Fred Avila, director of Price-to-Win (PTW) with Alion Science and Technology, recently spoke with ArchIntel.com regarding the importance of a competitive intelligence report, customer intelligence, how to conduct analysis within the government contracting (GovCon) sector, as well as challenges and lessons learned in the field of competitive intelligence.
“Competitive intelligence revolves around data analysis. That’s where the heart of a competitive intelligence report is born. Finding the data is important, but the analysis enables leaders to make informed decisions from the facts collected. Data is not important, unless you’re able to analyze it and make a judgement.”
ArchIntel: What are some of the lessons you’ve learned throughout your career in competitive intelligence?
“Something that has been really important for me is identifying what you don’t know. A lot of times we have an idea of what we do know, and that tends to lead us down rabbit trails of finding data. When you don’t know something, and you’re aware that you don’t know a piece of information, that allows you to focus your research into critical areas within those gaps of knowledge. Whether it’s chasing an opportunity, learning about a competitor or a customer, gathering information effectively is an important skill.
The other lesson I’ve learned is that while ‘CI’ stands for ‘competitive intelligence,’ it should also include ‘customer intelligence’. In my role as a PTW practitioner, competitive intelligence is so critical in price-to-win; understanding competitors bidding behaviors, their qualifications, and past performance. Equally important is understanding your customer and how they award contracts. This can be difficult, because we’re such a highly regulated industry, and we are governed by the Federal Acquisition Regulation (FAR), which defines how the government buys and awards contracts.
Learning customer intelligence means learning about the decision makers, their history and finding critical data elements. You must find those gaps of knowledge to really understand your customers’ technical needs and pain points. Customers have behaviors when they award contracts. For example, do they only buy from the lowest bidder? Do they treat the best value as a true best value, meaning will they pay a higher price if they are receiving a solution or a product that is technically superior compared to other offers?”
ArchIntel: How do you predict a customer’s behavior in price-to-win?
“This is why having the right tools and having the intelligence makes a difference. You can obtain these tools through various subscription services to learn more about how the government has awarded contracts, especially contracts that are protested.
You could find data from a Government Accountability Office (GAO) protest that will give you a description of the price for the winner and loser. You could learn about their bidding tendencies or the customer’s buying behaviors. As we put together a price-to-win, identifying the buying behavior that a customer has is a critical customer intelligence data element, so we don’t underprice or overpriced.”
ArchIntel: What are the common challenges you face in competitive intelligence?
“One of the most common challenges is understanding the difference between tactical competitive intelligence and strategic competitive intelligence. Tactical competitive intelligence is very targeted, very specific data points that you’re trying to learn for an opportunity.
Strategic competitive intelligence is overarching, high level data that may pertain to a company. You have to really concentrate on tactical competitive intelligence. That is where it is going to make a difference as you’re filling your data gaps.
The other common challenge is data overload and trying to get those smaller data nuggets. If I had all the resources and unlimited time, filling 100 percent of the data gaps would be ideal. But, in most cases you might have to accept an 80 percent solution. That 80 percent solution would fulfill the critical data gap needs that we have.
You also must define the objective of the project. For example, if you’re trying to expand into new market segments, strategic competitive intelligence would be critical because we want to know the players and their major contracts.
If we’re going to go after a specific bid, I need the tactical competitive intelligence to understand what it’s going to take to do the job, such as the solution, the competitors and their key capabilities.”
ArchIntel: What makes competitive intelligence within government contracting unique?
“Within the government contracting space, you face unique challenges, but there are also unique opportunities. The challenges are working within a highly regulated industry and the fact that some of our customers issue classified contracts. You’re never going to know everything about the contract from publicly available sources.
The FAR treats proposals as proprietary; thus, you can’t really understand the salaries or indirect rates that a company considers as they develop their pricing. However, there are reverse-engineering techniques to estimate that kind of information.
On the flip side, there’s a lot of data that is still available. For example, through subscription services, you can obtain spending data on unclassified contracts. There are tools that ingest that data, dissect it and make it available for research.”
ArchIntel: How do you successfully bid on contracts within classified sectors?
“What really separates the successful companies is their customer intimacy, meaning that they learn directly from the customer and understand their problems, so they can ensure the proposal addresses and contains the technical solutions that the customer desires.
It requires an extensive amount of time to do the data collection, meet with your customer, research and check your data, then draft a hypothesis. It’s a multi-factor approach to get to the data and really understand the customer’s needs. If you don’t have that intimacy with the customer, it’s going to be very difficult to be successful in that space.”
ArchIntel: What are the critical factors to include in a competitive intelligence report?
“The bottom line is: ‘who are the consumers of a competitive intelligence report?’ They’re the leaders and the decision makers of the company or a business unit, so you must pinpoint what matters to them, which is the ‘so what.’
Once you have collected this competitive intelligence, you have to explain what it means for the capture or market strategy, then be able to communicate it. The ‘so what’ is a critical component of any competitive intelligence report.
Second, would be defining tactical competitive intelligence, which will form your technical or management volume in a proposal, price strategy or go-to-market strategy. It is essential to find the tactical data that can be analyzed and communicated effectively to assist leadership in making relevant decisions.”