Application of Project Management Principles to Proposal Management
Proposal teams share many similarities with project teams, so it’s no surprise that project management principles can also benefit the business development process. Learn how the basics of project management methodologies can improve the selling quality of bids, create smoother handovers, and reduce risk.
In many ways, bid are like projects. They are executed by temporary organizations—bid teams—that are established to achieve a specific goal, such as winning new business or gaining a competitive position within an account. And just as with a project, a bid that is pursued with a sound business case and governed by a clear set of strategies is more likely to achieve success—both in terms of contract wins and in the efficient use of resources.
For these reasons, many principles of project management (PM), as defined by the Project Management Institute, can be applied to the business development (BD) process. Applying PM principles improves the selling quality of bid, creates smoother handovers, and reduces risk by:
- Providing a structure and common tools that embed predictability and build on successful strategies
- Creating a consistent process that provides better insight into bid/no-bid decisions, captures lessons learned, and uses resources more effectively
- Aligning bid with organizational strategy to optimize the return on investment
Use this information to learn basic PM principles and how they apply to bid. This knowledge both bolsters your understanding of existing BD best practices and provides a framework for developing and applying new best practices.
1. Integrate and align your BD and PM processes.
Projects can be thought of as a portfolio of investments that an organization must manage to gain returns. Integrating PM best practices into the proposal management process provides a more comprehensive approach to managing this portfolio. Rather than viewing proposal management as a stand-alone process or, worse, a wheel that must be recreated with every new bid, BD teams work with PM teams to create a sustainable, streamlined, and integrated approach to proposal development.
This integration provides BD and PM teams with a common language and similar tools, which benefits both teams:
- BD can handle the detailed planning and move into execution more quickly and accurately, with fewer disruptions
- PM and BD teams benefit from lessons learned captured during execution, especially for future, similar projects
Figure 1 illustrates the integration between BD and PM.
2. Adopt an integrated project lifecycle and make PM products an integral part of your offer document.
To use PM tools most effectively in the proposal process, organizations should aim to execute integrated projects, rather than emerging or lagging projects. Planning for an integrated project starts at lead/inception and ends at handover and clearance, passing through the phases of BD and project execution as shown in Figure 2. Conversely, planning for lagging or emerging projects often starts later in the project lifecycle. These projects tend to be response driven, which can result in cut corners and questionable outcomes.
An integrated project limits conflicts between the proposal and the contract by providing an early execution strategy that can be incorporated into both the proposal and contract.
For example, in a lagging or emerging project, many responses in the “management volume” provide detailed descriptions of management processes, without providing specifics of what will actually be done and who will do it. Sometimes the negotiation process results in a contract that conflicts with the proposal and does not reflect approaches agreed upon as part of the delivery.
An integrated project mitigates these conflicts by generating a more thorough understanding of the project lifecycle at the beginning of the proposal process. The proposal details how the project will be managed, reducing the potential for “surprises” during project execution. The contract’s statement of work can focus on what has to be delivered (the products) and their quality attributes (including time and cost). In this arrangement, some project definition documents are actually created as part of the proposal process. Working arrangements can be captured in the project initiation documentation that forms the joint basis for collaboration.
In the lagging or emerging project, it is too late to introduce this way of thinking into the negotiating process because both requirements and the prospect’s selection process are already fixed.
3. Establish a controlled environment for your BD project(s).
Competitive bidding environments provide enough uncertainty to challenge the most talented Project Managers and Proposal Writers. This uncertainty can be partly managed by introducing controls. Controls foster an “all team” culture by ensuring that everyone is operating on the same page, with the same goals and expectations. Controls also help proposal teams make informed bid/no-bid decisions by defining success on a project-by-project basis.
There are many benefits to establishing a controlled environment, as shown in the following table.
|ENVIRONMENT WITH CONTROLS||ENVIRONMENT WITHOUT CONTROLS|
|Clear rules and criteria for the authorization, leadership, and start of BD projects are established.||Projects are started without clear justification, ownership, or funding.|
|Project decision points are aligned with the BD lifecycle and major bid decisions.||Management constantly requests additional information and detail at approval points.|
|BD projects are authorized with appropriate sponsorship and adequate funding. Clear limits for Project Managers are established.||Project Managers are given conflicting or multiple reporting requirements for the same information.|
|Project teams are supported with appropriate process and guidance.||There is no clear view of projects in progress at any time.|
|Lessons learned are systematically captured and products are archived for reuse from all projects, even unsuccessful ones.||Projects are abandoned. All that remains at the end of the effort is the costs incurred.|
Controls can be based on many factors, including risk, cost, timing, quality, benefits, and scope, as shown in Figure 3. They should be tailored to fit the size and nature of each project. They should also be flexible, clear, and applied consistently.
