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White Paper

By Fred Hargrove and Brian Giblin When Should Government

Contractors Invest in a Business Capture Solution?Executive SummaryOver the past 20 years, the federal government’s procurement budget has tripled. Over the same period, the average contract size has decreased by 40 percent. In an environment where the total market is growing but the number of proposals required is growing even faster, government contractors must focus not only on efficiency in responding to opportunities, but also in selecting which opportunities to respond to. This industry trend is compounded by challenges and requirements for increased:

• Transparency and accountability

• Conflicts of interest

• Use of multiple award contracts

• Attention to small business requirements

Additionally, the federal government has shifted more contract dollars to multiple award contracts, such as government-wide acquisition contracts (GWACs) and indefinite delivery/indefinite quantity (IDIQ) contracts.

Government Contractor’s ResponseTo respond to these industry trends and to meet the challenges of their own growth, government contractors often embark on internal transformation projects and implement new processes and systems that will give them the flexibility to sustain future growth. The business development process is a key area of improvement for growing government contractors.

When a company has more than one location, grows to a staff of 150 or more, and/or generates more than $30 million in revenue, the company must re-evaluate its strategies and processes and adopt a more formal approach to business development, capture, and proposal management. While ad hoc business development processes may be sufficient in a company’s early stages, key players in the government contracting sector eventually reach critical mass when informal processes simply are not effective at competing in the marketplace. As part of a more structured approach, companies need to leverage an automated solution that supports critical components in the business development process.

Findings and ConclusionsAccording to a survey conducted by MorganFranklin, government contractors are looking for a solution that supports Opportunity Management, Bid Pursuit Evaluation, Capture Strategy, and Proposal Generation with the end goal being increased revenues, improved win rate, and reduced costs. In a second survey by MorganFranklin of Deltek GovWin CRM* reported year-over-year revenue increases ranging from 25 to 75 percent, as well as improved performance management, improved efficiency, and improved win rate.

Contents

1 Executive Summary

2 Problems and Inefficiencies with Ad Hoc Business Development Processes

4 Automating the Bid and Proposal Process

5 Bid Pursuit Evaluation and Decision Making,

6 GovWin CRM Users Provide Positive Product Feedback

8 GovWin CRM Survey Conclusion

9 Identifying the Need for GovWin CRM

9 GovWin CRM Key Features

11 Conclusion

11 Methodology

* formerly Deltek Costpoint CRM

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Problems and Inefficiencies with Ad Hoc Business Development Processes

The process required for winning contracts and doing business with federal and local governments is painstaking, labor-intensive, time-consuming, and arduous. Multiple award contracts such as GWACs and IDIQs require government contractors to respond to RFPs with proposals that are simply bids to contend for future contract award programs. Subsequently, once an initial bid is selected (and there are usually several winners) additional proposals – often with short turnaround times – are needed to respond to task order requests and actually win the work.

With so much potential business at stake and work required just to bid on these opportunities, it is critical that government contractors have an integrated business development process. Unfortunately, these processes are not always in place.

To gain deep insight into the state of business development processes inside government contractors, MorganFranklin surveyed a wide cross-section of the industry including small, medium-sized, and large government contractors. In addition, they held informal face-to-face interviews with Deltek customers

at Insight, Deltek’s annual user conference. All information was gathered in confidence with the understanding that it was being used to evaluate GovWin CRM.

Based upon the survey responses from government contractors not using GovWin CRM, the business development process can be impaired by the following challenges:

• Inconsistent business practices and processes followed by various departments

• Lack of integration among data sources

• Sole support of a number of functions by spreadsheets alone

• Lack of a mechanism for all contributors to effectively collaborate and share information

• Poorly defined overall processes

• Failure to evaluate key performance metrics on a periodic basis to eliminate inefficiencies

Below is a graphical depiction (Fig. 1) of the bid and proposal process as typically performed by government contractors surveyed, who don’t have a system like GovWin CRM. Individual process functions were essentially isolated with limited integration among them. In some cases, each function was performed by different organizational groups utilizing various ad hoc spreadsheets or customized tools.

Internal Manual Process

L E G E N D

No Formal Process

ResourceManagement

ContactManagement

Report &StatsAnalysis

Bid Pursuit Evaluation & Decision Making

Capture StrategyDevelopment

Document Control & Management

Contract Award &Follow Up

Proposal Generation &Development

LeadGeneration

Figure. 1: Typical Bid & Proposal Process as Performed by Many Businesses

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Business development is essentially the gateway to continued revenue, profits, and organizational growth. Such development is arguably the most important component of a company’s growth strategy in the government contracting marketplace and developing a corporate strategy is critical. Countless negative consequences arise from maintaining overly manual processes or not managing critical tasks at all, including:

• Failure to maximize revenue

• Excessive costs (labor, proposal, B&P, travel, etc.)

