Process evaluation

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2004

Process evaluation

Claudia V. Guerrero

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Graduate Studies

M.S. Service Management Presentation of ThesislProject Findings

Name: ClaudiaV.Guerrero SS# Date: 2/25/04

Title of Research: Process Evaluation

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ChapterI

Introduction

Theglobal_{economy has} gonethrough_verytoughtimes _duringthelastthreeyears.

TheUSstock markethasexperienced greatdisappointments. Corporations thatwere

verysolid andstablehavereported_biglossesand_manyhavegoneinto bankruptcy.

Dueto this _{situation,meeting quarterly}market expectations and_improving

profitability havebecomethegreatest challengefor_manycompanies.Inthiseffort, it

also becamecrucialtodefinea clear_strategytocompete in themarketplace,_involving

actions toconfrontbudgetcutbacks.

One oftheindustriesmore_widelyaffectedis the UStelecommunicationindustry.

AccordingtotheTelecommunications Market Reviewand Forecast_(2001),since_1994,

everyyearbroughta milestone development_favoringtheexpansion ofthis_industry

while_urging serviceproviderstomake enormousinvestmentsin their technological

infrastructure. _{After experiencing}six years of_drivingtop-linegrowth,the_defining

trend inU.S. telecommunications_duringtheyears 2001and2002wasthe_sharpdropin

equipment_spending

-adecrease of24%.Even thoughit is_encouragingtoknow that

theU.S. telecommunicationmarketis_startingtorebound_duringyear_2003,it is still a

challengetokeep_upwithrevenuetargets and cost reductionobjectives.

Thisresearch willfocusona specific scenario within a_companythathas suffered

from thetelecom_industry downturn,TECHCorporation (TECH).TECH isdedicatedto

thedesignand_delivery ofsolutionsthat_helpbuild and maintainreliableand

beensuccessful at_offeringgreat valuetocustomers in termsof_qualityproducts and

expertise.

TECH has laid out a_{restructuring}plan andhastakenimportantstepsforits

implementation. _However, inthiscourseof_action, ithasalso established_many

bureaucraticmeasurestoassurepositive results out of_everytransaction.This_directly

affects _everyprocessthatinvolvesfinancialdecision-making._{TECH is very focused}on

financialresultswhile_overlookingother aspectsthat_{may be}of equalimportancetoits

mainobjective: generaterevenue quickly. Processeshave become_highlycentralized

andtime_consuming,since_companyrules stipulatethatseveral_hierarchylevelsneedto

providefinancial approvalsforsimple_day-to-dayactivities.

AccordingtoWomakandJones_(1996), lean_thinkingprovides a_waytodomore

withfewer_resources,while still_providingcustomers_exactlywhat_theywant_Every

organization needsto_studyindetaileach ofitsdifferent_processes, from_beginningto

end, andthink"lean"aboutthese. TECHisnot an exception_amongthesecompanies. It

isvitalfor TECHtoinvestthe timeand resources neededto_formallydefine_key

operationalactivities and_developmethodstoimprovethe_{way these}activitiesare

carried out_Equallyimportantis tofindwaysto operate more_efficiently,improve

qualityand reduce organizationalproblems.Oneprocess worth_evaluatingat_TECH,is

thepreparationof quotesforstandardhardwareand software._Manybureaucratic

controls generatedelaysin_respondingto thesecustomer'ssimple_{requests, resulting}

TECH's customers_mayrequest eitheraquotethat involveshighcustomizationand

differentservices,likeinstallationandengineering,or a simple quotethatdoesnot

require servicesor customization of_anykind.Today, bothtypesof quotes are prepared

usingthesame process withthe_onlydifferencethatwhen standardhardwareand

softwareisquoted,theServices Departmentisnotinvolved intheprocess.Some

non-valueaddedactions that takeplace_duringtheprocesstoquote standard hardwareand

software arethateventhough thesehave_customaryprices anddiscounts, it is

mandatoryfortheProduct Managertoprovide price anddiscountsinorderto seek

approvalfrom Business ManagementandtheFinancialOrganization._Also, Terms &

Conditionsarestandard,but it is mandatory for aContract Managertosendthese to

theSales_{Executive every}timea quote needstobe delivered.

Animportantobservationisthat it iscommonforcommunication service providers

tocontract_bigprojectstogrowtheirnetwork_accordingto themarket'sdemands. These

projectsare of significant size and_usuallyrequire alotof customization.Ontheother

hand, requestsforstandard hardwareand software are_usuallyneeded tocompletethe

bigprojectsbeingimplemented atthemoment ortosolve a problemthatis_affectingthe

performance oftheirnetworkWith_frequency, small quotes are much more urgentthan

theonesthatare_highlycustomized.

Problem Statement

Theprocess implemented_todaytoputtogethera quoteforstandardmaterial goes

throughvarious stepsthatdonot add valuetotheend _result,

_demanding

doesnotallowtheSales Teamstosubmit_verysimple quotesto thecustomerina_timely

manner.

PurposeStatement

Themainpurposeofthisprojectistomake management aware of thebenefitsin

cost reduction andincreased customer satisfaction of_puttinginplace a new processto

preparequotes forstandardhardwareandsoftware. Amore specific objective ofthis

projectis toobtainmanagementsupporttodifferentiatequotepreparationprocessesfor

standard solutionsandcustomized solutions._{Concurrently,}other questionstobe

addressed are:

1. Whatarethedifferenttypesof proposals atTECH?

2. Whatisthecurrent process used atTECHCorporationtocreate quotesfor

standardhardwareandsoftware?

3. Who isinvolved in thisprocess?

4. Whatisthetimeframeto respondtocustomer's requestsforquotesforstandard

hardwareand software?

5. Whatpercentage oftheproposalsprocessed atTECHare quotesforstandard

hardwareand software?

6. What isthesystemused atTECH tocreate_proposals, how isitused and who

usesit?

Methodology

Thisprojectwillreviewtheprocess used atTECHCorporationtoprepareallthe

intheLatinAmerican_region,from_January2003tillOctober 2003. Thesequote

represent32% of allthequotessubmittedto thiscustomer_duringthisperiod oftime.

Afterthisprocessis evaluated, are-engineered one willbesuggested.

Significance

Thisprojectwillfocusontheevaluation ofthecurrent processforthepreparationof

proposalsforstandardhardwareandsoftwareandtherecommendationof a new

processtoquotethesesolutions.Therecommended processisexpectedtohaveshort

range andlong-rangepositive consequencesfortheorganization.

