Enterprise IT Sales & Distribution A high level understanding

V Krishnan Iyer Software Client Leader, IBM India Pvt.Ltd iyerkrishnanv@gmail.com 9004689536

Transaction Vs Enterprise Selling Paradigms

Transactional/Commodity One Time Sell Well understood product Low price high volume Easy switch in/out Less sophisticated decisions Short sales cycles Simple sales org Price based Enterprise
Relationship Selling Needs consultative approach High price Long term commitments Highly sophisticated decisions Long sales cycles Complex sales structure Value Based

To Who Do I Sell
Enterprises
Tier I Based on revenue SME can be defined as 500 to 1000 crores

Senior Executives CXOs (LOB and IT)

Internal Stake Holders

Ecosystem

Org Structure

Buying Vs Selling Process

Customer Buying Process
Awareness initiation Acknowledge Pain Define Need Review Offers Rationalize Options Select Best Engage Operate

Organization Sales Process Demand to Inquiry Marketing

Engage Leads Generation Opportunity Qualification Opportunity Assessment

Inquiry to Order Sales

Propose Close

Order to Remittance

Service & Support

Order Customer Service Support

Cross Sell and Up Sell Reporting and Analytics

Sales Tools and Assistance

Industry Reports and Insights

Templates

Solution Training

Quotas and Targets

Collaterals

Lead Generation Engine

CRM

SME and Senior Execs

Territory and Account Plans

Industry and Customer Events

Short Supply Chain

Direct Selling Model OEM Led Partner Selling Model One level Distribution Channel
Short supply chain and hence lesser people to share margins.

Nuances
Long Sales Cycles Internal Selling Control High Costs Tough Negotiations Large Deal Size Industry Connection Recognition and Rewards

Understanding the Sales Process

Sales Management

The process of - Planning - Directing - Control of Personal selling including recruiting, selecting, equipping, etc. and motivating the sales force

What is Personal Selling

A promotional/sales method where there is in-person interaction between the seller and the buyer. Value to the seller is the Sale or Order

Value to the buyer is benefit of consuming the product or service

Personal Selling in IT Enterprises

In IT Enterprise Sales, personal selling is the method It is the part of marketing that consumes maximum resources (travel, training, etc.). Helps in building relationships for long term business benefits Helps selling to multiple stake holders in the business markets The best promotional technique in business markets where media based promotions are not so effective.

Activities in the Selling Process

Lead Generation Prospecting Lead Qualification Preparing for the sales meeting

Contact the Prospect

Can be multiple including demos and presentations Sales Meeting

Objection Handling
Order Closure Account Maintenance

Scenario

Shabari Technologies is a young software company started by 3 professionals (ex- TCS) to provide training services on SAP. Shabari Tech got its first order from a customer who the founders knew while working as consultants from TCS on their SAP implementation. Discuss how Shabari can find new leads for business

Lead A Potential Customer

Some Techniques of Lead Generation Prospect Initiated - website form, trade show booth or respond to an advertisement Profile Fitting Uses market research tools, such as company profiles, to locate leads based on customers that fit a particular profile likely to be a match for the companys products. The profile is often based on the profile of previous customers. Market Monitoring Through this approach leads are obtained by monitoring media outlets, such as news articles, Internet forums and corporate press releases. Canvassing Here leads are gathered by cold-calling (i.e., contacting someone without pre-notification) including in-person, by telephone or by email.

Lead Generation

Data Mining Evaluate information (e.g., in a corporate database) previously gathered by a company in hopes of locating prospects. Personal and Professional Contacts referrals from known sources, paid referrals Promotions The method uses free gifts to encourage prospect to provide contact information or attend a sales meeting. For example, offering free software for signing up for a demonstration of another product.

Prospecting

Is a continuous activity. Is based on planning. Happens in managed accounts as well as in business development
New solution areas from a wider portfolio or products and services New Customers

Necessary for long term planning and achieving targets Find what the customer is not looking for
Build the vision Be the one to create the need Servicing what the customer already know she wants gets you in the commodity trap and is not fun.

Scenario 2

Shabari Technologies gets a visit on its web site and Mital Shah of Patel Engineering from Ahmedabad fills up the prospect form. Shabari now has Mitals contact details e-mail id and phone number. Discuss how can Shabari do initial qualification of this lead?

