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An LSP’s Guide
to Quoting
Organizational Models, Processes,
Automation, and KPIs Necessary
to Improve Closing Ratios
By Hélène Pielmeier and
Donald A. DePalma
February 2016
An LSP’s Guide to Quoting
By Hélène Pielmeier and Donald A. DePalma
February 2016
Copyright © 2016 by Common Sense Advisory, Inc., Cambridge, Massachusetts,
United States of America.
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An LSP’s Guide to Quoting i
Copyright © 2016 by Common Sense Advisory, Inc. February 2016
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Table of Contents
Topic ........................................................................................................................................................ 1 Executive Summary ............................................................................................................................. 2 The Sales Estimation Function .......................................................................................................... 3
Quoting Involves More than Cost and Time Estimates ................................................. 3 Recognize Various Quote Types ....................................................................................... 4
Quotes Come in Many Forms ...................................................................................... 4 Quote Requests Originate from Multiple Sources .................................................... 4 Adapt the Quoting Effort to the Situation ................................................................. 6 Reduce Manual Quoting Activities ............................................................................ 7
Summary: Understand Quoting Basics ............................................................................ 8 The Quoting Process ............................................................................................................................ 9
The 10 Steps of the Quoting Process ................................................................................ 9 Step #1: Quote Submission ........................................................................................... 9 Step #2: Quote Intake .................................................................................................... 9 Step #3: Qualification of Opportunity ...................................................................... 10 Step#4: Discovery ........................................................................................................ 12 Step #5: Project Analysis ............................................................................................. 13 Step #6: Solution Development ................................................................................. 13 Step #7: Pricing Development ................................................................................... 14 Step #8: Quote Generation ......................................................................................... 14 Step #9: Internal Approval ......................................................................................... 14 Step #10: Quote Delivery ............................................................................................ 17
The Complexity of Workflows Depends on the Situation .......................................... 17 Summary: Master the 10 Steps of the Quoting Process ............................................... 19
Organizational Structure .................................................................................................................. 20 Many Employees Produce or Touch Quotes ................................................................. 20
LSPs Spread Out the Quoting Responsibility ......................................................... 21 LSP Maturity Affects Organizational Models ......................................................... 21
What Makes Great Sales Estimators ............................................................................... 23 Prioritize the Right Characteristics ........................................................................... 24 Offer Guided Training to Sales Estimators .............................................................. 26
Summary: Make Quoting Someone’s Priority .............................................................. 28 Quoting Automation ......................................................................................................................... 29
Companies Have an Arsenal of Tools at Their Disposal ............................................. 29 The Tool Landscape Extends Well beyond TMS .................................................... 29 The Latest Development: Lights-Out Quoting........................................................ 30
Technology Shows Benefits but Scares Off Many LSPs............................................... 31 Speed and Reduced Mistakes Appeal to Clients .................................................... 31 Efficiency Constitutes the Main Appeal for LSPs ................................................... 32 Technology Remains Under-Used at Many LSPs ................................................... 33
Some TMSes Efficiently Support Quoting Activities ................................................... 34 Client Portals Facilitate Quote Entry into the TMS ................................................ 36 TM Connectors Remove Manual Data Entry .......................................................... 37 Flexible Pricing Requires Easy Alteration Functionality ....................................... 38 Quote Generation and Delivery Mechanisms ......................................................... 40
ii An LSP’s Guide to Quoting
February 2016 Copyright © 2016 by Common Sense Advisory, Inc.
