Competitive Assessments: Understanding What the Competition Will Bid 2002 SCEA National Conference and Training Worksho

1. Competitive Assessments: Understanding What the Competition Will Bid2002 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 Background The Competitive Assessment Process Identifying customer needs Self assessment Competitor intelligence Strategy selection Winning Price

3. 3 SCIP Society of Competitive Intelligence Professionals (SCIP): www.scip.org Founded in 1986 Serving professionals engaged in the collection, analysis, and management of information on competitive and business strategies A global community of �CI� professionals

4. 4 SCIP Code of Ethics To continually strive to increase the recognition and respect of the profession To comply with all applicable laws, domestic and international To accurately disclose all relevant information, including one�s identity and organization, prior to all interviews To fully respect all requests for confidentiality of information

5. 5 SCIP Code of Ethics (cont.) To avoid conflicts of interest in fulfilling one�s duties To provide honest and realistic recommendations and conclusions in the execution of one�s duties To promote this code of ethics within one�s company, with third party contractors and within the entire profession To faithfully adhere to and abide by one�s company policies, objectives, and guidelines

6. 6 Competitive Assessment Process

7. 7 Information Needs You must have marketing intelligence on: Your customer(s) Yourself Your competitors

8. 8 Everyone Is Involved In Data Collection Winning strategy depends on excellent information network capture team members business development staff field representatives (yours and other companies�) management teammates and suppliers Develop alternate sources to: correct communications errors remove biases, opinions, inaccuracies increase sample size (and confidence)

9. 9 Who Is the Customer? Everyone in the two organizations involved in buying and operating the acquisition agency the user community Learn everyone�s roles and authority in: defining requirements deciding program strategy deciding selection strategy

10. 10 Customer Requirements All customer requirements are real but do not necessarily have the same importance Compliance Issues �must haves� which all offerors comply with but don�t produce differences among proposals compliance is a necessary but not sufficient condition to winning Discriminators more than the requirement, lower risk approach, etc. result from an assessment against the customer�s Most Important Requirements (MIRs)

11. 11 More on MIRs MIRs are needed to assess our competitors (and ourselves!) MIRs for a program in formulation can be synthesized through regular contact with the program office Explicit MIRs appear in: Commerce Business Daily synopses Draft RFP Section M Final RFP Section M

12. 12 MIRs: Evolution and Sources CBD Customer Contacts Libraries Draft Documents: Competition SOO Teammates Statement of Work Final Trade Associations Sections L & M L&M Seminars Specifications Journals Pre-RFP Draft RFP Final RFP

13. 13 Identifying MIRs MIRs Compliance Issues

14. 14 Self-Assessment See yourself as others see you Utilize unbiased, objective sources Customers Other companies Consultants Resist the tendency to over-emphasize what you perceive to be your strengths The customer will be the judge

15. 15 Intelligence on Ourselves What do we bring to the party? Why should the customer want us? unique technical solution low risk approach affordable cost domain expertise good past and present performance system and software engineering processes skills to manage complex teams Don�t drink your own bath water!!

16. 16 Example of Unique Approach �We will deliver the Core Operational Capability (COC) at the first site six months ahead of schedule� benefit: �our approach could save $1M in O&M costs on current system as a result of early cutover� credibility: �we will prove during our proposal demonstration that, for us, COC exists today� 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

17. 17 Competitor Intelligence Company Data Annual reports Capabilities statements Trade shows, exhibits, and other presentations Public data Dunn and Bradstreet Government reports Business libraries Trade magazines and newspapers FOIA requests Source selection debriefings

18. 18 Competitor Intelligence (cont.) Interviews (face-to-face or telephone) Employees and ex-employees Customers Teammates Consultants Internet searches Search services (e.g., LEXIS-NEXIS) Competition databases

19. 19 Competitive Intelligence INSTINCT INTERVIEWS INVESTIGATIONS COMPANY DATA PUBLIC DATA COMPETITION DATABASE

20. 20 Competitive Assessment Session Involve any and all with knowledge of the competition Use some sort of scoresheet maintains focus provides documentation Look at strengths and weaknesses of both self and competitors vs. customer MIRs must be done from customer perspective must be honest and objective

21. 21 Competitive Assessment Worksheets Most Important Requirements (MIRs) MIR 1 MIR 2 MIR 3 MIR 4

22. 22 Scoresheet Legend + Distinct advantage when assessed against MIR 0 No advantage or disadvantage - Distinct disadvantage when assessed against MIR

23. 23 MIR Shoot-Out Summary MIR 1 2 3 4 5 6 7 8 X Y Z Self

24. 24 Action Required If... You are a �-� anywhere You are a �0� and the competitor is a �+� Also If you are a �+�, how do you stay there?