Qualification

The process of assessing if a lead is a potential buyer Prospect

Key Qualification Criteria
Lead is contactable can I approach the stakeholders? Has a requirement. Requirement can be met do I have the solution? Has budget can buyer afford TCO? Is winnable can we compete? Is worth winning - do we want to compete?

Situation 3

Before the sales person meets Mital of Patel Engineering, how can Shabari Technologies gather more information on Patel Engineering? Discuss why such a preparation is necessary and how can information be gathered?

Preparation for the Sales Meeting

Sales Call Lead is already qualified or need more information to qualify.

Sales Call can be telephonic or physical.

What Happens in a Sales Call? - Seller tries to know more about the prospect
What is the requirement Who is the decision maker Organization Structure Purchase Decision Method What is the current IT landscape

Prospect tries to understand the offering if interested Each comes to understand if more time needs to be spent!!

Gathering Information
From Web Sites Publications Be habituated to regular reading Access financial statements if company is public Talk to sales personnel from none competitive industry Check with existing customers in the same industry Access social media - LinkedIn

Importance of Preparation
First impression !!!

Informed people are more confident

Tailor presentation, talk, collaterals to hit the nail Build compete strategies early in the cycle

Contacting the Prospect

Refers to the initial contact. In a few cases, prospect initiated In most cases, seller initiated. Typical method is cold calling.

Situation 4

Rajesh Kothari, senior sales manager of Shabari is meeting Patel Engineering shortly for a detailed discussion/presentation on Shabaris offerings. Discuss what will Rajesh try to do in this meeting?

The Sales Meeting

The essence of the sales process is the sales meeting!! There can be multiple sales meetings. - Initial presentation - Requirement workshop - Detailed presentation, etc.

Sales Meeting

Seller tries to get clarity on the requirements Rapport building Collect more information about the prospect Solution presentation Assess the prospect

Situation 5

During the sales meeting, while Rajesh is presenting about Shabaris training programs, Mital asks him You are a new company with limited training experiences. How can you take care of all the training needs on SAP in the manufacturing vertical? Discuss, how Rajesh should respond to this sudden question?

Objection Handling
Objections refer to resistance a prospect has towards the solution or the company Can resistance be positive? Objection handling comes with practice

Having up to date information is important

Hear the objection completely before responding

Situation 6

Patel Engineering is very happy with the training solution offered by Shabari Technologies. Mital has asked Rajesh to submit his formal proposal. Rajesh has already discussed the ball park commercials. Rajesh is very happy!! Discuss, if the deal is close to closure?

Order Closure

Assurance from the buyer is not closure Deal is not closed until signed on the dotted line Buyers commitment is tested at this stages Sales personnel need to be persuasive
Persuasion here is assistance and not manipulation

Closure is a long process involving contracts.

Situation 7

Patel Engineering places the order with Shabari.

The Purchase Order is released and the scope is signed.

Discuss if Rajeshs job is over?

Account Maintenance
Order closure is the beginning of a relationship In the business market, post purchase evaluation is extensive. Seller needs to make sure that buyer feels satisfied. Post Sales consumes good sales time and is proportional to order value. Proper account maintenance is key to increased customer share of wallet.

Managing the Sales Funnel

Sales Pipeline Management

Sales Pipeline
Pipeline refers to the set of prospects likely to close business with you with value to each opportunity with a timeline to closure. Pipeline has multiple stages as per the sales process defined by the organization. Sales leads enter the pipeline and some of them come out as customers. Others drop out at different stages.

A Typical Sales Pipeline

Suspect Lead Prospect Develop Propose

Orde r

 Sales pipeline should look like a funnel Movement in the pipeline from one stage to the other is called velocity or acceleration. Historical level of acceleration and average deal size define how your pipeline should be. Pipeline management is the most important task for individuals and organizations. Mismanagement of pipeline is recipe for failure. Focus on Prospecting.

Sales Force Management and control

Dimensions of Sales Management

Sales Organization
Based on Sales Territories Areas of Specialization

Sales Strength and Qualification

Optimum Team size based on target markets Nature of activities

Compensation and Incentive Systems

Above average compensation Rewards performers, motivates the rest and weeds the rest

Role of a Sales Manager

Set Objectives for the Sales Team Recruitment of Sales Force Manage Sales Budgets Motivate and Direct the Sales Force Monitor and help in sales activities Relationship Building Help Field Sales by assisting in cross functional interactions

Information Technology in Managing the Sale Force

Sales is a set of activities to be performed to increase the probability of closure with effective relationship management with all the stakeholders by successfully moving opportunities in the sales funnel on a regular basis. IT systems called SFA tools help the sales force effectively carry out the sales activities with sales managers monitoring sales performance with ease. When seen together with marketing management capabilities, such systems are also called CRM systems.

