Looking At Presales Bid Management Information Technology Essay

This topic s not a primary focus of this book but this is included here for greater awareness. The chapter has a major real-time case study at the end. This chapter takes you through the preliminary concepts and then introduces the third party consultants and their role in large deals. Role of onsite relationship managers is also discussed here.

What Is Presales & Bid Management?

Presales involves lead generation & follow-ups, solution preparation, final proposals, product demonstrations, proof of concepts (POC), and many other marketing related activities till the customer is acquired. Bid Management is a vital Presales support service that provides copywriting, administrative and technical resources to ensure the quality of proposal documentation and presentations. A bid manager’s role is to present a proposal to client that meets their business and cost objectives, while minimizing business risks and maximizing profit margins (to her parent organization). Bid manager is the owner of proposal making process. She studies the request for proposal (RFP docs) from the client, which can be very comprehensive and legal in nature. She plans the whole proposal making like any other project and is solely responsible for keeping quality, costs and schedule for the whole bidding process.

She needs to work very closely with sales, technical, delivery and commercial teams to co-ordinate the preparation of a winning proposal. The sales, delivery and technical teams can belong to different verticals and might be scattered across the globe, so the effective coordination and inter personal skills are the key here. A bid manager may not have any direct control over any of the teams, she is working with. For participating executives from different verticals, proposal making may be an extra add to their already tight day-to-day schedules, so getting quality time from them can be one of the biggest challenge in the process. The term ‘winning proposal’ is very important here; because if we don’t win, the whole exercise will be just a big overhead to the organization and how many such overheads your organization can absorb without significantly affecting the bottom line?

Following are the main functions that can be categorized under presales and bid management.

Qualification and prioritization of proposal and tenders.

Co-ordination with sales, solutions, delivery and finance departments

To ensure the availability of complete and quality information from each source within set timelines.

Proposal documentation.

Final presentations to the client with sales team that may involve technical consulting and product demonstrations.

Who Fits?

A good fit here would be a person who knows the company and it’s offerings inside out. Good communication, co-ordination, presentation, and interpersonal skills are usually required. It will help if the person for the bid manager post has work in similar projects/ products (as required by RFP) and can appreciate their commercial as well as technology aspects. She will be required to do a lot of number crunchings say for schedule, cost and scope and quick ‘what-if’ computations to deal with variations in these factors. A thorough understanding of industry segment in which she is working will be a big plus. Not to forget – stress and round the clock working under extreme pressures of dead lines is an integral part of this job.

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The Organization For Presales And Bid Management

This will vary from company to company. In IT services companies there may be a few people marked working for presales function at each vertical/ department level. Typically it is headed by a manager – presales. For large deals there can be a presales group working at corporate level that helps presales managers at different verticals. The corporate level presales group might involve very senior and seasoned professionals as far as the whole process of bid management is concerned. Whenever the organization receives a RFP (Request for Proposal), pre sales group may need to draw people from different verticals as per the expertise required in making proposal. Technical writers, commercial and legal managers are invariably required in case of large deals. There can be a bid manager designated for every individual RFP depending upon the size of the deal. In case of smaller deals, a single bid manager might takeover multiple bids.

A bid manager is like a project manager with a responsibility of complete bid process. The bid manager typically belongs to the presales organization but there can be variations; if the stakes in proposal from a particular vertical are more, they may like to appoint the bid manager in consultation with pre sales. Once the bidding process is complete, expert from other verticals may go back to their regular assignments.

Role Of Third Party Consultants In Execution Of Bids

Companies typically specialize in their line of business; floating a tender and managing the whole process may altogether be a different ballgame. It’s true especially when the stakes on the buyer side are high and tenders floated globally.

The buyer’s side may find it an uphill task to manage the whole bidding process and fortunately consultants are there to help. In the whole process of bid management, consultants can be employed by both buyers as well as sellers. On buyer’s side they help in writing documents for RFP (Request for Proposal) and manage the whole bid process till the right vendor is selected.

