Competitive Assessments: Understanding What the  Competition Will Bid 2002 SCEA National Conference and Training Workshop ...
Agenda <ul><li>Background </li></ul><ul><li>The Competitive Assessment Process </li></ul><ul><ul><li>Identifying customer ...
SCIP <ul><li>Society of Competitive Intelligence Professionals (SCIP):  www.scip.org </li></ul><ul><ul><li>Founded in 1986...
SCIP Code of Ethics <ul><li>To continually strive to increase the recognition and respect of the profession </li></ul><ul>...
SCIP Code of Ethics (cont.) <ul><li>To avoid conflicts of interest in fulfilling one’s duties </li></ul><ul><li>To provide...
Competitive Assessment Process Request For Proposals Gather Intelligence Competitive Assessment Self Assessment Strengths ...
Information Needs <ul><li>You must have marketing intelligence on: </li></ul><ul><li>Your customer(s) </li></ul><ul><li>Yo...
Everyone Is Involved  In Data Collection <ul><li>Winning strategy depends on excellent information network </li></ul><ul><...
Who Is the Customer? <ul><li>Everyone in the  two  organizations involved in buying and operating </li></ul><ul><ul><li>th...
Customer Requirements <ul><li>All customer requirements are real but do not necessarily have the same importance </li></ul...
More on MIRs  <ul><li>MIRs are needed to assess our competitors (and ourselves!) </li></ul><ul><li>MIRs for a program in f...
MIRs: Evolution and Sources <ul><li>CBD </li></ul><ul><li>Customer Contacts </li></ul><ul><li>Libraries  Draft Documents: ...
Identifying MIRs <ul><li>MIRs </li></ul><ul><li>Compliance Issues </li></ul>
Self-Assessment <ul><li>See yourself as  others  see you </li></ul><ul><li>Utilize unbiased, objective sources </li></ul><...
Intelligence on Ourselves <ul><li>What do we bring to the party? </li></ul><ul><li>Why should the customer want us? </li><...
Example of Unique Approach <ul><li>“ We will deliver the Core Operational Capability (COC) at the first site six months ah...
Competitor Intelligence <ul><li>Company Data </li></ul><ul><ul><li>Annual reports </li></ul></ul><ul><ul><li>Capabilities ...
Competitor Intelligence (cont.) <ul><li>Interviews (face-to-face or telephone) </li></ul><ul><ul><li>Employees and ex-empl...
Competitive Intelligence <ul><li>  INSTINCT </li></ul><ul><li>  INTERVIEWS </li></ul><ul><li>  INVESTIGATIONS </li></ul><u...
Competitive Assessment Session <ul><li>Involve any and all with knowledge of the competition </li></ul><ul><li>Use some so...
Competitive Assessment Worksheets <ul><li>Most Important Requirements (MIRs) </li></ul><ul><li>MIR 1  MIR 2  MIR 3  MIR 4 ...
Scoresheet Legend <ul><li>+   Distinct advantage when assessed </li></ul><ul><li>against MIR </li></ul><ul><li>0   No adva...
MIR Shoot-Out Summary <ul><li>MIR  1    2  3  4  5  6  7  8   </li></ul><ul><li>X </li></ul><ul><li>Y </li></ul><ul><li>Z ...
Action Required If... <ul><li>You are a “ - ” anywhere </li></ul><ul><li>You are a “ 0 ” and the competitor is a “ + ” </l...
Assessment of Strengths  and Weaknesses <ul><li>Competitor is a “ + ” and you are a “ 0 ” </li></ul><ul><li>1.  Make yours...
Influencing the Customer <ul><li>Before formal RFP release, you have the opportunity to interface with your customer: </li...
Improving Features  and Benefits <ul><li>Rethink solutions and strategies </li></ul><ul><ul><li>revisit alternatives and t...
Ghosts <ul><li>Bring to bear the power of  Negative  thinking! </li></ul><ul><li>If effectively raised and the competition...
Ghostbusters <ul><li>Tackle your own problems head-on </li></ul><ul><ul><li>never ignore a weakness or deficiency </li></u...