Benefits of IT in Sales

Helps in centralizing data Allows contact and account management Maps the organizations sales policies and processes Helps in assigning ownership and avoids conflict. Helps reporting upwards in the hierarchy Helps in conducting sales activities by highlighting information need areas and with alerts and notifications Helps in objective assessment of sales funnels Helps in transitions, when required

You are interacting with a customer for a solution on real time analytics of their transaction data to drive insightful action.

Discuss, what activities need to be conducted from start to end to close this engagement.

Role of Presales

Presales is the set of activities that needs to be conducted during the sale process to align your solution to the customers business problem. It is called pre-sales with sales being defined as the order closing. Presales includes the following tasks - Need Analysis - POC - Solution Design - Solution Proposal - Solution Demonstrations - RFP responses

What is an Opportunity?
In the case of a business organization, Enterprise Sales opportunities are
Favourable business chances Qualified based on reasonable yet thorough questions/parameters With organizational confidence around being able to deliver to the customer For gains that are monetary and/or for reputation and/or market penetration/expansion

Many Opportunities appear at different times.

Being strategic is about choosing the right ones!!

Not all opportunities are strategic or beneficial.

Saying no professionally is not arrogance but being professional and in the interest of the prospect, organization and self.

Constructing a Deal
You are the sales manager in your territory. You are interacting with the head of operations of a large Bank. The Bank is internally thinking of putting a workflow system in place such that a lot of customer requests originating from the web, contact centre, branches and letters can be managed in a centralized place and automated. You have a proven solution in this area and your brand is well known. The VP of Operations is arranging a meeting for you to showcase your solution to the VP of Business Solutions, VP of IT and the COO. The relationship with the VP of operations is healthy. You have a senior consultant in your team who can showcase the solution effectively. Discuss your next steps.

Channel Management

Discussion

You operate successfully with your transaction reconciliation software in the Indian Banking space as the OEM. You develop, implement and support your solution. You are considering expansion in the African market.

Discuss what will be your strategy

10 mins of preparation time

What is a Sales Channel?

Producer Intermediaries End Consumers

Sales Channels can be from 0 to n levels.

Unlike sales channels in consumer markets, intermediaries do not generally hold physical stock. Order fulfillment is also most of the time done by the OEM and not the intermediaries.

Importance of Channel in IT Enterprise Sales

Allows the seller wider market reach
Manage Geographies Manage Cultures Manage Social, Legal, Political environments

Channel partners help discover and create value. Allows OEM to focus on core competencies Build Economies of Scale Allows buyers the convenience of place (availability) In Business Markets, allows better relationship management Allows selling in parts when the consumer is still thinking in whole !!! Puts more feet on the street that you can possibly afford.

Take a position: Effective Channel Management can reduce piracy.!!

Types of Channel Partners

Distributor Distributor of your products who deals with the OEMs and further deals with the resellers Resells your product at a margin. Adds value in the form of IP, services and resells

Reseller Value Added Reseller

ISVs

Software creators. By virtue of their software selling, underlying pre-requisite gets sold

Considerations for an Effective Channel Strategy

What is your market? What are your growth targets? Who are your current and potential competitors? What is the channel norm in your category?

Channel Conflicts
Goal Incompatibility

Unclear roles and rights

Differences in perception

High dependence on the manufacturer

Ownership

Proposal

What is a Business Proposal

A Written Proposal from a Seller to the Buyer

As a Key Step in the Sales Process

When Price is not the Only Consideration

Proposal Types
Formally Solicited Proposals As a Response to RFP Detailed Competing Proposals are also Sought Informally Solicited Proposals Based on Discussions Between Buyer and Seller Has Context to Business Needs Brief compared to a Formal Proposal When Competing Proposals are not Sought Unsolicited Proposals which are brief Talk About Sellers Capabilities Generally Leave Behinds /Collaterals Price or Commercials are Generally Avoided

Proposals May Further Be -Technical Proposals -Commercial Proposals With Binding Quote -Commercial Proposals Without Binding Quote (Ball Park, Trial Balloon)

You are engaging a large manufacturing company for your solution that can take care of their supplier management, order tracking, etc.
You have finished your first presentation to the representatives of business and IT. By the end of it, you are asked to submit your proposal. Discuss your next steps.