RFP document is important as it tells exactly what goods and services are required along with location, price, constraints and other terms and conditions. It’s a legal document and forms the base for writing proposal on the supplier’s side. Similarly on buyer’s side, third part consults help in evaluating the proposal. Typically they can take the role of a bid manager on the supplier’s side and do coordination with verticals as required, and manage the whole bidding process.

When third party consultants are engaged by the buying organization, they are the sole contact points for vendors for the whole bid-life-cycle. For buyers, they ensure quality of RFP and supporting documents, the right placement of the RFP (putting to select qualified vendors), the assessment of vendor capabilities and fit, the the documentation is as per agreed standards and finally help the buyers to rate the vendor proposals to conclude the bidding process. They may also monitor the transition and change management for buyer and typically oversee steady stare operations for an agreed period.

Role Of Onsite/ Customer Relationship Managers (RM)

It’s often onsite relationship managers, who are first to know – yes! Some thing right is going on there. They may bring in the lead; much before the official tender is floated. They help to ensure, their company is also a party to the bidding process. In many strategic deals the tender may not be floated publicly but the buyers place it to select companies, who they believe, have the capabilities to deliver as per their requirements. Onsite coordinators can bring in vital information about buyer groups, managers and their motivation behind floating such a tender. Some time approximate budget is also known. All this information can be vital in upbringing of a winning proposal, in fine-tuning the commercials and other details in last minutes if required. Post win – onsite managers play a lead role in transition and ensure required levels of co-operation from client’s end. It’s the familiarity of onsite coordinators with client managers and their business (and also on ‘what will fly’) that makes them a crucial link in the whole process.

Section – B: Sales & marketing of IT Companies

Definitions

Many of us do not appreciate the fact that sales are an important sub-part of marketing. Marketing is everything you do to promote your business. If you have an apt marketing strategy, most of the job is done. If the customer values your product & services, she will herself make an effort to buy them. And you need little or no sales effort at all. The primary job of marketing is to create interest of the customer in your company’s products and services. Marketing strategies deal with business development, selling techniques, communication and customer relationships. Marketing creates value for your customers as well as the company.

With this, I think we understand the difference between sales & marketing. Now; when we talk of IT we are generally concerned with marketing & selling our solutions. For the purpose of this discussion; a solution is a mutually agreed-upon answer to a recognized problem that should provide some measurable improvement. So what’s different here?

We have two processes in any business scenario – purchase and sale. The solution sales processes depends more on the buyer, who must feel the need for value from the organization, beyond its standard product or services being sold. The buyer must also perceive the prospective seller as having the credibility to deliver that expertise. At the same time the buyer must feel trust in supplier to discuss a problem & share information that may be crucial for his survival. After that only a supplier may be allowed to do due-diligence and offer a solution and associated commercials (to the buyer). So we can make out the difference between a buyer in two situations – solutions selling and selling standard products & services. Fair enough!

Critical Success Factors In Solutions Selling

Already so much has been written on this topic in the management literature. We will discuss only a few of key points for the sake of completeness.

Believing the emotional value and benefits of solution offerings:

It is important to get an emotional understanding of your service offerings along with technical and business aspects. You need integrity and a strong belief in your offerings. For making a sale you should be able to transfer all this into the hands of buyer.

Ability to find qualified buyers:

Meaningful selling happens when you can find people who have a certain need and you can fill that need.

Establish trust:

Selling always requires building relationships and determining the buyer’s true needs. If trust can’t be established; selling a solution might be extremely difficult.

Match needs/wants to product benefits:

It is critical to understand the buyer’s true needs and be able to match them with the solution’s benefits.

Ability to ask for the “sale” and deliver:

Simply presenting the benefits of solution isn’t enough. You must be able to ask

the “prospect” to take an action in the form of placing an order. Once the order is placed – you must be able to deliver on what you proposed. This is directly linked with your credibility to make next sale to the same customer or in the greater market place.

