The Ultimate Bid and Proposal Compendium: The reference guide to winning bids, tenders and proposals.

By Christopher S Kälin

Finally! The Ultimate Bid and Proposal Compendium is the most comprehensive guide to winning bids, tenders and proposals. It's packed with lots of hands-on examples and best practice guidance to develop winning proposals.

This well-structured and easy-to-read book shares insights to virtually all aspects of modern bid and proposal mana

• Language: English
• Publisher: CSK Management GmbH
• Release date: Mar 1, 2019
• ISBN: 9783952506127

Christopher S Kälin

Christopher S. Kälin is a global authority on bid and proposal management. He gives public and corporate seminars, conducts live and virtual training programmes on how to win more business with convincing proposals and bid management best practices. He has worked with companies around the world to improve their success rate, creating over 50 billion dollars in business. He works across many industries, including IT, telecoms, defence, transportation, financial industries, large event organisation, gambling or business outsourcing. He was co-founder and chairman of the German speaking APMP chapter (Association of Proposal Management Professionals) and Regional Director for Europe/Africa. He is APMP certified at the Professional Level (CPP APMP) and is an APMP Approved Trainer. In 2013, he also received the prestigious Fellows Award. He developed the BidMaster™ Framework and the Storyline Method™ for developing compelling proposals. He is also a well-received speaker at business development conferences and sales conventions around the globe. He graduated in Business Administration and Information Technology from Zurich University.

Book preview

The Ultimate

Bid and Proposal Compendium

First Edition

Christopher S. Kälin, CPP APMP Fellow

The Ultimate Bid and Proposal Compendium: First Edition 2019

All rights reserved, especially the right to make copies, edit and translate. Without written permission from the publisher, no part of this work may be reproduced in any form (electronic, photocopy, microfilm or other processes) or edited, copied or distributed using electronic systems.

All brands and product names are used without any guarantee of free usability and may be registered trademarks. For the most part, the publisher uses the creator’s spellings.

Copyright:

© 2019 CSK Management GmbH, Herrliberg, Switzerland

Author:

Christopher S. Kälin, CPP APMP Fellow

ISBN:

978-3-9525061-2-7 (eBook, EPUB format)

Publisher:

CSK Management GmbH

Seestrasse 235

CH-8704 Herrliberg

[e-mail]

www.cskmanagement.com

www.proposal-compendium.com

eBook Conversion:

BookDesigns

Cover image:

Fotolia.com / Adobe Stock Photo (© Andres Rodriguez) / CSK

For Mum and Dad

Your Access to the CSK Knowledge Portal

By buying this book, you receive free access to the CSK Knowledge Portal.

Here, you’ll find:

Comprehensive checklists

Useful tools and lists

Document templates

Useful links from the world of bid and proposal management

The CSK glossary

The CSK literature list

… and more

We constantly develop the portal for you, so check it regularly.

Here’s how to receive your log-in:

Send a copy of the purchase receipt for your book to [e-mail].

You’ll receive your personal access details and a link to the CSK Knowledge Portal within 48 hours.