Contents of a Formal Proposal

1. Introduction 2. Executive Summary 3. Process and Other Capabilities In an RFP situation, Generally, the Response Format and/or Response Areas is/are Provided by the Buyer. 4. Understanding of Scope (What, How, However, It Leaves Scope for the Bidder to Include Additional Alternatives) Information 5. . Approach and Methodology

The typical contents of a Formal Proposal Are

7. Project Organization 8. Commercials 9. Legal Terms

6. Project Plan

 Software Licensing

Proprietary Software License

Governed by copyright Software is the Intellectual Property of the publisher. User is granted the rights to usage. Restriction on copying, distribution, reverse engineering, modifications. Example, Microsoft Windows, Oracle Database, SAP ERP Accompanies warranties and support

Open Source Software License

Copyleft!! Passes right to the software and usage object code and source code. Creates a copy owner and not another copyright owner!! If one modifies the code, one has to share the source code and not the object code of the modifications. Warranties are generally not attached and support is community based and not liability of the publisher.

Example: JAVA, LINUX, MYSQL.

Is Open Source always free?

What is a License
An agreement or legal instrument governing usage or distribution of the software Licenses are applicable to proprietary software as well as free ware/open source In the case of proprietary software, buyer is granted only the rights to usage. Ownership of the software still resides with the publisher. In the case of free/open source software, rights to the software are generally transferred to the user.

License Types
Traditional License Types
User Based Access Server Based Access Processor Based Access Devise Based These license types are not discreet. A combination is generally used. For example, 20 user licenses for only two server modules of the available 5 modules. For example, buyer can have Microsoft SQL Servers Standard Edition without the option for a Disaster Recovery (DR) option for only 10 Client Access Licenses (CALs) New Age Licenses Transaction Based Master Record Based Subscriptions (ASP/Saas)

User Based Licenses

Governs number of users accessing the software Can be
Named User Concurrent User Unlimited Users

Licenses generally governed by EULA, license is trust based. (Publisher trusts the user that more copies will not be used)

For users that have to connect to a server, restriction can be imposed through the license manager. (Publishers necessarily do not put this restriction)

Server Based Licenses

Refers to modules enabled on the server. For example, Siebel CRM has sales, service and marketing modules. One can enable some or all modules. Server licenses are also used as license managers that govern end usage number of people connecting, number of installations, etc.

Other Types
Processor Based: Based on the number of processors in the server (Single Processor, Dual Processors, etc.). End usage in such cases in unlimited. Transaction Based
Governed by number of transactions for a periodicity and not number of users/servers etc. Follows new age solution approach and brings publisher and buyer to a symbiotic relationship

Master Record Based

Based on number of entities that require processing and not number of users. Example: HRMS systems are licenses on number of employees and not number of users.

Enterprise Licenses
- Based on Special Terms - Gives sellers large transactions and stickiness and buyers benefit of bulk purchases and special terms - Are based on special agreements.

Proprietary License Lifetime

Generally, licenses are perpetual However, technology keeps changing New versions are available as part of Annual Maintenance Contract (AMC). If not on AMC, in the case of version upgrade, licenses need to be procured fresh.

Saas
Software as a Service is the future. If not all, then the majority of offerings will be subscription based. Solution providers not only provide the software/solution, they provide other necessary services like physical servers and space, security, system maintenance, backup and BCP (High availability, Disaster Recovery), etc either as a bundled offering or as options.

Benefits of SaaS to Buyers

Capex vs Opex Deferred payments reducing huge cash outflow No need to worry about infrastructure, resources

Consumption of solution and not technology. Dealing with one supplier only.
Access to advanced services like BCP at fractional costs No need to worry about upgrades, patches, etc. Easy switch in switch outs

Benefits to Providers
Wider market reach Ease in penetration as TCO is lower Circumventing technology biases Servicing costs are lesser

Protection against user bias against front end systems

What is an RFP

RFP Request for Proposal Also called RFQ Request for Quote Traditionally known as Tender A process
of inviting bids from competent parties for generally well defined needs signifying only an intent and not an obligation.

Types of RFPs
Open RFPs
Generally available to all (access) Satisfying certain eligibility criteria (Respondents)

Closed RFPs
Available to only select parties Generally succeeds an RFI process

When?
Generally Public Sector or Public Sector Enterprises Large Enterprises When requirements are complex Large Capital Outlay Specialized Suppliers

You are the sales manager of a CRM solution organization with good repute in the Indian market.
One day, while reading the newspaper at home over your morning tea, you notice a tender invitation from a large Insurance company for a CRM application. You are very excited to reach office and call upon this company for a meeting. If this is won, you will become a star!