Reducing Risks <ul><li>Educate the customer on your approach </li></ul><ul><ul><li>white papers, briefings, visits </li></...
No Stone Unturned! <ul><li>Winning strategy includes: </li></ul><ul><ul><li>some or all of the above </li></ul></ul><ul><u...
Action Plan <ul><li>Identify required actions </li></ul><ul><li>Designate a  single person  responsible for closure of eac...
Go-No Go Questions <ul><li>What gaps do we still have in technology? </li></ul><ul><li>What gaps do we still have in perso...
Learn From Your Experiences <ul><li>Why did we lose?  Why did we win? </li></ul><ul><li>Why did we get tossed out of the c...
Corrective Actions <ul><li>Fix customer perceptions </li></ul><ul><ul><li>either they were wrong or you have a problem </l...
Winning Price….. <ul><li>Is a function of: </li></ul><ul><ul><li>The competitors’ likely bid prices </li></ul></ul><ul><ul...
Price-to-Win (PTW) Analysis <ul><li>Top-down estimating that is based upon knowledge of: </li></ul><ul><ul><li>the competi...
Top-Down vs. Bottoms-Up <ul><li>PTW analysis is allocated to the WBS items </li></ul><ul><li>Bottoms-up cost proposal usua...
Iterating the Bottoms-Up <ul><li>Challenge those areas that don’t reach their “bogey” - accept only reasonable and justifi...
Basis of Estimate Base Data Judgement Factors Estimate Rationale Supportable Cost Estimate + + = <ul><li>Four key question...
Competitive Assessment.... <ul><li>Selected Strategy </li></ul>Customer MIRs Program Definition Our Options/ Win Factors S...
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Competitive Assessments: Understanding What the

  1. 1. Competitive Assessments: Understanding What the Competition Will Bid 2002 SCEA National Conference and Training Workshop Frank R. Flett Flett and Associates 1830 N. Atlantic Av., C-605 Cocoa Beach, FL 32931 (321)-868-2156 www.competitiveassessments.com
  2. 2. Agenda <ul><li>Background </li></ul><ul><li>The Competitive Assessment Process </li></ul><ul><ul><li>Identifying customer needs </li></ul></ul><ul><ul><li>Self assessment </li></ul></ul><ul><ul><li>Competitor intelligence </li></ul></ul><ul><ul><li>Strategy selection </li></ul></ul><ul><li>Winning Price </li></ul>
  3. 3. SCIP <ul><li>Society of Competitive Intelligence Professionals (SCIP): www.scip.org </li></ul><ul><ul><li>Founded in 1986 </li></ul></ul><ul><li>Serving professionals engaged in the collection, analysis, and management of information on competitive and business strategies </li></ul><ul><ul><li>A global community of “CI” professionals </li></ul></ul>
  4. 4. SCIP Code of Ethics <ul><li>To continually strive to increase the recognition and respect of the profession </li></ul><ul><li>To comply with all applicable laws, domestic and international </li></ul><ul><li>To accurately disclose all relevant information, including one’s identity and organization, prior to all interviews </li></ul><ul><li>To fully respect all requests for confidentiality of information </li></ul>
  5. 5. SCIP Code of Ethics (cont.) <ul><li>To avoid conflicts of interest in fulfilling one’s duties </li></ul><ul><li>To provide honest and realistic recommendations and conclusions in the execution of one’s duties </li></ul><ul><li>To promote this code of ethics within one’s company, with third party contractors and within the entire profession </li></ul><ul><li>To faithfully adhere to and abide by one’s company policies, objectives, and guidelines </li></ul>
  6. 6. Competitive Assessment Process Request For Proposals Gather Intelligence Competitive Assessment Self Assessment Strengths And Weaknesses Win Strategy Proposal Themes, Features and Benefits Competition Database Action Plan Identify and Validate MIRs
