Practical Software Estimation Measurement

What Are We Missing in the Proposal Process to Win Business?

Major corporations spend millions of dollars each year writing proposals to win software and systems business. They typically have a team of people that spend hours or days in strategy meetings to write what they hope will be a winning bid. Usually these companies are responding to a “Request for Proposal” which is sent out to a number of competitors. It’s almost like a sporting event. Let the games begin! Our team versus theirs. Sometimes jobs are on the line. No one wants to have to lay off people because there is not enough business coming in the door.

As part of this process, a project plan will be created. Oftentimes the team will work out a plan based on some previous experience and the opinions of a number of subject matter experts. Usually the plan will include a detailed spreadsheet with a larger number of tasks and the hours that it will take to complete each task.

The fact is most people don’t have a way to validate whether or not the plan is reliable. They also can’t see what chance they have of achieving their overall promised schedule, quality, and budget goals. They don’t have an easy way to negotiate these proposal decisions internally or with the client.

What's missing? A top-down, empirically-based estimate. Running a top-down estimate allows the proposal team to generate a “big picture” estimate for cost, duration, risk, and quality based on historical data and time tested mathematical models. With SLIM-Estimate (shown below), the team can run an overall project level estimate, and sanity-check their proposal with industry trends to make sure that their numbers are competitive and realistic.

Software Project Proposal

Not only that, the team can look at multiple bid options and see a risk assessment on each option for time and budget. For example they might have a 90% chance of finishing in 15 months but only a 60% chance of finishing in 12 months. Then they can answer questions like: can we achieve the schedule that the customer needs? What impact will adding more developers have on project delivery cost and schedule? Will having a bigger team help or hurt our chances? Can we build this system for a price that is competitive in the market?

Software Project Proposal

Proposal work can have a major impact on the success of a company. A top-down estimate is key to generating and negotiating the pricing and schedule numbers that make up proposals. A strong proposal requires a stake in the ground - an empirically-based method to show credibility and to validate why your bid is the best. And if you win the business, you need to make sure that you can deliver on your promises. You can’t do all of that in a spreadsheet.

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