by John Swaren
| November 15, 2016
In our previous blog, we defined PCA and PRICE’s unique approach via TruePlanning. This blog is the fifth of seven to describe by specific impacts on key business processes and functional areas that benefit from this capability.
Estimates based more on engineering judgment than statistical data lack credibility. This comparison is especially true when proposing design alternatives to meet a customer’s unique program requirements. Companies that can’t demonstrate a rigorous affordability management process score low with their proposals because their bids presented without statistical data to back their estimates appear over-optimistic and risky, or too expensive. This situation ultimately has a negative impact on the business’ win percentage.
The organizational use of TruePlanning (a component within the PRICE® Cost Analytics solution) impacts directly in establishing budgets, winning projects and managing programs. The ultimate value-adds are improving bid success ratio, bidding more competitively, and improving project win rates with insights for more competitive bidding. Overall improvements are seen in organizational ability to win new business as well as renewal/expansion of customer funding. Use of True Planning and PRICE tools/ services translates into developing winning proposals with the right balance of capability versus price, compliant with prospective customer’s requirements as well as compatible with organizational costs.
The PRICE Cost Analytic Framework also delivers the tools and methods needed to create a robust and reliable decomposition of the price-to-win into the cost targets necessary to keep grassroots estimates “in-the-box”. TruePlanning maps estimates for the activities and resources of the product breakdown structure (PBS) to that of the work breakdown structure (WBS) familiar to the project leaders. With this mapping of estimated costs, TruePlanning’s data-driven estimating methods give individual leaders the context of measured benchmarks around which to form their estimates for a winning approach. This persistent link between the PBS and the WBS is key to winning bid validations.
Top down to bottom up estimation comparison ensures that any areas of the proposed solution that may cause problems as the bid progresses are identified very early on in the process allowing time for the organization to mitigate any underlying uncertainty and to test alternative solutions.
The PRICE® Cost Analytics Framework provides the capability to reconcile data-driven estimates with grassroots estimates to garner confidence of true bid validation, unifying top-down statistical estimating with bottoms-up buy-in. In addition to these benefits, PRICE® Cost Analytics enables:
Success can be accelerated by the PRICE® Predictive Cost Analytics (PCA) integration of business, engineering, and program management objectives in order to produce competitive solutions.
TruePlanning immediately facilitates objective quantitative assessment of customer needs/requirements, winning-business solutions, and project lifecycle cost management.
Contact me for a demonstration, either in person or via telecon. We’ve had many success stories here. You can be next!