MANAGING PRESALES

JAYANT KULKARNI
SESSION 10
WHAT DID WE COVER IN THE PREVIOUS SESSIONS?

 View from Seller’s side of things

 Qualifying the prospect
 Strategic decision to bid
 Bidding strategy issues
 RACI matrix
 The presales process
 IT project commercials – Costs and cost control
 IT project commercials – Exercise
AGENDA FOR SESSION 10

 IT engagement models
 Detailing the technical and commercial contents of the RFP Response template
 Technical Content
 Commercial Content
 Legal Contract and its elements
 House-Keeping Practices
 Confidentiality / Copyright / Disclaimer
 Clarity: Exclusions / Assumptions / Caveats / Consistency / Order of Preference
 Contracting Relationships
 Strategic Alliances
 Steering Committee

 Proposal as a Selling Document

 IE4 – Writing a response/proposal to a RFP
Internal evaluation no 4 – Writing a response to RFP
Total marks – 25

Group exercise – Write a proposal as a response to the given RFP. The response should
include both the technical and commercial part.

The excel sheet has details of which group should use which RFP.

The technical response should touch upon the various sections as required. Please mark a
section as “Not applicable” if the same is so for the RFP under your consideration.

The commercial response should detail the approach and should indicate “Price quoted” with
T&Cs, if any. The team should be able to explain the approach used to work out the price.

When and how – We will use the sessions during the next week i.e. week beginning 25th
September as Experiential learning sessions for this assignment. The groups to present
their proposal in our sessions during weeks beginning 2nd October and 9th October. This
will be a classroom presentation. Time allotted per group 20 minutes with 5 additional
minutes for Q&A.
Marks – Total 25 marks (20 marks for the proposal document, 5 marks for presentation)
 Technical and Commercial content

DETAILS OF THE RFP RESPONSE

THE RFP RESPONSE – TECHNICAL CONTENT

 Executive Summary
 Brief overview of the entire proposal and the specific value that you
bring to prospect / customer
EXECUTIVE SUMMARY

 Provide a summary of the proposal being presented in response to this RFP

 Limit the content to approximately 3-5 pages

 Do not include any costs for the solution within this section.
 This document will be included in briefing papers for key members

 Ensure that this section is a self-contained document

EXECUTIVE SUMMARY – SAMPLE FORMAT

 General information

 Suggested solution alignment with client business objectives

 Other specific brief

 Current relationship, if it exists

EXECUTIVE SUMMARY – GENERAL INFORMATION

 What advantage or additional value can your company provide that differentiates you from your
competitors?

 Why did you choose the solution specified in the response?

 What are the benefits of your solution benchmarked against outsourcing industry standards?

 What are the potential disadvantages to your solution and what would you propose to mitigate them?

 What is the added value of your solution?

EXECUTIVE SUMMARY – SOLUTION ALIGNMENT

 How will your solution deliver continuing cost reduction and effectiveness?

 How will your solution provide sole supplier accountability for all managed areas?

 How will your solution deliver exceptional service management – including continuous improvement?
EXECUTIVE SUMMARY – OTHER SPECIFIC BRIEF

 How will you explore the benefits of innovative commercial solutions – linked to risk and reward?

 How will you share views on broader market directions and strategies, as appropriate to a strategic
relationship?

 How will you ensure high quality Service Levels?

 How will you ensure excellent career prospects for transferred staff?
EXECUTIVE SUMMARY – CURRENT RELATIONSHIP WITH CLIENT

 Highlight
 the extent of your existing relationship with client company and
 the extent to which you have a deep understanding of client’s business in
particular and the <domain> market sector in general.
THE RFP RESPONSE – TECHNICAL CONTENT
 Corporate information
 Company registration details: Name, address, registration number, Organization chart
 Brief history
 Vision
 Brief description of IT services offered by your company
 Core competencies
 Partnerships and alliances
 Key clients
 Key clients in the relevant sector
 Significant achievements
 Overview of the company’s strategic plan for next 3 years
 Strengths and weaknesses
THE RFP RESPONSE – TECHNICAL CONTENT

