Professional Services firms can face a number of pricing issues that prevent the winning of, delivering and making money from new assignments and customers. These issues are driven by:

  1. Fixed price arrangements in place of ‘time & disbursements’ for means of cost-certainty and transferring risk from the buyer to the seller
  2. Maturing procurement departments commoditising what they buy
  3. ‘Buying’ organisations recruiting employees from the ‘selling’ organisations to bolster their negotiation power
  4. Work undertaken being unprofitable from under-billing, cost-creep and price being set on a revenue basis with no predictions of associated profit
  5. Ineffiencies, oversights and shortcomings along with a lack of innovation meaning that competitors are one step ahead

At Enginance we work with our clients to support the profitable winning and delivering of work based on cross-industry experience and over 10 years of encountering and counter-acting the causes of losing work, losing money and under-selling in professional services environments.

Some examples of solutions we offer to mitigate the risks of: (1) the loss of existing business, (2) the loss of money on existing business, (3) not winning new business are:

  • Building open-book easy-to-follow cost & price models (incl. monetised risk to variable or fixed price contracts) to allow price to be adjusted and for value-for-money to be explained to the customer
  • Analysing and aligning disparate and inconsistent prices and rate-cards across the business
  • Enabling firms to embrace fixed priced engagements by identifying, quantifying, analysing, monetising and mitigating the associated risks
  • Post-award, crafting pricing models into budgets/baselines and using this to gap analyse planned income and cost profiles against the actuals month-by-month. This enables income to be maximised, costs to be minimised and profits to be optimised
  • Designing and advising effective bidding strategies that focus bidding effort on the opportunities most likely to be won, and most aligned to the strategy and vision of the firm

The “WIN” phase – finding, retaining and competing for new business & customers

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We work collaboratively with our clients to:

  • Support and advise pricing strategies for pitches and retaining existing clients
  • Innovate on pricing structures: examples being (1) low-cost retainer with fees-upon-award and (2) pain/gain-share mechanisms
  • Discuss, address and solve any prevalent pricing and winning/making money issues
  • Model and analyse salary and remuneration costs, expenses/subsistence, resource utilisation, indirect cost recovery and margin levels and run scenarios to optimise competitive-pricing and profit realisation
  • Lead or support specific pursuits, pitches and bids as required case-by-case
  • Support risk assessments through the classification of risks to those that are financial, contractual and operational and mitigating each
  • Build bespoke pricing models that align internal cost and price structures to the structure of the customer contract and billing mechanisms – typical formats being cost-plus, fixed-price, fixed-unit-price and firm-fixed price
  • Advise on the contractual, cashflow and currency risks of fixed pricing and build ‘open book’ models to explain and monetise each element

The “DELIVER” phase – meeting customer’s expectations and quality levels whilst realising the greatest revenue and lowest costs month-by-month

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By converting win-phase pricing models into budgets and baselines it is possible to compare the actual performance of an assignment against the plan. Any deviations in costs and revenues can be assessed for their root causes and corrective actions put in place.

Ultimately we work with our clients to evaluate the costs of delivery and hunt for efficiencies that lower costs whilst increasing income.  This can be augmented through the analysis of billing, invoicing and aged-debtors to check that all income is secured and realised.  In addition Enginance can conduct and advise on any contract variations and amendments and pursue ‘equitable adjustments’ for any extra services delivered and not being billed for.

For further information or an exploratory discussion please contact