How Technical Background Helps?

It is very difficult to find people who are well-versed in selling solutions. Companies are investing a lot many $ in training qualified people with relevant technical backgrounds so that they are able to find the right solution for the customers. An effective solutions sales executive should be capable of processing a potential client’s business needs, comprehend the technologies available and help designing a solution that delivers desired value to the customer and maximize the profits for her company. Most successful solution sales profiles have good engineering and business backgrounds. They have the right soft-skills, and thorough understanding of market. The key soft-skills that count here are business communication, public speaking, conflict management, and negotiation.

Challenges Faced By A Customer Relationship Manager (RM)

One of the most important skills RM needs is the ability to multitask and utilize

various skill sets depending on the assignment at hand. Each day can bring its own set of unique responsibilities and challenges. For example it is anchoring a series of client meetings to discuss a large proposal for outsourcing their infrastructure & ERP maintenance. It can well be a networking event to congregate the important stake holders, both from business and IT for a big project. Managing several different tasks at the same time might be challenging.

The variety of responsibilities a RM has, to keep the business and relationship running can be very interesting at times. Back in office, there can be reviews of ongoing projects in onsite- offshore model with a couple of meetings per week. There can be one-on-one meetings with the client and other stake holders. Other meetings can be with the offshore teams late in the evening.

Effective presentation and negotiation skills are very important for a RM. It can be periodic presentations to client’s CIO on overall engagement or it can be presentation regarding resolution to a major break down in IT services. At times RM is there only to listen and make a compromise or mediate difference of opinion on project scope between project owner and the offshore project manager. One major task for RM is Bids and new initiatives as we have discussed in earlier sections. RM is one of the very few persons present on client side (from vendor) so she is the one who takes the first reaction from the client for both good and bad of offshore teams. She needs to be a true diplomat if you want to say it short!

RM vs. BRM

We are very much familiar with the role of customer relationship managers (RM) in solutions selling. The role of Business Relationship Manager (BRM) is a relatively new role in IT organizations. The BRM is an important link between IT and the business. The BRM needs to have significant knowledge pertaining to both technology and the commercials. BRM generally talks for the business within an IT organization, without any additional responsibilities to sell products or work on upcoming business deals. BRM role was actually created by CIOs in IT as a solution to what business sees IT as a barrier. Many times business doesn’t understand how swiftly IT organization can respond to their fast changing needs or simply doesn’t appreciate the capabilities of IT? BRM is supposed to fill this communication gap. BRM needs to know both business and technology to a reasonable level. This position also requires an ability to understand the business adequately to communicate the substance of projects to the technology teams. On the other hand, BRM also needs to comprehend the technology sufficiently to communicate its complexity in simple terms for the business.

Case Study: A Complete Bidding Cycle for a Multimillion $ IT Outsourcing Deal

Y Inc. is a US based IT outsourcing company dealing in Information Technology products and services. It has marketing and development offices in more than 50 countries all over the world with sales revenue running in multi billion dollars from services alone. The services IT portfolio covers almost every segment ranging from high end ERP consulting, internet, mainframes to legacy applications. Y Inc. has development centers in all Indian metros with total staff exceeding 40,000 in India alone. ERP services and Web Applications are the most revenue earning activities throughout the globe.

Y Inc. had received a request for proposal (RFP) from a European conglomerate (AtoV inc.) for managing their IT operations worldwide. They wanted to outsource their entire IT operations in order to achieve better operational efficiencies, substantially , reduce IT operations costs and get an ability to focus more on their core manufacturing and retail business. AtoV Inc. has diverse interests throughout the world that include heavy engineering, consumer goods, house hold electronic equipment, electric distribution grids, automobiles and retail businesses. They also have a fully owned IT company (IT Ltd.) that is supposed to manage IT operations for all their group companies. The group IT Company (IT Ltd.) is seriously short of skilled manpower to support other group companies in a cost effective manner. Also there is a lot of interference in the operations of IT Ltd. itself by the corporate (AtoV Inc.) and it’s not free to price its services as per market standards. Many a times IT Ltd. is forced to give resources free of cost or at nominal rates to other companies in the conglomerate to manage their IT operations. Appointments at top level in IT Inc. are also dictated by the corporate (AtoV Inc.); and there are many more such reasons, this group IT arm (IT Ltd.) is fast becoming economically not-so-viable for providing IT services to the group. The corporate was forced to look outside for better options (vendors) that are market driven and can be held responsible incase of non performance. This was the first occasion in past several decades where AtoV Inc. had floated a RFP outside to its group empire for outsourcing IT operations. They were extra cautious and are taking every possible effort to make it a success.