  7. 7. Information Needs <ul><li>You must have marketing intelligence on: </li></ul><ul><li>Your customer(s) </li></ul><ul><li>Yourself </li></ul><ul><li>Your competitors </li></ul>
  8. 8. Everyone Is Involved In Data Collection <ul><li>Winning strategy depends on excellent information network </li></ul><ul><ul><li>capture team members </li></ul></ul><ul><ul><li>business development staff </li></ul></ul><ul><ul><li>field representatives (yours and other companies’) </li></ul></ul><ul><ul><li>management </li></ul></ul><ul><ul><li>teammates and suppliers </li></ul></ul><ul><li>Develop alternate sources to: </li></ul><ul><ul><li>correct communications errors </li></ul></ul><ul><ul><li>remove biases, opinions, inaccuracies </li></ul></ul><ul><ul><li>increase sample size (and confidence) </li></ul></ul>
  9. 9. Who Is the Customer? <ul><li>Everyone in the two organizations involved in buying and operating </li></ul><ul><ul><li>the acquisition agency </li></ul></ul><ul><ul><li>the user community </li></ul></ul><ul><li>Learn everyone’s roles and authority in: </li></ul><ul><ul><li>defining requirements </li></ul></ul><ul><ul><li>deciding program strategy </li></ul></ul><ul><ul><li>deciding selection strategy </li></ul></ul>
  10. 10. Customer Requirements <ul><li>All customer requirements are real but do not necessarily have the same importance </li></ul><ul><ul><li>Compliance Issues </li></ul></ul><ul><ul><ul><li>“ must haves” which all offerors comply with but don’t produce differences among proposals </li></ul></ul></ul><ul><ul><ul><li>compliance is a necessary but not sufficient condition to winning </li></ul></ul></ul><ul><ul><li>Discriminators </li></ul></ul><ul><ul><ul><li>more than the requirement, lower risk approach, etc. </li></ul></ul></ul><ul><ul><ul><li>result from an assessment against the customer’s Most Important Requirements (MIRs) </li></ul></ul></ul>
  11. 11. More on MIRs <ul><li>MIRs are needed to assess our competitors (and ourselves!) </li></ul><ul><li>MIRs for a program in formulation can be synthesized through regular contact with the program office </li></ul><ul><li>Explicit MIRs appear in: </li></ul><ul><ul><li>Commerce Business Daily synopses </li></ul></ul><ul><ul><li>Draft RFP Section M </li></ul></ul><ul><ul><li>Final RFP Section M </li></ul></ul>
  12. 12. MIRs: Evolution and Sources <ul><li>CBD </li></ul><ul><li>Customer Contacts </li></ul><ul><li>Libraries Draft Documents: </li></ul><ul><li>Competition SOO </li></ul><ul><li>Teammates Statement of Work Final </li></ul><ul><li>Trade Associations Sections L & M L&M </li></ul><ul><li>Seminars Specifications </li></ul><ul><li>Journals </li></ul><ul><li>Pre-RFP Draft RFP Final RFP </li></ul>
  13. 13. Identifying MIRs <ul><li>MIRs </li></ul><ul><li>Compliance Issues </li></ul>
  14. 14. Self-Assessment <ul><li>See yourself as others see you </li></ul><ul><li>Utilize unbiased, objective sources </li></ul><ul><ul><li>Customers </li></ul></ul><ul><ul><li>Other companies </li></ul></ul><ul><ul><li>Consultants </li></ul></ul><ul><li>Resist the tendency to over-emphasize what you perceive to be your strengths </li></ul><ul><ul><li>The customer will be the judge </li></ul></ul>
  15. 15. Intelligence on Ourselves <ul><li>What do we bring to the party? </li></ul><ul><li>Why should the customer want us? </li></ul><ul><ul><li>unique technical solution </li></ul></ul><ul><ul><li>low risk approach </li></ul></ul><ul><ul><li>affordable cost </li></ul></ul><ul><ul><li>domain expertise </li></ul></ul><ul><ul><li>good past and present performance </li></ul></ul><ul><ul><li>system and software engineering processes </li></ul></ul><ul><ul><li>skills to manage complex teams </li></ul></ul><ul><li>Don’t drink your own bath water!! </li></ul>