Information Technology Perspectives

You want to effectively target prospects to increase the success ratio in your Marketing efforts and to get more bang for the bucks spent there. A strong BI solution coupled with multi media marketing suite will let you target the most potential buyers with the most suitable products. This will also be a source of sustained competitive advantage for you. Discuss your view points.

 In todays world, IT is increasingly commoditized.

Packaged software for even the most complicated requirements Advancements in computing and development platforms IT is outsourced Propensity for renting it out over the cloud

IT is for infrastructure IT investments alone do not lead to competitive advantage

You wont lose by being a follower.

IT is like any other investment area like raw material, machinery, etc.

IT is a concept and strategy

Amazon.coms business model was dependent on IT and it was a concept. For flipcart.com, the same technology is commodity.

A dish is not so much distinguished by its ingredients as it is by the cook!! IT becomes strategic when coupled with great business strategy. Organization should be culturally geared to use IT to its full advantage

Innovation is continuous and organizations needs to be agile

From the supplier side, domain expertise, best practices, consultancy and knowledge creation are the levers.

You represent a small IT services organization doing small to mid sized projects for the government of Madhya Pradesh. You specialize on web technologies and your skill set is on Microsoft stack. An RFP has been floated by the government of MP for a citizen grievance management system for a completely web based solution capable of handling 40 million cases per year. Is this a worthwhile opportunity for you and should you bid? Discuss what will be your consideration.

The act of bidding engages you in the following

-Relationship with an Enterprise

- Aligning with the strategic intent of your organization -Showcase capability -Invest (Actual Investments and Opportunity Cost) -Compete -Win to earn revenues -Deliver the solution

Some Strategic Questions to Answer

-Should I get into this relationship? -Is this in line with the strategic intent of my organization? Should I Win? - Do I have the capability? - Can I Invest?

- Can I compete?
- Can I win? - Do I have the resources to deliver? - Can I commit for long term?

Bidding is secondary first, have a good sales strategy!

Only a healthy sales funnel will let you make strategic decisions!
Otherwise, Top Line takes away all the attention. Objective the subsequent sections is to understand the strategic areas in bidding assuming that the above are in place!

Part II: Strategic Bidding

What is Strategic About Bidding

Given an RFP that you have received and you need to respond, what is strategic? Discuss. Key Considerations are around Winning Profitability Reputation Opportunity Cost

Scan through the shared RFP and identify its contents

Typical Contents of an RFP

Requirement Eligibility Criteria Scope Timelines and Dates Contract Details Response format Contact Details

COST: The objective of bidding successfully by any supplier are to - Win the opportunity - Optimize risk for the customer and self

Risk of exceeding target cost

100
80 60

40
2 0 0 Strategic Zone TC1 TC2 Total Cost

STRATEGIC ISSUES AND QUESTIONS

Win: Bids Submitted = ?

Have we lost in the past on pricing? If so, what factors were responsible for higher quote? Have we made losses on projects? If so, was it because of quoting less? If so, what factors were responsible for quoting less? Are there wins in the past that should not have been? Are there projects where technical expertise was a constraint? Are there projects where assumptions gave birth to serious issues later? Are there cases that we want to exit but contractually, we are stuck?

Are there cases where we overlooked crucial aspects in the RFP that adversely affected us later?

Did we put the effort to analyze the bid documents sufficiently without missing crucial details that may adversely affect us later? A well defined strategy not only handles strategic issues but also helps in improving the success ratio! Have we understood our role in the project delivery correctly? Are we able to identify the list of deliverables and properly account for its costs and associated risks?

Are we committing to something that we have no control on?

Do we clearly know the gap between what we claim and what we have and can deliver?

Elements of a Good Bidding Strategy

A Structured Bidding Process Identifying the key cost factors
Contractual Terms Deliverables Risks Resources

Bidding is defined as

Strategic Issues

The art and science of using historical data, personal expertise, institutional knowledgebase and exploiting the underlying strategic issues to predict the optimal expenditure of resources and time
Discuss why is it an Art as well.

