Prospector1 an exploration of bidding from opportunity to winning profitable business.
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Transcript of Prospector1 an exploration of bidding from opportunity to winning profitable business.
Prospector 1
Prospectoran exploration of bidding from
opportunity to winning profitable business
Prospector 2
Prospectoran exploration of bidding from opportunity to winning profitable business
This simulation is designed to allow you to explore the commercial aspects of winning profitable business.
A computerised business model will simulate the impact of your actions and those of several virtual competitors
Prospector 3
The SimulationPreparation
Familiarisation
Winning Profitable Projects Search for Opportunities Pre-qualify the Project Prepare and Refine the Tender Negotiate the Contract Win the Bid
Review Execute Projects Present, discuss & compare
Prospector 4
• Your Situation• The Projects• The Clients• The Competition• The Deal• Influencing the Deal• The Bidding Cycle• Your Decisions• Using the Computer• Learning through Simulation• Observations
Contents:
Prospector 5
Your Situation
Newly setup subsidiary in Eastern Europe
You must build a portfolio of projects for next year
You have a small team of commercial staff to bid
You can call on the parent for pre-contract design
Next year you will have your own design staff
You may have some experience of like projects
And a prior relationship with some customers
All prices and costs are in a universal currency
Prospector 6
The ProjectsDesign projects that differ in terms of:
– Size (from 100 to 2000 design weeks)• Many Small (<400 man weeks)• Some Medium (400 – 1200 man weeks)• Few Large (>1200 man weeks)
– Technical Complexity• Low through High
– Urgency (desired completion week)• High (completion in first half year) • Medium (completion in third quarter)• Low (completion in last quarter)
Prospector 7
The Clients
• Types of Customer– Public (probably financially safe)– Private– Other (possibly financially risky)
• May have Prior Experience (of like projects)• Relationship (possible prior and changing)• Competency (most reasonably high)• Aggression
Prospector 8
The Competitors• There are several virtual competitors
– Delaise Percival• Large Multinational but not well established
– Justin Tyme• Medium Sized local company but financially weak
– NoJob2Odd• Small local company with high profit margins
• Historic margins from 10 – 16 %– Margins that seem to depend on
• Competitor• Urgency• Size
Prospector 9
The Deal
• Contract Style– Fixed Cost– Capped Cost Plus– Cost Plus
• Agreed Start & Completion• Payment Terms
– At start, at completion, retention & stages during the design period.
Prospector 10
Influencing the Deal• Client Meetings
– Improve the relationship– Reduce ambiguity and uncertainty
But– Will plateau– Take bidding time
• Pre-contract Design–Improve chances of winning–Reduce post-contract design work
But–Costs money–That will not be recovered if the contract is lost–Improvements not guaranteed
Prospector 11
The Bidding Cycle
• Search for Opportunities
• Pre-qualify the Projects
• Tender
• Negotiate
• Win the Bid
• (Simulate Outcomes)
Prospector 12
Search for OpportunitiesExpend effort to search for opportunities that
match the criteria you set.Some clients may come to you.You receive information about
• Project Size (small, medium or large)• Your Project Experience and Client Experience• Project Urgency (high, medium or low)• Prior & Current Relationship • Client Type (public, private or other)
You need to decide which to pre-qualify
Prospector 13
Pre-Qualify
Get new information about the project• Expected Work (in man-weeks)• Desired Completion (week)• Contract Style (Fixed Cost, Capped Cost +, Cost Plus) • Technical Complexity (low, medium or high)• Client Aggression
And reprised information about• Prior & Client Experience • Current Relationship
You need to decide which to prepare for tender
Prospector 14
Prepare to TenderGet new information about the project
– Range of work durations– Price & probability of winning
And reprise the information you have about– Technical complexity– The Client
And budget– For design work– Oncost %– Perceived Project Risk
Eventually submit tender price
Prospector 15
Negotiate:– Start and finish dates– Payment schedule
Client Feedback– Clients will provide feedback on individual
areas, showing different levels of rejection or acceptance.
Negotiate
– from through to
Eventually make final offer and win or lose
Prospector 16
Win the Bid
After negotiating you will make the final submission to the client and hopefully win the business.
A bid that has maximum profitability and minimum risk!
But, your negotiation may make a competitor’s bid better.
Prospector 17
(Simulate Outcomes)
At the end of the simulation:– you decide funding needs – design staff levels.
Then all the contracts that you have won will be executed and you will see:– The difference between actual and budget work– If you completed on time– If you made an adequate profit– Whether you had the funds and staff
Prospector 18
Your Decisions• Opportunity Search Criteria• Projects to Pre-qualify• Projects to tender• Explore tender prices• Submit tender• Negotiate project timing & terms • Submit final bid• Meet with client• Pre-contract design work• Forecast staff and funding needs
Sequential for individual bids
At any stage
Prospector 19
Using the Computer
• Decide team name (up to 6 letters)• Select from menu• Help available about
– Help with using the software– Advice on the current task or report– Explanation of result or decision
Prospector 20
ControlButton(s)Control
Button(s)
Desk Top
SimulationName
SimulationVersion
Task Bar
Help &Advice
Current Entryor Report
PrinterControl
CurrentTime
Aids
Prospector 21
Learning through SimulationYou will be working in small groups so that you
can:– Share knowledge & experience– Promote, present and negotiate ideas– But, not rely on preconceived ones
The trainer is there to:– Answer your questions– Coach you– Challenge you– But not tell you what to do
You are in charge of the learning process
Prospector 22
Observations
• it takes time to understand• but the business still has to be run• therefore your decisions will not be perfect• time will be a constraint
• by the end you should (just) be in charge• your business skills will be challenged
• remember the purpose is to learn! (rather than just to win!)• so, take time to reflect & review• and have fun!
It will take time to get your feet wet.
But the tutor is there to help.