Contents

The Aim of This Book: Professional Bid and Proposal Management

Part I: Successful Bid and Proposal Management Organisation

1 Professional Proposal Management Organisation with Flexible Role-Based Model

1.1. Typical Tasks and Roles in Bid and Proposal Management

1.1.1 The Role of Proposal Manager or Bid Manager

1.1.2 The Role of Sales

1.1.3 The Role of Bid or Proposal Support (Bid or Proposal Support Office)

1.1.4 The Role of the Opportunity Board

1.1.5 The Role of Project Manager

1.1.6 The Role of Subject Matter Expert (SME)

1.1.7 The Role of Pricing Manager

1.1.8 The Role of Contract Manager

1.1.9 The Role of Quality Assurance (QA)

1.1.10 The Role of Compliance Manager

1.1.11 The Role of Finance Manager

1.1.12 Other Possible Roles

1.2. Organisational Set-Up of Bid and Proposal Management within a Company

1.2.1 Temporary or Dedicated Team?

1.2.2 ‘Breathing’ Proposal Management Organisation

1.2.3 Anchoring Bid and Proposal Management within a Company

1.2.4 Decentralised Organisation, Central Management

1.2.5 Offshoring or Nearshoring

1.2.6 Using External Consultants or ‘On-Demand’ Proposal Managers

2 Crucial: A Well-Trained Proposal Team

2.1. Training for Proposal Managers

2.1.1 The Requirements of a Proposal Manager: A Superhero

2.1.2 Key Training Topics for Proposal Managers

2.1.3 A Track Record for Proposal Managers: APMP Certification

2.2. Training for Other Team Members

3 A Tailored Process

3.1. More Than Just a Process of Internal Approval

3.2. Professional Integration into the Company’s Process Landscape

4 Competition Culture

5 The Right Tools

Part II: Systematically Understanding the Customer’s Perspective

1 From Need to Contract: The Long Decision-Making Process

1.1. It Always Begins with a Need

1.2. From Need to Want: The Desire for Change Awakens

1.3. From Want to Demand: Things Get Serious

1.4. Finally: The Purchase Decision

2 The Buying Centre: The People behind the Purchase Decision

2.1. The User

2.2. The Subject Matter Expert (Technical Buyer)

2.3. Management (Economic Buyer, Approver)

2.4. Procurement (Purchasing, Sourcing)

2.5. The Great Unknown: External Consultants

2.6 Additional Roles

3 How Customers Evaluate Your Bids

3.1. The Tender Evaluation Process: Different Every Time

3.2. Central Mechanisms: Spreadsheets, Criteria and Points

3.3. The Customer’s Evaluation Goggles

3.3.1 Foundations: Easy Readability

3.3.2 Go the Extra Mile: Compliance and Responsiveness

Part III: The BidMaster Framework

1 Bid Preparation: Before the Request for Proposal (or Tender) Is Received

1.1. Save Valuable Time with Preparatory Work

1.2. The Four Typical Areas for Preparatory Work

2 The RFP Has Been Received: Let’s Go!

3 RFP/Request Analysis

3.1. Make Your Core Team Responsible for the Analysis!

3.2 The Dynamic Dozen: Analyse the Twelve Key Components!

3.3. Get Answers to Your Questions and Use the Question Rounds

4 Bid Qualification or the Bid/No-Bid Decision

4.1. Use the Six Magic Questions

4.2. Qualification Is a Management Task: The Opportunity Board

4.3. If You Say No, Say It Properly!

5 Proposal Strategy and Bid Set-Up

5.1. Your Team Set-Up: Get Your Whole Bid Team Together

5.2. Define the Optimal Document Structure

5.3. Proposal Planning: Plan Your Proposal Process Working Back from the Due Date!

5.4. Define the Target Price

5.5. Develop the Four Pillars of Your Proposal Strategy!

5.6. Draft Your Storyline

5.7. Define the Structure of Your Business Case

5.8. Draft the Executive Summary

5.9. Set up Joint File Storage for the Team

5.10. Thoroughly Prepare for the Kick-Off Meeting

6 Solution Design

7 Finalising the Storyline and Document Draft

8 Calculating Costs and Risks

9 Writing and Editing Iterations (Text and Graphics)

9.1. Draft Images before the Text!

9.2. Observe the Seven Golden Style Guidelines When Writing Your Text!

9.3. Have All Documents Systematically Proofread or Edited!

9.4. Observe Correct (Micro) Typography

9.4.1 The Most Important Typography Rules for Proposal Writers

9.4.2 Different Strokes for Different Folks

9.5. Use a Professional Document Template

9.5.1 Text

9.5.2 Page Design (Layout)

9.6. Plan, Manage and Review Any Translations Thoroughly

10 Finalising the Business Case

11 The Red Team Review (Final Document Review, Document Readiness Review)

12 Business Case Approval

13 Finalising the Proposal Document (Printing, Binding, Hole Punching, Folders, Creating PDFs, Packaging etc.)

13.1. Final Formatting and Digital Production

13.2. Physical Production

14 Submitting the Proposal

15 Post-Submission

15.1. Get Ready for Subsequent Requests and Clarifications

15.2. Use the Proposal Presentation to Build Trust

15.3. Don’t Let the BAFO Put Too Much Pressure on You!

15.4. Negotiate Smart, Not Hard!

16 Maintaining Customer Relationship and Lobbying during the Proposal Process

17 Partner Management (Teaming)

18 Logistics

19 Efficient Management of the Proposal Process

20 Lessons Learned: Improve Systematically

21 Party Time!

Part IV: Developing a Convincing Story (Storyline Method)