Short Range Consequences

(a)Reducethecycletime toprepare quotesforstandard &customized solutions

(b)Eliminatenone-value addedtasks

(c) Reduceresources requirements

(d)Increasethe_efficiencyoftheBids & Proposals Team

LongRange Consequences

(a)Reduceoperationalcosts

(b)Increasecustomer satisfaction

(c) Delivera standardizeformatforproposals

(d)Acceleraterevenue recognition

(e) Increasethe_accuracyof_highlycustomizedproposals

Limitations

Anewprocesstoquote standard hardwareand software requires management

preparation system.Aswell,bureaucracy,whichisintended tocontroltheentire

business;it_{may be difficult}toobtainFinancial Managementsupportfor thiseffort

Summary

Thisproject willevaluatetheprocessused_todaytoputtogethera quotefor

none-customized materialatTECHCorporation.Inthe opinion ofDrake(2002), thereal

challengefaced_bymanagementis todeterminewhere, and_how,theenterprisehascost

leaks andfindcreativewaystoendthesewithout_compromisingtheperformance ofthe

basic operations. Guided_bythisstatement,a re-engineered process willbe suggestedto

increase the_efficiencywhen_preparingthesequotes. Theresearch willdetailthe

methodologyused toanalyzethecurrent process and recommendations willbeshared

after_consideringthe findings.

The_followingchapter willfocusonthepreparation of sales proposals_offering

details regarding structure, metrics,_technologyand proposalmanagement.Insights

fromrelevantarticles,white papers andbookson proposalpreparation,process

improvementandcostreductionefforts willbe includedtoprovide abetterexplanation

onthesubject.The literaturefound onthis topic_mainlyrefersto the term"proposal".

Duringthecourse ofthisstudy,thewords_"quote", "bid"

and"proposal"_maybeused

interchangeablyand are all relatedto ihepurchase of aproduct.In_addition,subsequent

chapters will_identifythecurrent proposal_process, demonstrateissueswiththat

DefinitionofTerms

Inordertoassurethe_{understanding}ofthis_research,adefinitionoftermsisshared

below:

(a) RFQ: Request forquote

(b)B&P: Bids&Proposal Team

(c) CaptureTeam: Allemployeesinvolved inthequote preparatcion process

(d)PM: ProposalManager

(e) PH:Product House

(f) CM: ContractManagement

(g)BM: Business Management

(h)FO: Finance Organization

(i) COR: Standsfor Customer_OpportunityRequest. It isan electronicformused to

registerthecustomer'srequest andtostarttheproposal production process.

(j) KOcall: Kick-Offcall.Conferencecall scheduled_bythePMtoget the capture

team togetherand starttheprocess.

(k)ProposalPackage: Electronic foldercreated ontheCORtogather allthe

documentsthatwillbe deliveredwithintheproposal.

(1) StandardHardwareandSoftware: Nocustomizationisrequired.

(m) StandardPrices,Discounts andPayment Terms &_{Conditions: Prices,}

DiscountsandPayment Terms&Conditions thathavebeen_previouslyagreedtowith a

(n)Value Stream: Allactionsrequired to_bringa good oraservicefromconceptto

design, fromorder_takingto _delivery, andfromraw materialsto afinishedproductto

thecustomer's hands.

ChapterII

LiteratureReview

Introduction

Salesquotes_and/or proposals are a powerfulinstrumentused _byvendors to

position their product and service_{offerings, attempting}tomeet customer needs and

win newbusiness. Fieldprofessionals agreethatthereis an_{ever-increasing level}of

sophistication and_qualityexpected_bycustomersincompetitive sales proposals.Even

thoughcompanies aremorethenever pressuredtopresenthigh_qualityproposals at

theleastexpense, this achievementdependson_havingtheneeded resourcesinplace.

Thischapter examines the_following;

(a)Proposal Development

(b)ProposalManagement

(c) Proposal Structure

(d)RFQsVs.RFPs

(e) Proposal Metrics

(f) ProposalCostand TimeCycleReduction

(g)The Roleof_TechnologyinProposalDevelopment

(h)Creatinga LeanProcess

ProposalDevelopment

There isno standard_waytoputtogethera salesproposal. _Dependingonthe

customer's requestfora given project andthe_complexityoftheexpected_response, a

Per Kelman_(2000),whois involvedinproposal_publishingmanagement andtechnical

communications_development,"ona smallproposal,one skilled production person

may beenoughforthejob", (p.₂₃₎

Ontheother_hand,Kelman₍₂₀₀₀₎also points outthatalargeproposalwill most

likelyinvolve a completeteam of professionalsdedicatedto theeffort,where_producing

a single component oftheoverallproposal_maybeafull-time job forone person.As an

example, Dickson₍₂₀₀₁₎sharesthe_followingdevelopmentcycle of a given proposal:

(a) RFPor_RFQisreleased.

(b)Vendor decidestobid forthebusiness or notIf thevendordecidesnottobid,

thecycle ends. If it decides thatthebusiness shouldbe_pursued,thenext stages_may

follow.

(c) Kickoff_Meeting- It is_meanttointroduce the

team,sharethe scope ofthe

proposal,setthescheduleand agree onthe_strategytofollow.

(d)Draft ProductionoftheProposal

(e)Formal review ofthe entire proposaltoconfirm thatthesolution meetsthe

customer's requirement

(f) Reviewoftheproposaldocument for finalcorrections.

(g)Formattheproposal's presentation_accordingto thecustomer's guidelines.

(h) Delivery oftheproposal.

Proposal Management

Onceavendordecidestobidfora _business,theProposalManagementteam takes

accuracy. The Proposal Manageris_activelyinvolved in thecreationofa proposal

strategy, _pricingand _{teaming; making}surethatalltheresources needed are alignedfor

thedevelopmentoftheproposal andthata_timelyresponseisgiventoRFPsand RFQs.

It isalsotheproposal manager's_{responsibility}tolayouta schedule oftheproposal

developmentprocess, _assigningactionitems andduedatesto all ofthose involvedin

theprocess. _{A very important}taskistomake surethatallinputs aredeliveredas

scheduled andthattheseareincompliance withthecustomer'srequest andin

accordanceto thesale_{strategyoriginally}defined.

Oneofthetoolsused tomeasure proposal_qualitybefore it issubmittedtothe

customeris theuse of red reviewteams.Thered reviewteamisa_group of_people,

usuallynot_companyemployees, selectedtoproof readtheentire proposaltoassure

that thereare noinconsistencies. Itisrecommendedtoperformshortreviews_earlyin

theproposal_writingprocess toconfirm thattheinitialstructure and _strategyare

properly designed. Assuggested_byHerdon_(2000), afinalredteam revision should

take placetovalidatetheproposal'scompliance, completeness, responsiveness,

presentationand_sellingapproach.Eventhough thesmallest proposals canbenefit from

simplereviews,redteamsare most_likelyto_playa role when_dealingwithhigh

complex proposals.

