Kittle Group is learning all the time. What challenges do our clients consistently face and why? How can these challenges be overcome?
We want to share this learning, so each month, we’re going to be exploring a new topic. The first is the peaks and troughs in bidding demand, and why looking at Deliveroo might provide the answer.
What bid writing and food delivery have in common
The growth of food delivery services shows that outsourcing allows you to increase your sales and multiply your customer base without incurring physical expansion costs.
Before hiring a delivery driver, a restaurant’s busiest night was limited to the capacity of their tables. By hiring a driver, they were able to increase sales by taking on more orders from home-based customers, but were still limited by the capacity of this resource (and left with an overhead to maintain in quieter periods).
In short, peaks and troughs were an issue.
More and more restaurants have therefore decided to outsource their delivery service to providers like Deliveroo, as this gives them the capacity to meet fluctuating demand without adding further overheads.
Companies bidding for contracts not only face the same challenges as these restaurants, but can adopt a similarly effective solution.
Macro-level data obscures the reality
If you currently bid for contracts and have hired, or plan to hire, internal bid writers, you are already one step ahead of your competitors. You’ve recognised the need for skilled writing resource, and trust that they will do a better job than salespeople or business development teams. You’re also heading off the problem that these individuals may not be available, or able, to write bids when needed. However, you still face the problem of unpredictable bidding demands driven by the inconsistent number of opportunities from month-to-month, and consequently you face unpredictable demand on your bid writing resource.
This is not typically recognised as a problem, as broad, macro-level data obscures the more important micro-level data from your individual company. Macro-level statistics show that the number of procurements published monthly in the UK is relatively stable.
However, all companies, regardless of their industry, size, and service, are only interested in a small number of procurements, the majority of which are published to an unpredictable timeline. There may be five in one month, and none for the next three. This issue is compounded by the fact that Buyers work in silos, and do not co-ordinate with other Buyers as to when they will publish their opportunities.
These factors render the macro-level picture meaningless.
To pick up the restaurant example again, there could be an average of 500,000 restaurant delivery orders in a city like London every Tuesday night. However, for individual restaurants operating on a micro-level, major variants week to week make no Tuesday night the same.
An added frustration in our case is that companies wanting to bid cannot control Buyers’ requirements. While a restaurant cannot accurately predict customer demand on a single night, they do work from set menus. Companies have no such control, with no ability to influence when bids are released; no say over requirements; and no input into deadlines.
Four resourcing strategies to deal with this problem
Below, we detail the four main strategies for dealing with this unpredictable demand. These are:
- Stable resourcing
- Predictive resourcing
- Selective engagement
Ultimately, we will show why we believe that businesses are best served by an outsourcing model that can readily flex up and down in accordance with the needs. We also show how working with this model can not only improve the efficiency and effectiveness of your process, but also drastically improve the outcomes of your bids.
Strategy One – stable resourcing
One of the most common strategies that companies adopt to manage volatility is maintaining a bid team of the same size, but this resourcing tactic is almost always inefficient. To return to our comparison, if a restaurant decided to use this method, they would only have their internal delivery driver(s). This would mean that they miss out on sales on busier nights and have staff with nothing to do on quieter nights. The same logic applies in bidding, where a static team will always be working at either under- or over- capacity.
The resource vs requirement graph above shows the impact of this strategy across a typical year. The blue line represents a stable writing resource, and the orange line represents a fluctuating requirement.
The areas in red show periods where demand has exceeded internal capacity. In these scenarios, internal writers will be overworked, the environment will become stressful, rates of burnout will increase, and staff attrition will rise.
Conversely, areas of green show periods of inefficiency caused by overstaffing during falling requirements. As well as the obvious resource costs, overstaffing can lead to career anxiety and disengagement which can, in turn, lead to attrition rates rising.
As staff leave, the company will be trading crucial experience for the added pressure and expense of recruiting and training new staff.
Even if the company manages to retain a set number of employees, factors like holidays, sick leave, parental leave, and notice periods all impact a business’s ability to efficiently resource bids.
