When to budget for a bid management solution?

When you touch $ 15 mn? Or reach 200 employees? We attempt to answer this here.

Well it is that time of the year when most companies are finalizing their next year plans and initiatives. Some companies we have pitched to in the recent months have said, maybe they are not big enough to have a bid management platform and others have said that theirs is a simple-enough process. Our responses aside, here are the points you should consider when deciding if a Bid Management solution makes sense for your organisation in the new FY:

No. of proposal/bids submitted p a. This is probably the most apparent parameter and, in most cases, a very direct indicator of the need. If your organisation submits 10-12 proposals a year you probably can manage the work streams in a spreadsheet and thru manual-driven processes. If you are a solution provider submitting more than 1 proposal a week, you are very likely to benefit from a Bid Management platform, irrespective of the size of your organization.

But to genuinely arrive at a decision, create a triad by adding the following two parameters to the mix - No. of executives involved in the process and Complexity of your proposals.

We all know that solution proposals and tender/RFP responses involve multiples executives. To begin with, the Bid Owner, which in most cases is the account manager or the designated pre-sales manager or the bid manager. His responsibility is to ensure the bid is ready for submission as per the customer requirements, on the stipulated date and time. Maybe it should change to - submitting winning bids. But that’s another topic.

Next, the Contributors – those who help develop the solution – engineering/ pre-sales/ practice leads. These executives understand the customer requirements and translate them into technical solution. The output is solution architecture, BOM/BOQ, effort estimation, etc.

Then we have the Reviewers – business oversight functions who review the work done by the contributors, e.g. practice heads, subject matter experts, consultants, etc. Reviewers also include those who independently review the bid processes, such as the finance & commercial organization, legal & contract teams, and PMO/ Quality/Risk functions. Their output is a list of comments, observations that the bid team should amend or take care of during bid development.

And lastly those who approve. Head of Sales, Finance, Business Units, and CXOs. They can agree or veto the bid components and their approval is mandatory for the proposal to be sent to the customer.

Putting all of this together, any bid worth more than $ 50K or Rs 35L will easily involve 10+ executives.

With these many people involved (not to forget multiple bids going on at the same time), it’s easy to miss suggestions, skip guidelines, or just forget an important assumption. Any one of these misses can be worth 10%-15% of the TCV. At other times, laptops crash, emails are lost, people change. For renewals opportunities, a system can serve organisations better, compared to people-dependant processes.

Complexity of your proposal – Even though it may seem so at the onset, defining Complexity is not difficult. Does your proposal go thru multiple iterations, involves deep customer interactions, requires adequate reviews? Involves external teams? Includes stringent SLAs or penalties? If you answered yes to two of these questions, there is high chance it’s a complex opportunity. Add to this the average deal value and the picture becomes super clear.

This triad is a good quantitative measure and can quickly give you a strong sense of yes, no, or let’s explore. You can plot your business parameters for today and 2 years down the line and see where you belong. As the above diagram shows, even if you are submitting “10+” bids per annum but if the complexity is “Medium” or/and the no. of executives involved are “5-15” it makes a strong case for a system to be in place for your bid processes.

Need more quantitative justification, read this blog on how you can compute an ROI for a bid management solution.

Comments and observations welcome at hello@pricebid.co.