 Understanding of requirements
 Provide details of your understanding of requirements
 In scope and out of scope
THE RFP RESPONSE – TECHNICAL CONTENT

 Solution options
 Describe potential solutions
 Relative strengths and weaknesses of the options
 Identify and give details of the option which you recommend

 Provide brief analysis covering

 Setup
 Transition timeline
 Team size and location(s)
 Expectations from client / prospect
THE RFP RESPONSE – TECHNICAL CONTENT

 Operating model
 Organizational structure
 Resourcing mechanism
 Infrastructure
 Location
 Experience
 Working practices and tools
 Estimation methodology and tools used, if any
THE RFP RESPONSE – TECHNICAL CONTENT

 Transition
 Methodology and tools for base-lining the applications and
knowledge acquisition Performance metrics, monitoring and
frequency during transition
 Transition schedule (contingency planning)
 Detail transition plan with milestones and deliverables

 Organization structure
 Team structure covering client, vendor, third parties with identified
roles and JD (Transition and BAU)
THE RFP RESPONSE – TECHNICAL CONTENT
 Governance
 Account management, that is the structure and customer interface for sales
and delivery
 Communication flows within your team, with client and with other
supplier(s)
 Escalation mechanisms and timelines, and all roles that are identified in the
escalation path
 Any audit requirement
 benchmarking of service parameters like estimation, quality, productivity, etc.

 Support model
 How to align support and development teams
 Communication
 Knowledge transfer
Example of Steering Committee - Part of Governance Model

▪ Ensure Business JLR

Customer
Customer
Wipro
Service Provider
Alignment & Program
Direction Program Sponsor Vertical Head
▪ Strategic Requirements &
Plan Executive Steering Account Manager
Business Stake Holders
▪ Key Issue Resolution Committee

JLR Wipro
▪ Status Review Customer Service Provider

▪ Project Management
Project Managers Account Manager
▪ Issue Resolution
▪ Change Management
Project Management Architects Perf Test Lead
Office

▪ Manage Project Schedules

JLRCustomer Wipro
Service Provider
▪ Manage Deliverables
▪ Status reporting Project Managers Perf Test Lead
▪ Manage Resource
Operational Management Project Team Perf Test Engineer
Committee
Project Teams
THE RFP RESPONSE – TECHNICAL CONTENT
 Documentation
 Development / service project documentation deliverables, MIS reports with
formats
 Any other performance measurement
 Internal record keeping
 Describe how all of the documentation is used

 Risk management
 List all the risks under transition and BAU stage along with mitigation plan.
 Management risks
 Operational risks
 Technical risks
THE RFP RESPONSE – TECHNICAL CONTENT
 Quality management
o How do you define, measure and monitor quality of deliverables
o How do you measure productivity
o How will you ensure y-o-y improvements in productivity
o Any specific initiatives to ensure quality
➢ Third party review
➢ Customer team

 Infrastructure
 Location facilities
 Requirements from customer
 Backup and recovery plan
THE RFP RESPONSE – TECHNICAL CONTENT
 Staffing
 Flexible resourcing models
 Optimal utilization
 Handling peaks and troughs in requirements
 Expected commitments from client
 Provide concise profile of key members
 Current attrition level and steps to control
 Any skills you currently don’t have and how to fill the gap
 Training process on business domain for specific assignment
 Background checks / security screening

 Key technology expertise

 Domain sector expertise
THE RFP RESPONSE – TECHNICAL CONTENT
 Subcontractors
 Do you intent to partner / subcontract part of the work outlined in this RFP?
 the work that you intend to sub-contract
 details of the organization(s) and/or individual(s) that you intend to use as sub-contractors
 how you propose using the subcontractors
 impact, if any

 Information security and disaster recovery

 Security policies and processes
 Methods that prevent unauthorized access
 Ensure IPR are protected
 Provide overview of disaster recovery plan
THE RFP RESPONSE – TECHNICAL CONTENT

 Differentiators
 Primary benefits to client
 Primary benefits to your company
 Why YOU over your competitors
 What are critical success factors for this
assignment
THE RFP RESPONSE – TECHNICAL CONTENT

