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

Prospector 1

Prospectoran exploration of bidding from

opportunity to winning profitable business

Prospector 2

Prospectoran 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

Prospector 3

The SimulationPreparation

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

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• 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:

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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

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The ProjectsDesign 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)

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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

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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

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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.

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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

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The Bidding Cycle

• Search for Opportunities

• Pre-qualify the Projects

• Tender

• Negotiate

• Win the Bid

• (Simulate Outcomes)

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Search for OpportunitiesExpend 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

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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

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Prepare to TenderGet 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

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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

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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 competitor’s bid better.

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(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

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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

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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

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ControlButton(s)Control

Button(s)

Desk Top

SimulationName

SimulationVersion

Task Bar

Help &Advice

Current Entryor Report

PrinterControl

CurrentTime

Aids

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Learning through SimulationYou 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

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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.