Project Management Institute

Applying PMI best practices to proposal development projects

Abstract

This paper is written from the Seller's perspective. The objective of the Bid Process is to develop accurate and profitable winning solutions for the Buyer, leading to a long-term relationship and continued satisfaction. It is for the Seller's advantage to apply PMI best practices in all phases of the Bid Management processes.

This paper presents some of these practices in all relevant steps of the Seller's Bid Opportunity Management Processes and the relationships with the Buyer's Procurement Management Processes.

Introduction

“There is no use to hurry a camel” (Old Arab proverb)

The camel crosses the deserts with rhythmical and unchanged cadence, so should we when conducting our lives and our projects.

Sellers are making very large investment in R&D for data processing solutions and must feel comfortable that all aspects of the proposal will be managed well. Due to shrinking budgets, the ability to efficiently develop viable proposals is becoming a key concern.

In today's environment, prospective buyers are looking for sellers who can deliver good technical solutions and manage projects well. Developing Proposals with adequate rhythm and following the recommendations outlined in this paper will optimize the use of seller budget dollars and resources, as well as mitigating harmful risks and producing quality proposals.

Scope

The examples and practices/recommendations described here refer to solution deployments in the application area of Telecommunications and contracted values around tens of million US$. The examples and practices shown in this paper refer to a typical RFP response.

These principles with minor variations in the steps flow can also be customized to any application area, project size and for both “proactive” and “reactive” proposals to respond to RFPs, RFIs, RFQs and IFBs.

Stakeholders

Stakeholders may include (but not limited to) the following groups of people:

  • Buyer (Customer)
  • Senior Management: The steering committee that actually participates in the executive approvals and Bid-No bid decisions: Division (Ex: LATAM) CEO, Operations Director, Pre-Sales Director, CFO, Legal, Development (SDC) and Alliance directors.
  • Proposal Team: The team that will respond and is accountable for the various sections of the RFP.
  • Contract Administrator
  • Solution Architect: In Convergys, this person is the Proposal Project Manager
  • Solution Coordinators: Help to achieve the required quality standards for the final deliverables.
  • 3rd Party Companies and System Integrator representatives: Managers that will be actively involved in the planning and execution phases of sub-contracted portions of the SOW as well as the delivering of complementary solutions.

Buyer X Seller Processes Relationship

From the Buyer's perspective most of the work done is performed by the Seller during the Solicitation step of Procurement Management.

Exhibit 1 shows an actual example of how a Buyer would schedule his Solicitation and Source Selection processes:

Exhibit 1

- Exhibit 1 -

The exhibit 2 shows an example of the main relationships between the 2 Process Groups : Buyer X Seller. A summary description of the numbered steps are described below.

Exhibit 2

- Exhibit 2 -

Initiation

Steps 1 to 10 are executed during Initiation Phase.

Steps 1 and 2 below refer to Pre-Proposal activities:

1-BUYER Qualification.

Buyer Qualification may not be possible prior to RFP release. It is always required for “proactive” Proposals and is an input for the risk identification process (ROAM).

If current company standards will not be followed, pre-Proposal activities may include:

-the development of the Communications Plan (how, to whom and when the Proposal progress work updates and status of execution of proposal sections / deliverables will be distributed) and

-the development of the quality management plan.

2-Opportunity and qualification assessment completed by Sales. Deliverables are updated in a Sales Administration System in the Seller's Intranet (At Convergys, this system is called Phoenix).

3-Contact RFP source (from BUYER) to acknowledge receipt and provide contact point for any changes and inquiries (Communication feedback is important to ensure understanding of the message)

4-RFP given to appropriate Sales and Pre-Sales Directors

5-Risk assessment (ROAM) and first cut of delivery timings, assumptions and constraints is completed.

This is the first pass as an input for the decision of going forward with the Bid process.

The ROAM is designed to support the overall process of assessing Proposal viability and to assist management with the bid/no-bid decision. The questions in this model have been found to be critical for evaluating potential risks for a new project. The ROAM provides a high-level “first pass” evaluation of the risks associated with the delivery of the Proposed Product/Service based on the RFP requirements. The project team and management can use the results to decide to proceed or not with the Proposal Development Project.

6-RFP pre-analysis is performed.

7-High level solution architecture mapped against seller solutions. The output is a list of specific component versions & Proposed Solution Roadmap considerations. Proposal Response Strategy, qualitative/quantitative risk analysis and risk response strategy are developed. These strategies may include the use of Partners (SIs, body shop, etc) and 3rd Party complementary solutions. Financial strategies are also developed and may include lowering the price to address competitive situations, outsourcing options, market penetration, etc

8-Bid/No-Bid meeting.

Stakeholders meet to determine if the project will go forward. Sales presents opportunity for senior management sign-off for the project using previous forms assembled and recommends next steps. Management Team discusses the opportunity from a "solution fit", delivery timing/staffing perspective, strategic importance and financial view.

Management Team determines Bid/No-bid and Sales/Pre-Sales take appropriate next steps.

If bid is OK to proceed, go to the next steps. If not OK, send “gentle” letter to BUYER and the project enters the closure phase.

Steps 9 and 10.

Pre-Sales Director assigns a SOLUTION ARCHITECT as the Proposal Project Manager and releases a preliminary version of the Project Charter to the stakeholders. If winning bid, the signed contract will serve as the definitive project charter for the seller.

Planning

Steps 11 to 22 are executed during Planning Phase.

Steps 11 to 17 refers to Organizational Planning and Staff acquisition.