Above all, controls help guide the bid team when a proposal begins to experience turbulence. Controls are the foundation for making justifiable bid/no-bid decisions. They are also essential for setting and qualifying the project’s business case, which is explained in the next section.
4. Monitor the business case of your BD project.
Every project requires a purpose, also known as a business case. Bids are no different. The business case doesn’t need to be financial, but it must be valid because it drives the project.
It’s not enough to establish a business case. It must also be constantly evaluated. As you learn more about the project’s requirements, costs, and risks, you should re-evaluate the business case to see if it is still viable. If controls are exceeded or unmet, or if the situation changes, a project’s business case may no longer be justified.
How is this determined? Through qualification, a testing process equivalent to the decision gate process in BD. It is perhaps the most important management theme in the BD process because it goes to the heart of business justification for bidding. It should be a continuous process documented in a live business case, as shown in Figure 4.
Qualification can be conducted in many ways. The win strategy, or project approach, should be tested to ensure that it is still competitive. Similarly, costs and risks (everything from pre-sale costs to delivery estimates) can be compared to ensure that there will still be a profit if the bid is successful. This ties back to the strengths of an integrated project lifecycle: this level of qualification, with the visibility it requires of both BD and PM activities, demands an integrated approach to project planning and execution.
Ultimately, when a business case is no longer justified, the Project Manager should escalate the issue to senior management and either:
- Seek approval for a revised business case
- Seek approval to terminate the proposal
Having documented controls in place will help the Project Manager make the decision.
5. Build lessons learned into your project approach and plans.
Whether a bid is successful or not, capturing lessons learned is essential. Knowledge capture is not easy, especially with separate teams and processes. But when BD and PM teams have an integrated standard to follow, it is much easier to track estimates for specific activities. By tracking details in a consistent fashion, BD can compare estimates to actual results and use this knowledge to inform future bid, especially for similar projects. This also creates a better assessment for risks: with this knowledge, you can lower your prices to gain a more competitive position, or you can increase your margin.
These benefits require a standardized, integrated, and governed project management lifecycle that starts with BD, as shown in the following table.
|BUSINESS DEVELOPMENT||PROJECT PLANNING||PROJECT EXECUTION|
|Scope as bid||Scope during planning||Final delivered scope|
|Bid estimates||Contract estimates||Variation during delivery|
|Initial estimate of resources||Required resources||Actual resources|
|Estimated cost and overhead||Planned cost and overhead||Actual cost and overhead|
|Contingency identified in bid||Contingency identified in project planning||Actual spent contingency|
|Price||Budget at completion||Actual spent budget|
It is easier to manage project details across functions, from proposal creation through PM, when the method, process, and structure are similar. For example, BD and PM teams should use the same work breakdown structure, scope/technical specifications, quality standards, resources, initial estimates, prices/durations, master schedule, vendors and subcontractors, constraints, assumptions, stakeholders, and risks.
To support this process, management can:
- Implement a common process across BD and project delivery so that common products and artifacts are created
- Make reviewing lessons learned a required step in each planning process and at the start of each major step in the project lifecycle
- Have “lessons learned incorporated in this plan” as a required section in each plan document (plans here include those created as part of the bid process)
- Support the process with training, accessible guidance, and helpful templates
This will ensure that acquired knowledge becomes part of lessons learned, not just lessons noted.
6. Construct a functional organization for each project based on defined roles and responsibilities.
A bid team, like a project, is a temporary organization. It typically cuts across organizational and functional boundaries and has reporting lines in addition to team members’ normal lines of management. The Project Manager, therefore, must establish a clear functional organization and reporting structure for the project. This tells project members who is doing what and who they should go to for direction. Figure 5 is an example of a typical functional organization.
The organization of the bid team must be scaled in size and complexity according to the project’s needs. Roles can be combined to reduce organizational size, or they can be split across resources when size demands it. To support the process of effective organizational design, organizations should:
- Maintain a clear set of individual and organizational roles (see Individual and Organizational Roles for more information)
- Identify the competencies required for each role
- Provide suggested mapping of roles to jobs within the organization
The project functional organization should address all levels of management, including direction, management, and execution.