Leverages

RFP Response Stages

Receive the RFP Check eligibility and feasibility

File exceptions, Seek Clarifications

Draft the response

Internal reviews and approvals

Submit and collect acknowledgement

People Involved
Client Sales Pre Sales

RFP Team

Services/Consulting

Subcontractor (If Required)

Senior Management

Finance

External Consultant (If Required)

Steps In The Structured Bidding Process No Step Owner

1
2 3 4 5 6 7 8 9

Receive RFP and setup teams

Understand Requirements Conceptualize Solution (What?) Conceptualize Solution (How?) Gap Analysis Formulate Response Strategy Prepare Proposal Strategic Review Submit Proposal

Bid Owner
Team 1 (PM, Sales Mgrs, Commercial Mgrs) Team 2 (PMs System Analysts, Architects) Team 3 (PM, Commercial Managers) Team 1 Team 1 + Owner Team 1 and Team 2 Team 1 + Owner + External Consultant (Optional) Sales Manager

Receiving an RFP

What do you mean by receiving an RFP? Discuss RFPs/RFIs can be received from the customer, web site, partners. The output of this step is whether to go or not for the bid and the people that will be involved in the case of Go.

Understand the RFP Requirements

What do you mean by understanding requirements? Types of Requirements Generic
Eligibility Scope Legal Terms Timelines Financial Aspects, etc.

Does customer have a part to play here? Unless details and doubts are asked and clarified, requirement cannot be understood.

Technical
Functional Requirements Technical Environment Integrations and Interfaces

Conceptualize Solution (What and How)

What is the solution is a matter of KNOWLEDGE WHAT is the stepping stone to know the HOW WHAT Defines the SCOPE HOW is determined by the level of SKILL HOW Defines the Deliverables, Resources, Effort and ultimately the COST.

GAP ANALYSIS

Identifies gaps between what has been asked or is required and what can be provided. GAPs exist with resources, finances, infrastructure, processes, etc.

Response Strategy

The key to winning a bid is the right response. The right response is the one that has The right solution The right cost Optimal risk Considered the strategic issues and leverages Response Strategy defines the look of the Proposal.

Understanding The Steps In Strategic Bidding

Understanding RFP Requirements

Customer
Request for Clarification

Delivery Function

Clarification Responses

Understand RFP Requirements

Technical Scoring, Key Professionals Required, Risks Suggested Outsourcing Partners/Subcontractors

Request for Clarifications

RFP

Risk Areas

Sales

You are an IT services company working in the web development domain and specialize in Java as well as .Net. Read at a high level the RFP on POS system of Great Car Care and discuss if you would want to bid or not for this RFP. Also discuss your key considerations on your position.

 The decision to bid (Go) or otherwise (No Go) is the fist and crucial outcome of understanding the requirements.

It is taken by the bid owner after discussions with and findings of one or more people in the team.
This decision is taken considering critical and strategic issues in or with respect to the RFP and can depend on one or more of the following
Eligibility Criteria Resource Availability Legal and Contractual issues Restrictions or role in the RFP The Functional Requirement

At times, customer is also involved in the go or no-go decision

Read the Great Car Care RFP in details on POS system to analyze and identify the requirements. The requirements can be categorized under the work product, implementation, support, training, etc. and generic requirements. Define a table with S.No, Requirement Category, Components and Remarks. Try to do this individually and then compare your notes.

Steps in Understanding the RFP Requirements

Analyze Requirements
The outcome of which is the Deliverables Checklist

Conceptualize Vendor
Talks about your role in the RFP (based on the Deliverables) that can be
Prime Bidder bidding alone Prime Bidder bidding jointly with a partner/sub-contractor Become the sub-contractor, remain behind and let another company frontend.

Prepare Bid Analysis Report Review the Bid Analysis Reports and Arrive at the Final Report

Bid Analysis Report

RFP is analyzed to understand the deliverables, risks, capabilities, resources , strategic issues and leverages.

List of Deliverables.
Helps to understand the scope and expectations Helps to decide on the role in the RFP. Helps in the response strategy later by calling out the strategic issues and leverages. Helps in proper estimation based on deliverables identified

Potential Risks.

Risks in a project arise out of many areas like resources, domain, industry type, project type, technology, etc.
Identifying risks along with their extent/degree allows us to first take the go or no-go decision. It allows in identifying the strategic issues and associated risks to then plan for risk mitigation

Technical Capabilities.

We can only claim what we posses in terms of platform expertise, domain knowledge, type of engagement, etc. Proper assessment of capabilities helps in identifying the following.