• Inefficient time and labor management

• Lack of transparency and poor decision making

• Laborious data management requirements and duplication of effort due to lack of systems integration

• Inability to generate useful reports and statistics

• Inefficient and ineffective communication with customers/contacts

• Low-quality proposals

• Poor information security

• Resources expended on low-probability opportunities

• Insufficient resources available for high-probability or must-win opportunities

• Time wasted manually compiling data and information that could be automated

Lack of transparency into the bid and proposal process prevents even the largest government contractors from answering the simplest questions, such as:

• How many competitive proposals did we bid last year?

• What percentage of them did we win?

• What was the average cost of each proposal?

Without insight into these simple statistics, companies cannot determine the level of wasted effort embedded in their processes. Furthermore, they cannot determine how to improve their business development strategies. Most of the companies surveyed that were not using GovWin CRM didn’t track these metrics and lacked a clear view of the true cost of an inefficient bid and proposal process. Government contractors require a solution that addresses the challenges of the bid and proposal process, limits negative consequences, and provides companies with the ability to continuously improve their processes by monitoring efficiency metrics.

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Automating the Bid and Proposal ProcessTo conduct and manage an efficient business development process, government contractors need timely and accurate information – hence, the need to automate the process as much as possible. Automation supports a more integrated and collaborative process. This survey revealed that most government contractors did not have an automated tool in place to streamline and integrate the entire business development process, and most have relied heavily on Microsoft Excel and Microsoft Access to support various functions of the process.

Whether it was Opportunity Management, Bid Decisions, Proposal Generation, or Reporting, by function the percentage of responses identifying reliance on Excel or having nothing in place varied from 45 to 68 percent. In addition, it was noted that while some automated tools may have been used to support various functions, none were consistently used across the entire process. The overall conclusion made was that automation was not used to drive efficiencies across the entire process.

With multiple and/or ad hoc systems, users must re-key or cut and paste data from one system to another – wasting time, creating delays, and leading to mistakes. In addition, when making decisions or reporting results, users invariably end up using different data and data sources from various points in time, leading to different conclusions. They then must spend time reconciling their differences to ensure proper results. Multiple systems reporting different results can lead to bad decisions, time wasted validating analyses, or loss of confidence in all the systems. These bad decisions include bidding on opportunities that have a low probability of winning, and/or tying up resources that could be put to better use.

Lead/Opportunity GenerationTracking and Management

Bid Pursuit Evaluation andDecision Making

Capture StrategyDevelopment

Proposal Generationand Development

Contract/CustomerManagement

Document Controland Management

Internal Resource Schedulingand Management

Contract Award andFollow-up

Reporting and StatisticalAnalysis Tools

Other

0 2 4 6 8 10

Figure. 2: Priorities for Capture Management Process Systems (Weighted Average – 10 being highest priority)

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When selecting an automated tool to meet the challenges of the business development process, a crucial component involves identifying business and functional requirements and then determining which features and attributes the software must have to meet those requirements. The companies surveyed provided insight into the functions that they believed would benefit most from using an automated tool to maximize the performance of the business development process.

Lead/Opportunity Generation, Tracking, and Management ranked as the most important part of the bid and proposal process, and scored a weighted 8.5 on a scale of 1 to 10 in importance to the overall process.

Bid Pursuit Evaluation and Decision Making, Capture Strategy and Development, and Proposal Generation and Development were identified and ranked by the survey respondents as the second, third, and fourth most important functions of the overall bid and proposal process, respectively. Figure 2 highlights the key functions that companies indicated they would like to automate to strengthen their capabilities.

When asked about their objectives for a capture process solution, respondents indicated that increasing revenue was their highest priority when considering using a business development capture tool, rating it a 9.9 on a scale of 1 to 10 (Fig. 3).

Increasing win-rate was the second highest priority, with respondents rating it an 8.2. Reducing overall costs was also very important and was rated 7.8. Figure 3, below, highlights all of the objectives that respondents want to achieve from an investment in business development capturing tools.

