What Distinguishes Leading Price-To-Win and Competitive Analysis Companies?

Howard Nutt has been a business development (BD) professional for more than 30 years. He is currently Executive Director of the BD-Institute International, a non-profit corporation dedicated to BD excellence through the BD-Capability Maturity Model (CMM) and continuing research and development on BD best practices. During 2011, the BD-Institute undertook an industry study to identify what comprises benchmark capability in Price-To-Win and Competitive Analysis (PTW/CA) within a company. The study identified best practices currently in use by industry leaders, investigated organizational approaches, and assessed critical success factors (CSFs) for establishing and operating an effective, internal PTW/CA system. We recently visited with Mr. Nutt to find out just what it is that leading PTW/CA companies are doing to maintain and improve their competitive edge.

What is the reason behind the study and why is it so important to the industry?
This study is supported by many industry experts and individuals who practice PTW/CA because it is becoming more important for organizations to recognize that it is a crucial tool in the bid process. We found that PTW/CA has become more of a focus for organizations in the past few years, and changes in Federal acquisition strategy have encouraged this.

What is the difference between Price-to-Win and Competitive Analysis?
Price-to-Win is the process of analyzing customer and competitive data in order to identify what numbers other bidders might produce for customers, and ensuring that the numbers your team agrees to are the most competitive. Competitive Analysis is the process of gathering and analyzing data on both customers and competitors in order to develop the best strategies, tactics, and solutions that will increase the win probability. The two concepts go hand in hand; it is impossible to have one without the other and still have a complete process.

What are some of the elements of a good PTW/CA process?
A truly good PTW/CA process will be one part of a good, end to end business development process. Companies that make a long-term commitment to developing a PTW/CA team tend to have the most success with it. From the survey respondents we found that consistent use of repeatable tools in a well documented process, support from all levels of management, independence of the PTW/CA team from the capture team, and an early start time to allow enough time for effective research and analysis are some of the elements that make up a superior comprehensive process.  

What tools and resources can a company use to better their PTW/CA process?
Almost unanimously we found that the best tool is custom built for the team. Tools such as Microsoft Excel spreadsheets can use top-down and bottom-up analysis to derive outputs, and good Customer Relationship Management (CRM) tools can be used to capture information on people and practices. There are many other tools that good PTW/CA teams use, including E-pipeline@Risk, INPUT, knowledge management tools, should-cost models, and PRICE models software for parametric cost estimation. Many survey respondents also noted that the Freedom of Information Act remains one of the most important resources for gathering intelligence about customers and competitors. Not all of the tools are software or web-based either; many good PTW/CA teams report that simple SWOT analysis performed at every stage of the process increases the likelihood of success. Of course organizations should not discount how much information they can glean about their competitors and customers just by visiting their websites and reading their publications, including press releases and investor data; this practice is called “mining” and is often underscored in its importance to the PTW/CA process.

How is the performance of the PTW/CA team measured?
PTW/CA is not an exact science because it is a living, breathing practice that evolves with the industry. There are many parts of the process that can be measured and evaluated, such as how closely customer information and competitor solutions and strategies was identified, and how closely customer should-costs and competitor bid prices were derived. The process is very much based on experience and learning from mistakes and customer feedback and it is constantly being adjusted. It will be interesting to see what literature and information comes out as the process continues to evolve.

Please visit the publications section of the International BD-Institute website for more research studies and whitepapers.

Topic(s): Best Practices