Bidding for software contracts Fiona Pearson, CEO CliniSys

Introduction 25 years in the software industry Started as a programmer Business manager at Logica for 14 years Managing director of three software businesses: Data analysis for the world’s airlines Software integrator in telecoms market Clinical applications for hospitals worldwide

Bidding is only one part of the sales campaign Prospect Who has need? Qualify Do they have funding? Will they proceed? Position Develop relationship Prove credibility and capability Beat competition Bid Pre-sales Demo Explain product Reference site visits Agree contract Formalise discussions and offer Non-sales people often think it is all about the bid – because this is the visible portion. Relationship building, understanding, building trust

Get involved in bidding - good experience and exciting Increase commercial awareness Understand customer’s perspective Broaden knowledge of your company’s products and services Meet different teams in your company Opportunity to shine Broaden knowledge of your company’s market Puts your development work into context

To-day’s bid CliniSys Solutions Ltd. Develop laboratory information management systems (LIMS) Our new product has been proven in 1 hospital – but there is still some outstanding development required We receive 1,000 page tender, we have three weeks to respond Everyone very busy, tight timescales to get first solution complete Most bids, tight deadlines, late bids are not read Divide class into tech team, all working on the project, bid manager, sales team, Terry and Simon – FD and commercial director

Timetable

What is the first question to ask? Did we know this tender was coming? Are we speaking to the customer?

Qualification Bids can often cost more than 5% of contract value (small bids could cost as much as 20%) 1:3 is a good hit rate Do we have time and effort to bid? ‘No bid’s – never win business Discuss fact, company very busy – must get product right, word gets around if you no bid

Qualification questions How well do we know the customer? Do we understand his real requirements? Who are the competition? Is there an incumbent? Does the customer have budget? Has the procurement been approved? Do we have a solution which meets the requirements? Are the customer’s timescales realistic? Are the commercial terms acceptable? Tender document often written by a contractor or copied from a neighbouring hospital, so may not totally reflect their requirements Timescales not realistic but sales team think they can change this First reading commercial terms seem OK but reserves right to change his mind

Bid strategy Why will Hillingdon hospital want to buy from CliniSys? Being technically best will not win us the business This is what differentiates good sales people What does the customer really want Persuade the customer we have it Sales team drive this – if not it will be the solution the techies want to deliver

What benefit is the customer looking for? Most software projects are intended to deliver a benefit Cost reduction Increase in productivity Improved safety or accuracy Improved quality Identify the desired benefit Not always what is stated in tender documentation How will it be measured

Listen to customer needs Often bid team too quick to tell customer what they want False assumptions are made Requirements altered to fit bid team’s desired solution

Know your customer Who are the actual decision makers, not always who it seems. Easy to spend all time with IT department selling them technie stuff but rarely the IT department who makes the decision. In this case it is the clinical director and the FD who has the veto. However IT dept like us and are feeding us useful information about the requirement and the competition – bid manager is taking note of and feeding into solution.

Hillingdon Hospital Benefits Improve turn-around times for test results which reduces patient bed-time Improve reporting service to GPs Enables multiple labs to consolidate to reduce costs Provide CEO with benchmarking data to compare each lab’s performance

What is the 2nd question to ask? Can I have an extension?

There is never enough time Understand requirement Design solution to meet requirement Software; our product, third party product, bespoke development Hardware; servers, PCs, peripherals Network Estimate cost of solution Effort to develop Effort to deploy Which licence modules required Cost of hardware and third party software Plan deployment Work packages, timescales, which skills Dependencies on customer Assess risk and cost contingency Write proposal Prepare contractual response Gain internal approvals By definition never finished

Bid Timescale Taken three days to qualify and agree bid strategy – almost one week of three weeks gone

You get extension – 1 week Not what you asked for but you take it gratefully

Bid Management Essential to have a detailed bid plan Run a bid like a project Get the right people on – fast! The deadline cannot move Expect to work week-ends and nights Allow time for review and iteration Allow time for document production and delivery In a very short space of time, a bid manager has to collect a group of people who can tell him exactly what the customer wants, can design a technical solution within the customer’s budget which meets his requirements, can assess how much it will cost and how long it will take, can review all of the risks, can bring everything together in a clear and coherent document, satisfy the commercial department and remember to sell the solution to the customer