25. 25 Assessment of Strengths and Weaknesses Competitor is a �+� and you are a �0� 1. Make yourself a �+� 2. Make your competitor a �0� or a �-� How? 1. Customer requirements change 2. Teaming 3. IR&D or investment 4. What else?

26. 26 Influencing the Customer Before formal RFP release, you have the opportunity to interface with your customer: Draft RFPs Electronic Bulletin Boards Bidder�s Libraries Watch how the solicitation package changes Based on your inputs Based on your competitors� inputs

27. 27 Improving Features and Benefits Rethink solutions and strategies revisit alternatives and trade studies review teaming alternatives Reshape customer�s perceptions revise MIR order of importance make cost the �most important� MIR ghost the competitors� likely solutions Reassess your ability to compete can you ever get better?

28. 28 Ghosts Bring to bear the power of Negative thinking! If effectively raised and the competition hasn�t thought of it and/or countered it, he gets hurt Bring up the ghost, then show that the same ghost is not in your approach: �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.�

29. 29 Ghostbusters Tackle your own problems head-on never ignore a weakness or deficiency your customer and/or your competitors will know Devise methods to correct the shortcomings �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.�

30. 30 Reducing Risks Educate the customer on your approach white papers, briefings, visits IR&D or investment Demos, simulations, prototypes Fix customer perception of problems Initiate/complete contract tasks prior to award accelerates schedule proves technology enhances proposal credibility

31. 31 No Stone Unturned! Winning strategy includes: some or all of the above what�s left? take competition off the street buy competitor(s) leverage off other programs spend to win accelerate or delay RFP what else?

32. 32 Action Plan Identify required actions Designate a single person responsible for closure of each action item Establish schedule and cost for each item Spell out expected result of each item Develop the �Action Plan� Tie plan to MIRs, win factors, strategies

33. 33 Go-No Go Questions What gaps do we still have in technology? What gaps do we still have in personnel? What gaps do we have in experience? Who do we have to beat to win? We know and acknowledge that we are either the front-runner or else a lesser competitor with a lower probability of win.

34. 34 Learn From Your Experiences Why did we lose? Why did we win? Why did we get tossed out of the competitive range? Why did we make the �short list� but not the final cut? Did we make cost and/or technical mistakes? Did we fail (again!) to correctly size up the competition?

35. 35 Corrective Actions Fix customer perceptions either they were wrong or you have a problem Team with winners a piece of the pie is better than no pie at all! Bid more selectively were you ever a legitimate contender? Improve and intensify the marketing intelligence acquisition process prompt, positive adjustments to behavior

36. 36 Winning Price�.. Is a function of: The competitors� likely bid prices The customers budget and his view of �best value� The evaluation criteria and cost realism Remember: there is such a thing as being �too low�

37. 37 Price-to-Win (PTW) Analysis Top-down estimating that is based upon knowledge of: the competitors� past pricing behavior current market conditions Relies heavily on data from recent contract awards for same/similar products or services but, does not merely use history as a predictor of the future requires analysis of today�s environment and its likely impact on pricing strategies

38. 38 Top-Down vs. Bottoms-Up PTW analysis is allocated to the WBS items Bottoms-up cost proposal usually results in numbers higher than the �bogeys� Re-verify total PTW Reassess allocation of the PTW to the WBS Revise technical/management approach Continue to iterate the bottoms-up 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�

39. 39 Iterating the Bottoms-Up Challenge those areas that don�t reach their �bogey� - accept only reasonable and justified estimates Get the lowest supplier prices possible and maintain competition amongst vendors Conduct design trade-offs: repeat, adjust, repeat Don�t accept the excuse that �this is the way we�ve always done it.�

40. 40 Basis of Estimate

41. 41 Competitive Assessment.... Selected Strategy