Successful business acquisition attempts three things:
- Increase backlog with profitable work
- Reduce project acquisition cost
- Select profitable work in line with business strategy
When evaluating and selecting a project to be pursued ideally one should look for
the sweet spot or
overlap of what the customer's needs are, what one's company's strength's are and
competitors' weaknesses are.
The above diagram shows that a company acquires work when the strengths overlap with
the customer's needs and the competitor's weaknesses. At this point the company is
differentiated from the competition and is uniquely advantageous to the customer.
As an example lets take as the Client (the Customer) someone tendering for a project
in Western Africa who's evaluating multiple offshore oil and gas fabricators. Now
let's put ourselves in the shoes of the Business Development Manager for a given
Western African fabricator. As part of the formula for success the this person in
question should identify what the Customer's needs are. One could of course say:
"just a fabricator", but this would be only a fraction of the total picture. One
should always establish a good relationship and line of communication with the Customer,
and from which one could uncover more information about what the client needs (wants,
fears, preferences, current execution plan, openness alternatives, etc.). It could
well be that the client is not just looking for any fabricator, but someone that
can give further assurance of meeting a tight schedule deadline for example.
The purpose of opportunity management is to:
- Be selective in which opportunities are pursued
This is the key to lowering bid costs by properly focusing on the opportunities with
real chance of being successful and profitable projects.
- Bid smarter, not harder
- Make intelligent resource commitments.
Determining Expected Value and Pursuit Cost
The expected value of an opportunity is a function of the probability that the project
will be funded (Go%), times the probability that the project will be awarded (Get%),
time the project awarded value amount.
Project Expected Value = Go% x Get% x Project Value.
The pursuit cost should always be lower that the Project Expected Value x Project
Below are listed some good rules of thumb to use when pursuing opportunities:
- If you don't learn of an opportunity until it's been publicly advertised (via direct
RFP/ ITB/ ITT or web portal), you're too late. Being well position creates preference,
and the preferred contractor wins more than 67% of the time. Also after the client
formally advertises the project communication might be restricted.
- If you don't know the customer, don't bid. Customers award contracts to companies
they know and trust, so you must invest the time to build confidence and trust. Furthermore,
tendering for a project without knowing the customer is akin to running hurdles
blindfolded. For example one might tender to what could be classed as a difficult
client that's very particular about the project's specifications, with no allowance
for alternates, and that additionally creates whether directly or indirect delays
or additional work via rigid and slow lines of communication.
- Know what it takes to win. There's no substitute for good intelligence. You need
to develop sponsors in the customer organization who will give you the "inside" information
that isn't revealed in the RFP.
- Pre-sell your solution, project manager and team, and differentiators. That is
have the tender already pre-packaged and pre-sold to the client prior to the official
tender being released.
- If possible preempt formal competition. Sole source speaks for itself.
1. Proposal Management
- The proposal manager is identified early and is dedicated to the effort.
- The proposal manager knows the client well and is committed to pursuing the work.
- The proposal manager is a good team builder, not an autocrat.
- The proposal manager holds regular team meetings through proposal development and
keeps the writers informed.
- Ideally, the proposal manager will become the project manager.
2. Customer Knowledge
- The proposal team has a good understanding of the customer's key issues.
- The team receives good intelligence throughout the effort.
- The team knows the specific,issues and concerns of each of the key decision makers
and influencers in the customer's organization.
3. Proposal Team
- The team is staffed by the right people (who know the issues, who are technically
competent, and who know how to write good proposals).
- Team members are dedicated to the effort, committed to getting the work, and empowered
to make decisions about their sections of the proposal.
- Team members understand the customer's needs and requirements, as well as the execution
- The team is cohesive and enthusiastic.
4. Win Strategy
- A win strategy is always developed, even before the RFP/ ITT arrives.
- It is based on customer knowledge and early positioning efforts.
- The strategy evolves as more intelligence becomes available.
- The strategy is reviewed and approved early by senior managers and is communicated
to the team.
- The team translates the strategy into key messages that appear in the executive
summary, proposal, and presentation to the customer.
5. Customer Relationship
- Long-term relationships have been developed at all levels in the customer organization,
so the customer has confidence and trust in the bidder.
- The proposal team maintains regular contact with key customers throughout proposal
development, receives feedback on the proposed execution plan and/ or proposed project
team, and is able to react to it.
- The proposal team is responsive to the customer's questions and concerns.
Strategy Tool: Key Issues Analysis
A tabulation of the key issues (see below picture) can be very helpful as part of
the bid/ no bid decision as well as ensuring key stakeholders in the decision and
strategy development make timely contributions to the analysis during in the business
acquisition process. Some of the benefits of this tool include:
- It focuses effort on what is important to the customer.
- It guides team discussion to capture essentials in less time.
- It ensures that we take a wider view of the competitive marketplace.
Common Denominators of Excellent Proposals
- They are 100% responsive to the customer's request for information. They answer
every question in the order in which the customer asked the question.
- They are written for multiple types of readers: for detail evaluators as well as
- They show how you will meet the customer's needs and requirements and respond to
their key issues. They do not merely present our qualifications.
- They differentiate us from our competitors. They demonstrate and prove why the
customer should choose one. They consistently link issues, features, benefits, and
- They make it easy for the evaluators to score us highly.
- They contain no untailored boilerplate.
Proposals: Anatomy of a Loser
- In typical losing proposal efforts, there has been no positioning, so the RFP is
a surprise, and half the available response time is lost while a bid decision is
- When a proposal manager is finally assigned, he is overwhelmed and plunges into
getting the proposal written. No
strategy is developed.
- In a scramble, the proposal team can do little more than throw untailored boilerplate
into the proposal; to mitigate risk, the estimate is deliberately high and there's
no time to refine it.
- The proposal receives only a cursory review; however, some senior managers (who
haven't been involved in the effort) insist on massive last-minute changes, which
are made on the fly. The proposal is submitted with seconds to spare.
Proposals: Anatomy of a Winner
- In winning proposal efforts, you have known about the opportunity for a long time,
have pre-sold your solution, are well-positioned with the customer, and are ready
when the RFP arrives.
- The proposal manager and core team develop a win strategy, responsive outline,
and executive summary before the kickoff. Senior managers review and approve the
strategy at this point.
- At the kickoff, the writers receive everything they need to do an excellent job
quickly; the estimate is refined until it is consistent with the offer and highly
- Before submittal, the proposal draft gets a thorough red team review and is polished.
As it's submitted, senior managers contact their counterparts, whom they've already
met, and express their commitment.