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The Capture Management Life-Cycle. “Winning More Business”. Presented By: Gregory A. Garrett, CPCM, PMP Steven Shipley, & Chanan Greenberg December 2003. 1. The Capture Management Life-Cycle. Key Topics of Discussion:. The World WE Live In! Creating Value for Customers

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slide1

The Capture Management Life-Cycle

“Winning More Business”

Presented By: Gregory A. Garrett, CPCM, PMP Steven Shipley, & Chanan GreenbergDecember 2003

1

slide2

The Capture Management Life-Cycle

Key Topics of Discussion:

  • The World WE Live In!
  • Creating Value for Customers
  • The Capture Management Life-Cycle

2

slide3

New SupplyEnvironment

SupplyDrivers

  • Growth of Internet architecture
  • Continued Growth of wireless technology product and software applications
  • Rapid growth of Enterprise software tools

Pros+ Wider range of products and services

+ More modular products and services

+ Improved price/ performance

+ Accelerated pace of change

Cons

- More complexity- Higher cost of integration- Less reliability- Accelerated pace of change- Rapid Obsolescence

Technology

  • Increased U.S. Government focus on outsourcing and Privatization.
  • Increased pricing flexibility
  • More demanding Buyers with special focus on Past Performance

Regulation

Dramatic Increase in Products and Services Choices for Customers

The World WE Live In

3

slide4

Creating Value for Customers

SupplyChain Management

SupplyChain Management

Quality of Service

On-TimeDelivery

Speed

Maintainability

Best in Class Service

Best in Class Products

Capacity

Trust

Trust

Availability of Resources

Breakthrough Technology

Reliability

On-TimeDelivery

Price

Trust

Type of Contract

Discounts

Best Value Deal

Payment Terms

Financing

Relationship

Quantity

Third Parties

Customer Loyalty

Value

4

From: The Capture Management Life-Cycle, by Gregory A. Garrett and Reginald J. Kipke, CCH 2003, pg. 4

slide5

The Capture Management Life-Cycle

5

Reference Text, pg. 15

a case study for transforming the business development enterprise

A Case Study for Transforming the Business Development Enterprise

Applying the BD-CMM® -- Business Development Capability Maturity Model® in Real Time

Presented by Steve Shipley, President & CEO, Shipley Associates

Capability Maturity Model® and CMM® are registered trademarks of Carnegie Mellon Software Engineering Institute

agenda
Agenda
  • What is the BD-CMM?
  • Understanding the Fundamental Case – A Real Life Example
  • Attachments
    • Understanding the Origins of the BD-CMM
    • Partnering for Business Development Excellence
what is the bd cmm

What is the BD-CMM?

What is it?

How does the BD-CMM fill a void in current industry?

bd cmm strategic objectives

Being developed primarily as a framework, guide, and path for managing and improving business development processes

  • Not currently envisioned for process certification
BD-CMM Strategic Objectives
  • Provide a Framework
    • Description of key elements of business development
  • Describe a Path
    • Evolutionary business development improvement path
  • Give support from a Guide
    • Key practices for measuring and managing business development performance
bd cmm other cmms and cmmi

CUSTOMER

BD-CMM

CMMI

SW-CMM

SA-CMM

SE-CMM

HR-CMM

PM-CMM

COMPANY

BD-CMM, Other CMMs, and CMMI
  • Addresses major void in CMM family
    • Typically not addressed in business process reengineering (BPR)
  • Provides “customer-facing” dynamic to CMM integration
  • Complements Project Management CMM (PM-CMM) in seeking to improve the customer interface
understanding the fundamental business case

Understanding the Fundamental Business Case

What is the business development challenge?

How does the BD-CMM envision success?

What are the potential benefits?

Is there a compelling value proposition?

What’s the resulting business case?

emerging benchmark concept

BD-CMM Level-2

BD-CMM Level-3

BD-CMM Level-4/5

Capture

Ratio

Capture

Ratio

Capture

Ratio

Win

Rate

Win

Rate

Win

Rate

Emerging Benchmark Concept

Note: Projections based on data collected during APMP Benchmark Study 2002, prior national benchmark studies, and Shipley process consulting experience

bd cmm bottom line benefits
BD-CMM Bottom Line Benefits

Process Continuum

Focus: Many Small,

Routine Opportunities

Focus: Few Large,

Strategic Opportunities

Note: Projections based on data collected during APMP Benchmark Study 2002, prior national benchmark studies, and Shipley process consulting experience

value proposition real results
Managed Implementation:

Mid-size company in the Washington DC area

IT services industry

Federal, state, and local government markets

Aggressive growth targets

Broad-based process development in partnership with Shipley

Effort begun in January 2003

Implemented BD-CMM

Level 1 in January 2003

Level 3 by end of July 2003

RESULTS:

Value Proposition… Real Results!

1200

65%

150%

100%

30%

2002

2003 YTD

2003 Sales by Mid-Year

400

2003 Annual Goal

2002

2003 YTD

Number of

Proposals

Win Rate

Annual

Sales

business case what success really means
Business Case… What Success Really Means!
  • Assumptions at BD-CMM level 1:
    • $250M annual revenue, with average 2-year turnover
      • 5% reinvested in BD = $12.5M
        • 2% allocated to proposals = $5M
    • 1200 proposals/year at a cost of $4.2K per proposal
    • 30% win rate
      • 360 wins per year to maintain $125M turnover
        • Average value of proposals won = $347K
    • Relative proposal process inefficiency = 35% (minimum)
    • Note: Notional analysis not based on actual client costs
business case what success really means18
Business Case… What Success Really Means!
  • Assumed cost of BD-CMM implementation to grow capability from level 1 to level 3:
    • Scenario #1 – Managed services
      • Change management provided by outside consultants
      • Typical project duration of 6-12 months
      • $250K for outside process services, training, etc.
      • $500K for internal costs and charges
    • Scenario #2 – “Organic” development
      • Change management provided by inside personnel
      • Typical project duration of 18-24 months
      • $1000K for internal costs and charges
  • Note: Notional analysis not based on actual client costs
business case what success really means cont d
Business Case… What Success Really Means! (cont’d)
  • Benefits derived at BD-CMM level 3:
    • $375M annual revenue, with average 2-year turnover
      • $125M increase in annual revenue
      • 3.3% reinvested in BD = $12.5M (constant)
        • 1.0% allocated to proposals = $3.75M (reduced due to greater efficiency)
    • 400 proposals/year at a cost of $9.4K per proposal
    • 65% win rate
      • 260 wins per year to maintain $188M turnover
        • Average value of proposals won = $723K
business case what success really means20
Business Case… What Success Really Means!
  • Calculated return on investment:
    • 1.7% gain in BD effectiveness = $6.4M to “bottom line”
    • Return on investment
      • Managed services ($6.4M ÷ $0.75M)= 8.5 to 1
      • Organic development ($6.4M ÷ $1.0M) = 6.4 to 1
    • Note: No other cost impacts considered in calculation
summary

Summary

Why should you implement the BD-CMM in your organization?

Where can you get additional information?