Increase Revenue(meet/exceed revenue goals)

Maximize Capture Ratio(increase win ratio)

Reduce Costs (proposals,travel marketing)

Maximize Performance(revenue per salesperson)

Improved Productivity(higher quality bids, lower cost)

Efficient Scheduling (proactive planning & positioning)

Performance Management(metrics & reporting)

Integration (with other businessapplications, easily configurable)

Increased Transparency(audit trail)

Security (role based access)

0 2 4 6 8 10

Figure 3: Objectives for Capture Management Process Systems (Weighted Average – 10 being highest priority)

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GovWin CRM Users Provide Positive Product Feedback

In their second survey, MorganFranklin used the actual experiences of GovWin CRM users to identify, qualify, and quantify the efficiency and improvement realized by implementing the GovWin CRM product. The users surveyed consisted of veteran users (since 2004) and new users who recently implemented GovWin CRM.

In contrast to the previous group of companies surveyed, the GovWin CRM users that were polled employed a far more organized and efficient approach to managing the demanding bid and proposal process. Based upon the survey results (Fig. 4), GovWin CRM enables businesses to reduce time and effort, decrease costs, and improve overall business intelligence, data management, and process efficiency.

The GovWin CRM users reported year-over-year revenue increases ranging from 25 to 75 percent.

Many factors contributed to these results. When asked how GovWin CRM has helped in overall organizational performance, 56 percent of respondents said that it increased overall performance management, while 44 percent said that it improved overall efficiency.

GovWin CRM users also reported that GovWin CRM enabled improvements through maintaining schedules (meeting milestones), improving performance and business development and win rate, as well as reducing costs (proposal production, travel, and marketing).

Because prior to GovWin CRM, they did not have the tools in place to generate or report on those statistics, many of the companies that replied to the second survey could not identify the exact levels of increase they experienced from years prior to their GovWin CRM installations. Now that these companies are using GovWin CRM, however, they have gained the ability to track these important business metrics.

Increased Performance Management –Solid Metrics and Accurate Reporting

Improved Efficiency – Fewer SourcesTargeted, Quality Deals with Fewer Leads

Maintained Schedule – Met ProcurementMilestones, Proactive vs. Reactive Action

Improved Performance – Business Development/Sales Person, Win Rate

Reduced Costs – Proposal Production, Travel, Marketing, etc.

0% 10% 20% 30% 40% 50% 60%

Figure 4: Benefits Reported by GovWin CRM Users

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Figure 5 shows the results of the GovWin CRM users that were surveyed. Of the government contractors surveyed:• 91 percent indicated that they have

experienced significant improvements in report and metric monitoring.

• 70 percent indicated that GovWin CRM increased their data accuracy including having up-to-date data.

• 70 percent indicated that GovWin CRM helped to improve the ability to perform revenue forecasting/projection and to communicate business development metrics and statuses.

• 64 percent indicated that GovWin CRM improved the quality of their revenue forecasts and projections.

• 64 percent indicated that GovWin CRM’s capabilities to integrate with back office accounting and finance applications have provided them the ability to generate critical information to improve decision making.

• 46 percent indicated that GovWin CRM increased automation that reduced cumbersome, manual processes.

In other words, not only is GovWin CRM able to significantly facilitate increased revenues, but by providing companies with better business intelligence and decision-making tools to prioritize bid and proposal efforts, it is also extremely effective in ensuring that the most lucrative contracts are bid on and won.

GovWin CRM users reported year-over-year revenue increases ranging from 25 to 75 percent.

Improved Reporting

Improved Data Accuracy(e.g., up-to-date data)

Improved RevenueForecasting/Projections

Improved Pipeline Monitoring

Improved Communicationsbetween Departments

Increased Automation/ Reduced Manual Processes

0% 20% 40% 60% 80% 100%

Figure 5: Operational Improvements Reported by GovWin CRM Users

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Qualitatively speaking, GovWin CRM demonstrates its ability to improve the bid and proposal process through many of its robust features. Respondents indicated that they experienced vast improvements in business intelligence and data integrity, as well as in their ability to generate statistics and report on information gathered. Of the respondents, 68 percent claimed that GovWin CRM improved the quantity as well as the quality of the information they were able to gather and share across the company (Fig. 6). All respondents realized improvements in their ability to review opportunities, maintain data accuracy, and check the status of programs. Furthermore, 56 percent were able to develop a more consistent process and better define criteria for evaluating and comparing opportunities.

As a result, respondents indicated that they can make faster and smarter decisions based on better information.• 63 percent reported that decisions were made

earlier and in a more timely manner.

• 50 percent reported that decisions were made based upon more information and better quality of information/intelligence.

Companies also reported that they were able to eliminate B&P spending before a bid/no-bid decision was made.

During the actual proposal generation process, 50 percent of respondents were able to enhance productivity through GovWin CRM’s automation of previously manual tasks, thus allowing more time for qualitative analysis. Additional productivity increases were realized by 40 percent of the respondents who were able to develop more defined capture processes, improving their overall proposal strategies. GovWin CRM users’ organization improvements have helped to facilitate better than expected revenue growth.