The direction level identifies the Senior Manager or Managers who will be responsible for project oversight and funding. At this level, the focus is on setting direction and exercising governance. The Project Manager will handle day-to-day project management. The Project Manager is responsible for:
- Representing business, user, and supplier interests
- Securing project sponsorship, budget, and resources
- Authorizing project stages and plans
- Exercising governance and setting tolerances
At the management level, the Project Manager may be supported by Team Leaders who take responsibility for areas of the project under the Project Manager’s direction. The Project Manager and Team Leaders form the core team for the project. The Project Manager may also be supported by a project office that handles administrative and support functions. Leaders at this level are responsible for:
- Managing day-to-day details
- Controlling delivery and acceptance of project products
- Developing and maintaining management products (such as strategies, plans, budget, and status registers)
- Providing reporting and support functions
- Leading and directing specialist teams
- Managing work packages
At the execution level, the specialist resources and subject matter experts who develop or source the project products/deliverables. They are responsible for:
- Providing specialist knowledge and expertise
- Creating individual project products
Review the organizational structure throughout the project lifecycle
The project functional organization should be reviewed at the beginning and end of each project stage. Lifecycle points at which review is appropriate include:
- Start-up. Who should manage this?
- Initiation. What resources will we need?
- Start of a new stage. Are the resources in place to deliver?
At any stage, there can be only one Project Manager. It’s good practice to maintain team continuity throughout the project’s lifecycle. Nonetheless, organizational review should also ask, “Do we have the right management team for the next stage?” and be prepared to change as needed.
7. Empower the project team to manage within defined limits.
The project team must be empowered to manage the project. Constantly having to ask management for permission or authorization is a recipe for paralysis. For this reason, management should establish a sound framework for delegation. The key concepts for effective delegation are management by stages and management by exception.
Manage by stages
There are practical limits to the time spent on detailed, high-confidence planning. Project Managers limit their planning time to what is realistic for detailed planning. Beyond this, they make outline plans that are based on realistic assumptions but essentially contain more uncertainty. For bid projects, it makes sense to manage by the eight phases of BD, as outlined in the Introduction to the Business Development Lifecycle section. Those phases are:
- Market Identification
- Account Planning and Positioning
- Opportunity/Capture Assessment (Identification and Qualification)
- Opportunity/Capture Planning
- Proposal Planning
- Proposal Development
- Negotiation and Post-Submittal Activity
- Delivery and Ongoing Customer Relationships
The length of a management stage is determined by the time over which detailed planning is sensible, which depends on the project and the business environment. Note that these are management stages, which are distinct from inherent technical phases within a project.
Manage by exception
When managing by exception, the Project Manager is empowered to lead the project, provided that it stays within approved limits set by management on a stage-by-stage basis. Limits can be set on scope, cost, risk, benefits, quality, and progress. For each of these, management may define a degree of tolerance that provides a level of discretion to the Project Manager. Figure 6 illustrates the application of limits and tolerances.
For example, during proposal development, a situation may occur that causes a change in the solution, schedule, or cost. When this happens, the changes should be identified and escalated to the appropriate decisionmaking level.
Exceptions should be rare. Projects that continually escalate issues to management are out of control. Governance rules that cause constant stage and project tolerance changes are symptoms of an unstable project environment. That is an issue that senior management should resolve.
8. Focus on deliverables, not activities.
To manage a project effectively, focus on what must be produced (products or deliverables) rather than on what has to be done (activities) to create the deliverables. Products are visible: they are either finished or not.
Technique and processes (the activities) are the framework of PM. A good Project Manager works within this framework to stay focused on the goal (product): a successful project or a profitable contract. Figure 7 shows the basic components of a product-based approach.
In proposal management, this means validating the compliance and responsiveness of content against requirements and strategy, and not just focusing on completing the work by its deadline. Basing plans around deliverables or products provides several advantages:
- Proposal Managers will be able to see the status of the project in terms of what it needs to deliver. A product status register tracks what is finished and what is not.
- Acceptance or quality criteria can be established for each deliverable or product. This allows quality assurance (QA) activities to be planned around deliverables and to define their fitness.
- Using a product-based approach to QA scales the process appropriately. Product quality criteria provide a basic checklist for selecting appropriate quality methods, which range from simple inspection to formal review.
- For each product, ownership can be assigned to the person or team that is producing it. This provides a simple mechanism to control progress. Each responsible owner reports on expected delivery and current status.
- Products provide a straightforward basis for tracking configuration and controlling change. Products are configuration items with issues and status that can be recorded and tracked. Changes can be assessed in terms of the products that are impacted and the dependencies between them.