 References

 Corporate social responsibility

 Provide details of your :
 Environmental policy
 Health and safety policy including any training
 Equal opportunity policy
 Policies with regard to social and ethical responsibilities
THE RFP RESPONSE – TECHNICAL CONTENT

 Assumptions
 <Vendor> may further refine the approach and structure after obtaining further
details and after the due diligence phase before starting transition
 Out of scope activities are based on current understanding of the requirements
and <vendor> will be pleased to re-visit any of the requirements for inclusion or
variation.
 <customer> will provide a single point of contact to interact with <vendor>
during the engagement. The contact persons will have sufficient backup cover
 The approach to schedules and the cost estimates proposed by <vendor> are
based on the information contained in the RFP. Any major deviations will be
discussed and mutually agreed with <customer>
 <customer> will make available any logistics support required for access,
communications and onsite infrastructure on a continuous basis
THE RFP RESPONSE – COMMERCIAL CONTENT

Estimations

 Software development effort estimation is the process of predicting

the most realistic amount of effort (expressed in terms of person-
hours or money) required to develop or maintain software based on
incomplete, uncertain and noisy input.

 Effort estimates may be used as input to project plans, iteration plans,

budgets, investment analyses, pricing processes and bidding rounds.
THE RFP RESPONSE – COMMERCIAL CONTENT ESTIMATIONS
There are many ways of categorizing estimation approaches.
 The top level categories are the following:

 Expert estimation: The quantification step, i.e., the step where the estimate is produced based
on judgmental processes.
 Formal estimation model: The quantification step is based on mechanical processes, e.g., the
use of a formula derived from historical data.
 Combination-based estimation: The quantification step is based on a judgmental and
mechanical combination of estimates from different sources.

 Expert estimation is the dominant strategy when estimating software

development effort.

Ref: Wikipedia
THE RFP RESPONSE – COMMERCIAL CONTENT ESTIMATIONS
Estimation approach
Analogy-based estimation
WBS-based (bottom up) estimation
Parametric models
Size-based estimation models
Group estimation
Mechanical combination
Judgmental combination
Ref: Wikipedia
Category
Formal estimation model
Expert estimation
Formal estimation model
Formal estimation model
Expert estimation
Combination-based estimation
Combination-based estimation
Examples of support of implementation of
estimation approach
ANGEL, Weighted Micro Function Points
Project management software, company
specific activity templates
COCOMO, SLIM, SEER-SEM, TruePlanning
for Software
Function Point Analysis, Use Case Analysis,
SSU (Software Size Unit), Story points-
based estimation in Agile software
development, Object Points
Planning poker, Wideband Delphi
Average of an analogy-based and a Work
breakdown structure-based effort estimate
Expert judgment based on estimates from a
parametric model and group estimation
HUMOR IN ESTIMATIONS
The chronic underestimation of development effort has led to the coinage and popularity of numerous humorous adages, such as
ironically referring to a task as a "small matter of programming" (when much effort is likely required), and citing laws about
underestimation:

Ninety-ninety rule:

 The first 90 percent of the code accounts for the first 90 percent of the development time. The remaining 10 percent of the code
accounts for the other 90 percent of the development time.

— Tom Cargill, Bell Labs

Hofstadter's law:

 It always takes longer than you expect, even when you take into account Hofstadter's Law.

— Douglas Hofstadter, Gödel, Escher, Bach: An Eternal Golden Braid

Fred Brooks' law:

 What one programmer can do in one month, two programmers can do in two months.

— Fred Brooks

Adding to the fact that estimating development efforts is hard, it's worth stating that adding more resources doesn't always help.