  16. 16. Example of Unique Approach <ul><li>“ We will deliver the Core Operational Capability (COC) at the first site six months ahead of schedule” </li></ul><ul><ul><li>benefit: “our approach could save $1M in O&M costs on current system as a result of early cutover” </li></ul></ul><ul><ul><li>credibility: “we will prove during our proposal demonstration that, for us, COC exists today” </li></ul></ul><ul><ul><li>competition: (unsaid) we know he does not have a COC capability available until mid-2002, which will barely allow him to meet the required delivery </li></ul></ul>
  17. 17. Competitor Intelligence <ul><li>Company Data </li></ul><ul><ul><li>Annual reports </li></ul></ul><ul><ul><li>Capabilities statements </li></ul></ul><ul><ul><li>Trade shows, exhibits, and other presentations </li></ul></ul><ul><li>Public data </li></ul><ul><ul><li>Dunn and Bradstreet </li></ul></ul><ul><ul><li>Government reports </li></ul></ul><ul><ul><li>Business libraries </li></ul></ul><ul><ul><li>Trade magazines and newspapers </li></ul></ul><ul><ul><li>FOIA requests </li></ul></ul><ul><ul><li>Source selection debriefings </li></ul></ul>
  18. 18. Competitor Intelligence (cont.) <ul><li>Interviews (face-to-face or telephone) </li></ul><ul><ul><li>Employees and ex-employees </li></ul></ul><ul><ul><li>Customers </li></ul></ul><ul><ul><li>Teammates </li></ul></ul><ul><ul><li>Consultants </li></ul></ul><ul><li>Internet searches </li></ul><ul><li>Search services (e.g., LEXIS-NEXIS) </li></ul><ul><li>Competition databases </li></ul>
  19. 19. Competitive Intelligence <ul><li> INSTINCT </li></ul><ul><li> INTERVIEWS </li></ul><ul><li> INVESTIGATIONS </li></ul><ul><li> COMPANY DATA </li></ul><ul><li> PUBLIC DATA </li></ul><ul><li>COMPETITION DATABASE </li></ul>LUCK 5% CREATIVE DIGGING 15% BASIC DATA COLLECTION 80%
  20. 20. Competitive Assessment Session <ul><li>Involve any and all with knowledge of the competition </li></ul><ul><li>Use some sort of scoresheet </li></ul><ul><ul><li>maintains focus </li></ul></ul><ul><ul><li>provides documentation </li></ul></ul><ul><li>Look at strengths and weaknesses of both self and competitors vs. customer MIRs </li></ul><ul><ul><li>must be done from customer perspective </li></ul></ul><ul><ul><li>must be honest and objective </li></ul></ul>
  21. 21. Competitive Assessment Worksheets <ul><li>Most Important Requirements (MIRs) </li></ul><ul><li>MIR 1 MIR 2 MIR 3 MIR 4 </li></ul>Company X Company Y Company Z Self
  22. 22. Scoresheet Legend <ul><li>+ Distinct advantage when assessed </li></ul><ul><li>against MIR </li></ul><ul><li>0 No advantage or disadvantage </li></ul><ul><li>- Distinct disadvantage when </li></ul><ul><li>assessed against MIR </li></ul>
  23. 23. MIR Shoot-Out Summary <ul><li>MIR 1 2 3 4 5 6 7 8 </li></ul><ul><li>X </li></ul><ul><li>Y </li></ul><ul><li>Z </li></ul><ul><li>Self </li></ul>Comments:
  24. 24. Action Required If... <ul><li>You are a “ - ” anywhere </li></ul><ul><li>You are a “ 0 ” and the competitor is a “ + ” </li></ul><ul><li>Also </li></ul><ul><li>If you are a “ + ”, how do you stay there? </li></ul>
  25. 25. Assessment of Strengths and Weaknesses <ul><li>Competitor is a “ + ” and you are a “ 0 ” </li></ul><ul><li>1. Make yourself a “ + ” </li></ul><ul><li>2. Make your competitor a “ 0 ” or a “ - ” </li></ul><ul><li>How? </li></ul><ul><li>1. Customer requirements change </li></ul><ul><li>2. Teaming </li></ul><ul><li>3. IR&D or investment </li></ul><ul><li>4. What else? </li></ul>