1 The Customer and Needs Analysis

2 Developing Key Messages

3 Setting up a Message Tree

4 Developing Compelling Proposal Content

4.1. Create Images BEFORE Text

4.2. Ground Rules for Text Development: Two Principles, Seven Golden Style Guidelines and a Couple of Tricks

4.2.1 Principle 1: Use the Customer’s Language from the Beginning!

4.2.2 Principle 2: Focus on the Benefit.

4.2.3 Seven Golden Style Guidelines

4.2.4 Stay Positive!

4.2.5 Ghosting

4.2.6 Repeat Your Messages: Little Strokes Fell Big Oaks

Part V: Typical Elements of a Proposal Document

1 Cover Letter (Side Letter)

2 The Executive Summary

3 The Customer’s Business Drivers, Aims and Challenges: We Understand!

4 Solution Description (‘Our Offer’)

5 Experience and Skills

6 Commercial Information

7 About the Bidder

8 Next Steps

9 Attachments

9.1. References

9.2. CVs

9.3. Indexes

Part VI: Tender Types and Consequences for Proposal Management

1 The Beauty Contest

2 Q&A-Style Requests

3 Unsolicited Proposals

4 Public Tenders

5 Grant Writing

6 Licence Applications

Part VII: This and That

1 Local Differences

2 Industry Differences

3 Risk Management

4 Proposal Management Controlling

5 The APMP (Association of Proposal Management Professionals)

6 Bidding for Small and Medium-Sized Enterprises

7 Knowledge Management and Acquiring Information

8 Bidding under Time Pressure

9 Pre-Written Texts (Boilerplate)

10 Sizzle

Thank You!

About the Author

The Aim of This Book: Professional Bid and Proposal Management

This book is a comprehensive reference guide for anyone involved in the processing of complex bids and proposals in any way, shape or form. It has been written for anyone with a vital interest in ensuring that successful proposal documents are issued by their organisation. It’s a collection of best practices, knowledge, insight and experience from countless bid projects and seminars with hundreds of clients from various industries. It’s also the result of the ongoing dialogues that I continue to have with countless representatives of the APMP (Association of Proposal Management Professionals) and other experts. The book is intended to contribute to the professionalisation and standardisation of ‘proposal management’ as a discipline and provide the many existing bid and proposal managers with tangible help in their everyday work.

Filling a Literary Niche

The decision to spend three years writing this book came about because I’m always asked what literature there is surrounding bid and proposal management¹. And sadly, I was never able to find a comprehensive, up-to-date work that covered the topic to a sufficient breadth, depth and quality. I want to close this gap with this book.

This book is therefore relevant to all proposals, whether they’re for public or private customers. Even so, we can’t cover all the national or local quirks along with their individual legal situations. It’s much more about proposal management best practices in general.

For Anyone Involved in Creating Proposals

This book was written for anyone involved in creating proposals in any way, shape or form. Of course, it’s especially aimed at all ‘bid managers’, ‘proposal managers’, ‘offer managers’ and their team leaders. Not forgetting all sales staff, business consultants, solution architects, project managers, support staff etc. that contribute to proposals (including sales assistants, graphic designers, editors, proofreaders etc.).

And, of course, all managers that are responsible for proposal management in a supervisory capacity: you can and should derive value from this book as well.

Not all chapters will be equally relevant for all readers, but the structure of the book has been set up to make it easy for readers to find important sections.

For All Industries

I’m always asked whether proposals differ across various industries. In my role as a specialist consultant and proposal management trainer, I’ve developed extensive insight into bid management across various areas, including IT, defence, telecommunications, consulting, auditing, finance, gambling, transport, engineering, printing, optics, mega event and energy industries, as well as the nuclear industry. In my role as chairman of the German-speaking chapter of the APMP (APMP DACH) and as the regional director for Europe/Africa, I’ve also had many occasions to speak with representatives of various companies about their idiosyncrasies and specific quirks. And, yes, there are differences. But they aren’t nearly as significant as you might expect. Most aspects of this book therefore apply to all industries and regions.