  • After the Release and approval of the Proposal Charter, the Proposal Manager has the required authority to negotiate and ask for resources from the other functional areas of the company. The negotiations to assemble the Team and commit the human resources should be backed up by the Proposal Charter.
  • Proposal Project Manager organizes proposal team, RAM, defines the possible external partners and establish WMS coding for time reporting. The WMS codes (Project and Activity ID codes) are required in order for the Functional Manager/Project Manager to control the performance and X-charge of time between departments.
  • The RFP Response Format Templates, boilerplate type texts (based on RFP requirements and quality standards set on step 1) are also defined.

The deliverables from steps 14 and 15 are based on mandatory RFP requirements.

Steps 16 to 22 are summarized below:

  • Team is acquired thought negotiations with Functional managers and tasks assigned based on lower level of WBS
  • Team directory and WBS dictionary are published in the Intranet (Proposal Workgroup).
  • List of activities, precedence, time and cost and critical path are determined and the Proposal response schedule is developed.
  • Final proposal plan is released for approval.
  • Information of kick-off meeting date/time, WMS codes, RFP documents and proposal response templates are distributed based on company communication standards confirmed in step 1.
  • Proposal Project Manager contacts all support staff and proposal stakeholders for KICK-OFF meeting. Proposal Project Manager provides overview of opportunity, response schedule, ROAM and assignments.

Development of the Proposal – Execution and Control Phases

Steps 23 to 32 are performed during Execution and Control Phases:

  • Proposal Team develops required outputs according to RAM.
  • Team provides progress at status meetings.
  • Proposal Project Manager is responsible for ongoing status meetings, progress reporting, obtaining additional support, and escalations as required
  • An EAF review is scheduled per the response schedule and forecasting the progress of completing all required output
  • A final quality review of each required output is scheduled and performed as completion of each required output occurs. This review ensures quality and accuracy of text, grammar and format, and, reconciliation and consistency with other required output. A baseline of each required output, agreed by the Proposal Team, will be the physical delivery for these reviews. Each baseline output will be evaluated for partial or total use as a “proposal response template” for future use during the Quality Review. Quality Review participant for each required output to be defined by the Proposal Project Manager, minimally to include key contributors and owner.
  • A Pre-EAF meeting should optionally be scheduled with the management team, in preparation for the EAF with IMG Executive Mgmt
  • EAF will use required outputs from the proposal response process as input for the EAF Form. EAF meeting results will be communicated to the Proposal Team through the Pre-Sales Director.
  • Proposal steering committee approves BAFO after interactions with senior management
  • RFP response updates may be required as we progressed through the project and found out more relevant information about the opportunity. After APPROVED BY a change control board changes are incorporated in the Proposal. Sales Lead will provide frequent updates to the Proposal Team on the progress of the buyer's source selection process. The frequency of these updates is determined in the Communications Plan. Sales Lead will trigger the Change Mgt Process with requested changes. Project Manager and the team will drive any required APPROVED CHANGES.
  • RFP Response finalized.

Execution and Closing

Steps 33 to 37 are performed during Execution and Closing Phases:

Proposal is sent to BUYER and archived. Proposal Project Manager works with Sales Director, Sales Lead and any agent for packaging and distribution of the RFP Response. Proposal Project Manager will archive, with security, the RFP Response documents. Proposal Project Manager will schedule Response Team closing and process improvement meeting (DEBRIEF)

Lessons Learned

Team meets to close effort and discuss process improvements. What went well, what needs to improve, how should other support should be involved, what process steps must be added or changed. Proposal Project Manager will communicate the success or failure of our response, if we are in the short list or additional changes are required to win the bid.

Negotiations

Main items that might be negotiated include: Responsibilities, Authority, applicable law, technical and business management approaches, contract financing, price (if not FP contract type)

Resources released: Last activity of Closing phase.

Post-Project Activities: Optional presentations, visits to buyer site and participation in Q&A sessions may be required. Project Manager needs to make sure not to release the team if any of these situations happen.

Contract received

If seller hopefully wins bid, the contract will serve as the basis for the project charter. A revised, more detailed ROAM can be develop, providing a more knowledgeable view of the project risks and help select which risks must be closely managed to enable project success.

Tasks for the Initiation process of next phase include the revision of the assumptions, constraints, proposal, contract terms and conditions and the starting of Contract administration and Project planning activities.

Table of acronyms

AFO Best and Final Offer
CEO Chief Operations Officer
CFO Chief Finance Officer
CVG Convergys
EAF Executive Approval Form
FP Fixed Price
IFB Information for Bid
IMG Information Management Group
LATAM Latin America
PHOENIX Intranet System used to update Sales related information
Q&A Questions and Answers
RAM Responsibility Assignment Matrix
RFI Request for Information
RFP Request for Proposal
RFQ Request for Quotation
ROAM Risk Opportunity Assessment Model
SDC Solution Development Center
SI System Integrator
SME Subject Matter Expert
SOW Statement of Work
T&L Travel and Living
TEAM Proposal Team, Response Team
WMS Work Management System - Intranet

References

1.   Project Management Institute. (2000) A guide to the project management body of knowledge (PMBOK® Guide) (2000 ed.). Newtown Square, PA: Project Management Institute.

2.   Convergys Information Management Group (December 2002) Project Management Handbook v 7.0, Cincinnati, Ohio : Convergys Corporation

3.   Risk Opportunity Assessment Model (ROAM) Version 1.0 (2004) Retrieved 08/02/04 from Convergys Intranet web site: https://www.convergys.com/

4.   Rita Mulcahy (2002-1998) PMP Exam Prep – A Course in a Book (4th Edition for the PMBOK Guide 2000) RMC Publications, Inc., USA

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2004, Flavio Santos
Originally published as a part of 2004 PMI Global Congress Proceedings – Buenos Aires, Argentina

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