Bidding for software contracts Fiona Pearson, CEO CliniSys.

Bidding for software contracts

Fiona Pearson, CEO CliniSys

Introduction

25 years in the software industryStarted as a programmerBusiness manager at Logica for 14 yearsManaging director of three software businesses:

Data analysis for the world’s airlines Software integrator in telecoms market Clinical applications for hospitals

worldwide

Bidding is only one part of the sales campaign

Prospect

• Who has need?

Qualify

• Do they have funding?

• Will they proceed?

Position

• Develop relationship

• Prove credibility and capability

• Beat competition

Bid Pre-sales

• Demo• Explain

product• Reference

site visits

Agree contract

• Formalise discussions and offer

Slide 3

Get involved in bidding - good experience and exciting

Increase commercial awarenessUnderstand customer’s perspectiveBroaden knowledge of your company’s products and servicesMeet different teams in your companyOpportunity to shineBroaden knowledge of your company’s marketPuts your development work into context

Slide 4

To-day’s bid

CliniSys Solutions Ltd.Develop laboratory information management systems (LIMS) Our new product has been proven in 1 hospital – but there is still some outstanding development requiredWe receive 1,000 page tender, we have three weeks to respond

Slide 5

Timetable

Slide 6

Mon Tues Wed Thurs Fri Sat SunWeek 1 1 2 3 4 5 6 7

Bid arrivesWeek 2 8 9 10 11 12 13 14

Week 3 15 16 17 18 19 20 21

Week 4 22 23 24 25 26 27 28Bid due

Week 5 29 30 31

What is the first question to ask?

Did we know this tender was coming?Are we speaking to the customer?

Slide 7

Qualification

Bids can often cost more than 5% of contract value(small bids could cost as much as 20%)1:3 is a good hit rateDo we have time and effort to bid?‘No bid’s – never win business

Slide 8

Qualification questions

How well do we know the customer?Do we understand his real requirements?Who are the competition?Is there an incumbent?Does the customer have budget?Has the procurement been approved?Do we have a solution which meets the requirements?Are the customer’s timescales realistic?Are the commercial terms acceptable?

Slide 9

Bid strategy

Why will Hillingdon hospital want to buy from CliniSys?

Being technically best will not win us the business

This is what differentiates good sales people

• What does the customer really want• Persuade the customer we have it Slide 10

What benefit is the customer looking for?

Most software projects are intended to deliver a benefit

Cost reduction Increase in productivity Improved safety or accuracy Improved quality

Identify the desired benefit Not always what is stated in tender

documentation

How will it be measured

Listen to customer needs

Often bid team too quick to tell customer what they wantFalse assumptions are madeRequirements altered to fit bid team’s desired solution

Slide 12

Know your customer

Hillingdon Hospital Benefits

Improve turn-around times for test results which reduces patient bed-timeImprove reporting service to GPsEnables multiple labs to consolidate to reduce costs

Provide CEO with benchmarking data to compare each lab’s performance Slide 14

What is the 2nd question to ask?

Can I have an extension?

Slide 15

There is never enough timeUnderstand requirementDesign solution to meet requirement

Software; our product, third party product, bespoke development Hardware; servers, PCs, peripherals Network

Estimate cost of solution Effort to develop Effort to deploy Which licence modules required Cost of hardware and third party software

Plan deployment Work packages, timescales, which skills Dependencies on customer

Assess risk and cost contingencyWrite proposalPrepare contractual responseGain internal approvals Slide 16

Bid Timescale

Slide 17


Bid arrivesWeek 2 8 9 10 11 12 13 14

Week 3 15 16 17 18 19 20 21

Week 4 22 23 24 25 26 27 28Bid due

Week 5 29 30 31

You get extension – 1 week

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Bid arrivesWeek 2 8 9 10 11 12 13 14

Week 3 15 16 17 18 19 20 21

Week 4 22 23 24 25 26 27 28

Week 5 29 30 31Bid due

Bid Management

Essential to have a detailed bid planRun a bid like a projectGet the right people on – fast!The deadline cannot moveExpect to work week-ends and nightsAllow time for review and iterationAllow time for document production and delivery

Slide 19

You now have 12 working days to produce the solution and create a winning proposal


Bid arrivesWeek 2 8 9 10 11 12 13 14

Week 3 15 16 17 18 19 20 21

Week 4 22 23 24 25 26 27 28Review Finish proposal Print


Bid Reviews

EssentialObjective and independentAvoid costly mistakesExperienced check Is the level of risk acceptable?Most companies have bid review checklists

Use this to support your bid planning

Slide 21

Extract from our bid checklist

Slide 22

When does the customer want the system operational?