ProposalStructure

Thepresentationand structure of a sales proposal_playa_{very important}roleinthe

customer's_{decision-making}process. Dueto thefactthataproposalisintendedto

wantThe formatandspecificsofaproposalis_totallydependentonthecustomer's

requestAproposal canbeasbriefas a_memo;others_mayextendtoseveralhundred

pages andhavenumerous sections. Sincethereis nostandard_waytopresent a proposal

itiscommontofinddifferentrecommendations_regardingtheproperstructure.

Market!₍₂₀₀₁₎suggeststhe_followingbasic structure whentheorganization

requestingtheproposaldoesnot provide a guideline:

(a)Summaryprovidingabriefstatement abouttheproposed_solution,company's

credentials, budgetand schedule.

(b)Introduction_orientingthereader,_providing adescriptionofthepurpose ofthe

proposal, background detailsand thescope ofthe solution proposed.

(c) Program _describingwhatisproposed anditsdelivery,and_{why it is}thebest

option forthe customer.Thissection should alsoincludeadetailed listof who willbe

providingwhatinformationor resources _duringtheproject's process.

(d)Qualifications/Experience oftheproject staff andthecompany's_historyand

experienceasitrelatesto theproject

(e)Budget,which_greatlydependson the projectAgoods proposal_typically

providesjustthebottom linecostfor thecustomer.

(f) Appendices_{includingwork/ task}schedules,testimonials, references,

graphs/charts and evaluation methods.

Anotherrecommendedproposal structure_accordingto_{Hickey(2001),}CEOof_TIU,

abusinessandfinance-consultingfirm:

(b)Agenda_{includingstructure,}agreement of agenda and addition of newtopics

(c)

Company

(d)Overviewofthebasicrequirements and adiscussionofobjectives

(e) Proposed solution_explaininghowthevendoris_planningtomeetthoseneeds

and _specificallywhat willbedone

(f) Benefits oftheproposed _solution,overview ofthebenefits oftheproposed

solution andhow thiswill add valueto the_company

(g)Costsassociated withtheproposed solution

(h)Summary ofthebenefitsofthesolution.

Theabove guidelines canbeusefultocreate a detailedproposal,butsmaller

proposals_mayrequire a simpler structure.The_followingsections_maybeenoughfor

thesestraightforward cases: (a)Cover letter

(b)Descriptionoftheoffer (c) Price Section

(d)Terms& Conditions

RFQs Vs.RFPs

Someprofessionalsinthefieldunderstandthatthereare cleardifferences betweena

requestforquote_(RFQ)and arequestforproposal_(RFP).InDickson's ₍₂₀₀₁₎opinion, a RFQis usuallyusedtopurchase off-the-shelfproducts_meaningitemsthatare_very

standard andfrequentlyavailable through_manysources. Theseproducts aremuch

These bids detailtheitemoffered_alongwithitsprice.Ontheother_hand, aRPF

suggests thesubmission of alargeproposal,which_usuallyrequiresafulldescriptionof

theproposed solution.The_followingisa templateprovided_byDickson (2001)that

showsthedifferencesbetween_creatingabid tooffer a_commodityproductand_creating

a proposalto offer a solution or specific services: (p. ₁₎

Characteristics Commodities/Products Solutions/Services

Whattobid? Picktherightlineitems Figureout an approach

Pricing Addit_up Estimatethelevelof effort and

calculatethetruecost ofthelabor

Teaming Notapplicable _{It may}needto_bringinother

companiestoprovide specialized

expertise

ProposalOutline Basedontangiblerequirements andgoods Basedon_{the approachprocesses,}

andcapabilities

Writing Verylittleoriginalcontent.Oneproposal

lookslikethenext

Everyproposalisunique._Verylittle

contentcanbere-usedwithout

significant customization

Production It'san_{assembly line} It'smorelikeresearchand

development.

RFQsare_basicallyfocused on price andRFPs involveamore complicated purchase

Acustomer_mayissuean_RFQwhenthere isa specificneed,have decidedtomakea

purchaseand havethebudgettodoso. Otherreasonsfora customertodo RFQsareto

discover_pricingwithoutthe intenttomake a purchase orto_justifyusinga preferred

vendor. Whena_purchasingdecisionisnot yetmade,a coverlettershall_accompanythe

price detail_emphasizingthecommitmenttofulfill thecustomer's need.ARFQ

responseisalso an_opportunitytodemonstratevalueforthecustomer.

RFPsare_usuallyissuedwhenthecustomeris interested inalargerprojectanditis

frequently sent outtoseveral vendors. When_respondinga_RFP,it is_veryimportant to

includeallthedetailscalledforandtofollow thecustomer's guidelinesfor its

presentation and submission.

Proposal Metrics

Organizationsmake_everyefforttoproduce_{winningproposals,}while also_looking

to trim downthe_operatingexpensesthatare requiredtoproducethem. Inorderto

achieve _this,it isimportant to_{constantlyobtain, maintain,} and analyze accurate and

meaningfulmetrics.Ametricisa standardmeasuretoassesstheperformance of a

particulararea.Asexpressed_byWesner(1995), metrics shouldbe:

(a)Specific: Targetedto theareathat is_beingmeasured.

(b)Measurable:Able tocollect accurate and completedata.

(c) Actionable:_Easyto understandinorderto takeaction whenneeded.

(d)Relevant _Onlymeasure whatisuseful.

(e) Timely: Abletoobtainthedatawhen needed.

The definitionofmetricsvariesfrom_companytocompany.When referringto

measuringtheperformanceof a proposaldevelopmentprocess,theproper metrics

should be carefullyselected.Theproposal managementteam_usuallykeepstrackof

proposal statisticstomeasuretheperformance oftheteamandtheoverall proposal

preparation process.Toillustrate thedifferentmetricsthat_{may be}usedtomeasurethis

process, an exampleissharedbelow:

NCR isa_companythatprovides_{Relationship Technology}solutionsfor_retail,

financial, communications, travelandinsurancemarkets. Messin₍₂₀₀₀₎ statesthat

Metrics atNCRare usedto measuretheProposal Center'sperformance andtolevel

workload.Thereare_{usually 20}or30active proposals at atime. Thesemetrics are:

1. Proposal_qualitybybusinessunit

2. Proposal_qualitybysolution_{(product/service)}

3. Duration

4. Start date

5. End date

6. Staffhours

7. WinRate

8. Sizeof effort(derived fromstaff_hours)

9. Dollarvalue

10.Numberof copies

11. Pagecount

13. Customertimesaved

14._{Customer propensity}toreturn

15.Customercomments

Regardingmetricstoevaluate_proposals, FreemanandFreeman(2000),suggestthe

use ofthe_followingMetricsToolboxinordertoassurethata proposalislikelytowin

or atleastassurethatthemessageis_clearlycommunicated. Theseguidelines are

probablymost appropriate_{for very large}proposal effortsin_{very large}companies

involving manypeople on a proposalteam. But,when_gettingto the_{basics, it mayhelp}

evaluatethepotential of_anyproposal,regardless ofitslengthor complexity.

