Article – Are your budgeting practices cramping your business development style? - Shipley Asia Pacific

When their win rate is not tracking where they believe it should, Shipley clients embrace the concept of “left-shifting” their business development practice – that is, spending more business development effort in the period before a formal procurement is announced. This is time when they can build customer relationships and knowledge, test solution ideas and generally embed themselves as trusted advisers outside the constraints of the procurement process.

In spite of understanding the value of this approach, many organisations struggle to create meaningful customer engagement before the RFX is issued. When we look at their structures and processes, we see two key factors contributing to this difficulty.

First, the same customer-facing team that builds the relationships is also responsible for submitting the proposal – and the close deadline always trumps a less defined future deal. Second, bidding costs are closely monitored by management and the decision to allocate useful funding to the pursuit is often postponed and reviewed until the last possible moment, sometimes after the RFX arrives.

In a mature process, costs are distributed throughout the opportunity lifecycle. This does not increase overall business development expenditure, but has the reverse effect, driving higher win rates from the same input. This effect is the result of:

•Better customer focus driven by investment in relationship building

•Bid decisions that are based on real understanding of the customer and opportunity, and no-bid decisions that take a clear-eyed look at what you do and don’t know

•Advanced capture strategy eliminating the re-writing that happens when you have to strategise and write the proposal simultaneously

As you go into preparing budgets for the next year, consider how you can allocate it to support the team to enact best business development practices. Are you funding proposals but not prospecting and relationship-building? Are you resourcing excessive bidding at the cost of early strategy and solution development? If so, you may be creating a vicious cycle in which you continuously need to bid more, because you don’t have the in-depth customer understanding you need to win the opportunities that match your business strategy.