For All Kinds of ‘Beauty Contests’

It’s worth mentioning that this doesn’t just apply to commercial proposals for goods and services. The majority of the information in this book also fundamentally applies to any ‘beauty contests’, such as licence and grant applications. As an example, this includes applications from telecom companies for mobile frequencies (as they were assigned for the GSM spectrum in Europe in the late nineties, while third generation mobile frequencies were later mostly assigned via auction for ludicrous sums) or applications for gambling permits (lottery licences or permits to operate casinos). This could even encompass a city’s application to hold the Olympic Games. Another example of a beauty contest could be a funding or grant application (creating these applications is also known as ‘grant writing’). This book is designed to cover this topic as well.

To sum it up, this book is not solely intended for private corporate business. The content is just as relevant for all other kinds of organisations involved in creating a proposal or an application as part of a beauty contest. However, as the vast majority of readers will come from the world of business, the book will talk about ‘companies’ even where the statement is just as valid for other organisations, such as a city’s Olympic bid committee.

Preparation for APMP Certification²

Readers preparing for the APMP Foundation™ Level will find explanations on all topics relevant to the APMP Certification Programme Syllabus. The topics in the APMP Body of Knowledge, which serves as the knowledge base for the Foundation™ Level test, are fully covered in this book with detailed explanations and examples. At various points, I’ll specifically refer to APMP definitions, especially when the APMP’s perspective does not completely comply with my own. The Ultimate Bid and Proposal Compendium is therefore an excellent revision source during your test preparations.

Book Structure and Content

This book is split up into seven main sections:

1. Part I: Successful Bid and Proposal Management Organisation

2. Part II: Systematically Understanding the Customer’s Perspective

3. Part III: The BidMaster Framework™

4. Part IV: Developing a Convincing Story (Storyline Method™)

5. Part V: Typical Elements of a Proposal Document

6. Part VI: Tender Types and Consequences for Proposal Management

7. Part VII: This and That

Part I: Successful Bid and Proposal Management Organisation:

In the first part of the book, we’ll discuss how successful bid or proposal management can and should be organised. In the first section, I’ll suggest a role-based organisation model and describe the individual roles. We’ll also touch on organisational models, along with how they can be embedded into a company’s overall organisation. The second section contains descriptions of various skills that an organisation needs and should promote in order to develop a hard-hitting proposal team. In the third section, I provide a rough overview of the BidMaster Framework™ and illustrate the various process steps that typically have to be included in complex offer processes (regardless of the company’s specific process). This process overview will make it easier to understand and appreciate the overall proposal process. We cover the BidMaster Framework™ in more detail in Part III. The fourth section, ‘Competition Culture’, describes the challenges facing management and organisation culture. And finally, in the last section, we’ll discuss how to choose the right tools to improve proposal management.

Part II: Systematically Understanding the Customer’s Perspective:

In the second part, we’ll discuss the other player in the game: the customer. Only when you know how the purchasing side works can you come up with a proposal that’s guaranteed to get the deal. We’ll also discuss the fundamental difference between needs and requirements, and see how customer needs develop in the run-up to their decision. We’ll then also describe the various members of the ‘buying centre’ and their typical roles. Here, the main question is of what role the purchasing department plays. And finally, we’ll discuss what the customer wants to see in your proposal — and what they don’t want to see (so not: ‘we are the leading provider of…’, ‘our flexible, innovative, state-of-the-art solution’).

Part III: The BidMaster Framework™:

In the third part of the book, we go through the whole bid and proposal management process step by step, sharing the best practice for each phase. We’ll begin with proposal preparations and carry on through to the party you’ll be throwing when you’re awarded the contract. This is a collection of all our knowledge, insight and experience from countless bid projects and seminars with hundreds of clients from various industries. This part can and should serve as a handbook for daily use in drafting proposals. You’ll notice that the content and language take on a ‘recipe-like’ style from Part III.

Part IV: Developing a Convincing Story (Storyline Method™):

With the Storyline Method™, you can introduce a train of thought into your proposal by developing convincing key messages for your service package and placing these into your proposal document using a logical structure. This method aims to win over the customer with consistent, clear and hard-hitting messages, while also making it easier to read and evaluate the proposal document.

Part V: Typical Elements of a Proposal Document:

As most proposals often feature a similar document structure with the same chapters and often even the same headings, this part will discuss the best practices that should be considered for each of these typical elements.

Part VI: Tender Types and Consequences for Proposal Management:

Here, we’ll cover various tender types and variations. As well as the classic beauty contest, we’ll consider special cases such as applications for research funding, unsolicited proposals and applications for telecom licences and lottery permits. We’ll also compare Q&A style tenders and open tenders.