GovWin CRM Survey ConclusionIn summary, not only is GovWin CRM able to significantly facilitate increased revenues, but by providing companies with better business intelligence and decision-making tools to prioritize bid and proposal efforts, it is also extremely effective in increasing efficiency and productivity across an organization.

Qualitatively improvedacross the enterprise

Quantitatively improvedacross the enterprise

Become more consistentdefined, and disciplined

Helped focus bid and proposal direction and enhanced corporate messaging

Aligned business goals and core competencies with the right deals

Improved predictability/probability or win-based on gathering and sharing

0% 10% 20% 30% 40% 50% 60% 70% 80%

Figure 6: Improvements in Business Intelligence as Reported by GovWin CRM users

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Identifying the Need for GovWin CRMThe survey results indicate that many companies that have attained a level of growth and complexity where transparency, communications, and efficiency have begun to diminish and management have lost intimate insight into their operational details. Companies with these challenges should consider purchasing a full-featured business development capture tool such as GovWin CRM. The inability to answer simple questions such as, “How many contracts did we bid on in the previous year?” or “What was our average cost per bid?” is a strong indicator that an organization has reached this point.

While there is no precise metric, companies that realize annual revenue growth beyond $30 million and have substantive opportunities and proposals tend to require a more structured approach to business development and capture. Without an efficient and disciplined process, operating costs could increase and bid decisions could be based on a poor understanding of win probabilities. Further resource allocation decisions could be sub-optimal, thus diverting the time and effort essential to developing quality proposals.

Most important is that for a company to identify its need for an automated business development capture tool, it must first understand its own strengths and weaknesses to assess what features and benefits the business requires from a potential solution. While companies may be tempted to select a tool that is capable of only one or perhaps several features, a more future-minded perspective is essential to assess the needs of the business as it continues to grow.

Efficiencies gained through the proper use of the best tool have an excellent chance of accelerating company growth. The needs of the business may change more rapidly as well, placing additional emphasis on the importance of selecting a full-featured, complete solution that encompasses the entire government bid and proposal process. Adopting this type of tool is a strategic investment decision, not a tactical one.

GovWin CRM Key FeaturesGovWin CRM incorporates opportunity management, bid pursuit evaluation, capture strategy, proposal management, and contact management. These are all high-priority features identified by government contractorsthat they need in a full-featured, comprehensive solution for businesses tackling the government bid and proposal process. Additionally, the tool is capable of integrating with many other business applications – allowing for one-way or two-way transfer and manipulation of data – saving time and reducing the chance of error. GovWin CRM interfaces with software and services including:

• Deltek Costpoint®

• Microsoft® Word

• Microsoft® PowerPoint

• Microsoft® Excel

• Centurion

• INPUT

• FSI (FedSources)

• Microsoft® Outlook

• QuarkXpress

• Windows® Mobile Devices

• Microsoft® Pocket PC

• Adobe® InDesign

The most important benefit that companies using GovWin CRM reported is that the tool enables them to manage the entire bid and proposal process – from lead generation through contract award, to reporting, statistical analysis, and beyond.

GovWin CRM users have achieved a far more efficient and organized process because of the automation of previously labor-intensive tasks, such as finding and compiling data. This has freed up time for more analytical or value-added activities. Furthermore, a previously linear process has been transformed into a cyclical one in which contracts awarded are more properly managed, leading to better customer relations and additional future business awards.

The most important benefit that companies using GovWin CRM reported is that the tool enables them to manage the entire bid and proposal process – from lead generation through contract award, to reporting, statistical analysis, and beyond.

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Critical functions that have historically been ad hoc or sporadically and ineffectively maintained – such as contact and customer management, reporting and statistical analysis, and document control and management – remain at the core of every step of the GovWin CRM bid and proposal process. These functions become easy to maintain, and continue to be useful well beyond the contract award. Beginning with lead identification, GovWin CRM essentially creates a feedback loop where economy of effort is leveraged to reduce proposal generation and lead turnaround time. In contrast to the “silo” process described above, the GovWin CRM bid and proposal process prompts a more integrated approach. The GovWin CRM tool supports a closed-loop process as depicted in the following graphic.

GovWin CRM is easily configured and integrated with other office software programs, which gives it great flexibility and value as a central data management and business intelligence tool. Capture plans and opportunity reviews can be automatically generated in PowerPoint, saving hours of time and avoiding inevitable human error. The information can be exported to Excel to create any number of statistical analysis tools and reports.