Ref: Wikipedia
COMMERCIAL MODELS

Pricing Model Description

Time and Material • Most commonly used model wherein the client pays for the effort hours and materials spent by the vendors.
(T&M) • This model is used when the scope of work is unpredictable or expected to change over time.
• Since the Unit of Work (UoW) is hours billed, the provider has less incentive to improving the resource
productivity.
• The client therefore takes higher risk of delivery.
Fixed Price • Provider is paid a fixed price for an agreed scope of work.
• The provider takes on a higher risk f delivery as they need to absorb the higher cost of execution in case of
delays attributable to them.
• Since the provider takes on a higher risk, they might charge a risk premium and pad the price with
contingencies.
• In this model, the scope of work needs to be clearly defined, with well-defined deliverables, rewards,
penalties, and acceptance criteria.
• Most importantly, clients should compare internal estimates to derive a fair price before agreeing on the
project pricing.
• Any scope, price or timeline change will result in a Change Request (CR).
• For efforts that require annuity based services, the work demand should be predictable, and SLA
expectations need to be clearly spelt out in the SOW.
Incentive add on • Incentives awarded for achieving or exceeding agreed milestones/service levels or both.
pricing • This can be supplemented on top of T&M or FP
• Can be used when Time to Market is critical for clients
COMMERCIAL MODELS

Pricing Model Description

Unit Based Pricing • A predetermined price agreed for a well defined Unit of Work.
• The per unit pricing will include cost of labor, materials, and associated services
• Allows for a fair amount of flexibility in scope and is ideally suited for situations, where beyond a certain
minimal volume of work, the demand cannot be defined.
• Some examples of Unit based pricing: No of customers on-boarded per month, no of test cases per project, no
of regression suites in testing, no of incident tickets processed per unit time (day/week/month), no. of
transactions per day of varying complexities per day.
• In the Infra world, no of servers, switches, maintained per day by the service provider.
• Allows for volume based discounts.
• Hence this becomes an incentive for both the client and the Service provider to work towards mutual benefits.
Outcome Based
• Output-and-Outcome-Based-Service-Delivery-and-Commercial-Models
Models
Shared risk and • Client and provider both invest in the development of the product/service.
reward pricing • Once the product/service is ready and launched for generating revenue and profits, they agree on a revenue
sharing model in agreed proportions per the contract
• This is a good model to use in situations where cross-functional industry solutions are to be developed, that
require strong domain expertise and intellectual property (IP) from one company and strong “contextually”
capable technical resources from the other organization.
• This model promotes co-innovation
 IT Outsourcing – Commercial Models

Output based Outcome based

To stay ahead of the Aspirational
competition IT
providers must move
Emerging
Commercial Model Maturity

here
More than 85% of IT
providers are here
today

Prevalent Prevalent Gaining traction

Traditional

Input based

Staff Augmentation Co shared Managed Services

Service Delivery Maturity

** Source – Cognizant Insights Whitepapers
BID DOCUMENTATION

 Legal Contract and its elements

Microsoft Word
Document

 House-Keeping Practices

 Confidentiality / Copyright / Disclaimer

 Clarity: Exclusions / Assumptions / Caveats / Consistency / Order of Preference

PROPOSAL AS A SELLING DOCUMENT (WHAT, WHY)

 Content and Preparation

 Importance of an Executive Summary

 Why YOU? – Win-Win Value Proposition

 Techniques for Estimation and Costing

 Pricing Strategy: Discounting/De-scoping

EXAMPLE OF A REAL LIFE
EXECUTIVE SUMMARY
Commercial Offer: Pricing View (1 of 3)
I. Performance Test Planning, Design, Script, Execute, Report and Analysis
ABC proposes to execute the projects either in in T&M model based on the below rate card or in Fixed price model. To have a
standardized and a transparent estimation model, ABC proposes to implement an Element based estimation framework.

T and M Rate card Fixed Price – Unit/Element Based Pricing Framework

Role Exp Location Rate (GBP/Hr.)
Junior Tester < 3 Years Onsite (UK - JLR Locations) 40.7
Junior Tester 3 years Onsite (UK - JLR Locations) 47.1
Mid range Tester 5-7 years Onsite (UK - JLR Locations) 49.6
Senior Tester 10+ years Onsite (UK - JLR Locations) 59.8

Junior Analyst 3 years Onsite (UK - JLR Locations) 48.3

Mid range Analyst 5-7 years Onsite (UK - JLR Locations) 50.9

Senior Analyst 10+ years Onsite (UK - JLR Locations) 61.7

Junior Tester < 3 Years Offshore ( India) 14.6

Junior Tester 3 years Offshore ( India) 15.9
Mid range Tester 5-7 years Offshore ( India) 18.4
Senior Tester 10+ years Offshore ( India) 28.6

