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To understand why it is imperative to scale your proposal response volume, you need to first understand the principles of growth and scale. There is a nuanced but very important distinction between scale and growth.
Learning how to scale proposal response volume should help you increase the success rate of your proposals, which may help the company grow. Learning how to scale proposal responses will allow for the company to increase revenues with no major increase in costs of operations.
Growth occurs with an increase in production capabilities through the addition of production capacity and resources that have a financial cost. A factory that operates 24 hours a day may decide to build a new facility, extend existing facilities, purchase new equipment or expand operations, which would increase profits. Growth costs time, resources, and money.
By contrast, scaling is the practice of increasing revenue without a meaningful increase in growth or expansion of the current operational capacity. There are two common but distinct uses for the term “scaling” when it comes to project proposals.
The first is as explained above. If a factory that is only open during the day adds additional shifts in that window of time, rather than extending business hours, is scaling. In this scenario, the production would theoretically increase between two and three times the former level of production. This would also occur without the need to expand the production facility or to purchase new equipment for production.
The second form of scaling has to do with reducing the number of proposals produced in response to RFPs. Rather than electing to create brand new proposals for each RFP, the company can be more selective. In reducing the number of proposals they produce, the quality can increase proportionately, and the number of proposals won should increase as well.
It can be tempting to respond to every RFP that closely matches the ability of your group. With all the potential for financial gain, high response volume is exciting, but not a viable business practice. In fact, responding to every RFP can reflect poorly on your group and damage your reputation and your ability to win more bids.
It seems counterintuitive, but by learning how to scale your proposal response rate, you can increase your chances of winning more proposals and having fewer rejected proposals.
There is an added cost-saving — not only because you are decreasing workloads, but because you are increasing your success rate. The key to successfully scaling your proposal response volume is determining which RFPs are more likely to produce positive results, focusing on quality as opposed to quantity.
Determining whether or not to respond to an RFP can be reduced to a cost/benefit analysis. All of the relevant facts and information need to be addressed and analyzed by the response team leaders. Ultimately, the determination of whether an RFP is worth consideration or not should be determined by a project management team.
The project management team should be composed of people familiar with the operations and management of similar projects either with the business or with other companies they may have worked with within the past. The determination can be made using the same process as that for a cost/benefit analysis.
The management team can determine what in-house personnel can be used for the project, and what impact this will have on the current operations of the company in terms of both finance and man-hours. Further consideration should be given to the need for third-party vendors, additional industry experts, and other resources that may need to be brought in from outside the company.
Determinations should be made regarding the sensitive nature of any intellectual property or IP: trade secrets or other materials and information will have to be revealed to third-party vendors. These sensitive aspects of operations may receive legal protection through the use of Non-Disclosure Agreements, but industry experts are just as fallible as anyone else at the end of the day.
A project manager should determine any potential gains that are not necessarily financial in nature. Some of the more common, non-financial benefits of the bid proposals will be an increase in positive press or other public relations exposure. Is there any potential for long-term financial gain or an increase in business or profitability from these gains?
Conversely, the project management team should also determine whether or not there would be any negative impact from winning the bid proposal. Would winning the bid put the business in an uncomfortable position with the local administration or citizens?
If winning the bid proposal means having to transport toxic waste or other hazardous materials through the local communities, or having to store large amounts of these toxins, is it worth bidding? Are there any potential legal or legislative considerations that may incur added costs at a later date?
All of the ramifications of the RFP, both positive and negative, need to be carefully considered. There are times and occasions when it is best just to let those other companies deal with the negative results and reject the RFP completely. Never underestimate the importance of having a qualified and capable project management team to help deal with these difficult decisions.
When everything is said and done, scaling down your proposal response volume is not about walking away from business or about losing money, but about increasing the scale of business operations without increasing costs. When this effort is successfully managed, the end result should be in an increased number of successful bid proposals and the ability to win virtually any request for proposal.