The tool is also capable of interfacing with finance and accounting software, providing efficient management of bid and proposal budgets, saving time for capture managers and accounting staff. In addition, for automatic lead generation and data population, GovWin CRM interfaces with opportunity search services such as FSI and INPUT.

During proposal development, GovWin CRM utilizes document templates to efficiently and accurately populate standard company information, past performances, and opportunity-specific resumes. Productivity increases, as less time is spent performing highly labor-intensive tasks such as compiling spreadsheets from multiple users. Information sharing is seamless and transparent and reports are automatically generated, allowing company personnel to focus on analytical processes.

GovWin CRM’s robust reporting and statistical analysis tools vastly improve the ability to communicate business development metrics and project/contract status to executive management, boards of directors, and/or investors. Internal audits are performed more easily and rapidly, identifying organizational strengths and weaknesses more readily. GovWin CRM facilitates information exchange with automatic, up-to-date reporting on current intelligence, and also aids in the performance of gap analysis and the production of more accurate revenue projections.

Docum

ent Control & Managemen

t

Reporting & Statistical Analysis

Lead/Opportunity Generation

Track

ing & Management Bid Pursuit Evaluation

& Decision Marketing

& Follow Up

Contract Award

& Development

Proposal Generation

Develop

men

t

Capture

Str

ateg

y

Lead ID

OpportunityManagement

Figure. 7: Government Bid and Proposal Process Managed by Deltek GovWin CRM

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Opportunities can be evaluated and prioritized based upon company specific criteria, enabling structured bid/no-bid decisions. As the surveys showed, this can dramatically improve efficiency in the decision-making process, as well as improve the quality of the bid decision, leading to improved win ratios, increased revenues, and lower average costs per bid.

ConclusionWhile ad hoc business development processes may be sufficient in a company’s early stages, as the company grows it reaches a size or complexity where the strategy and processes that got them there no longer enable future growth. Any company that continues to grow and cross the chasm recognizes that it must make the strategic decision to re-evaluate its business capture process. As part of that transformation, it must make a strategic investment in software that can propel its success.

The companies surveyed for this study universally recognized the need for an automated tool to enhance the business development function. They viewed such tools as a means of reducing the overall timeframe for the bid and proposal life cycle.In the past, several software tools existed that addressed one or two aspects of the government business development and proposal management processes, but none that were designed as a complete solution specifically for the government contractor business capture market. Deltek’s GovWin CRM offers a robust and user-friendly solution for government contractors.

As a result of the survey conducted and based on MorganFranklin’s experience with the complexities of the local and federal government bid and proposal processes, it was determined that Deltek GovWin CRM offers a compelling solution. GovWin CRM users reported above average year-over-year revenue as well as improved performance management, improved efficiency, and improved win rate.

MethodologyMorganFranklin Corporation developed two separate surveys designed to gather information to objectively evaluate Deltek’s GovWin CRM solution, a business development and proposal management tool designed specifically for government contractors. GovWin CRM is a tool that is a Web-based central knowledge repository for business intelligence that helps companies automate and streamline their bid and proposal processes. It also provides significant visibility into the status of corporate business development and proposal management activities.

The surveys were designed to assess when it makes sense to invest in automating and standardizing BD processes, and for those companies that made that investment – what, if any, business benefits were realized from this investment. For the first survey, MorganFranklin collaborated with Deltek to prepare a list of companies operating in the government contracting market that did not use GovWin CRM. This survey was developed to identify the features and benefits of a business development capture tool that were most important to government contractors. For the second survey, MorganFranklin obtained a list of GovWin CRM users from Deltek. This survey was designed to determine measurable changes and results that companies experienced after implementing GovWin CRM.

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Deltek (Nasdaq: PROJ) is the leading global provider of enterprise software and information solutions for professional services firms and government contractors. For decades, we have delivered actionable insight that empowers our customers to unlock their business potential. Over 14,500 organizations and 1.8 million users in approximately 80 countries around the world rely on Deltek to research and identify opportunities, win new business, optimize resources, streamline operations, and deliver more profitable projects. Deltek – Know more. Do more.® deltek.com

MorganFranklin is a single source for all financial, management, and technology support with a proven track record leading time-sensitive and technically intensive initiatives. We bring together individuals with operations and Big Four audit and consultancy experience, including an average of 20 years of experience at manager and higher staff levels. Our teams carry certifications and advanced degrees such as CPA, CIA, CISA, MBA, and PMP, just to name a few. Our ability to tap diverse in-house expertise allows us to proactively manage your requirements and quickly address issues that could impact your compliance, efficiency, or profitability. Count on MorganFranklin to bring extensive experience, diverse perspectives, determination, and competitive rates to meet all of your business, financial, and information technology needs.