Welcome to the new era of business development
As competition for government contracts intensifies, contractors need to focus their investments on identifying, tracking and pursuing business opportunities. Do you know where to put your resources?
It’s no secret that there are fewer new opportunities in the government market, thanks to looming budget cuts and an increasing trend away from the use of new contract awards in favor of established governmentwide acquisition contracts.
However, companies can increase their ability to compete and even boost their win rates and revenues if they invest in and optimize their business development and capture management processes and tools.
“More companies are fighting for smaller pieces of business out here in the market, but those companies that invest and work hard to build and optimize their processes will do better in competition,” said Robert Lohfeld, CEO and founder of Lohfeld Consulting, a proposal services consulting firm, and a columnist for Washington Technology. “It’s a lengthy journey to creating and optimizing them, but once established, these processes become the economic engine the drives the company. They can really raise your win probability up to where you’re capturing between 60 and 80 percent of the deals you pursue.”
Making the decision to invest is easy, but implementing it is not, said Bill Scheessele, president and CEO of Mastering Business Development Inc., (MBDi), a firm that provides assessment and consulting services. Scheessele also is a Washington Technology columnist.
“The world has changed considerably in government contracting to the point that there are only two options in this competitive space now,” he said. “You’re either on the front end of developing relationships and gathering human intelligence and staying on top of your opportunities, or you’re on the back end: reactive, dependent, chasing, selling.”
The life cycle involved in identifying a business opportunity and the time frame involved in going after it has been compressed considerably and is much less contingent on a Rolodex approach to business development and more reliant on cooperation and information sharing within an organization. Adjusting to these changes requires a shift both in how companies think and how they operate during the very front end of the business development process.
It can be difficult, but it is necessary if companies are to remain in a competitive position. “Managing a pipeline today has become equally important as all of the history around compliance,” said Jim Rogers, vice president of government contracts marketing and product strategy at Deltek, which provides tools and software to support the business development life cycle. “Compliance in the past has always been the key to government contracting, and there’s been a tremendous focus and investment on compliance, but pipeline management now rivals compliance as a fundamental business area of investment.”
With time and competition pressures at an all-time high, companies that don’t invest in streamlined, effective processes will lose out on — and potentially go out of — business. “For a contractor to be able to identify an opportunity, build a team, look at their past performance, get the right resumes in place, build a proposal, get their costs right and win it within days to weeks is a tremendous process,” Rogers said. “You simply cannot expect to go about business as usual in today’s environment and survive.”
Investing across a life cycle
Companies do have choices in how to go about designing better business development and capture processes. They can do their own research and build their own in-house intelligence management systems around individuals and intelligence, or they can hire outside consultants that specialize in helping companies document and streamline their processes to confront and cope with organizational and cultural challenges. There are also vendors that can help companies decide what IT tools to apply and still others that can help oversee the process.
Although there are variations in how the business development life cycle is defined, it essentially has three phases, and companies can choose from a variety of tools and approaches to help streamline and optimize their efforts during each of those phases.
- Business development involves identifying and qualifying new business opportunities and then determining which to pursue. This information is often derived through market research firms, such as Input and FedSources — both now owned by Deltek — but companies can also root out potential business by doing their own market research and contacting customers formally and informally.
- Capture management is where companies begin positioning themselves to pursue and win business opportunities. That means putting the data and human intelligence that has been collected on each opportunity into an accessible, shareable repository; detailing the requirements; developing a solution; researching and understanding the competition; creating a win strategy; creating a teaming strategy; creating a pricing strategy; and then overseeing that process. A good capture process will also provide easy-to-access management reports that note, among other things, how many proposals have been submitted, how many are in the evaluation stage and how many are coming up for bid. To help with this kind of pipeline management, many companies use a customer relationship management tool, which can collect and maintain data relevant to various opportunities and track opportunities over time. The dominant ones in the marketplace are GovWin CRM from Deltek, Salesforce.com and Microsoft Dynamic CRM. Some companies, Lohfeld said, also use homegrown tools that aren’t nearly as sophisticated but might work well for the needs of a particular company.
- Pursuit involves choosing and going after a qualified business opportunity and can be broken down even further into three subphases: preproposal development, proposal development and postproposal submission. That essentially involves moving the capture assets on the chosen opportunity and potential client into the creative phase, as personnel move information into the strategies and tactics that will be included in the final proposal and then, once an RFP has been put in place, to make a full-scale effort to deliver a winning proposal. The submission will also involve oral presentations, final responses and then, if a contract is awarded, negotiations and other tasks associated with closing the deal. Some of the tools that companies can use during this time include Sharepoint from Microsoft and eRoom, which can be used as a knowledge repository in which companies map the capture activities to the proposal activities, and Privia, which is integrated with Salesforce.com.
In some instances, the business development, capture and pursuit processes can be streamlined into a single end-to-end strategy. For example, Deltek provides life cycle tools and processes within a subscription-based, software-as-a-service offering that automates the workflow through the various steps, while Lohfeld Consulting offers a solution called Capture Command Center that helps companies integrate the process seamlessly between whatever CRM capture tools and knowledge repository they’ve chosen to use.
It’s the people, stupid
Although the business development, capture and pursuit tools available to companies are highly automated, functional, dynamic and convenient — even mobile — they are not a panacea for the larger cultural problems that can hamstring a company’s efforts to identify and win new opportunities, said Nicholas Coppings, senior vice president of consulting and general manager of MBDi.
“This is really not an IT problem,” he said. “The best upfront business development systems are built around an internal process, where the company has developed the process themselves and then they’ve had somebody come in and customize it and apply some IT tools.”
No tool, no matter how effective, can overcome a poorly defined process or lazy and untrained business development professionals, he said, noting that any company that’s had a salesperson leave suddenly, taking their contacts and files with them, understands the potential dangers involved.
“I’ve seen companies succeed and get along quite well using an effective process and Outlook, and I’ve seen bad people hide behind GovWin and fail,” Coppings said. “You need an IT process that mirrors an effective business development process that actually disciplines the business development staff to get the information that’s required and enter it into the process.”
Companies — whether small, medium or large — that recognize that need and invest effectively in training, process development and IT can succeed despite an increasingly tough contracting marketplace, according to business development experts.
“We always talk about people, process and technology being the key to everything we do in this industry and that’s certainly the case with business development — now more than ever,” Lohfeld said. “But if you get all three working in this area, you’ve got a company that’s destined to be successful. If you don’t, you’re running a handicapped race.”
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