The RFP was not advertized publicly but only a few major players across the globe were invited to put forward their proposals. AtoV Inc. thought these were the IT services companies who could sale up to their standards in terms of quantity, quality and reliability. Total nine global IT service providers were invited to participate in this prestigious worldwide bidding exercise. Each one of the participants had annual sales revenues well exceeding $ one billion. All were global players. They all had expertise build up over the years in the areas desired by AtoV Inc. These nine service providers were selected based upon a comprehensive research project undertaken as a part of preparing formal RFP documents. The selection of final vendor would depend upon how well these service providers understand the requirements of AtoV and present a customized solution. Pricing and other commercials of the proposal were to play an important role. However the contract could be awarded to a vendor whose quality and solution perfectly suited the needs of AtoV. In that case the pricing could be second or even third best (amongst all the bids submitted). We see therefore, the pricing was not the sole criteria. The total pricing of goods and services asked by AtoV Inc. was likely to run into several hundred million $, spread over the contract period. Depending on the annual performance reviews, the contract was likely to be extended up to 5 years. As expected, this bidding exercise attracted the attention of business press, the worldwide. In India it was in headlines in national business news papers, as much of the contract was likely to be executed from India (that is perceived a low cost region). Almost all the contestants for this contract had major back office presence in India.

Executives of AtoV had no prior experience in dealing with the bidding processes of this magnitude and geographical spread. So they engaged a third party consultant (TP Con.), specializing in bid management for large deals, to manage the selection of most suitable vendor for them. TP Cons were given complete responsibility from concept to closure. The selection of a suitable vendor was the closing point of the bidding process. TP Cons were also supposed to monitor the transition and work out a plan for change management. Both AtoV Inc. and TP Cons were headquartered in California. TP Cons started talks to various department heads and CXOs of companies within AtoV group that were likely to be parties in this off shoring exercise. It required almost a month’s due diligence for TP Cons to figure out the IT needs of various participant companies. It was decided to contract out IT operations in phases. For the first phase Infrastructure Services (IMS) and ERP were chosen. These services badly needed an overhaul and they were the ones, consuming the maximum portion of IT budget; almost in all the cases (Companies). After everyone agreed in concept for inviting proposals in order to contract ERP and IMS services, the first step was to write a request for proposal (RFP) document.

RFP is a comprehensive document that mainly focuses on the scope of goods and services requirements and conditions governing the bidding process and the contract there after. As stated earlier this was to be a multimillion $ contract spanning over 5 years. The RFP document itself was running close to hundred pages including many annexure. The main document had many sections. The first section included company back ground (AtoV Inc.) and the intentions behind floating the RFP. Various acronyms used in the main RFP document and its annexure were defined. It had contact points for the purpose of proposal from AtoV side. It also had proposal submission timelines and terms and conditions governing the whole process of proposal making. It also had the general requirements that a vendor and its proposal needs to fulfill as a prequalification note. It had executive summary of the overall scope being outsourced. And as main content – it had two sections on the detailed scope of goods and services sought from prospective vendors. One section contained detailed description on ERP services and the other one detailed infrastructure service (IMS) outsourcing requirements. It had a NDA (non disclosure agreement) to be signed by prospective vendor as AtoV was sharing a lot of confidential information regarding their applications and infrastructure. All this information was vital to the prospects for an accurate proposal making. The RFP also had a template (an outline format) for proposal and broad guidelines on what proposal would contain terms of solution and commercials. Apart from the said details in the main body of RFP; there was a number of supporting annexure documents in including some detailed spread sheets. They included NDAs, formats for commercials, legal terms and conditions governing proposal, application landscape and their interface details with multiple ERPs in the scope of proposal, details of servers and diagrams of network architecture and many other details to work out the solution and commercials of the proposal as accurately as possible.