This Metrics Toolboxconsists of a quantitative_ratingsystemthatputstogethera

proposal evaluation process. Thissystemhelpssavetimeand _moneysince subject

matter expertsfocus ontheirarea of expertise anditstreamlinesthereview process. It

evaluates a proposal on several categories_byusinga predefined score sheet and _by

ratingeach category. Categoriessuggestedfora Metrics Toolboxsystem are:

(a) Basics: Grammar,Spelling&Punctuationreview

(b)Knowledgeabout whatthecustomer wants and needs

(c) WritingStyle

(d)Proposal Organization

(e) Visual Presentation_/ Balance

(f) Language Tone_/ Professional,Competent, Non-_Arrogant

(g)CredibilityandCompleteness

(i) Cost_(Reasonable, Basisand_Clarity)

(j) Risk_/Canyoudeliverwhat you promise

Thereare_manywaystoreview or rate a proposal. Proposalreviewers are often

focusedontechnical_accuracyand one-on-one complianceitembut_onlylooking at

these two thingswill not_{necessarilyhelp}improve thereviewprocess or evenincrease

theprobabilitiesof_winningabid. Giventhat_everyproposalisstructured_differently

anditrespondstodifferentneeds, each_companyor proposal management_group

definesits own_strategytoreview andimprove itsproposaldevelopmentprocess.

LockheedMartin FederalSystems_{(LMFS), Owego,}isa_{manufacturingfacility} (IBM

Electronic Defense_Systems)foundedin_1956,where a_qualityimprovementprogram

was implemented in_early1995.As described_bySalamida (2000), thiseffort was

extended toall_{departments, including}theProposal Process Management(PPM). Prior

to _1995,thisteam _{poorly documented its}processes, proposal process control was

inconsistentand performed no measurementtracking.Inordertostart_measuringthe

efficiencyoftheproposalprocess, LMFStook the_followingsteps:

1) EstablishedaProductionProcessQualityImprovement Team (QIT)to

investigateproposal production process problems and recommendsolutions.

2) Keyissues &Responsibilitieswheredefined:

o Inconsistent textstylesand formats(Responsible: Proposal_{Coordination)}

o Excessivepreparationtime(Responsible: Proposal_{Coordination)}

o Lostofback levelgraphics(Responsible: Art_{Coordination)}

o Highamountof"throw-away"graphics(Responsible:ArtCoordination)

3)

Existing

4) Measurementpoints and metrics goals wheredefined,_{mainly focused}on

reducing cycletimesand_loweringcosts

5) Process improvementsweredefined_primarilybased on clearerdefinitionof

responsibilities._Keyinitiatives:

o _Developa teamapproachtoproduction management

o Defineandimplementtwonew positions ontheproductionteam

o Redefinethe_existingproposal coordination position

6) Process Improvement Tested:Testswhere made ona pilot proposal.

7) Datawas collected.Whentheproposal was_{ready for}submission,thefollowing

datawas gathered:

o Feedbackfrom lessons learnedmeetings

o Art_trackingspreadsheets

o Word processingand graphics support vendorinvoiceswith_detailsof

hoursand dollarschargedforeach proposal task

o Logs, reports,orinvoicesrelatedto theproduction, likecolor_copies,

bindersand proposalteamlabor.

8) Dataanalysis anditerativeprocessimprovementtookplace. Datawas analyzed

and compared withthepredefined goals. Theteamdiscoveredthat themetrics could

9) Anon_goingprocessimprovementeffort started out withtheimplementationof

several_qualityinitiatives:

o Internalcustomer satisfaction surveysthataddressedthe_efficiencyof

process_{implementation,} issueresolution,innovationsolutions,training, general

processknowledgeand schedule management

o Lessons Learnedmeetingstogetinputson_processes,facilities andtools.

o Action Teamstofocuson specific areas of process concern orissues

identified through thesatisfaction surveys andthelessons learnedmeetings.

o Continuousmeasurements collection_focusingonthethings that impact

proposal costslikecost perdeliveredpage againsttotalproduction_cost, cost per

graphic _{generated, among}others.

Anotherexample of the metricsthat_{may be}used toevaluatetheprocessto prepare

a sales proposalisprovided _bySBCCommunications, atelecommunications service

providerin theUnitedStates. Per Green's(2000)article onthissubject, themetrics used

atSBCincluderevenuetoexpense_ratios,customer satisfaction_results, thenumber of hours itsavesthesalesteamsandthewinrates.SBC'sproposal center uses adatabase

that tracks_everyproject_includingdata_regardingtimespent_bythe_team,revenue

impact to thecompany, thestatusofeach proposal(wonor_lost)and otherdetails.

ProposalCostAndTime CycleReduction

Asstated _above,proposalmetrics are often usedtomeasurethecostsincurredwhen

cycleoftheproposalpreparationprocess. Thesetipsarearesult oftheexperience of

several proposal managers andconsultants.

o Usepeoplethatare qualifiedforthejob.

o _Keepthe teamsmall.

o Provide_trainingforthestaff. o _Reducerotation ofthestaff.

o

_Keep

o Answerall questionsinan_RFP, before_anyreviewisdone.

o _Keepfiles updatedand_{document any}performance problem

o Establisha specificformatand tailorit tomeetthe RFPrequirements

o _Keepthecompany's experience and profile updated.

o Definetheproposaltargets andbudget for_everythingneededtowin

o _Activelyinvolvea proposal advisor

o UsethehelpofProposalCenters,whenneeded.

o _Keepbackupsofallinputsand24-hours_securityprograms.

o Follow the_{strategy originally}definedwiththe team.

Role Of_TechnologyIn ProposalDevelopment

Ingeneral_terms,thebasicideaof_{usingtechnology}toautomatethemanagementof

data istriggered_bytheinterest in_reducingtimecycles andlaborcosts. Thesame

objecitves alsodrivetheuse of_technologyintheproposal_developmentprocess.

today.As Wilson_{(2001) states, "specialized,}computer-based proposal automation

products werefirstintroducedtothe marketplaceinthelate1980s" (p.67);thesehave

evolvedto_very sophisticatedtools thatareavailabletoday.