Part VII: This and That:

In the last part, we’ll discuss all the topics I simply couldn’t fit into the other chapters in a way that made sense…

The Vision

This book is also a personal mission for me. I have a vision of a business world where companies have largely recognised the strategic importance of proposal management as something that will give them a competitive edge. This would be a world where organisational units involved in proposal management work professionally and where the role and career of bid/proposal manager enjoys the reputation it deserves. This book is my contribution to this vision.

I hope you enjoy reading it!

Key Terms

As some central terms are used differently and even in contradictory manners by different companies, it’s necessary to explain some of them. Most of the terms in this book are applied as they’re used by many international companies or by the APMP (Association of Proposal Management Professionals) in their certification process.

Firstly, we have to establish that the term ‘proposal’ is mostly equivalent to ‘bid’ or ‘offer’. The term ‘tender’ is somewhat confusing, as it’s used synonymously to mean ‘request for proposal’ and ‘offer’ and is therefore used by both sides. ‘Tender management’ is, however, mostly used by the bidder. In any case, there’s a certain level of uncertainty surrounding the terms. It isn’t always clear whether ‘offer’ (or ‘bid’, ‘tender’ or ‘proposal’) refers just to the proposal document or to the offer as a whole, including all commercial content and the overall offer creation process. The term ‘bid’ is less commonly used in markets with an American focus than in those with a British one. The term ‘bid’ tends to be more broadly interpreted (i.e. more than just the document), while ‘proposal’ and ‘offer’ are mostly only used to refer to the document itself, or its creation. However, this vagueness tends to become inconsequential in context.

The following graphic illustrates the most significant terms used in the bid management process.

‘Capture management’ is a term mostly used in the United States for what the rest of the world mostly calls ‘opportunity management’. This involves managing a potential transaction (deal or opportunity) from the moment the sales department identifies the potential customer up until the moment the customer decides for (conclusion of contract) or against (rejection) going into business with the proposing company. This is therefore a classic sales task, but related to a specific potential transaction. Some companies use the term ‘deal management’ or ‘pursuit management’ to mean practically the same thing. The term ‘proposal management’ of course refers to activities relating to creating the proposal, typically from the release of the request for tender (or if there is no request for tender, from the decision that a proposal should be submitted) up to the submission of the document. That’s why a typical proposal manager isn’t involved in the offer presentation or the negotiation phase. A proposal manager in the purest sense therefore has hardly any to no direct customer contact. A capture or opportunity manager in the purest sense can therefore fall back on a proposal manager to create the offer. The bid manager, however, takes on the roles of opportunity manager and proposal manager in one. Still, proposal managers are called bid managers in many companies, even if they don’t take on any opportunity management tasks.

Within this book, we therefore often use the terms ‘bid management’ and ‘proposal management’ interchangeably. With regard to the American proposal community, the term ‘proposal’ is used somewhat more often than ‘bid’.

You’ll find a comprehensive glossary with over 300 terms in the Knowledge Portal.

Part I:

Successful Bid and Proposal Management Organisation

Bid/proposal management is like an elite sport. As there’s no second place when it comes to awarding contracts, ‘good’ team effort will only result in the occasional gold medal. There are hardly any organisations that don’t have significant potential to improve their proposal creation process. Systematic professionalisation is worth it in every case: it’s almost too easy to work out the business case.

There are five starting points to professionalise an organisation’s proposal management: 1) organisational structure and role-based model;

2) the proposal team’s training; 3) the process; 4) ‘competition culture’ and 5) choice of tools. These five things are also the success factors for successful proposal management.

Proposal Management Is an Elite Sport

I firmly believe that proposal management is like an elite sport. Only the best proposal will bring home the gold medal, or the deal. Unfortunately, in the world of drafting proposals, there’s generally only one winner. There is no silver medal for the runner up³. Organisations that win more gold medals enjoy a higher success rate and make more money. In short, they’re more successful.

Figure I-1 Proposal management is like an elite sport. There can be only one winner. A small edge can make all the difference.

