How To Turn Challenges Into Opportunity?

Market is always changing. Within these changes, your decision quality is based on three factors; your collected data, your data analysis system and of course the minds who operate them.

In construction industry, the challenge of changing market becomes more complex due the huge investment the contractors are doing. This challenge is smaller in engineering firms comparing to contractors. However, having a sustainable business is crucial for both.

Here it comes the d2b complexity the consultant and contractors face every day. The decision to bid is a high risk investment. A contractor/consultant might spend thousands to millions on overhead before he wins a project. A startup company or new market entry is a very good example of this high cost investment with no certainty on return. This decisions become more complex within a multinational company or multi-discipline group where their overhead is covered by current operation which means the real cost of business development and bidding is hidden within the operation cost.

This d2b is not just important for the contractors/consultant, it is so important for the construction sector and overall economy. If the d2b made badly, it would lead the contractor to submit low bid price than average which means project delivery problems, late delivery and it might lead to collapse and bankruptcy.

Therefore, on changing market how can we turn the challenges into opportunities. The answer is sample which is that, consultants and contractors to focus on operational initiatives that would keep the business running, and stay ahead of the competition by maximizing the opportunities and not just avoiding risks and cutting cost.

One of the initiatives to turn challenges to opportunities is creating bid portfolio system. From a research conducted on 2011 about the d2b, the following outcomes found:

• 93% use some kind of internal procedures (but not necessarily involving the use of a mathematical model or special software).
• 82% evaluate the d2b at a number of stages within the bidding period.
• 78% evaluate between 5 and 15 factors.
• 77% calculate the factors weights separately for every contract.
• 73% use a list of written factors from which to choose those needed for a particular contract.
• 73% set aside some of the factors for separate risk evaluation.
• 70% do not have a fixed set of factor weightings.
• 34% use mathematical models with basic software such as MS Excel.
• 30% use special equations created by their own management.
• 16% rely on personal experience and “gut feelings” in making their d2b, stating that they do not need a formal method.
• 7% use mathematical models that need special software.
• 5% use special mathematical models created by external consultant.

And of particular significance is that 68% agreed that they do need a formal method to improve their d2b system. For more information please refer to http://eprints.qut.edu.au/82801/ .

Here, the suggested Bidding Portfolio system which has a defined timeline planning, becomes crucial to be developed for any company to create more certainty on the decision to bid and moreover to create more options to choose from. It will quantify the risk and express the level of confidence of any bids wining. It will give also a link to operation and will give a link back from operation to bidding portfolio. Bidding portfolio is not a luxury. It becomes a must like you must have a schedule to deliver you project and a master schedule to deliver a program.

Finally, creating the a live bidding portfolio will ensure a sustainable business, high revenue and will create a long term dynamic plan to grow and ensure return for investment.

 

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