Companiesconsumehigh-valueresources_respondingtoRFPs. Somereasons are

that_theymightnothavetheadequate_{qualifications,}efforts are_duplicated, same

mistakes aremade_failingtoleveragebestpractices and no post-mortem win/loss

evaluationisfollowed. Theproper use of_technologywould allowforthesecompanies

tohavea central warehouseforcontent and _{templates, have}aflexibleapplicationfor

qualifyingand_{executingRFPs,}definea structured processtostreamline reviews and

approvals and even set alerts and notificationstoacceleratetheprocess.Theuse of

technologyallows proposal managementteams to_continuouslymeasuretheir

performance and improvebestpractices.

Thereare_many softwaretools in the market placethatare_aimingto providethe

perfect solutionforcompanies orindividuals to_effectivelyand_efficientlyprepare

proposals, regardless ofthe_industrythese_belongto. Wilson_(2001),who alsoisa

proposal professional atCACIInternationalInc, a_companythatprovidesITand

network solutionsforUS GovernmentAgencies, emphasizesthatproposalautomation

products are not a one sizefitsall solution.Thesetools are_veryusefultorespondlarge

complex_RFPs,tohelpmakebid-nobid_decisions,to trackandevaluatetheproposal

process,to managetheproposaltextandgraphics moreefficiently,_among others._But,

inorderfor anyofthesesoftwareproductsto_helpachievethespecific goals set_byan

Theseproducts are notintendedtoreplacetheproposalmanagement_{team, but}ifused

properly,_theycan save_{time, money}andthefrustrationassociated with adisorganized

proposaldevelopmenteffort

There are_manyvendors of proposal automationtools. Alotofthesetools arefully

network compatible and web-based solutionsthatcan_helpfacilitatethemanagement

and coordinationof_teams,evenif theseare_{geographically}apart_Nearlyeveryone of

theproductsavailablehasaccess control and_securityfeatures. Someare considered

mostfavorablein_engineeringenvironments and others workbest forcommercial

product sales.

Followingisa shortlistof proposal automation products availablein the

marketplace:

o Virtual ProposalCenter(www.intravation.com)

o Proposal Master/RFPMaster/eProposalMaster (www.santcorp.com)

o Proposal Assembler(www.pragmatech.com)

o Slate(www.sdrc.com/slate)

o ProposalSmartz(www.proposalsmartz.com)

o WinAward(www.acibiz.com)

o Deltek Proposals (www.deltek.com)

o Wind2Award! (www.wind2.com)

Tobetterillustrate the impact that theproper use of_{technologymay have}inthe

proposal preparationprocess, thecase ofL. RobertKimball& Associates Inc isshared

L. RobertKimball& AssociatesInc _(Kimball)isafull-service firmestablishedin

Pennsylvaniain1953. This firmoffers servicesin architectural/_engineeringbuilding

systems, civil and environmentservices,_mappingsciences, telecommunications and

technology, andtransportationservices.

Kimball has alargeproposal operation with a sales teamof10people and a

marketingteam of18. Thesetwogroups worktogether toprepare and submit

proposals. Before_implementinganautomated proposalsoftware, the_marketingteam

would preparetheproposal_usinga word processor and_{consultingexisting}filestoget

informationsuch as_{companyhistory,}resumes,related _experiences,and so on. Someof

the disadvantagesofthisprocess werethatthe_existingfilesgot_quickly outdated anda

lotoftimewasinvested in_completinggovernmentdocuments liketheSF254andSF

255,whichindicateafirm'spast experiencein thearea relatedto theprojectinhand.

Kimball's Information System department decidedtolookintoproposal automation

softwareinorderto improvetheproposaloperation. _{They finally}decidedtopurchase

the AwardlCRM's _familyof softwarefrom Wind2_Software,Inc. Thissoftware offered

the_capabilitytoprepare_focused, effective and_{exquisitely formatted}submittalsforthe

private sector and evenincludedan optionalSF 254 andSF 255module,whichhad

templatesfora numberofdifferent formats.

Theprocess starts withtheAwardlCRM's Proposal Generatormodule. Theprogram

hasseveral tabsfortheusertoaccess_keysectionslikedcover page and_letter,

introduction,projectapproach,schedule, projectorganization, project_experience,

wordand the softwaredraws information froma databaseclassified_bysubjectIn this

case, thesoftwarewill_bringupa version ofthe_{companyhistory}onthespecifiedtopic.

Installingand _{using AwardlCRMsoftware,}hasallowedKimballto decreasethe

cycle timeoftheproposal operationfromthreeorfour_daysto twoorthreehours. The

sales and_marketingteamscan also prepare more comprehensive andfocused proposals

and are ableto_carefullytrackeach proposal._Nonetheless,theproposals are_uptodate

and_highlyaccuratebecausethe_marketingteam_{is constantly updating}thefilesin

AwardlCRM. Ata rate of5,000proposals per_year,Kimballfoundthat the_timesaving

alonefromtheuse ofthissoftwarehasresulted inahugereductionoflabor hours. It

hasalso allowedthemtoattendmorebusinessopportunities.

Theautomation oftheproposal preparation process aims toincrease the_efficiency

and_accuracyof_proposals, reduce costs and save time.Companiesthat_properly

implementthesetoolscandelivermore_qualityand consistent proposals and are most

likelyto gainimportantfinancial benefits fromthiseffort

Creating aLean Process

Management ismoretheneverchallengedtodelivervaluetoitscustomers. Thefirst

steptoovercomethis challengeis to evaluateits internal_processes, while_rethinking

valuefromthe

customers'

point of view. In thiseffort, theattemptis to_identifythe

value stream of each process and eliminate wasteinordertoallow a smoothflowof

value-creatingactions with nointerruptions.Leanthinkinglooksintothe

butaddno value atall. _AccordingtoWomakandJones (1996),actions_mayfallinto

threedifferentcategories:

1) Actionsthatcreate value perceived _bythecustomer

2) Actionsthatdonot create valuebutthatcannotbe currentlyavoided

3) Actions thatdonot create valuebutcanbeavoided_immediately

Creating

Fitzsmmons _(1998),define a value chain as"the_activities,from_beginningtoend,that

are needed toproduce a service,each of whichhasthepotentialtocreate valueforthe

customer"

(p.78). Thereisa physical and a virtual value chain. Thevirtual value chain

isknowntobethe information thatsupportsthephysical elements ofthevaluechain.

Inorderfora processtoflow_smoothlyandforthevirtualvalue chaintocreate real

valueforthecustomer,the informationmustbe_gathered,processed and made

availabletotherightpeople. _Goingthroughthescequence ofthesestages allows

value-addingelements andleanactivitiesto takeplace.Asstated_byWomakandJones _(1996),

"The lean activityis toredefinethework of_{functions, departments,} andfirmsso_they

can make a positive contributiontovaluecreation andto speakto thereal needs of

employees at_everypoint_alongthe

stream" (p.24).