Source: KEYSTONE/AP (Markus Schreiber), 2009 World Championships in Athletics in Berlin

Today: A Lack of Professionalisation and Standardisation despite Increasing Demands

Whether it’s outsourcing deals, submissions for industrial facilities, takeover bids or more complex consulting proposals — in B2B business, complex and large-scale offers are par for the course. This makes it even more astonishing to find out just how poorly structured and unprofessional many companies’ approaches are. It’s a fact that the majority of submitted proposals fail to achieve their aim to win the contract. The competition gets the contract and the immense, often unknown costs for drafting an offer are not recouped, as only one proposal is usually accepted — as already mentioned, there’s no silver medal for second place.

Professor Colin Coulson-Thomas of the University of Greenwich (UK) analysed win rates and established that only 4% of companies win more than 75% of tenders, while 77% are successful in less than half of their attempts. Around 40% have win rates that fall between 25% and 50%⁴.

In some companies, proposal creation isn’t even clearly regulated. In many cases, there may be a sales process but proposal creation is simply defined as a single step in the process (‘create offer’) or as an approval process. Proposal creation encompasses so much more than this. In actual fact, there are still many companies that don’t have a dedicated bid manager or proposal manager. Or even worse: they haven’t even defined a corresponding role. It’s mostly project managers, sales staff or business consultants that create offers ‘on the side’, so to speak.

This unsatisfactory situation has several causes. On one hand, the root is often an extensive lack of knowledge (and frequently, ignorance) surrounding the topic at management level. The complexity of creating large-scale proposals is regularly underestimated, and the overall costs of proposal creation are often dismissed or even simply ignored, although these far exceed the associated staffing costs. The bid/proposal management process practically has to bring all of an organisation’s service providers together under time pressure. These extreme conditions are unlikely to be seen at a similar level in any other process. The sum of all activities involved makes proposal creation an independent, time-critical project, the complexity of which is mostly underestimated (even by experienced pros) because each part seems simple when viewed in isolation. In the worst-case scenario, operational chaos reigns before the proposal is submitted and the quality of the submitted document simply isn’t up to scratch. Research carried out by CSK also shows that internal bid evaluations often differ considerably from the customer’s actual perception.

On the other hand, the challenges impacting proposal management have massively increased over the last ten to twenty years and competition has continued to intensify due to ongoing globalisation. Purchasing departments in companies (and also councils) have become more and more structured and professional. The procurement community (also called purchasing) is strictly and systematically organised into associations⁵, while the proposing side lags behind significantly in these terms.

Not too long ago, most (even larger) contracts were awarded without going through a tender process. The purpose of the proposal in such cases was simply to provide written confirmation and documentation of the services on offer and to provide a contractual confirmation of the price. Once accepted by the customer, the proposal then served as a contract for the transaction. Within this system, the customer’s actual decision-making process would only be impacted by this document if it included an unexpected show-stopper. In these cases, the decision would have mostly already been made.

Some contracts are still awarded in this manner even today, although the professionalisation of procurement already mentioned means that this is becoming more and more unusual. In general, a selection of possible contractors is now invited to submit a bid. The proposals are then processed by an evaluation team, which awards points to establish the best offer. Fundamentally, this gives all bidders the same chance of being awarded the contract. The proposal has therefore become the final selling point, making it an important factor in the purchasing decision (see Figure I-2).

Figure I-2 The role of the proposal as a sales document is becoming more and more important, increasing its position as a key to success.

Source: CSK Management

The argument that your relationship with the customer is more important is only partially true. In all, there are four influencing factors that impact the customer’s purchasing decision:

Product or service on offer

Price

Customer relationship

And: the proposal

The weighting of these individual factors varies from case to case. In some cases, a certain factor may have no weighting at all. But the current trend is that the proposal is becoming more and more important. Just a few years ago, you could afford to forego systematic, professional proposal creation. Today, the professionalism of proposal creation and the quality of resulting proposals have become strategic success factors for the company. Unfortunately, some CEOs didn’t get the memo.

The fact that terms are used differently and even sometimes in contradiction just goes to show that bid/proposal management is far from a well-established discipline in most companies. Standardisation and unified definitions of terms are desperately needed. Significant terms have already been explained, but you will find a comprehensive, if not exhaustive, glossary in the Knowledge Portal.

Proposal management is responsible for ensuring proposal quality, regardless of whether a role or function has been defined or not. Companies that want to optimise their performance in proposal creation must systematically professionalise and standardise proposal management — an investment that starts a chain reaction. This book can serve as the foundation for this.

