his attention to the next target in the Account Plan. Because companies do not often handoff primary ownership from phase to phase through the life cycle properly they incur more cost than needed as they hold meeting after meeting to coordinate with persons who actually are now out of touch with the requirement (which is contained in the RFP), and to make group decisions that one responsible and accountable person can make. Because these roles are not properly defined, companies waste money as many individuals try to do the same task.
Copyright secured by Digiprove © 2010 James Movich
http://www.azmo.org
http://businessdevelopment.co
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