Lean_{thinkingmay be}applied to_anyprocess, _includingtheprocessto prepare

competitive sales proposals.Theinicialapproachtoaleanerprocess starts_by

evaluatingwhatis currently_takingplace,from_beginningto completion,_aimingto

identifyanyopportunity toeliminatebackflowsor_stoppages,withthefinalobjective of

Summary

Asales proposalisstructured, prepared, reviewed and presenteddependingonthe

customers'

requirementsand _{purchasingdecision-making}process. Itisalsodependant

onthevendor's_{sellingstrategy,}its nature anditsown goals.Thischapterdiscussedat

lengththe stepsfortheDevelopmentofSales_Proposals,structures forsalesproposals,

theperformancemeasurement oftheproposaldevelopmentprocess, theresources

neededtoputtogethera proposal _{(includingtechnology),}thedifferencesbetweena

RFQand aRFP andhowtocreateleanprocesses.

Thenext chapterhasthe objective of_bringingtheconcepts discussedin thissection

toamore specificscenario,_goingthroughthe_methodologyusedtoevaluate a current

Chapter III

Methods & Procedures

Introduction

This Evaluation Research isadescriptive studythatfocusesontheproposal

preparation process used atTECH Corporationtoquote non-customizedhardwareand

software._Today,TECH Corporationmakes nodifferentiation betweenthepreparation

ofstandardquotes,whichare_verysimple and straightforward,andthe preparation of

those thatare_highlycustomized.As sharedinChapter_I,apurpose ofthis projectisto

recommend a newleanprocesstoputtogetherthesesimplequotes. Thischapter will

gothroughthemethods andprocedures usedtoevaluatetheprocess_currentlyin_place,

which willleadto therecommendation of a new one.

Methodology

This _studyisbasedontheprocess used toprepare standard quotes fora specific

customer in theLatin Americanregion,_onlytakingintoconsiderationtheproposals

submitted from_January2003throughAugust 2003. Itisafactthat the average cycle

timeofthequotesdelivered _duringthespecified timeframeis ten₍₁₀₎ calendardays.

Thisaverage willbecompared withthecycletimeexpected after_puttinginplacethe

reengineered processthatwillberecommended in thelastchapter ofthis research.The

processfor preparingcustomized proposals willnotbetakenintoconsideration_during

this review.

The_methodologyused inthis _studyconsists of_{three sections,}which aredescribed

DescriptionoftheValueChainofthe_existingprocessforproposalproduction,

detailingthePhysicalandVirtual_stages, and thedepartmentsinvolved_alongwiththeir

responsibilitiesthroughoutthe process.

Identificationofthe actionsthatdonotaddvalue,_pointingout which resources

are_beingconsumed.

Eliminationoftheactions_{previouslyidentified, offering}an explaination ofthe

reasoning behindtheelimination of each activity.

Inordertoobtainthedata neededtoevaluatethecurrentprocess, interviewswere

performedtoemployees ofthe differentdepartments involved in theprocess. The

participants of suchinterviewsaredetailedbelow:

SalesExecutive

ProposalManager

Product Manager

ContractManager

Business Manager

ChiefFinancialOfficer

i

Aflowchartofthecurrent process willbeevaluatedinorderto_identifytheactivities

thatconsume resourcesbutadd no value.Forthepurpose ofthisevaluation, an_activity

isconsidered toadd no valuetotheprocess,whenitisfeasibletoeliminateit_by

properlyusinginformation. Mostlikely, theseactivitiesrequireaminimum ofdecision

makingand areliable for_extendingthecycletimeoftheprocessdueto_waitingtime in

value _{addingactions,}whichare performedthrough and withinformation. Inaddition,

the_followingassumptions shallbetakenintothoughtthroughoutthisevaluation:

(a) Prices are standard

(b)Discountsare standard

(c) Terms & Conditionsare standard_accordingtoa General Purchase Agreement

previouslysigned between thecustomer andTECH Corporation

(d)Hardwareand Softwareneed no customization or specific configuration.

(e) No services areincludedinthesequotes

(f) TheChiefFinancial Officerapproves all quotes with standard prices& discounts.

Bias InThisResearch

1. Theaveragetimecyclethatisprovided earlierin thischapter,may include

quotes thatexperienced delays duetoerrorsinpartnumber, containedhardwarenot

yetavailablein themarket,orhardware alreadydiscontinuedandthereforehardto

find in thedatabasesavailable.Thesedifficulties may havedemandedmoretimeand

effort thanusual,_{directlyimpacting}theaveragetimecycle.To avoidthis_bias, the

populationof quotesforstandardhardwareand software wasdrawn into a_{graph, to}

clearlyviewtheunusual spikesincycle time.Thethreehighestspikeswere nottaken

intoconsiderationtocalculatetheaveragetimecycle ofthequotes preparedthrough

Figure3.1CycleTime ForStandard QuotePreparation

13%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

#OfQuotes

87%

As shown onFigure_3.1,thisevaluation considers87% ofthetotal of quotesfor

standardhardwareand softwarethatwere prepared_duringthespecifiedtimeframe.

After_takingouttheunusual_spikes,a view oftheadjusted graphis sharedbelow:

Figure 3.2 Cycle Time _DisregardingUnusual Spikes

28 26 24 22 20 18

I

* ₁₀

8 6 4 2

0 i 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

2. Datacollectionthroughinterviewsperformed_byphone mightleaveout

important details oftheprocess. Toavoidthis_bias,interviewswhere performedto

everyemployeeinvolved inthequote preparationprocess, _{allowing for its} description

tobeas accurate as possible.

Summary

Thischapterdetailedthestepstakento_properlyassesstheprocessthatisfollowed

todaytoquote standardhardwareand software atTECHCorporation. Inaddition,this

section points outtwoprobablebiasesofthisproject as well astheactionstaken

towards itsavoidance.Thenext chapter will offer a clear explanation onthe

evaluation's outcome. Thefindingsresultedfromthe_{methodology previously}

ChapterIV

Findings

Introduction

Thischapter will discuss atlengththeresultsobtained after_followingthe

methodology describedin theprevious section. Thefindingsare_thoroughlyanalyzed

partingfrom flowchartsthatareintended toprovide a clear view oftheprocessinplace

toprepare standardquotes.

TheflowchartinFigure4.1describesthe PhysicalValue Chainofthe_existing

processforproposal_{production,detailing}thedepartmentsinvolved _alongwiththeir

responsibihtiesthroughout the process.Inaddition,theVirtualValue Chainis

describedinTable 4.1.

Physical Value Chain

Thephysical value chainincludesthesequence of actions performedfromthe

momentthe Sales Teamreceives a requestforquote untilthequoteisdeliveredto the

Figure4.1- Physical ValueChain

ofCurrentProcess

Client Sales : B&P : PH : CM BM FO

RFQ

PO*-T

<

>

-x^.

