Friday 31 October 2014

Knowledge Management for bid teams

A couple of weeks ago I published a blog post about KM for Sales. A bid team is also involved in selling, but selling in a very different context to that of the field sales force, and the Knowledge management framework for bidding is more akin to that for projects. 

The task of compiling a modern bid document should not be under estimated. The cost of tendering can run into very substantial figures. The bid team works as a team. Some organisations have a full-time team to work on all bids, while others create new teams to service each bid.

 We have worked with bid teams in the Nuclear Industry selling services for decommissioning nuclear power stations, bid teams in the service industry bidding for major PFI (public financed initiative) contracts, and oil and gas teams bidding for the right to explore acreage. In each case, the team is looking to sell its service to the client, in competition with other rival companies.

Bidding is not a continuous operation, it is episodic, and each bid can be considered to be a project. The metric for the bid is simple - win or lose (although the magnitude of the win is also important, as the service needs to make a profit. As one bid manager told us, “If we get it wrong on a major bid, we can get it wrong for the next 25 years”).   The best bid team is the one with the highest conversion ratio - the ratio of won bids to lost bids.

 A bid team needs the following knowledge.

  • Knowledge of the bidding and procurement process. They have to know how tendering works, how prequalification works, how bids are awarded, and so on. This is fairly basic knowledge, but needs tailoring for each specific market and each specific bid process. Does the client have a preferred contract style, for example? Do they require certain prequalification conditions? What aspects of the bid document are most important, and will be awarded most points in the bid evaluation process? The bid team needs to acquire this knowledge from previous teams operating in this market or with this client. 
  • Knowledge of the client. They need to understand the needs of the client, and their business drivers. The successful bid will be one which speaks directly to the client’s needs, and which uses examples and references which the client will understand and appreciate. This knowledge will come from those who interact with the client - maybe the sales force, maybe people with a history of working with that client, or people already delivering a service to that client. 
  • Knowledge of which bids may be coming up in the future. There is huge advantage in being networked into the market, so that you have advanced notice of forthcoming projects before the request for tender is issued. You can gain some advanced notice, and do some research before the bid even begins. Again, this knowledge comes from your colleagues already working in the market. 
  • Knowledge of how to construct a bid document. Creating a bid document is a complex project requiring collaboration between many people, and the cost can be considerable. There is huge value to the organisation in being able to construct bids quickly, effectively and efficiently, perhaps reusing powerful content from previous bids. Again, the bid team needs to acquire this knowledge and content from previous teams within the organisation. 
  • Knowledge of the product or service. This is crucial, and this knowledge provides the core of the document. Very often, the knowledge and experience of the bidder is a strong selling point, and this experience needs to be clear in the document. Also you need to make it clear that you have a good Knowledge Management system in place, and that you can therefore guarantee that the service or product you are offering will include the best knowledge of your company. This knowledge comes from those already delivering that product or service. 
  • Knowledge of pricing. This is also crucial knowledge. For a big bid, if the pricing is too low, the company may make a loss for a long time. If the pricing is too high, they may not win the bid at all. This knowledge comes from past history of bidding, and from teams already delivering the service (and who can therefore warn of hidden costs and hidden risks), as well as any market intelligence which might be available. 

A Knowledge Management framework for bid teams will therefore contain the following elements. 

  • Processes 
    • Lessons capture (Retrospects) at the end of each bid. 
    • After Action Reviews during bid preparation 
    • Peer Assist at the start of each new bid, involving previous bid teams, people currently involved in delivering the service which is being bid, and anyone with detailed knowledge of the client. 
    • Creation of knowledge assets on bidding
    • Creation of knowledge assets on main products and services 
  • Roles
  • Technology 
    • A knowledge base including a historical knowledge base of previous bids, and relevant pieces of “boilerplate” text which can be reused in future bids. 
    • A forum for the bidding Community of Practice 
    • A yellow pages, to allow the bid team to identify the correct people to attend the peer assist.

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