Repeated from Our Customers’ Success Stories page, this KnowRisk Story bears retelling:
Big Eight Consulting Firm Wins More Bids, Profits More on Bids Won
Succeeding at one of the of the two actions in the title is easy. Win more bids by bidding lower. Make more profit by bidding high. Both together requires an organization commitment. This “Big Eight” firm selected us to help them achieve that goal.
To do so, we reviewed and improved their estimating, bidding and risk management methods. In that era, it was common practice to charge customers to manage their own risks: We pioneered a different approach.
Using our KnowRisk services, we identified risks that customers were willing to commit to manage as contract exclusions, so the bids were significantly lower. Then we wrapped our risk management processes and other differentiating PM methods around their Systems Engineering methods.
Next, we developed a custom PM Workshop for their Senior Consultants and Managers, and trained their trainers in rolling it out worldwide. Not only did they move from #4 to #2 in the Big 8 ranking, their newfound approaches transformed the way consultancies estimate and bid projects, and manage risks, still today, over 26 years later.
That adventure began in 1987, and ended in 1990. We were contractually restrained from sharing our innovations with others–especially the competition–for five years from our project start date. In the interim, we observed–and coached–the firm in fine tuning its methods. In so doing, we explored the implications of this risk management approach in all other types of project and program engagements.
We were surprised that in the first year that this brave new risk management approach was offered, only 25% of companies were willing to save money by managing risks that were within their control By the second year, it was over 50%. By the third year over 75% demanded this way of managing the bidding process–and we had a three year head-start over all others.
When our “non-compete” expired, we began offering our KnowRisk service to all our customers. The service required significant amounts of project history data, including what we coined “Project Intelligence, incidences of Risks, Issues, Failures and Lessons Learned (we presented on this in the IPMA World Congress in India in 2005; see the paper in our Articles list).
Truly managing risk also required recording the consequences of risks realized, typical responses, their effectiveness, and significant additional data. Not all of our customers had the rigor to save reliable information.
So we began developing our own universal risk management database, and our KnowRisk service became the basis for an accompanying Risk Management product.
Today, we use both our KnowRisk product and our KnowRisk service in our consulting engagements, for our customers that are interested in managing high risk. And that is the KnowRisk Story!