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6 1^ AResearchProposal for HITACHIDATASYSTEMS COMPETITIVEPROPOSALANALYSIS Preparedby INPUT 1280VillaStreet MountainView,CA94041 415-961-3300 415-961-3966(Fax) Revision1,August20,1992 Page1of Propertyof-INPUT i. 6 ResearchConsultingProposal-August20,1992 COMPETITIVEPROPOSALANALYSIS For: HitachiDataSystems BACKGROUNDANDOBJECTIVES A. Background TheU.S.marketforcomputerhardwareandrelatedservicesisincreasinglycompetitive. Hitachi DataSystems(HDS),apremiersupplierinboththefoilsystemandDASDmarketsegments, findsitselfinverycompetitivebiddingsituationsinbothofthesemarkets. Fieldfeedback indicatesthatHitachi'spricingandcompetitors'discountingpracticesarethemajorfactor contributingtolostbids. Hitachiwouldliketogainamoreobjectiveandquantifiedassessmentof justwhatfactorsworkforandagainstthemincompetitivesituations,andhasaskedINPIJTto developafieldresearchproposalthatwouldmeetthefollowingobjectives: Objectives Determinethediscriminatingfactorsthatareprimaryinmakingthedifferencebetweena "win"and"lose"situationforHitachi. QuantifythedifferencebetweenHitachi'sandthewinningorlosingproposer'sprice. ProvideanalysisandrecommendationsastowhatHitachi'sstrategyshouldbetoincreaseits biddingsuccessrate. SCOPE ' • \. • Giventhedifficultyofobtainingaccuratecompetitivepricinginformationthroughtraditional researchtechniques,INPUTproposesthattheinitialengagementbelimitedtoapilotstudy analyzing20competitivesituationstocertifytheproposedmethodology. Assuming certificationoftheapproach,afollow-onproposalwillbedevelopedexpandingthesampleto obtainstatisticallysignificantresults. • ThesampleforthepilotwillberestrictedtobiddingsituationsthattookplaceintheUnited StatesandCanada. • Eventhoughpricingappearstobetheprimaryconsiderationaccordingtofieldsalesfeedback, INPUTwillattempttodeterminetheinfluenceofotherfactorssuchasbundledservices, softwareandsupportontheevaluationprocess. PHATAC1.DOC Page2of Propertyof-INPUT CompetitiveProposalAnalysis-HitachiDataSystems ^ ^jj METHODOLOGY INPUTwillutilizetelephoneinterviewstoobtainthefielddatarequiredtoperformtheproposed analysis. AsindicatedunderSCOPE,asampleof20companieswillbeinterviewedforthepilot. INPUTwillattempttobalancethesampleintermsof"won"and"lost"situations,andanticipates thatitwillrequireaminimumof2interviewspercompanytoobtaintherequiredinformation. To facilitatetheinterviewprocessHitachiwillprovideINPUTwiththenamesandinitialcontact pointsofaminimumof50firms(biddingsituations)inwhichadecisionwasreachedbyHitachi's prospectwithinthelastsixmonths. Totheextentpossiblethebiddingsituationsprovidedshould bebalancedbetween"wins"and"loses". TheinformationprovidedbyHitachiwouldinclude: ^ • Thenameofthefirm / • Nameaddressandtelephonenumberoftheprimarycontactpoint ^ • Namesandtelephonenumbersofanyothercontactsrelevanttothebid(asavailable) ^ • Adescriptionofthepackageofproductsandservicesincludedinthebid Theactualprojectwillproceedasfollows: • INPUTwillprepareaninterviewguidedesignedtomeetthestudyobjectivesforreviewwith Hitachi. Theinterviewguidewillcontainbothopen-endedandstructuredquestions. In additiontocapturingtheappropriatedemographicinformation,theinterviewguidewillfocus onthefollowingaspectsoftheprospect/client'sevaluationprocess. Pre-proposalcommunications - Proposalcontent(diditmeetclientexpectations) - Softevaluationcriteria(technical,support,andservice) Post-proposal/pre-decisionsupport Pricing Differentiatorsinthecompetitor'soffering Theutilizationofoutsideconsultantsintheevaluationprocess Anattemptwillbemadetoget"hard"dataonactualcompetitiveprices. However,itismore likelythatintervieweeswillbeinclinedtorespondbycitingpercentagedifferencesbetween Hitachi'sanditscompetitors'prices. • HitachiwillreviewtheinterviewguideandINPUTwillmakeanyappropriateadjustmentsto