  26. 26. Influencing the Customer <ul><li>Before formal RFP release, you have the opportunity to interface with your customer: </li></ul><ul><ul><li>Draft RFPs </li></ul></ul><ul><ul><li>Electronic Bulletin Boards </li></ul></ul><ul><ul><li>Bidder’s Libraries </li></ul></ul><ul><li>Watch how the solicitation package changes </li></ul><ul><ul><li>Based on your inputs </li></ul></ul><ul><ul><li>Based on your competitors’ inputs </li></ul></ul>
  27. 27. Improving Features and Benefits <ul><li>Rethink solutions and strategies </li></ul><ul><ul><li>revisit alternatives and trade studies </li></ul></ul><ul><ul><li>review teaming alternatives </li></ul></ul><ul><li>Reshape customer’s perceptions </li></ul><ul><ul><li>revise MIR order of importance </li></ul></ul><ul><ul><li>make cost the “most important” MIR </li></ul></ul><ul><ul><li>ghost the competitors’ likely solutions </li></ul></ul><ul><li>Reassess your ability to compete </li></ul><ul><ul><li>can you ever get better? </li></ul></ul>
  28. 28. Ghosts <ul><li>Bring to bear the power of Negative thinking! </li></ul><ul><li>If effectively raised and the competition hasn’t thought of it and/or countered it, he gets hurt </li></ul><ul><li>Bring up the ghost, then show that the same ghost is not in your approach: </li></ul><ul><ul><li>“ An offeror that does not share our emphasis on personnel recruitment, training and retention runs the risk of high turnover rate; for the last four years, we have demonstrated the best white-collar retention rate in our industry.” </li></ul></ul>
  29. 29. Ghostbusters <ul><li>Tackle your own problems head-on </li></ul><ul><ul><li>never ignore a weakness or deficiency </li></ul></ul><ul><ul><li>your customer and/or your competitors will know </li></ul></ul><ul><li>Devise methods to correct the shortcomings </li></ul><ul><ul><li>“ Because we experienced some throughput difficulties on the XYZ project, we invested $500K of our own funds to upgrade our bench test facility in order to protect the aggressive delivery schedule required on this effort.” </li></ul></ul>
  30. 30. Reducing Risks <ul><li>Educate the customer on your approach </li></ul><ul><ul><li>white papers, briefings, visits </li></ul></ul><ul><li>IR&D or investment </li></ul><ul><li>Demos, simulations, prototypes </li></ul><ul><li>Fix customer perception of problems </li></ul><ul><li>Initiate/complete contract tasks prior to award </li></ul><ul><ul><li>accelerates schedule </li></ul></ul><ul><ul><li>proves technology </li></ul></ul><ul><ul><li>enhances proposal credibility </li></ul></ul>
  31. 31. No Stone Unturned! <ul><li>Winning strategy includes: </li></ul><ul><ul><li>some or all of the above </li></ul></ul><ul><ul><li>what’s left? </li></ul></ul><ul><ul><ul><li>take competition off the street </li></ul></ul></ul><ul><ul><ul><li>buy competitor(s) </li></ul></ul></ul><ul><ul><ul><li>leverage off other programs </li></ul></ul></ul><ul><ul><ul><li>spend to win </li></ul></ul></ul><ul><ul><ul><li>accelerate or delay RFP </li></ul></ul></ul><ul><ul><ul><li>what else? </li></ul></ul></ul>
  32. 32. Action Plan <ul><li>Identify required actions </li></ul><ul><li>Designate a single person responsible for closure of each action item </li></ul><ul><li>Establish schedule and cost for each item </li></ul><ul><li>Spell out expected result of each item </li></ul><ul><li>Develop the “Action Plan” </li></ul><ul><li>Tie plan to MIRs, win factors, strategies </li></ul>
  33. 33. Go-No Go Questions <ul><li>What gaps do we still have in technology? </li></ul><ul><li>What gaps do we still have in personnel? </li></ul><ul><li>What gaps do we have in experience? </li></ul><ul><li>Who do we have to beat to win? </li></ul><ul><li>We know and acknowledge that we are either the front-runner or else a lesser competitor with a lower probability of win. </li></ul>