After issuing RFP, the suppliers were given a chance to raise their questions regarding proposal and bid processes. The proposal was to be submitted by email before a stated due date (fixed) and time that was to be followed very strictly. After two weeks of making proposal, each one of the 9 prospects was to be given a chance of oral presentations to a selection committee comprising of senior executives from AtoV and TP Cons. The period between floating of RFP and final award of contract was approximately 2 months that is typical to deals of this magnitude. After the contract award date, there was a transition period of 3 months to transfer application and Infrastructure services to the bid winner, Y Inc. in our case. TP Cons were to chalk out and execute a plan for transition and change management. During transition all expenses were 50-50 between Y inc. and AtoV. Expenses included salaries for Y Inc. and AtoV, all overheads, software/ hardware and whatever it takes for smooth transition of services to Y Inc. The transition was to work under an onsite/offshore model from India as offshore base. Main onsite locations were spread in North America, UK, Germany, Japan, Singapore and Australia. After all transition is done TP Cons were to monitor the steady state operations for an additional quarter.

Once Y Inc. officially received the RFP; a RFP response team was to be formed. First member, the bid manager was from presales team as it happens in many cases. He was the project manager for this mega proposal making exercise. The team members were required from infrastructure group and ERP competency. Almost all the elements of IT infrastructure like mobile devices, phones, copiers, PCs, servers, data centres, software, networks and the processes including help desk were involved and IMS was the biggest component of RFP. Three to four senior experts were needed to cover all the areas of IMS required in the proposal. As usual the resources were already busy doing other billable projects. Making a proposal was important to organization but it can’t be billed to any client obviously. So taking a project manager out from his billable role for a couple of month was a difficult call for any functional head. For ERP stream we required experts from SAP, Oracle Apps and People Soft HRMS systems – both technical and domain experts. Though the size in terms of $ value of ERP stream was smaller but we needed many more members there because of diverse nature of functionalities involved and we had 3 core ERPs to support. In ERP stream also the story was the same – all designated members for proposal making were busy in billable roles. To start with, the members in both the streams were put in dual roles of working in their regular work and contributing in proposal making s well. All the team members including bid manager were busy in study and analyzing the RFP documents from the client. Legal and finance teams also studied the proposals.

Around 35 questions from all the streams were sent to the client for clarifications. Sending too many questions is considered as if you have not done your home work in analyzing information supplied in RFP and at the same time sending too few (of them) may be taken as if you have not studied the RFP in the depth required for making the proposal (so it’s a fine balancing act). All the nine prospects sent in their list of questions to AtoV for getting more information and clarifications, which they thought were required to make a decent proposal. AtoV executives took about one week to get back with answers. Q&A from all the 9 prospects was combined and this combined list was circulated to each participant. This is a typical practice to make sure each prospect is benefitted by the questions raised by others and all of them have maximum possible information (right information) before they start working the proposal. AtoV along with TP Cons also hosted a pre-bid face-to-face meeting in which all the prospects could discuss the answers and ask on any remaining questions. This was the last chance for all the participants to raise their questions or ask for more information. After closing of this meeting till the submission of final proposals, any officials from the potential vendors (9 prospects) were not supposed to talk to ANYONE from the client (AtoV). Any such attempt could disqualify the prospect from making a proposal.