Analyzing what the project must produce in terms of a product breakdown structure and then documenting this in product descriptions will provide the means of control. Product descriptions form the basis of a “contract” between the Proposal Manager and the Producer. The Proposal Manager defines what is needed, what it should contain, how it should be presented, and the standards by which it will be accepted. The Producer agrees to produce what was asked for, to the standards required, at a given time and cost.
Tools and templates are particularly useful here, including checklists, model statements, proposal themes, proposal strategies, value propositions, decision tools, and review criteria.
Distinguish between management products and specialist products
The outputs of the project (e.g., a proposal document) are referred to as specialist products. The internal deliverables used to manage the project (e.g., plans) are called management products. Their composition and quality criteria can also be captured in product descriptions. Mature organizations include management product descriptions as part of their project, program, and portfolio management process support and provide Project Managers with guidance on how to tailor them to specific situations.
Application in Diverse Environments
Scale implementation around the management themes, time available, and key milestones
Proposal processes should be scalable and flexible. The PM world provides BD teams with useful guidance on how to do this. Management themes are recurring concerns that require a Project Manager’s time and attention throughout the project. The rigor and detail with which the Project Manager addresses these themes can be tailored in the project management plan. A guide for tailoring management themes is shown in Figure 8.
In the bid management context, qualification and strategy are themes that are closely linked to the business justification theme. Available time, imposed schedule dates from submission deadlines, and set dates for management reviews will also affect the degree of tailoring.
Types of organizational environment
Proposal development is driven by the type, structure, industry, culture, and organization of each company. Therefore, there is no one-size-fits-all approach. The Project Manager’s role in different organizations is detailed in the following table.
|ORGANIZATION TYPE||FUNCTIONALLY OR OPERATIONALLY STRUCTURED||MATRIX STRUCTURED||STRONG MATRIX WITH SPECIALIST PROJECT MANAGEMENT FUNCTION|
|Project Manager Influence||Low||Low to medium||High|
|Ability to Effect Change||Low||Local or departmental level only||High|
In some industries, such as systems integration, it’s common for project execution teams to manage new proposals and develop them as projects with the potential of becoming awarded contracts. These awarded contracts are then executed as projects.
In many other areas, there is a gap between the two realms, separated by either the contract award (in the case of contractual relationships) or allocation of funds (in the case of corporate internal program development). This gap has caused several organizations to fold or lose significantly. BD teams should look for opportunities to develop a dual-win proposal when providing guidance to pricing teams.
Sometimes, BD staff are so driven by quarterly quotas, targets, and commissions that the big picture can be lost if it is not managed closely. The winning proposal should let the execution team develop a risk-balanced plan that leads to profits. No one likes a winning proposal that results in financial losses during execution, or one that doesn’t generate solid benefits.
Agile PM provides a new, growing source of useful experience for proposal professionals. Agile PM is rooted in software development. It is an iterative process that tends to favor people over processes and collaboration over negotiation. The Agile Manifesto includes many principles that can be usefully applied to proposals, as summarized in the following table.
|AGILE PRINCIPLES||PROPOSAL MANAGEMENT PRINCIPLES|
|Our highest priority is to satisfy the customer through early and continuous delivery of valuable functionality.||We identify customer value through early opportunity planning.|
|We welcome changing requirements, even late in development. Agile processes harness change for the customer’s competitive advantage.||We support continuous communications with the customer to gain the best possible understanding of its issues and needs.|
|We deliver working functionality frequently, from a couple of weeks to a couple of months, with a preference for the shorter timescale.||We break activities into discrete modules that have identified inputs and outputs.|
|Business people and developers must work together daily throughout the project.||We keep the project team aligned by establishing controls and creating opportunity plans and proposal management plans.|
|We build projects around motivated individuals. We give them the environment and support they need and trust them to get the job done.||We provide team members with the conditions, resources, and support needed to complete their activities.|
|The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.||The most effective method of sharing information is through immediate contact, either through face-to-face meetings or over the telephone.|
|Working functionality is the primary measure of progress.||We focus on product over activity (i.e., creating value for the customer over simply meeting deadlines).|
|Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.||We establish a consistent process, but tailor it to the opportunity.|
|Continuous attention to technical excellence and good design enhances agility.||We start with customer needs and build solutions to satisfy those needs.|
|Simplicity—the art of maximizing the amount of work not done—is essential.||We maximize the evaluator’s time by making the proposal concise and easy to read.|
|The best architectures, requirements, and designs emerge from self-organizing teams.||We base solutions on customer requirements, not on organizational capabilities.|
|At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.||We perform lessons learned reviews and use the results to better inform future proposals.|
Online collaboration tools
Virtual services range from point solutions for small teams to enterprise-strength tools that integrate with other corporate platforms. All online tools support online collaboration features. enabling team members to share status, report progress, and contribute to discussion. Online tools also include version control features to facilitate collaborative proposal writing and review.