Put together high level plan, take last week-end for production, allow two days for iteration following bid review. And at the moment you do not have a team You now have 12 working days to produce the solution and create a winning proposal

Bid Reviews Essential Objective and independent Avoid costly mistakes Experienced check Is the level of risk acceptable? Most companies have bid review checklists Use this to support your bid planning Why bother with bid reviews as they take so much valuable time

Extract from our bid checklist

Replacement oil delivery system ‘Our system will do everything your current system does…’ Bid price: £800,000 Final cost: £3,250,000

You now have a bid team and work can start Not full time and you keep losing people to the project You now have a bid team and work can start You now have 10 working days to produce the solution and create a winning proposal

Solution Development Problem: We need to design a £1m solution to meet Hillingdon’s requirement in three weeks. Answer: Base solution on similar projects and focus on what is different and what are we going to do about it. Crazy – it would take several months in the project. We can only do this if we know what we are doing. Other bids, talking to customer and worked up a solution beforehand with customer

Specify Solution Clear unambiguous statement of requirements This will form part of the contract Can each statement be tested? Avoid user friendly, future proof,… Clear set of performance measures How fast, under what conditions But remember you are still selling

You sold what! Explain benefits but do not make claims we cannot deliver

Avoid promising the undeliverable CliniSys’ software saves lives CliniSys’ software reduces time in hospital by 10% CliniSys software will track all reported hospital infections and alert the nurses as to which beds may be infected

In a chance discussion with the sales guy, you learn that the system also needs to cover the community lab You have 4 working days left, the solution needs a major change, you have no estimates and very little of the bid has been written

Customer Management Keep discussing during the bid Test ideas Make sure results of conversations are fed back into the bid Keep sales team integrated with bid team Sales team need to sell the solution, feed them with the key points, sales team need to let technical team know asap of any changes

The Proposal Companies will have templates and guides for proposals You may need to follow customer defined structure It is a sales document ‘Storyboard’ the proposal Ensure it follows the bid strategy Key themes are understood Extensive use of pictures (relevant) Avoid excessive use of boilerplate Ensure it is an attractive document and easy to read Most important section is the executive summary

Typical Contents Executive Summary Understanding of Requirement Proposed Solution Benefits of Solution Company Capability Implementation Plan Support Services Pricing Contractual Response Check exec summary – count how many times company name, how many times customer name

Preparing Estimates Licences – modules, users, locations… Effort to deploy licences Effort to develop new modules, interfaces… Cost of hardware, PCs, peripherals, network, data centre Cost of third party software, databases, interfaces Timescales, team size, skill mix

Preparing Price Estimates drive cost Price driven by: Level of profitability Level of contingency Financing charges Inflation allowance

Getting paid When How much Currency Taxes Payment from invoice Validity

The legal stuff Obligations and consequences Indemnities Warranties Liabilities You will need legal advice as only used if in dispute

Bid Review Doesn’t go well, the FD and commercial director want to put profit and contingency in which take price above customer budget. Salesman is convinced that we cannot win the deal at that price. Stand-off – what can we do

Imaginative approach required Chips are down, this is when you earn your salary and the salesman’s undying gratitude because you realise that you can re-use the configuration for the main lab in the community lab and save three months of effort bringing the price back into budget – but depends on salesman selling approach to customer – you give him benefits of same system, less training, consistency of approach

You were still printing at 6am this morning, you had to cancel the couriers and take it in yourself. You delivered the bid with one hour to spare.

What happens next? Nothing Short listed Demo’s Reference site visits Revised submissions Bid team goes to sleep for two days, except dev team who are behind on their work and need to work extra hard to catch up

Document all agreed changes and keep proposal under change control Quotes can get out of control at this point – they ask for so many options you are no longer sure what combination they will order for how much Customer wants us but cannot afford it, so loads of questions to get price down. Salesman pushing hard and offering lots of options – he is being difficult to control.

We have been awarded the contract