Gate decision or Bid decision is an important component of a business developmental lifecycle. It is the key to a winning proposal that prevents business from investing on unnecessary projects. Decisions to continue pursuits or to abandon opportunities are made at the gate-decision reviews. The three basic questions that every gate decision attempts to answer are Is it real?, Can we win? and Do we want to?
Gate decisions are always a series of decisions which help to achieve organizational objectives related to winning business. The series may include market entry decision, opportunity qualification decision, bid pursuit decision, bid/no-bid decision, bid validation decision and a final review. It is important to standardise the bid decision with templates and schedules. This ensures consistency and much easy governance. Templates are generally created in presentation or word processing software which works equally well in face-to-face or virtual settings. It is possible to realistically review a bid with the help of a standard template and a standard checklist of what are the things that need to be submitted for this particular gate decision.
Organizations must set reasonable expectations for information quality and maturity at various gate decisions. Expectations should be set on decisions like at what point the exact summary should be submitted, where the project template is going to be, or what the schedule is going to look like. These expectations help decide how to give feed and what is the right information that needs to be shared to the customers. The next step is deciding on the bid and proposal investment. The cost of a bid should always be determined based on what it will cost to win, instead of what it will cost to bid. Cost includes labour, other direct costs, travel, and incidentals required to develop and submit a bid.
Establish a proper decision criteria at every single stage depending on the risk and the sales target of the company. It helps to understand whether the bid is appropriate and if so what is stopping it from winning. The decision criteria should be around the probability of win and probability of go. Probability of win is the probability an organisation to win a particular opportunity. For example, if there are four competitors the probability of winning is 25% and it changes according to the progress. The important parameters for measuring the probability are pre-RFP activity designed to influence requirements, customer preferences, customer knowledge of the organization bidding technical capability, management capability and so on.
Probability of go or probability of happening represents the likelihood the customer will actually proceed with a funded program upon making an award decision. It is completely based on the client and can be assessed using parameters like mission need or requirement, customer champion and funding availability. Since the opportunity progresses, the leadership and presentation roles change at gate decisions. It is crucial to understand who is responsible for these decisions at this point of time. Questions like “who are the key decision makers?”, “who is the person responsible for ensuring that the right decisions are being made?” need to be answered. Follow up on action items related to gate decisions should also be done. The response given by the customer will ensure that the solution might be more risky/pricy or less risky/pricy. The actions in the decisions of one’s own company can help fill the customer responses.
There are a number of pitfalls in this as well. Lack of consistency in sharing the information is the most critical drawback of gate decisions. It is necessary to change the strategy and evolve according to the need of the situation. It doesn’t matter on what probability the bid started. Even though it is initially low, there is a chance of increasing the probability as it progresses. Resourcing is unimportant in probability of win calculations. Gates can be treated as reviews rather than decision points. Commercial discussions should not be kept late and ensure that the process is structured.
Based on APMP Copyrighted Material