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BID TIP 14 |
BID DECISION MAKING |
Most organisations recognise the importance of adopting a bid methodology, which includes a framework for making consistent bid decisions. Understanding project, risk and estimating techniques is excellent foundation, but must be supplemented by strategic decision support tools.
Decision Elements
Whether or not a bid oversight committee or single executive makes the bid / no bid decision is less important than making an informed well considered decision.
Some of the decision considerations include:
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Bid Sustainability |
Is the Bid Affordable? |
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What is the Opportunity Cost |
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Core Business Alignment |
Why do you want to win the opportunity? |
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How well does it fit in with your core business? |
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Bid Capture |
What do you actually know about the client? |
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How well are you regarded and what is the level or rapport |
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Clarity of Opportunity |
How well do you understand the client’s requirements? |
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How clear are the client’s objectives? |
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Market Conditions |
How many competitors are likely to bid on the opportunity? |
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What is your market status? |
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Expertise / Track Record |
Can you deliver – Do you the expertise? |
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Do you have the right experience for the job? |
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Additional Government Specific Decision Considerations
If the opportunity on offer is public sector related additional considerations must be factored into the bid decision process.
The considerations include:
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Public Sector Knowledge |
Do you understand outputs and outcomes? |
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What are the related policy initiatives? |
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Cultural Understanding |
What is the department’s culture? |
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What is the departments operating framework? |
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Experience with Bureaucracy |
How well do you understand tendering provisions? |
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How familiar are you with evaluation metrics? |
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Level of Compatibility |
Is this opportunity commercially compatible? |
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Do you have appropriate equity and diversity policies? |
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Global View
There are seven major categories that should be considered during the bid decision-making process. The number increases to eight categories if the opportunity is government related.
Decision Support Tools
Many organisations now use computer software based decision support tools for the purpose of consistent decision making. In addition to applying decision rules consistently software applications are also able to capture statistical data for in use in comparative modelling exercises.
Whilst some organisations elect to purchase off the shelf solutions others prefer to develop their own bid decision support software.
Decision Tool Development Advice
When developing a decision support application the following points should be taken into consideration:
Decision points should be categorised on the basis of importance.
A weighted scoring system should be used
Individual, grouped and cumulative scores should be displayed
A risk level should be associated with each category
Historical data should be available for comparison with current data
Category scores should be compared to established industry standards
An example report is illustrated below:
In this example the scores for each decision point (consideration) are displayed along with the industry average scores.
Scoring
Internet research will reveal scoring systems based on simple plus and minus systems, which are totally inadequate. The chosen scoring system must be weighted and linked to meaningful risk ratings