Strategy Two – predictive resourcing
Companies aware of upcoming tenders attempt to proactively combat volatility by hiring resources to meet the demand. However, as with the restaurant business, the market is at the total discretion of the customer: the Buyer dictates all aspects of a tender, including its release date; content requirements; and the submission date. Therefore, there is the likelihood of a tender being delayed or pushed forward, or having unexpected content, rendering initial resourcing decisions at best complex, and at worst totally wrong.
For instance, the graph above demonstrates the resourcing of a company ramping up their resources in response to growing demand during a busy period. They are first faced with the need to onboard and train the staff; as shown on the graph, this means resource is trailing the requirement.
Suddenly, a new and exciting tender is released: it’s strategically important and it’s large. However, the team is now understaffed again. The company quickly scrabble around to try and hire, onboard, and brief additional resource. It’s not easy, but eventually there is sufficient resource to get through this busy period and submit the bid. Once the team finishes, the requirement falls again, with the company becoming liable for a large and costly team. Some time can be spent developing the bid library and preparing for potential future bids, but the value of these activities quickly diminishes, and attrition begins to rise if the wait for the next tender is long enough.
Strategy Three – reducing engagement
Many companies aware of volatility initially believe that reducing engagement will allow them to meet the requirements of existing clients while protecting their bid writing team.
The opportunity cost of bidding should ideally be a fair consideration of whether to bid or not based on strategic pros and cons, the time and effort and cost of biding, vs the benefits and chance on winning. It’s a shame when suppliers turn down bids they would otherwise have pursued, because their bidding resource is in use elsewhere. For these reasons, this tactic is perhaps the most inefficient resourcing method, as it means turning away opportunities due to self-imposed constraints and indirectly helping competitors.
The graph above explores a scenario where a company maintains a consistent level of resourcing, and chooses to reduce its procurement engagement by not bidding when a tender requires more capacity. This puts a cap on strategic options that should be explored and limits the tenders a company chooses to bid for. Where the grey line exceeds the resource, this indicates missed opportunities. The yellow areas demonstrate the inefficiency of the bid writing team.
Strategy Four – outsourcing
Outsourcing bid writers – or, recognising volatility, and working with a partner who can help you overcome it
By contrast with the strategies above – where resources fail to line up with demand, cost is increased, and opportunities have to be declined – deciding to outsource bid writing means flexibility, lower overall cost, and the ability to pursue every business-critical opportunity, no matter when it lands in your inbox.
This is because resources, from a single writer to a full team, can be turned ‘on and off’ from month to month as required, whether at short notice or in line with a tender notice. As bidding experts who might work on anything from 5–25 different bids a year, the outsourced team will be able to quickly get up to speed with your solution, understand what the customer is looking for, and write compelling responses requiring minimal editing when compared with inexperienced or over-stretched internal writing teams.
If a bid is cancelled halfway through, the team can be reduced accordingly, with no overheads to maintain in the ensuing trough. Should another opportunity land, they will be there to help. Outsourcing can complement an existing internal team, or offer a standalone solution, further increasing flexibility.
Finally, by working with a provider like Kittle Group who employ their writers directly, you will benefit from a flexible but stable resource whose knowledge of your company develops over each bid, ensuring that we continually increase the effectiveness and efficiency of our partnership.
In the strategies above, we have provided the context of real work environments and internal resourcing strategies; why these strategies do not deliver efficient results; and why the most effective way to resource your bid writing team is to outsource. Outsourced companies do not operate on the same micro-level that you do, and therefore do not experience the same volatility as individual companies bidding for themselves. By outsourcing bid writing, companies benefit from flexibility, speed, and consistency, as well as a level of specialisation that significantly increase the chances of winning key strategic tenders.
If any of our insights have aligned with – or run contrary to – your own experiences of managing unpredictable bid pipelines, please get in touch; we’re keen to start a broader conversation across the industry about how companies can bid more efficiently and effectively.
If you’re interested in this topic or simply want to talk about bidding challenges, we’d love to hear from you. Please email our Business Development Team at email@example.com or call 01184492506.