Why Should You Manage Your Pipeline?
Pipeline = Strength of the Business
Pipeline = Growth or Velocity of the Business
Pipeline = Direction of the Business
Pipeline = Financial Health of the Business
Let’s start off by level setting on the definition of an opportunity pipeline. For a project-based business like yours, it is the visualization and/or measurement of contracts or projects that you will attempt to win over time. The time horizon can be “time now” to 10+ years into the future depending on the planning needs of your business or the length of your sales cycle. An opportunity pipeline is the incubator for your business growth and it should reflect your company’s overall business strategy. Potential opportunities in the pipeline will be in different stages as defined by your company’s business development processes. Often pipeline is depicted with a funnel. The top of the funnel is wide and it is taking in potential opportunities for new and exciting projects. The opportunity will then move through the business development decision gates (down the funnel and will either continue through the gates or be eliminated through the process) defined by your company until it reaches the Request-For-Proposal (RFP) Stage. Out of the tip of the funnel will come projects that you have won and that you must now execute. Also important are the losses and understanding why you lost. Keeping a set of lessons learned will make sure you don’t make the same strategic mistakes again. Having a gated and structured BD process will assure you are bidding on the right opportunities and making the most out of your bid and proposal budgets.
Why Have a Project or Contract Pipeline?
The most compelling reason to have an opportunity pipeline is to understand the revenue forecast and resource needs for the future. These revenue forecasts will be the barometer of your company’s future financial health. Managing the pipeline will help you adjust forecasts as opportunities move through the BD gate process. Picture your opportunities moving down the funnel, some are eliminated along the way, and the opportunities that continue through the gates or funnel will see an increase in their probability of award (POA). The POA will be the mechanism to right size the revenue opportunity. The calculations for POA are below. Changing environments can affect the Pwin and Pgo which will change the POA.
With structured tracking, valuable reports and KPIs will be available to help make those critical business decisions. You will be able to analyze what is happening to opportunities throughout the process, look for patterns, see which portfolios are the most profitable, forecast your labor demands, and project the trajectory of your business (funded vs. unfunded backlog for example). A structured process will also improve the chances of pursuing the right opportunities and closing more deals.
Pipeline Management is the Starting Point for the Project Lifecycle
Unanet is a powerful project-based ERP solution that can truly help your business manage the lifecycle of the project from pipeline to closeout. It is the only project-based ERP system today that provides one system for projects, people, and financials.
What do You Need From a Tool to Manage Your Pipeline?
- Customer Relationship Management (CRM) – track your customer interactions
- Contact categorization for easy reference (decision maker, geographic location, golf buddy, etc.)
- Workflow optimization assigning tasks and providing notification
- Opportunity tracking by phase
- Easy to use reporting, dashboards, and metrics to direct business decisions
- Real-time data
- Project notes and code fields for unparalleled analytics
- Resource demand planning with both current and TBD resources
- Ability to shift forecasts to the right or left
- Ability to make POA adjustments as opportunities moves through the funnel
- One-click transformations from proposal project to an executable project
- Cloud based system so there is 24/7/365 access to your information
What are the Results of Better Managing Your Pipeline?
Better pipeline management has a variety of positive outcomes. You will be able to experience higher win rates as you have gained more visibility and control over your entire BD process. You will be better able to evaluate opportunities and will spend your valuable time bidding on the right opportunities at the right time for your company. And finally, you will be able to maximize your bid and proposal expenses.
If you’d like to learn more about how to better manage your pipeline, click here to download a slide deck from a recent Unanet webinar: Improving Your ROI on Business Development Costs.