Risks Strategic issues and Leverages

Resources Required.
The right personnel are required for preparation of the proposal. Identifying the resources helps in making the RFP response plan and establishing ownership Assumptions/Clarifications References and Knowledgebase Other Comments

Understanding The Steps In Strategic Bidding

Conceptualize Solution

Conceptualizing the solution refers to the actual work product/software to be delivered. Solution is conceptualized at a high Level to arrive at WHAT is the solution. This is then drilled down to arrive at details on HOW to provide that solution through programming, integrating components and deciding the level of automation/sophistication. The high level solution as a context diagram identifies the man-machine boundary.
This is about how the various actors will interact bi directionally with the system The system itself may be further drill down to display the components in its architecture like products, integrations, infrastructure, etc.

Exercise.

Go through in detail in the RFP on POS system for Great Car Care and come up with the context diagram on the solution.

Admin

Login Authentication and Access

Enter the Masters Location, User, Product, services

POS System

Example Above tells an actor as Admin and an input to and output of the system.

Admin

Login Authentication and Access

Login Authentication and Access

FTEs/Supervis ors

Enter the Masters Location, User, Product, services. Create Users, Manage Access Create and Share MIS

Enter Sales Data in local currency

POS System

Delete and Modify Sales Data

View Sales Data in local currency as well as common reporting for HQ.

RMs and Managers

Access MIS and Edit Filter Parameters

POS SYSTEM

MYSQ L

I n t e r n a l F I r e w a l l

Applicati on Server

Query the data marts and access rights, update report run status

Reporting Framework

E x t e r n a l F I r e w a l l

Http access over web browser IE6, IE7, Firefox

The output of this exercise is Understanding of the high level solution Business Functions to be carried out by the application Man Machine Boundaries Entities interacting with the system

With these inputs, we can now work on identifying the input/output processes and business functionality required.
This is the first step of identifying HOW to deliver the solution.

Developing the Low Level Solution HOW

Business Functions as available from the context diagram and granulized further need to be prioritized across
Mandatory: Requirements that are essential for the software to function Important: Requirements that are critical for the software to function effectively and efficiently Ex: It is mandatory to have the facility to create reports. Report creation rights to end users may be important. It can still be done by the Admin. Desirable: Requirements that can be fulfilled provided there is sufficient budget. However, even without fulfilling these requirements, the system will function efficiently.

Exercise: Identify the functions required for the POS system and S.No Function/Requirement Priority (Mandadory/Important/Desirable prioritize them. The format should be
1 Admin to enter the Location Master Mandatory

S.No

Function/Requirement

Priority (Mandadory/Important/Desirable

1 2 3

Admin to enter the Location Master Admin to enter the product master Admin to create users and define permissions Admin to create user roles Admin to create MIS User Login User First Time Password Change Forgot Password Functionality Enter Sales Data Enter Data for only current of past dates Modify Entered Data Delete any data row

Mandatory Mandatory Mandatory

4 5 6 7 8 9 10

Desirable Mandatory Mandatory Mandatory Important Mandatory Mandatory

11 12

Mandatory Mandatory

S.No

Function/Requirement

Priority (Mandadory/Important/Desirable

13 14 15 16

User Access Control Manager Data View User Hierarchy View MIS

Mandatory Mandatory Mandatory Mandatory

17
18 19 20

Create MIS
User Access as per locale Reporting as per locale Consolidated reporting as per regional and national locales

Desirable
Mandatory Mandatory Mandatory

Prioritization is required to segregate the requirements that are absolutely necessary and the desirable ones. Also, it helps in identifying the price limits considering the various combinations and identifying the combination that fits in the strategic zone. Some leverages also arise out of here.

Once the functions and requirements have been identified, they need to be classified across the level of desired automation. A low level automation leaves most of the date entry to users with minimum validations whereas a high level of automation lets the system manage the data exchange, validations. Again, this is done to identify the cost range and leverages.

