Enterprise IT Sales & Distribution A high level understanding
V Krishnan Iyer Software Client Leader, IBM India [Link] iyerkrishnanv@[Link] 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
[Link] business model was dependent on IT and it was a concept. For [Link], 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 [Link], 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 [Link] Function/Requirement Priority (Mandadory/Important/Desirable prioritize them. The format should be
1 Admin to enter the Location Master Mandatory
[Link]
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
[Link]
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.
[Link]
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.