I

No

Yes

14

I

15

I

10

13

11

No

X

>

Yes

Inordertoprovide abetter_{understanding}oftheflowchartillustrated_above,every

stepalongtheprocessis describedina chronologicalorder:

1. SalesExecutiveconfirmsreceipt ofRFQ.

3. Sales Executive fillsout aCORonlineform.

4. _{Proposal Manager}receives automaticnotificationand schedules a KOCall.

5. Proposal ManagerleadsKOcall and assigns actionitems to_everyparticipant

and agrees onduedates.

6. ProductHousepoststheprice,discountand cost ontheCORonlineform.

7. ContractManagerpostsTerms & Conditions ontheCORonlineform

8. Proposal Managercreates adraftpricedocumentand emailsit toSales.

9. SalesExecutivereviewsthedraftprice and makes sure_{everything is}aligned

withthecustomer's request.

10. Proposal Managersends approveddrafttoBusiness Management

11. Business Managercreatesthebusinesscase and emailsit to theChiefFinancial

Officer forapproval.

12. The ChiefFinancialOfficerapprovesthebusinesscase and posts approval onthe

CORonlineform.

13. Proposal Managersendsdoes final_formattingto thequoteand creates a

proposalpackage,whichisposted ontheCORonlineform.

14. Sales Executivereceives automatic notificationthat theproposalpackageis_ready

for_deliveryand proceeds toprint outtheproposal

15. SalesExecutivedeliversthequoteto thecustomer

Thepreparationofa quoteforstandardhardwareandsoftware requiresthe

participationof sixdifferentdepartments,each withclearresponsibilities throughout

1) Sales: The SalesExecutiveisresponsiblefor registeringtheCOR, followingup

withthe_{PM, reviewing}thedraftprice and_deliveringto thefinalquotetothecustomer

2) B&P: TheProposal Manager isresponsiblefor scheduling the KOcallthatwill

bringtogether_{the capturing}team. Italso assigns action_items,follows_upwiththePH

and CMto assure ontime_deliveryof_inputs, sendsdraftpricetosales and putstogether

thefinalproposal package.

3) PH: The ProductManagerisresponsiblefor_providingstandard_price, discounts

and costs

4) CM: The ContractManagerisresponsiblefor_providingstandardTerms&

Conditions tobeattachedtotheproposal.

5) BM: TheBusiness Managerisresponsiblefor puttingtogethertheBusiness Case

with all requiredfinancial information.

6) FO:The Chief Financial Officer is responsiblefor_providingfinalapprovalforthe

Business Case.

Virtual ValueChain

Thevirtualvalue chaindescribes howinformationis_beingusedtosupportthesteps

Table 4.1- Virtual Value Chain_ofCurrent Process

Gathering Information

Organizing

Selecting

Synthesizing

Distributing

Sales B&P PH CM BM FO

Customer'srequestisreceivedthroughSales PHprovides_Cost,PriceandDiscounts CMprovidesTerms& ConditionsDocument BMprovides aBusinessCase

FOprovidesfinalapproval

Informationisorganizedthroughelectronicfoldersposted ontheCOR.

B&PandSalesselecttheinformationthatwillbeincluded inthe customer's quote

B&Pformatsthequote

CostinformationandtheBusinessCaseapprovedis_onlyavailableto B&P, PHandBM.B&Pcreatesthefinalproposal packagefolder,whichis made availabletoSalesandtherest ofthe_capturingteam

Thecurrent virtual chain ofthisprocess showsthatalltheinformationneededto

puttogethera responseforthecustomerisnot made availableto theSalesteam. Dueto

thislimited distribution,theowners oftheinformation,liketheProduct_House,

Contract ManagementandBusinessManagement, areforcedtogetinvolved inthe

process regardless oftheirworkload_and/or priorities.

Theactivitiesthatwerefound nottoadd valueto theprocesshave been identified

with boxesin theflowchart illustratedinFigure4.2,bearinginmindthecriteria

Figure4.2-Non-Value Added Activities_ofCurrentProcess

Client Sales ; B&P PH CM _; BM

j FO

RFQ

<

>

I

No

9 9

Yes'

14

I

PO^-15

4 +

1

10

Q

No

-> 12

Yes

Eachoftheactivitiesidentified inFigure 4.2consume various_resources, whichare

showedbelow. Theselectionofnon-valueaddedactivitiesisbasedonthe

neededtoprepareastandard_{quote, the involvement}offiveotherdepartmentswould

nolonger berequired. _Keepingthis inmind, the_thinkingbehindtheselection of each

activityisalsoincludedinthe_followingdetail.

Activity# 4& 5- PM

receivesan automatic notification and schedules aKOCall.

PM leadsKOcall and assigns actionitemsto _everyparticipantand agrees ondue

dates.

Theobjective of aKick-off Callis toassign actionitems and establishdue dates

foreach teammember. IftheSalesTeamalone can prepare a quoteforstandard

hardware and_software, neither an automatic notification nor aKick-off Callisneeded.

Resource Consumed: Proposal Manager'stimeand effort andthe timeofthecapture

team thatisexpected toparticipateinthiscall.

Activity# 6- Product House_posts

the price,discountand cost ontheCOR

The Product Houseuses adatabasetomake a search of thehardware_and/or

software requested_bythecustomerinorderto obtaincostand price of eachitem. Since

these itemsrequire nocustomization, thecost and priceisnot variable ordependenton

thecustomer'sspecific request._Regardingthediscount, thisisbasedon apercentage

previouslynegotiated withthe customerand approved_bythe ProductHouse. This

activity isnot_addingvaluetotheprocesssincetheinformationon_cost,price and

discount ismade availablethroughafixed database, _requiringnodecision making from

theProductHouse. Ifthis information ismadeavailableto theSales_Team,theProduct

House isnolongerrequiredtoparticipatein theprocesstoquote standardhardware

concentratemore onthe_highlycustomizedproposals,whichdo demand strategic

decision-making

Product Manager'stimeand effort.

Activity# 7- ContractManager

postsTerms & Conditionsonthe COR

Terms &_{Conditions have already}beenagreedtowiththecustomer underaGeneral

Purchase Agreement(GPA). Itisrequiredthat_everyquote or proposaldeliveredto the

customermustreiterate the paymentterms_previouslyapproved_bybothparties.The

ContractManagerprovidesthe samedocument_{every time,}withno changes exceptfor

thename or reference number ofthequote response. Paymenttermsarenotdependent

onthespecific customer request and theContractManagermakes noimmediate

decision regardingthose terms.This documentcan_{easily be}made availabletotheSales

Teamwith no need toinvolve aContract Manager. Resource Consumed: Contract

Manager's time and effort

Activity# 8- PM_{creates a}draft_pricedocument_{and emails}itto Sales

Themain reason_{why PM}needstocreate adraftpriceisbecausetheSalesteam has

no accessto_pricinginformation. If theSalesTeam had accessto this_information,the

PMwould nothavetodedicatetimeand effortto thepreparation of apricefile.