Many online tools also provide executive dashboard features, including custom key performance indicators for both supply and demand. This expands the range of options available to management, the project office, and Project Managers to implement the integrated lifecycle and work collaboratively.
Theory of Constraints-based scheduling
Application of the Theory of Constraints (ToC) to project scheduling has shortened time to market and development lead times for many businesses. ToC applies the saying that “a chain is only as strong as its weakest link.” Applying ToC means identifying the “weak links,” or constraints, present in an organization and either eliminating them or finding ways to work around them.
One way that ToC has been applied to PM is through critical chain PM, which focuses on the resources required to complete projects on time. The promise of shorter lead times and more robust development schedules is often attractive for Proposal Managers.
While many disciplines have been transformed by ToC, its application to BD remains an area for further research.
Common Pitfalls and Misconceptions
By their nature, PM methodologies are heavy duty and capable of supporting high-value, high-risk activities. The documentation and processes that enable these methodologies are similarly comprehensive. This can lead to two possible negative outcomes:
- An organization imposes a heavyweight process on every opportunity, regardless of size or complexity. The effort devoted to managing small projects or proposals is disproportionate to their value.
- Project and proposal teams find workarounds for perceived overly bureaucratic processes and use lighter approaches based on their own view of what’s appropriate. Consistency is lost as documented processes are abandoned.
PM methodologies provide a framework for consistent processes. This framework must be tailored to every opportunity to ensure success and adoption.
Too much focus on the process
Technique and process are the framework for PM principles, not the end goal. Rather than endlessly refining plans and documentation, Project Managers need to ask the right questions at the right times and make sure that their teams have what they need to win. It’s no different for the proposal team. The team needs to focus on creating value for the customer by using PM tools, rather than spending all their time refining those tools.
Reluctance to engage with Project Managers
Project Managers want realistic, achievable plans with budgets that cover a project’s real costs and risks. Sometimes this behavior is viewed as negative or overly rigorous, leading some to avoid engaging with Project Managers until late in the cycle.
Project Managers can avoid this by addressing all stakeholder concerns early in project development. They can also share the efficiencies and process improvements that PM principles can bring with their proposal development teams.
Just as there are good patterns of behavior, there are also anti-patterns that should be avoided. The following are familiar PM anti-patterns with equivalents in the proposal world:
- Analysis paralysis. Similar to focusing too much on the process, a team spends its time arguing about the best solution or requesting further information before committing. When the time comes to deliver, the team is not ready. This is why it is essential to focus on deliverables and have a sound business case already established.
- Death march project. Sometimes known as the “old man syndrome,” this situation occurs when the CEO has signed off on a doomed project and expects the team to win. The team knows it is hopeless, but carries on to the bitter end. This is where controls and qualification can result in a more effective use of resources. Backed by sound data, BD can approach management with a business case as to why the project is not worth the effort or resources.
- By applying PM best practices in BD projects, proposal professionals will:
- Gain sustainable competitive advantage for organizations
- Increase the probability of successful outcomes for bid
- Reduce the risk to profits and reputation resulting from poor handover
- Improve the selling quality of proposals
- Gain insight in evolving the best practices of the organization
- Organizations should strive to execute integrated projects, rather than emerging or lagging projects. Integrated projects are planned ahead and are more likely to achieve strategic objectives.
- Integrated projects can help limit conflicts between the proposal and contract
- Projects (and proposals) should continually be monitored for business justification
- Project Managers should construct functional organizations for each project
- Teams will be more successful if they focus on deliverables (products) rather than activities
Terms to Know
- Proposal Management Plans
- Building a Metrics Program
- Business Development Capability Maturity Model 2.0
- Collaboration and Other Proposal Automation Tools
- Compliance and Responsiveness
- Content Plans
- Customer Relationship Management Systems
- Daily Team Management
- End-to-End Process
- Gate Decisions
- Individual and Organizational Roles
- Introduction to the Business Development Lifecycle
- Lessons Learned Analysis and Management
- Opportunity Plans
- Quality Management
- Review Management
- Strategy and Win Themes
- Virtual Team Management