Is this achievable? Is it clear that the plan runs from contract

signature?

Requirements Is there a clear specification as to what we

are delivering?

Is there a clear list of deliverables for both services and software?

Is there a clear list of customer dependencies e.g. interface specifications, interface software, hardware, bandwidth, review of documents, software configuration, attendance at training etc.?

Are we required to provide any design documentation?

Are there any commitments for future development such as regulatory changes, changes to billing?

Have we documented all of our assumptions on the scope of supply?

Have you highlighted required developments /customizing of existing or new modules and has this information been shared with development ? Does the customer pay for these developments?

Performance Are we guaranteeing performance of any of

the following: - processor usage - user interface response times - database search times - message accuracy - message throughput - bandwidth requirements - software or hardware availability - any other

Replacement oil delivery system

‘Our system will do everything your current system does…’

Bid price: £800,000Final cost: £3,250,000


Bid arrivesWeek 2 8 9 10 11 12 13 14

Week 3 15 16 17 18 19 20 21

Week 4 22 23 24 25 26 27 28Review Print


You now have a bid team and work can start

You now have 10 working days to produce the solution and create a winning proposal

Solution Development

Problem: We need to design a £1m solution to meet Hillingdon’s requirement in three weeks.

Answer: Base solution on similar projects and focus on what is different and what are we going to do about it.

Slide 25

Specify Solution

Clear unambiguous statement of requirementsThis will form part of the contractCan each statement be tested?

Avoid user friendly, future proof,…

Clear set of performance measures How fast, under what conditions

But remember you are still selling

Slide 26

You sold what!

Avoid promising the undeliverable

CliniSys’ software saves lives

CliniSys’ software reduces time in hospital by 10%

CliniSys software will track all reported hospital infections and alert the nurses as to which beds may be infected Slide 28


Bid arrivesWeek 2 8 9 10 11 12 13 14

Week 3 15 16 17 18 19 20 21



In a chance discussion with the sales guy, you learn that the system also needs to cover the community labYou have 4 working days left, the solution needs a major change, you have no estimates and very little of the bid has been written

Customer Management

Keep discussing during the bidTest ideasMake sure results of conversations are fed back into the bidKeep sales team integrated with bid team

Slide 30

The ProposalCompanies will have templates and guides for proposalsYou may need to follow customer defined structureIt is a sales document‘Storyboard’ the proposal

Ensure it follows the bid strategy Key themes are understood Extensive use of pictures (relevant) Avoid excessive use of boilerplate

Ensure it is an attractive document and easy to readMost important section is the executive summary

Slide 31

Typical Contents

Executive SummaryUnderstanding of RequirementProposed SolutionBenefits of SolutionCompany CapabilityImplementation PlanSupport ServicesPricingContractual Response

Slide 32

Preparing Estimates

Licences – modules, users, locations…Effort to deploy licencesEffort to develop new modules, interfaces…Cost of hardware, PCs, peripherals, network, data centreCost of third party software, databases, interfacesTimescales, team size, skill mix Slide 33

Preparing Price

Estimates drive costPrice driven by:

Level of profitability Level of contingency Financing charges Inflation allowance

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Getting paid

WhenHow muchCurrencyTaxesPayment from invoiceValidity

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The legal stuff

Obligations and consequencesIndemnitiesWarrantiesLiabilities

You will need legal advice as only used if in dispute

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Bid Review

Slide 37

Imaginative approach required

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Bid arrivesWeek 2 8 9 10 11 12 13 14

Week 3 15 16 17 18 19 20 21


Week 5 29 30 31

You were still printing at 6am this morning, you had to cancel the couriers and take it in yourself.You delivered the bid with one hour to spare.

What happens next?

NothingShort listedDemo’sReference site visitsRevised submissions

Slide 40

Document all agreed changes and keep proposal under change control

Slide 41

We have been awarded the contract

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Bidding for software contracts Fiona Pearson, CEO CliniSys.

Documents

Transcript of Bidding for software contracts Fiona Pearson, CEO CliniSys.