Is It Worth It?

The question is whether investments in improving bid and proposal management are worth it for the company. Many sales employees, especially those who have held their positions for many years, will reject any kind of rejuvenation in proposal management. ‘We’ve had dedicated proposal management for years. They won’t do anything differently. It’s not worth it.’ In actual fact, good to excellent processes are implemented in most cases when it comes to solution development, condition design and management approval. The gap is most apparent in areas that don’t easily flow into a process, such as RFP analysis and especially in the development of a proposal strategy, formulation and presentation of arguments, but also in logistics (PDFing, printing, binding, hole punching, packaging etc.). So, it is indeed very worth it!

The Business Case Is Easy — and Best Practice Pays Off

It’s important to know how enormous an impact professional bid management actually has on turnover. To this end, we have to briefly touch on the key indicator in bid management: the win rate⁶ (often also called hit rate). This describes the ratio of won deals compared to submitted proposals.

Now, let’s say a company has a win rate of 25% (typical for the industry) and achieves 100 million dollars in contract volume each year (see Figure I-3 for a second example). If the company manages to increase their win rate to 30% (a measly 5% increase) through targeted improvements in bid management, this will increase their contract volume to 120 million dollars, i.e. a 20%, or 20 million dollars (!) improvement in sales. Even companies with a comfortable win rate of 50% that could increase this to 60%, for instance, would witness a turnover growth of a fifth. This chain reaction can be seen in the vast majority of cases.

Figure I-3 Good bid management is worth it: imagine your win rate increasing by just five to ten percent. The impact is huge!

Source: CSK Management

Another calculation shows how important professional proposal management (and therefore the win rate) is from a cost perspective. It’s not uncommon for accumulated proposal costs to devour half of your net margin! The cost of bidding isn’t just high, it’s very high. Experience shows that the average cost for proposal creation in complex business-to-business transactions amounts to around 1% to 2% of the expected revenue (TCV, total contract value)⁷. With a sales margin of 15%, this would take up 10% of the margin! If a company has a win rate of 20% (winning one in every five tenders on average), the costs for all five proposals will gobble up half of the margin from the one successful deal! So, investing in bidding should be considered carefully. You can read about proposal costs in Chapter VII 4. You’ll find aspects of the bid/no-bid decision in Chapter III-4.

When Is Bid and Proposal Management ‘Good’?

Improvements to proposal management pay off. But let’s first define what ‘good’ or ‘ideal’ proposal management looks like. The quality of a proposal encompasses two dimensions that generally have conflicting aims (see Figure I-4). The aim of any proposal is, of course, to win. As a result, the product or service on offer must be made as attractive as possible to the customer. If the proposal wins the tender, the proposal was successful. On the other hand, we have risk mitigation and the amount of work involved in the bid process. Sales work should result in as much turnover, margin or contribution margin⁸ as possible. But of course, the product or service on offer must be in line with commercial success.

Figure I-4 Proposal management has conflicting objectives concerning sales performance and minimising risks/expense.

Source: CSK Management

As already mentioned, proposal management is mostly evaluated by win rate to make things easier. But this very much simplifies the relationship between sales performance and proposal costs, and does not take risk components into account.

Five Stepping Stones to Successful Proposal Management

Let’s assume that you’re capable of getting your organisation’s proposal management into shape. We’ll presume that you can pull out all the stops that you want. You can change whatever you like. Money is no object. You decide. Ready?

Right, let’s go! — Now, where do we start? With a new approval process? A new database? New staff? New text templates from the marketing department? Or maybe a calculation tool? The answer is crystal clear: it depends… It’ll hardly surprise you to hear that there’s no one-size-fits-all patented formula that you can use in any organisation. You have to systematically analyse proposal management as a whole.

The following structure has proven itself useful in re-engineering bid and proposal management in countless consulting projects thanks to its simplicity and clarity. Measures to optimise proposal management in an organisation are logically split up into five areas, which I’ll discuss during the course of this chapter. They’re shown in Figure I-5:

1. Professional proposal management organisation with a flexible role-based model

2. A well-trained proposal team

3. A tailored process

4. Competition culture

5. The right tools

Figure I-5 To ensure successful proposal management, five areas should be analysed and optimised.