With all this information now it was imperative for Y Inc. to work on proposal on a war footing. They had 40 calendar days time left and team was not in place yet. Except bid manager himself nobody else was confident on content, clauses and scope of the proposal. Y Inc. decided not to engage a third party consultant for writing a proposal. Being an IT services major, making such proposals was routinely done. More over they had a specialized team under presales for such large deals. Even with large deals team, the experts were to come from respective team of ERP and IMS competency verticals. Including bid manager and two members from the large deal group a total of 14 members were identified for making this proposal. All had prior experience in making such proposals. Two technical writers were also included in the team. One of the team members from large deals group was of the level of general manager.

The day came when all designated proposal team members were detached from their regular work and they were all packed in a conference hall of the corporate office. No land lines in the conference hall (conf hall) and all mute cell phones – only hot discussions! They were sometimes useful and sometimes not so useful. But great, all team members were available in a room to exchange ideas and technical writers standing, to take notes and make things presentable. First bid manager presented a schedule on how to make it & who will do what by what date? A net 30 calendar day program – no offs; not even weekends. Start by 7:30 or 8:00 AM till half past mid night sometimes – but no compulsions. Breaks for tea and smoke; snacks made available inside the room; all make to order. The motto – only one, get it done whatever it takes. You can take your offs later.

Some model proposals were studied and things start taking shape. 0.1 draft versions was ready first & everybody is seen disappointed. A senior member from the large deals wanted everything to be redone. The onsite manager insisted inclusion of everything as per ITIL standards as it was very important from the client’s perspective. One ITIL expert and one graphics designer were also added to the team now. First draft was ready. Technical writers had to compile 485 pages for it. But finally things started taking shape.

Suddenly a new policy decision came from the client side. Written proposal was OK but more emphasis was now on the oral presentations. So everything was redone on power point slides. Thanks to the timely inclusion of a graphics designer in the team. Commercials, the heart of proposal was still under making. Commercials took about a week but they occupied only two slides in the final proposal. It was close to $300 Million proposal. Real strategic for the company! Need to win it any cost. Nearly 8 to 10 ‘what-if’ scenarios were worked out using different combinations in schedules, effort, resources, onsite-offshore ratio, scope and rates. Approval for all of them was taken from the corporate and the finance department in advance. These scenarios were for accommodating last minute changes prior to or during live proposal presentations. Excel work sheets were kept ready to work out any more custom scenarios if required. In the last minutes inputs from sales team become very important and you might need to change the commercials accordingly.

The final day in a San Francisco hotel witnessed three different committees from consisting of client and TP Con officials. And the final presentations made. Written proposals were submitted a couple of days advance in emails and seven print copies in sealed envelopes. All dropped in a designated physical mail box. AtoV wanted a month to study different aspects of the proposals made. They came back in just two weeks. Now it’s up to you to guess who was the winner? TP Con made evaluation matrices and criteria and the whole process was transparent only to AtoV.

Now it was transition of a huge number of applications and infrastructure. TP Con was the boss. They explained the process to transition team. They gave around 30 elaborate templates and forms to be filled for each stream at each step. All this was to be loaded in an orderly fashion on a web portal, designated for this transition. The progress of transition in real time was now available to everyone including top management of Y Inc. and AtoV, one more challenge, probably tougher than making the winning proposal. Main transition sites were offices and plants in Texas and New York. A couple of them added from Germany, UK and other places too. Y Inc. roped in 4 transition managers – one each in California, Texas, Chennai and Noida. The transition team structure was 50-50 for offshore and onsite. More onsite presence was required to cover the learning curve and attend face to face learning sessions with AnV subject matter experts. Later the onsite – offshore was to be reduced to 80 – 20 and finally 90 – 10 in the long term. TP Cons deployed not more than 3 members from RFP till the transition was over. A total of 6 months; end to end! As it was learned later TP Cons walked away with a handsome consulting fee. Much better than one could have imagined in the starting!

Want to manage bids as third party consultant??

Summary

RFI, RFQ, RFP, Bid manager, Large Deals, raising a Team For Proposals, Proposal making, What If’s, Commercials, legal,