1. Business Development Goals

Let’s assume that the goal is to develop $400 million in new business this year. Further assume we have established a 35% win rate and we usually bid on contracts either in the $50-$100 million range or in the $200-$300 million range. Arithmetic tells us how many proposals we need to prepare, and our recent experience helps us estimate the skills and hours needed to do the work.

2. Granularity and Flow of Proposals

Although business development goals help define the level of effort to prepare the bids, the granularity and flow of the bids is even more important in determining how much to outsource and how much to keep in-house.  Having many small proposals at least makes it possible the work might be spread evenly throughout the year.  However, having a few large proposals makes it likely you will experience a peaks and valleys situation.  Further, the federal government inclines to release relatively few solicitations in fall and winter and to release maybe twice as many in spring and summer

Making the Decision to Outsource or Not

For many companies, the issue of whether to outsource, and if so how much, is complex. For example, it’s often impossible to predict the timing of proposal releases, even with the best market intelligence. During the past two decades, I’ve been in a position to see how many of our customers manage their proposal preparation operations. Based on this experience, I offer the following guidelines:

  1. Companies planning to make a dramatic leap forward in business development usually opt for outsourcing.
  2. Companies fortunate in experiencing evenly spaced proposal releases can do well with insourcing only.
  3. Sometimes the possession of unique trade secrets makes companies need to avoid consultants.
  4. Companies entering new market areas usually do so by using a greater quantity of consultants in the mix.
  5. Companies that avoid outsourcing often end the year with fewer wins than had they outsourced at least some parts of their efforts.
  6. Companies bidding large and intermittent contracts are usually better off with a higher percentage of outsources.

Some executives don’t like the idea of using proposal consultants. Their reasoning may be based on a bad experience or be emotional and unrelated to logic.  My experience is that those executives fail to achieve their business development potential.  The normal happenstance of business requires them to work with unqualified insource talent force fitted into proposal slots. So they lose competitions they could have won.

Most proposal group leads / division general managers I have known approach the question on whether and how much to outsource as a business decision. Based on business development goals, proposal granularity, and proposal flow, the decision makers can perform a cost trade-off analysis to help them see the best direction.

There is no invariably correct answer to the insourcing / outsourcing question.  Making the decision best for your company is as much an art as a science. Those companies that make the wisest decisions will enjoy the greatest business success.