ResourceConsumed: ProposalManager's timeand effort

Activity# 9- SalesExecutive_reviewsthedraft_{price and makes sure}

eveiything is

aligned withthecustomer'srequest

Contraryto theactivities_{previouslymentioned,} this_activitywas_foundtoadd value

accordancewithher/hisrequest.On theother_hand,ithas beenselectedbecause it_only

takesplacetomake_upfortheflawsofthisprocess. Asshared_bytheSalesExecutive

thatwasinterviewed_duringthecourseofthisstudy,it is commontoaskforchangesin

theprice_document,often_requiringthePMtodo some re-workIftheneeded

informationweremade availableto theSalesTeam, a review at such an advanced stage

oftheprocesswould notberequired and rework wouldbereducedtoa minimum.

ResourceConsumed: Sales Executive'stimeand effort.

Activities #_10,11&12-_{Proposal Managersends approveddraftto theBusiness}

Managerwho will putinplace aBusiness Case. Business Manageremailsthe

Business Caseto theChiefFinancial OfficerforapprovalThe ChiefFinancial

Officerapprovesthe Business Caseand posts approval ontheCORonlineform.

Activities _10, 11&12sharethesame reasoning.The Business Managerand theChief

FinancialOfficerareinvolved toreach approvalforpricesthatare setinadatabaseand

for discountsthathave been_previouslyapproved and agreedtowiththecustomer. If

theSales Teamisabletoputtogetherthequotebasedon pre-approved prices and

discounts, there isno needforaBusiness Managertoelaborate aBusinessCaseforthe

ChiefFinancial Officer toapproveit. ResourcesConsumed: Timeandeffortofthe

ProposalManager,BusinessManagerand theChief FinancialOfficer.

Basedon_{the reasoningpreviously}discussed,nineactivities are subjectto

elimination.Theseactivitiesareconsideredto addnoreal valueto theprocessbutcan

onlybeavoidedifanewprocessisputinplace. TheflowchartsinFigure4.4 aim to

Figure4.3- Process

View BeforeandAfter Elimination ofActivities

Currentprocess After_eliminatingnon-value

addedActivities

Client Sales B&P PH CM BM FO

Client Sales jjpn 1 1 L\ No _ 2 RFQ T No t i

| Hes 1

x ₁ 3

iL ₁

5

1 14

No

1 6

, 7 l5

PO"* 8 1 1 q (es in No 2 Yes 1 1 13 14 I

Figure4.3showsthat_byehminatingthenon-value added_activities;theprocess_may

bereducedtoatotal offivesteps _{only requiring}theinvolvementofonedepartment

Conclusion

Resultsobtained throughthis_studyshow_{that thecurrent process atTECH}

Corporation toprepare a standard quoteisnotcarried out efficiently. After_evaluating

offifteenactivitieswerefoundtoaddno real valuetothefinal outcome. Inaddition,

these_{nine activities are}

consumingresources such asthetime and effort of sixdifferent

departments,whenthesalesteam alone can accomplishthis task.Thesenon-value

added activities arepart ofthecurrentprocess duetomismanaged_pricinginformation,

whichisnotshared_properlyamongstthe differentorganizations withinTECH, the

salesteamnot_beinganexception. Basedonthese_findings,recommendations_regarding

a new processtoquotestandardhardwareand software are sharedinthe_following

ChapterV

Recommendations

Thenewprocesstoprepare standardquotesisexpectedto_{significantly}reducethe

current averagecycletimeof10calendardaysandtooperate at alowercostwithfewer

resources. Driven_bythese_objectives,therecommended process suggests_onlyatotalof

six_steps, alltobeperformed_bythesalesteam. Thesesteps aredescribedbelowand

illustratedinFigure 4.5.

1. Confirmreceipt ofRFQ.

2. Decidetobidor nottobid

3. Fillout a CORonlineform to_formallyregisterthecustomer's request

4. SearchthedatabaseavailablethroughtheCORsystem and selectthe items

requested toobtainprice and discounts

5. Printout aformattedprice_file,whichdetailsterms&conditions_previously

agreedtowiththecustomerthroughaGeneral Purchase Agreement. Both_documents

are_{automatically}provided_bythesystem

6. _Deliverythe quoteto thecustomer, _{electronically}or a_{hardcopy, depending}on

Figure5.1_Recommended Process

Client Sales

RFQ 1

t No

<^>

\ 2 ? Nri Yes

3

1

4

I

5

1

1 U *

In orderfortherecommendedprocess toflow_smoothlywith no_{interruptions,}the

followingfundamentalsare suggestedtotakeplace:

Allow the salesteam proper accessto_pricinginformationonnon-customized

hardwareand software

Dedicateresourcesto _constantlyupdatethedatabasesthatprovide_pricing

information

Enhance thesoftwaretool_alreadyinuseto allowtheautomatic generationof

softwaretoolsshouldbeableto_{automatically}provideaBusiness Case foreach quote

delivered,which would_stayin therecordforfinancialcontrols andfuturereferences.

It isafactthat TECHCorporationis_facinga_challengingeconomicsituation,which

forcesuppermanagementto_{be very}cautious with_spendingand _veryserious about

achieving and_maintainingprofitability.Thenew process recommendedisaimedto

helpTECHCorporationinitsefforttoachievethesegoals._{The reasoning behind}the

new process isthat_byallowingthe salesteamtodeliversimple quotes through a much

leanerapproach,theotherfivedepartmentsthatare_currentlyinvolved in this task

wouldbeabletofocuson_highlycustomized proposals and acceleratethese deliveries,

which_bringimportantrevenueto thebusiness. Inaddition,thenew process will mean

todeliverquotes and proposals ina_timelyfashionregardless ofthe_complexityofthe

customer's request withthe intentionof_meetingor_exceedingcustomer expectations.

Asa result ofthis study,it is also_stronglyrecommendedtopursue adeeper

evaluation ofthecurrent processtoquotestandardhardwareandsoftware,which

should gobeyond the_quantityof activitiesthat_currentlytakeplace. Furtheranalysis

shouldtake intoaccountdetails on_{waitingtime, activityduration,}specificfinancialson

cost/ timespent and even considerthecustomer'sfeedback concerningtheir

expectations ontimeof response andhowthis_mayimpacttheirdecision_making

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