Junior Analyst 3 years Offshore ( India) 17.2

Mid range Analyst 5-7 years Offshore ( India) 19.7

Senior Analyst 10+ years Offshore ( India) 30.5

ABC shall consider of providing appropriate Service Credits against certain volume of business
Commercial Offer: Pricing View (2 of 3)
II. Performance Test Tools License Charges

Software as a Service(SaaS) Model for Performance Center

Quantity Code Description Unit Price Total
1 TD141AAE HP SaaS PC1Cntrl3M Bdl SW E-LTU 18,501 18,501
5 TD157AAE HP SaaS PC1-5K/100VU Prm3M Bdl SW E-LTU 1,242 6,210
5 TD159AAE HP SaaS PC1-5K/100VU Std3M Bdl SW E-LTU 621 3,105
Total Basic Services [PC on SaaS] for 3 months GBP 27,816

Software-as-a-Service also includes:

•Operational excellence - 24X7 Support, management and maintenance of the infrastructure bound by service levels
•Point upgrades and patches on new versions of the software
•Mentoring, knowledge transfer and best practices on new and existing versions
•Stable and scalable platform managed with ITIL best practices
•Highly secure environment with ISO 270001 certification from KPMG

Charges for Other Performance Test Tools

Sl No Tool Description Price in GBP
1 HP Diagnostics to monitor 1 instance of the server 5,598
Shunra for HP Performance Center bundle, includes licenses for 1 x controller, 100 vUsers, HP
2 15,904
analytics module and Network Catcher for 3 months
Commercial Offer: Pricing View (3 of 3)
III. ABC Data Center Charges – Infrastructure as a Service (Iaas) Model

VM Charges
10-12
1 WCU = 1 Core, 2 GB RAM 0-3 months 4-6 months 7-9 months > 1 year
months
Instance VM Deliverables VM Configuration OTC QRC QRC QRC QRC QRC
2 WCU 106 947 821 745 682 631
Windows/Linux 100 GB SATA Storage +
Instance Managed Firewall + AV + 4 WCU 106 1,301 1,127 1,023 936 867
OS Management + OS
License 8 WCU 106 2,013 1,745 1,584 1,450 1,342

Additional Components
Additional Components All figures in GBP
Component UOM OTC QRC
Bandwidth 1 Mbps 671 399
Tape based backup per VM of 100 GB 199 199
SATA Storage per 100 GB usable space 100
FC Storage per 100 GB usable space 133

OTC = One Time Charges

QRC = Quarterly Recurring Charges
CONTRACTING RELATIONSHIPS

 Enabling or Framework Agreements

 Sole supplier / Preferred supplier status

 Partnering / Strategic Alliance

 Teaming Agreements / Steering Committee

Strategic Alliances - Example

Successful Track
Perf Engg Expertise Performance CoEs Strategic Alignment
Record
• 350+ strong • 8 + Years of impeccable • Dedicated Practice on • Global SI partner with
Performance record executing Architecture for High HP
consultants Performance Testing Performance
and Engineering Applications (AHIPA) • Strategic Alliance with
• 85% Performance engagements CA for Appl. Perf. Mgt
specialists, 50% certified • Dedicated Performance tools such as
on LoadRunner / • 60+ Performance Engineering CoE Introscope and CEM.
Performance projects for more than
Center15% HP BAC 85 global customers • Established tools and • Strategic Alliance with
(Business Availability process supported by Team Quest for joint
Center) specialists, 5 % • Impeccable CSAT our Performance solutions and GTM on
on Capacity Planning score of > 6.5 score Engineering CoE Capacity Planning, and
tools out of 7 in numerous Performance Modeling
projects • Readily available
• Proposed methodology support tools and • In final discussions with
& roadmap in these utilities, accelerators, Dynatrace for Strategic
slides is based on Industry standard Alliance on Appl. Perf.
proven Performance templates, checklists for Mgmt. solutions
Engg experience different phases of
Performance
Engineering Projects