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Marketplaces Offer Convenience for Buyers ........................................................... 41 Summary: Leverage Technology to Decrease the Quoting Effort .............................. 42
Measuring Quoting Performance ................................................................................................... 43 Monitor the Sales Pipeline and Quoting Results .......................................................... 43 Select KPIs to Drive Improvement Efforts .................................................................... 44
Keep the Pulse on Closing Ratios ............................................................................. 44 Reduce the Time to Produce a Quote ....................................................................... 46
Summary: Closely Monitor and Manage Quoting Performance ............................... 48 Recommendations.............................................................................................................................. 49 Information Sources ........................................................................................................................... 50 Related Research................................................................................................................................. 51
About Common Sense Advisory .............................................................................. 52 Future Research ........................................................................................................... 52 Applied Research and Advisory Services ............................................................... 52
Figures
Figure 1: Tools Used to Funnel Quote Requests ............................................................... 10 Figure 2: Tiered Quote Approval System .......................................................................... 16 Figure 3: Sample Quote Workflow for a Brand-New Prospect ....................................... 18 Figure 4: Sample Quote Workflow for a Client with Repeat Work................................ 18 Figure 5: Sample Quote Workflow for a Client with an SLA in Place ........................... 19 Figure 6: Sample Quote Workflow through an Instant Quote Portal ............................ 19 Figure 7: Sample Groups of Stakeholders Involved on Quotes ...................................... 20 Figure 8: LSP Metrix: How Maturity Often Dictates Who Handles Quotes ................. 23 Figure 9: Building Blocks Necessary in TMSes to Generate Quotes .............................. 35 Figure 10: Quote Submission on a Retail TMS .................................................................. 36 Figure 11: Workflow Template to Process Quotes ........................................................... 37 Figure 12: CAT Price Grid to Tell the TMS How to Process TM Log Files ................... 38 Figure 13: Selection of Rounding Rules to Apply ............................................................. 38 Figure 14: Application of a Price Factor to Modify a Price List ...................................... 39 Figure 15: Application of Discount Logic .......................................................................... 40 Figure 16: Bid Submission on a Marketplace .................................................................... 41 Figure 17: Comparison of Bids Submitted by LSPs .......................................................... 42 Figure 18: Average Time to Produce a Standard Quote .................................................. 47
Tables
Table 1: Typology of Quotes .................................................................................................. 5 Table 2: Factors That Influence the Effort Needed to Produce a Quote .......................... 6 Table 3: Typical Quote Elements ......................................................................................... 14 Table 4: Checks and Balances on Quotes ........................................................................... 16 Table 5: Stakeholders Involved in Sales Estimation Activities ....................................... 22 Table 6: Typical Sales Estimation Responsibility Breakdown......................................... 24 Table 7: Resources to Train Sales Estimators ..................................................................... 27 Table 8: Technology to Support Quote Submission and Generation ............................. 30 Table 9: Measuring the Performance of Sales Estimation Activities .............................. 44
An LSP’s Guide to Quoting 1
Copyright © 2016 by Common Sense Advisory, Inc. February 2016
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Topic
As clients become ever more demanding, rates and turnaround times drop, and
service levels multiply. How can language service providers close more business
in this highly fragmented and commoditized chaotic environment? Before they
even think about sales estimation strategies, they should first fine-tune their
quoting function.
In November and December 2015, CSA Research interviewed 22 LSPs to identify
best practices. Executives and managers will find valuable advice in this report to
re-think or refine their setup. While the report focuses on quoting translation
jobs, interpreting-centric LSPs will also find relevant ideas and advice. This first
installment of findings on quoting practices covers:
The Sales Estimation Function. We present the goals of the function and how
LSPs adapt effort levels by quote types.
The Quoting Process. We summarize the quoting process and workflows that
LSPs use to assemble the various steps.
Organizational Structure. We share findings on organizational models,
workflows among internal stakeholders, and hiring and training tips.
Quoting Automation. We cover the typology of tools available, the benefits
counterbalanced with reticence to change, and building blocks that support
auto-quote features in translation management systems (TMSes).
Measuring Quoting Performance. We compile the variety of metrics that
LSPs track and discuss specific key performance indicators to drive
improvements.
Recommendations. We summarize what LSPs should do to set up the sales
estimation function.
Information Sources. We provide details on the profile of interviewees.
Related Research. We recommend other CSA Research reports and briefs that
provide additional data and analysis about the various elements of the sales
estimation function.
An LSP’s Guide to Quoting 51
Copyright © 2016 by Common Sense Advisory, Inc. February 2016
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Related Research
CSA Research has been writing about market rates and quoting since 2004.
Throughout this document, we referenced previous research that explained or
expanded on issues being discussed. We recommend the following CSA
Research reports and briefs on related topics:
“Specifications Improve Quality and Satisfaction” (Feb16) – This brief
addresses how LSPs and enterprises can use standard translation
specification to improve communication, customer satisfaction, and quality
outcomes.
“Design Strong Online Quote Forms” (Feb16) – This brief provides the detail
of our findings on our analysis of the use of online quote forms among top
LSPs.
“LSP Metrix” (Aug15) – This report describes CSA Research’s maturity
model for LSPs and how companies behave at each of the six stages of the
model. We dedicated an entire assessment area to sales estimation.
“The Responsibilities of Project Managers” (Mar13) – This report presents
data on the tasks that PMs are typically in charge of, including their
involvement in quoting projects.
“How to Maximize the Value of the Client-LSP Relationship” (Dec14) – This
brief documents the six steps of the relationship journey between client and
providers.
“LSPs Need to Know When to Turn Down a Client” (Nov13) – This brief
covers the common mistakes that LSPs make when accepting projects, how to
set up a process to identify potential mismatches, and the art of turning down
projects.
“Portal-Based Client Interactions” (Jan14) – This report explores features and
trends of client portals. It also covers quoting and job submission
functionalities in detail.
52 An LSP’s Guide to Quoting
February 2016 Copyright © 2016 by Common Sense Advisory, Inc.
Unauthorized Reproduction & Distribution Prohibited
About Common Sense Advisory
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