S.No

Function/Requirement

Low Level

Medium Level

High Level

Admin to enter the Location Master

Manual Entry Row Wise

One time file upload from excel and then periodic file upload One time file upload from excel and then periodic file upload Upload of user list from excel

Automatic Online update from HRMS

Admin to enter the product master

Manual Entry

Automatic Online Update from ERP

Admin to create users and define permissions

Manual Creation of users

Creation of users online integrating with HRMS

4 5

Admin to create user roles Admin to create MIS Run Standard Queries on the Database Wizard Driven reporting Integration with Data Warehouse

The project requires activities like software development and then installing it. Both these activities are discreet and can be called separate work items. Identify other such discreet work items and also sub work items, if any, within any work item.
Software Development

Requiremen t Study

Design

Work Breakdown Structure

POS System

Software Development

Commissioni ng

Training

UAT

Production Rollout

Post Production Support

Documentat ion

Requiremen t Study

- Project is divided into small and manageable units - Each unit is a Work Package (WP) - Each of the WPs has to be estimated for cost

Design

Developmen t

Testing

Estimation
Estimation here refers to estimating the cost of software development
This is the most crucial element of cost estimation Other elements are a lot of times derived based on the effort for software development

Estimations can be done through Judgmental as well Formal Estimation Techniques (FPA, COCOMO). The trend today is more of package implementations than bespoke development.
OEMs IP or products Reusable internal IP

Estimations are more Expert or Judgmental based. A key element is to use organizations historical data to arrive at estimates
Estimation Templates Probability of deviating and degree of deviation

Function Create User

Complexit y L

Effort in Days 1

Remarks Manual Creation of user record Editing login informatio n, permissio n, etc. Flagging a user as deleted

User Managem ent

Edit User

.5

Delete User

.5

Function PreDefined Reports

Complexit y H

Effort in Days 3

Remarks Need to take care of historical data

Report Report Generatio Access n Control Currency Based Rolling up

Function Enter Product Master

Complexit y L

Effort in Days .5

Remarks Need to take care of currency based pricing

Managin Maintain g Old Pricing Product Informatio n Editing Product Informatio n

Need to maintain historical pricing informatio n

Item
Development Data Modeling Requirement

Effort
25 3 5

Remarks

@ 20% of development effort

UAT Training Documentation

5 5 5

Rollout
PM

2
8 @ 20% of overall effort

Documentation

Rollo ut UAT and Regression Training Development and Testing Design Requiremen t

7/1/20 12

14/1/2 012

21/1/2 012

28/1/2 012

4/2/20 12

Project Resources

Requirement

Development

Testing

Documentation

Business Analyst

Project Manager

Tester

Technical Writer

Tech Lead

Dev Lead

Developer

Cost can now be estimated based on Rate Card for each resource type or a blended resource cost.
Question: Are we done with cost estimation?

Consider other elements of cost cost checklist

- Incidental Expenses - Non Billable Resources Project Management, QA, Configuration Management, etc. - Support Costs - Assurance Costs - Other costs on infrastructure, hosting, platform, etc

Understanding The Steps In Strategic Bidding

Formulating Response Strategy

Why a strategy is required for responding?

Only the best responses are selected. It is what you propose against what has been asked. A good response is not only your intent to deliver but your confidence in doing so. Role in the RFP Choice of Partners In every situation, we have strengths and weaknesses though to varying degrees. It is important to play up the strengths and manage the weaknesses. (Weakness here are strategic issues). RFPs give a peek into the buyers state of
Understanding. Preparedness Preferences Openness or biases.

Evaluation criteria

Formulating Response Strategy involves identifying the GAPS, Strategic Issues and the Leverages and handling them appropriately.

Scan through the shared RFP and identify its contents

Typical Contents of an RFP

Requirement Eligibility Criteria Scope Timelines and Dates Contract Details Response format Contact Details

GAP Analysis
Refers to GAPs with respect to the technical solution as well as GAPs in the engagement/RFP

Sales

Delivery Function

Overall GAP Analysis

GAP ANALYSIS

Technical GAP Analysis

GAPs can be with respect to process capabilities, technical capabilities, certifications, finances, resources, industry, engagement type, location, infrastructure, etc. Some of these could be treated as Strategic Issues as well.

GAPs and Strategic issues need to be addressed with a proper plan around how to manage them. What role you play in an RFP is a very effective tool to manage the GAPs and Strategic Issues. Managing GAPs and Issues is not about a defensive strategy. It is about managing them effectively with confidence possibly through alternatives, if any. If the GAPs and Issues cannot be managed, it will/should lead to the No Go Decision.

Leverage Parameters

Leverages refer to strengths in a given RFP situation.

It is imperative to identify the leverages beyond the obvious.

Leverages not only exist but also can be created!
A GAP in process may lead to a partnership that can become a leverage parameter)

Sources of leverage parameters are domain expertise, process maturity, past experience, references, favorable contractual terms, existing relationship, competitors, openness of the buyer, etc.