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Prospector1 an exploration of bidding from opportunity to winning profitable business.

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Presentation on theme: "Prospector1 an exploration of bidding from opportunity to winning profitable business."— Presentation transcript:

1 Prospector1 an exploration of bidding from opportunity to winning profitable business

2 Prospector2 Prospector an exploration of bidding from opportunity to winning profitable business This simulation is designed to allow you to explore the commercial aspects of winning profitable business. A computerised business model will simulate the impact of your actions and those of several virtual competitors

3 Prospector3 The Simulation Preparation Familiarisation Winning Profitable Projects Search for Opportunities Pre-qualify the Project Prepare and Refine the Tender Negotiate the Contract Win the Bid Review Execute Projects Present, discuss & compare

4 Prospector4 Your Situation The Projects The Clients The Competition The Deal Influencing the Deal The Bidding Cycle Your Decisions Using the Computer Learning through Simulation Observations Contents:

5 Prospector5 Your Situation Newly setup subsidiary in Eastern Europe You must build a portfolio of projects for next year You have a small team of commercial staff to bid You can call on the parent for pre-contract design Next year you will have your own design staff You may have some experience of like projects And a prior relationship with some customers All prices and costs are in a universal currency

6 Prospector6 The Projects Design projects that differ in terms of: –Size (from 100 to 2000 design weeks) Many Small (<400 man weeks) Some Medium (400 – 1200 man weeks) Few Large (>1200 man weeks) –Technical Complexity Low through High –Urgency (desired completion week) High (completion in first half year) Medium (completion in third quarter) Low (completion in last quarter)

7 Prospector7 The Clients Types of Customer –Public (probably financially safe) –Private –Other (possibly financially risky) May have Prior Experience (of like projects) Relationship (possible prior and changing) Competency (most reasonably high) Aggression

8 Prospector8 The Competitors There are several virtual competitors –Delaise Percival Large Multinational but not well established –Justin Tyme Medium Sized local company but financially weak –NoJob2Odd Small local company with high profit margins Historic margins from 10 – 16 % –Margins that seem to depend on Competitor Urgency Size

9 Prospector9 The Deal Contract Style –Fixed Cost –Capped Cost Plus –Cost Plus Agreed Start & Completion Payment Terms –At start, at completion, retention & stages during the design period.

10 Prospector10 Influencing the Deal Client Meetings –Improve the relationship –Reduce ambiguity and uncertainty But –Will plateau –Take bidding time Pre-contract Design –Improve chances of winning –Reduce post-contract design work But –Costs money –That will not be recovered if the contract is lost –Improvements not guaranteed

11 Prospector11 The Bidding Cycle Search for Opportunities Pre-qualify the Projects Tender Negotiate Win the Bid (Simulate Outcomes)

12 Prospector12 Search for Opportunities Expend effort to search for opportunities that match the criteria you set. Some clients may come to you. You receive information about Project Size (small, medium or large) Your Project Experience and Client Experience Project Urgency (high, medium or low) Prior & Current Relationship Client Type (public, private or other) You need to decide which to pre-qualify

13 Prospector13 Pre-Qualify Get new information about the project Expected Work (in man-weeks) Desired Completion (week) Contract Style (Fixed Cost, Capped Cost +, Cost Plus) Technical Complexity (low, medium or high) Client Aggression And reprised information about Prior & Client Experience Current Relationship You need to decide which to prepare for tender

14 Prospector14 Prepare to Tender Get new information about the project –Range of work durations –Price & probability of winning And reprise the information you have about –Technical complexity –The Client And budget –For design work –Oncost % –Perceived Project Risk Eventually submit tender price

15 Prospector15 Negotiate: –Start and finish dates –Payment schedule Client Feedback –Clients will provide feedback on individual areas, showing different levels of rejection or acceptance. Negotiate – from through to Eventually make final offer and win or lose

16 Prospector16 Win the Bid After negotiating you will make the final submission to the client and hopefully win the business. A bid that has maximum profitability and minimum risk! But, your negotiation may make a competitors bid better.

17 Prospector17 (Simulate Outcomes) At the end of the simulation: –you decide funding needs –design staff levels. Then all the contracts that you have won will be executed and you will see: –The difference between actual and budget work –If you completed on time –If you made an adequate profit –Whether you had the funds and staff

18 Prospector18 Your Decisions Opportunity Search Criteria Projects to Pre-qualify Projects to tender Explore tender prices Submit tender Negotiate project timing & terms Submit final bid Meet with client Pre-contract design work Forecast staff and funding needs Sequential for individual bids At any stage

19 Prospector19 Using the Computer Decide team name (up to 6 letters) Select from menu Help available about –Help with using the software –Advice on the current task or report –Explanation of result or decision

20 Prospector20 Control Button(s) Control Button(s) Desk Top Simulation Name Simulation Version Task Bar Help & Advice Current Entry or Report Printer Control Current Time Aids

21 Prospector21 Learning through Simulation You will be working in small groups so that you can: –Share knowledge & experience –Promote, present and negotiate ideas –But, not rely on preconceived ones The trainer is there to: –Answer your questions –Coach you –Challenge you –But not tell you what to do You are in charge of the learning process

22 Prospector22 Observations it takes time to understand but the business still has to be run therefore your decisions will not be perfect time will be a constraint by the end you should (just) be in charge your business skills will be challenged remember the purpose is to learn! (rather than just to win!) so, take time to reflect & review and have fun! It will take time to get your feet wet. But the tutor is there to help.

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