Source: CSK Management

Even after we’ve grouped the topics into five, clearly defined areas, there still remains the question of where to start. Astonishingly, lots of people tend to tackle the process right away. Experience has shown that it makes more sense to begin with a role-based organisation model for the proposal team. After all, only once I know the roles and their tasks can I begin to develop a process to suit these roles. As a subsequent step, you can then develop the skills required and come up with a training programme based on the roles and process. Then and only then can you start to motivate the team to foster a culture of competition.

And finally, you need to evaluate and implement the right tools to make work easier and more efficient.

1 Professional Proposal Management Organisation with Flexible Role-Based Model

The foundation of functional proposal management organisation is a clear yet flexible role-based model that can be applied to any tender and all related tasks. Subsequent proposal management must be organised based on these roles. A three-level organisational hierarchy can help deal with even drastically fluctuating workloads. Centralising proposal tasks to a certain extent can make sense in some circumstances, but fully outsourcing proposal creation in the sense of offshoring is generally not recommended. The use of external consultants or ad hoc proposal managers can also be useful, but this should be carefully reviewed and thorough preparations made.

In the following sections, we’ll discuss how you can organise your team to facilitate hard-hitting proposal management and enable the efficient and professional creation of successful proposals.

The starting point is a role-based model, wherein various proposal creation tasks are allocated to a clearly defined group of roles. Related tasks should therefore be grouped within one role.

Organisation can then be designed and set up based on this to ensure the right dimensions.

Let’s now turn our attention to the following:

1. Typical tasks and roles in bid and proposal management

2. Organisational set-up of bid and proposal management within a company

1.1 Typical Tasks and Roles in Bid and Proposal Management

The foundation for efficient, and therefore successful, bid and proposal management is an adequately designed role-based model that suitably reflects the company’s specific characteristics and environment.

Focus on Roles, Not Functions (or Positions)

The core of any role-based model is the role, which is independent from the individual and from the owner’s function. While a ‘function’ describes an employee’s purpose or permanent tasks within an organisation, the ‘role’ relates to a group of consolidated tasks within a certain process. A role describes the sum of the role owner’s rights and obligations, and therefore their position within the team. Consequently, other team members may have specific expectations as to what the role owner will or should do within a process, i.e. how this person behaves. Or to put it simply, when everyone knows what everyone else is doing (because their roles are clear), teamwork within the bid team is considerably easier. Several roles can therefore be allocated to a function or a position, and these roles in turn encompass several tasks.

Particularly since practically all proposals come with different conditions and because the proposal process takes place in constantly changing teams, it’s especially important and challenging to ensure that it’s crystal clear who’s doing what in which process step. Rather than redefining tasks and allocating them to team members anew each time, it makes sense to logically group typical tasks together and define these as roles. Depending on the type of proposal (e.g. in terms of complexity or type of transaction), the roles needed for this particular case are allocated to employees at the start of the proposal process.

In order to clearly define roles, we first have to establish and clearly structure all significant tasks so we can then group them into roles. Although this might seem a little academic at first glance, it’s worth carrying out this step carefully.

Companies that continually create the same kinds of proposals with the same employees can actually do without a role-based model. The task packages can simply be directly allocated to employees (or their functions). But these cases are rare in the environments covered by this book.

One Employee in the Core Team per Role

Of course, each role can be split up among as many different specialised employees as you like, as long as these are represented by one person in the core team. As we’ll see later on, it makes sense to set up a core team for more complex proposals, wherein each role is represented directly or indirectly. For example, the task portfolio for proposal support also includes ‘proofreading’ and ‘editing’. An editor is often involved in very large projects to check the whole text for errors and make stylistic improvements. However, most proposals will not be edited by a dedicated person.

Company-Specific Role-Based Models

The set-up of roles within a proposal team depends on the company and its environment. The proposal team roles within a typical consulting firm’s bid team will differ from those in a hardware manufacturer’s team. Still, we find the same or similar roles again and again across many different companies. That’s why these roles are described in the following section simply as food for thought. You can find a similar list of roles in the APMP Body of Knowledge under ‘Lead Your Team’ and ‘Individual and Organizational Roles’. When setting up a role-based model within an organisation, you always have to thoroughly analyse your particular situation. To this end, many different factors have to be considered:

Industry

Size or complexity of proposals

Size and structure of the organisation

Number of proposals to be created per year

Figure I-6 The proposal