Budget vs. Value – How to Get the Best of Both Using a 3-Step Proposal Assessment Method
“There can be no value in the whole unless there is value in the parts.” – Bertrand Russell
The famous British philosopher, social critic, mathematician, and Noble laureate, offered us a great piece of insight. As we discussed in many of our previous articles, the process of launching and successfully managing a Consulting project has several components that should be dealt with the necessary focus and dedication.
Now let’s talk about the criteria in selecting the best proposal and what you as a Client need to look for. But before we get to the proposals’ ranking, we need to establish some of the main considerations before the process.
Budget versus Value – Does the budget fit with the value you expect?
This aspect is a major point that defines the purpose of the entire project. What value do you expect from the project? When viewing the project is always a good practice to step back and think about what value the project will bring and what kind of ROI you will be looking at. Will it be a technical added value that will directly impact your bottom line or a political added value that will enable other projects?
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Benefits versus Risks – What are the value boundaries of the project?
What is the value of a successful project? Are we talking about significant benefits to your bottom line, and what will be the investment required? What are the risks if it doesn’t work? Could your company stand to take a major hit? These are serious considerations that, unfortunately, cannot be entirely predicted but estimated at best.
Budget versus Price – What budget do you have in mind for the project?
If you have done similar projects before, you already have a basis for defining the estimated budget for this project. However, be aware that the complexity, the depth of expertise, the expected duration, and the location of the project can have a significant impact on the price. Also, you might be working with a budget envelope not to be exceeded. Do you have a clear idea of how much you will be paying at the end? Is the budget construct easy to understand? Are there some potential hidden costs?
Proposal Price against Budget – How does the proposal price align with your budget?
The most exciting proposal that is 50% over budget is probably not the right proposal for you. Likewise, a shallow proposal within your budget is not always the best option. A well-organized proposal should provide answers to most of your questions.
Here is an outline of a reliable assessment method you can use to evaluate the quality of each proposal.
3-Point Assessment Method for Proposal Evaluation –
1- Identify the most promising proposals –
You can skip this step for small projects where you invite a short-list of consulting providers to bid. However, if you are working on a larger project or a longer list of potential providers, you’ll benefit from focusing on the most promising proposals first. You will always have the possibility to go down your list if necessary.
2- Rank the proposals –
Regardless of how many companies you are in talks with, you should start to form a first “podium” of the best proposals. It is sometimes difficult to get the whole picture on a potential project before you get to talk to the consulting providers. Nevertheless, you can already identify the strengths and weaknesses of the written proposals.
Rank the proposals on a limited number of criteria to simplify the process. The proposal assessment can be an excellent basis for the ranking. When you go through the different bids, you will quickly realize that some consultants have perfectly answered the different questions, while others have left some issues unanswered. At the end of the assessment, you will be able to rate the various proposals on a set of dimensions. You can, for instance, organize your questions in 6 major themes: objectives, deliverables, approach, experience, fit, and budget.
You can adopt a simple grading system such as a 5-star, to make it easier to grade and read. The goal is to have an overview of the quality of the proposals and start organizing the meetings with the consultants in the order of relevance.
3- Articulate the key elements you want to clarify –
If you have identified the weaknesses of the different proposals, write them down, and think about what questions could help you clarify these further. Got cost concerns? Ask for clarifications on the cost structure or for trade-offs to fit in your budget. This list of questions will be the basis for your meetings with the consultants. You will be able to clarify their proposals and make sure you get an accurate picture of their ability to support you in achieving your goals. We recommend sending these questions before the meeting, so the Consulting firms can prepare and come up with the answers you need.
Between the written proposal and the meeting, you should be able to answer the following questions:
- Has the consultant understood our objectives?
- Do the deliverables answer our questions?
- Do we trust the approach the consulting provider proposes?
- Does the team have the required experience?
- Is this consultant the right fit for you?
- Does the budget fit the value we expect?
We hope this framework will help you to pick the best proposal and the right Consulting firm.
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