  34. 34. Learn From Your Experiences <ul><li>Why did we lose? Why did we win? </li></ul><ul><li>Why did we get tossed out of the competitive range? </li></ul><ul><li>Why did we make the “short list” but not the final cut? </li></ul><ul><li>Did we make cost and/or technical mistakes? </li></ul><ul><li>Did we fail (again!) to correctly size up the competition? </li></ul>
  35. 35. Corrective Actions <ul><li>Fix customer perceptions </li></ul><ul><ul><li>either they were wrong or you have a problem </li></ul></ul><ul><li>Team with winners </li></ul><ul><ul><li>a piece of the pie is better than no pie at all! </li></ul></ul><ul><li>Bid more selectively </li></ul><ul><ul><li>were you ever a legitimate contender? </li></ul></ul><ul><li>Improve and intensify the marketing intelligence acquisition process </li></ul><ul><ul><li>prompt, positive adjustments to behavior </li></ul></ul>
  36. 36. Winning Price….. <ul><li>Is a function of: </li></ul><ul><ul><li>The competitors’ likely bid prices </li></ul></ul><ul><ul><li>The customers budget and his view of “best value” </li></ul></ul><ul><ul><li>The evaluation criteria and cost realism </li></ul></ul><ul><ul><li>Remember: there is such a thing as </li></ul></ul><ul><ul><li>being “too low” </li></ul></ul>
  37. 37. Price-to-Win (PTW) Analysis <ul><li>Top-down estimating that is based upon knowledge of: </li></ul><ul><ul><li>the competitors’ past pricing behavior </li></ul></ul><ul><ul><li>current market conditions </li></ul></ul><ul><li>Relies heavily on data from recent contract awards for same/similar products or services </li></ul><ul><ul><li>but, does not merely use history as a predictor of the future </li></ul></ul><ul><ul><li>requires analysis of today’s environment and its likely impact on pricing strategies </li></ul></ul>
  38. 38. Top-Down vs. Bottoms-Up <ul><li>PTW analysis is allocated to the WBS items </li></ul><ul><li>Bottoms-up cost proposal usually results in numbers higher than the “bogeys” </li></ul><ul><ul><li>Re-verify total PTW </li></ul></ul><ul><ul><li>Reassess allocation of the PTW to the WBS </li></ul></ul><ul><ul><li>Revise technical/management approach </li></ul></ul><ul><ul><li>Continue to iterate the bottoms-up </li></ul></ul><ul><li>Either reconciliation is not achievable (and it may be time to fold) or the basis of estimate can be made to support the top-down “bogeys” </li></ul>
  39. 39. Iterating the Bottoms-Up <ul><li>Challenge those areas that don’t reach their “bogey” - accept only reasonable and justified estimates </li></ul><ul><li>Get the lowest supplier prices possible and maintain competition amongst vendors </li></ul><ul><li>Conduct design trade-offs: repeat, adjust, repeat </li></ul><ul><li>Don’t accept the excuse that “this is the way we’ve always done it.” </li></ul>
  40. 40. Basis of Estimate Base Data Judgement Factors Estimate Rationale Supportable Cost Estimate + + = <ul><li>Four key questions must be answered: </li></ul><ul><li>What is the base data that was used? </li></ul><ul><li>Why is the base data relevant? </li></ul><ul><li>What adjustments were made to the base data? </li></ul><ul><li>Why are the adjustments appropriate? </li></ul>
  41. 41. Competitive Assessment.... <ul><li>Selected Strategy </li></ul>Customer MIRs Program Definition Our Options/ Win Factors Strengths & Weaknesses Acquisition Strategy Eval Criteria Competitors’ Strategy/Price Strengths & Weaknesses Competitive Lowest Credible Lowest Superior Competitive Minimum Acceptable Price Technical

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