Participating in tenders can be a complex, timely and costly way of doing business in B2B sales. It is important that you accurately estimate your chances of winning and deal size when deciding to pursue a tender - resources are finite and could have been spent on more remunerative deals. Prioritizing what opportunities to chase decreases the likeliness that your department becomes over-utilized and makes sure you focus on the deals that you have a real shot at winning. It also helps you prioritize the largest or most strategic relevant contracts first.

In addition, there are some trends in tender management that should encourage you to look at the way tender management is done in your company. Some trends that apply to most markets are the following;

  • Globalization and regulations to advance public expenditures transparency make tenders more frequent and more complex in most markets;
  • Group purchasing organizations are becoming more frequent, this increases the purchasing power of clients, putting the pressure on suppliers.

Besides this, many globally grown companies struggle with offering services across product-lines, divisions or countries. This challenge becomes bigger when tendering is decentralized, and product lines or divisions are not. In addition, the acquisition of new companies including its new products increases the chaos for those that need to respond to tenders. Since these tenders should be written and offered in a comprehensive and compelling way to up- and cross-sell products, services and maintenance contracts, employees should be very skilled and informed about all (new) products.

Tender management optimization can help organizations to create a lean process, designed for increasing the percentage of tenders won, and to fully optimize contract (lifetime) value. Most recently, BearingPoint helped a worldwide med-tech company to design and implement a uniform tender process across 8 divisions (product lines) and 15 countries. To do this in the most efficient way, we have used our BearingPoint Tender & Quote reference model, that uses an outside-in view to align with best practices in the world of tender. The new process reduces complexity and increases collaboration through a more efficient, clearer workflow with assigned roles and responsibilities. The increase in collaboration creates possibilities to leverage the organization’s product portfolio to offer integrated offerings, over different product lines. Furthermore, centralizing activities and implementing automation further improves the process.

Figure 1. BearingPoint Tender & Quote reference model

The BearingPoint Tender & Quote reference model formed the basis and works as follows. We divide the tender process into 4 phases: Identify, Qualify, Respond and Evaluate and subsequently work together with representatives from relevant departments to design the new process through co-creation.

Figure 2. High level overview of the four phases

1)     Identify

Through the Identify phase we help organizations with a process that focusses on the ability to shape tenders where possible and identify suitable opportunities in time. Collaboration between the salesforce and tender department is often a key success factor in adequately identifying tenders in time.

2)     Qualify

You miss 100% of the shots you don’t take. A saying attributed to famous Canadian hockey player Wayne Gretzky. In other words, you can’t succeed unless you try. While this may be true in sports, it can be different in business. Depending on your win rate, it may be remunerative to reduce the number of tenders you participate in and focus on those with a higher chance of winning, to further improve your chances. But how do you decide on what opportunities to follow up on and what opportunities to pass? Early qualification through objective criteria can help, with scheduled evaluation moments to reflect. You can find links between the criteria of the qualifications and the outcome of the respective bids and update the criteria accordingly in these evaluation moments.

3)     Respond

All needed materials are created, collected and submitted during the respond phase. This phase is often the most time-consuming phase, with short and strict deadlines. Chasing information and approvals from the various functions and departments may prove tough in these circumstances. Having a clear process with assigned roles and responsibilities and effective tender workflow support using tool support will help. This creates a situation where employees can work on tasks in a structured sequence. The improved workflow and better-defined responsibilities can lead to a higher quality output through improved collaboration and more time to the submission due to less following up on internal deliverables.

4)     Evaluate

One of the first activities that is scrapped when times are busy is the evaluation period and that makes sense. Even when you have scheduled a moment to evaluate on how the job is doing, when the deadline for a major deal is approaching and a lot of work has yet to be done, it is appealing to indefinitely postpone it. Evaluation, either after the result of a bid has been published (why did we win it? Or, why did we lose it?), or continuous learning activities (our win rate has decreased this year by 10% compared to last year, what has changed?) is incredibly important to remain competitive, as a competitor that does evaluate its process, is taking advantage from the insights they gain from it. 

Having a structured workflow leaves many opportunities to register data that can be leveraged to continuously improve on the process.

 Some examples of data registration could be the following;

  • Reasons for GO or NO-GO with the opportunity, the allocated (and spent!) time, expected value and final contract value
  • Reasons for winning/losing a tender or a bid, do not forget to evaluate reasons for winning too!
  • The expiry date of the contract, make sure you follow up before a tender gets published - whether it is the end of the contract of your competitor or your own
  • Resources it took to bid, update the hours and samples you needed to spend before you got the final go - this includes updates on readily published tenders
  • Additional feedback from the client and other lessons learned

Contract management

We notice that it can become difficult for organizations to monitor all active contracts due to the number and complexity of these contracts. Failure to adequately monitor these contracts may reduce in decreased revenue as clients may not fully spend the agreed-upon amount during the lifetime of the contract. Therefore, it is important to not only regularly evaluate your tender process, but also the characteristics of your active contracts and have a process to act accordingly if required.

Automation

To what degree does your organization use tooling in the tender process? A right tool can reduce manual tasks through automation, function as a central database to store information and provide an automated workflow, with alerts of upcoming tasks for relevant functions

Some benefits of automation are;

  • Automation of tasks for efficiency and accuracy
  • Central database to store and maintain information and feed back to other parts of the tender process
  • Automated workflow, with alerts of upcoming tasks for relevant functions
  • Tracking of all sorts of (previously mentioned) data that will optimize the understanding of your client and serve as a reference for other tenders

BearingPoint can help your organization improve your tender process and maximize the results from tendering. With extensive experience in process optimization, organizational design and software selection we can help to design the ideal tender process for your organization, at the same time maximizing output for your business processes.

Please feel free to contact us if you have any questions, or if you would like to get some more inspiration on how to improve your tender performance!

 

Authors

Sander Witteveen

Busines Analyst

sander.witteveen@bearingpoint.com

 

Annelieke Hoenderkamp

Manager

annelieke.hoenderkamp@bearingpoint.com

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