meetHitachi'srequirements. Aminimumof10interviewswillbeconductedtodeterminetheviabilityoftheprocess. INPUT'Sprojectmanagerwillanalyzetheresultsofthispreliminaryinterviewsetandmeet (0 withHitachitodiscussanyrecommendedchangestoeithertheinterviewguideortheprocess. Assumingago-ahead,theremaininginterviewswillbeconducted. PHATAC1.DOC Page3of6 Propertyof-INPUT CompetitiveProposalAnalysis-HitachiDataSystems • INPUTwillpreparea5to10pageanalysisofthepilotresults,andmeetwithHitachito reviewtheresultsofthepilotstudy. DELIVERABLES • Formalinterviewguideforobtainingthefielddatarequiredfortheanalysis • Mid-projectreviewofresultstodate,includingrecommendationsforchangesintheapproach orinterviewstructure. Themidpointreviewwillalsoincludeatabulationoftheresultsto datecross-tabbedbyrespondent,industrygroup,companysize,competitorsinvolvedand classofproductbid. • WrittenreportanalyzingthedataobtainedandrecommendationsforchangesHitachican makeincompetitivesituationstominimizethenumberoflostbids. • On-sitepresentationofthereportandrecommendations • Alistidentifyinginterviewees. (Thiswillbedoneonabest-effortsbasis. Intervieweeswillbe askediftheirnamesmaybegiventoINPUT'Sclient.) FEESANDSCHEDULES A. Fees INPUT'Stotalfeeforthepilotstudyis$J_2,000;$6,000payableuponauthorization. Assuming thatago-aheadoccursafterthefirstteninterviewshavebeencompleted,theremainingfeeof $6,000willbedueuponcompletionofthestudyreportandpresentationoftheresultstoHitachi DataSystems. Intheeventtheprojectisabandonedatthemid-projectreview,thetotalfeeswill be$6,000plusincidentalexpensesasdescribedbelow. Otherincidentalcostsassociatedwithfieldresearchstudies(includingtelephone,reproduction, etc.)willbebilledatcostandareestimatedtobelessthan5%ofthetotalprojectfeeof$12,000. B. Schedules-INPUTproposesthefollowingscheduleforcompletionoftheproject. • 9/3/92-PreliminaryReviewofQuestionnaire(Hitachi/INPUT) • 9/10/92-Questionnairefinalized,interviewprospectsturnedovertoINPUTbyHitachi • 9/17/92-Midpointprojectreview • 9/31/92-Presentationofstudyresults Note: TheabovescheduleassumesprojectauthorizationbyHitachibynolaterthanAugust24, 1992. PHATAC1.DOC Page4of6 Propertyo/-INPUT 7 • CompetitiveProposalAnalysis-HitachiDataSystems QUALIFICATIONS/STAFFING A. Qualifications INPUTiswellqualifiedtoassistHitachiDataSystemsinprovidingthedesiredinformation. Asa leadingmarketresearchandconsultingfirmtotheinformationservicesindustry,EVfPUThas1 yearsofexperienceinanalyzingmarkets,vendorstrategies,userrequirementsandcustomer satisfaction. Morespecifically,INPUThasconductedbothcustomandsyndicatedfieldresearch onthepricingstrategiesofprofessionalservicesandotherinformationservicesvendors. INPUT'Sinternalinterviewingstaffconductsover6,000userinterviewsayearwithinformation systemsandoperatingexecutivesofbuyingfirms. Theyareknowledgeableabouttheindustry andwell-trainedinobtainingissueandopinion-relatedinformationinadditiontostatisticaldata. HitachihasutilizedINPUTinpreviouscustomengagementstoobtainmissioncriticalinformation ofaproprietarynature. B. Staffing ThisengagementwillbeundertheoveralldirectionofR.Dennis(Denny)Wayson,VicePresident andGeneralManagerofINPUT. SeniorINPUTinterviewerswithsignificantexperienceinthe mainframecomputerindustrywillbeutilizedtoconducttheinterviewsforthisproject. CONFIDENTIALITY Asarequirementformeetingthestudyobjectives,HitachiagreestoprovideINPUTwithcontact namesfromwhichtodeveloptheinterviewsample. INPUTagreesthatthecontactnamesand relatedinformationaboutspecificcompetitivesituationsisthesolepropertyofHitachiData SystemsandmaynotbeusedordisclosedbyINPUTtoanypersonoutsideHitachiDataSystems. Furthermore,INPUTagreesthattheresultsofthestudyresearchalongwithconclusionsand recommendationsarethepropertyofHitachiDataSystems,andmaynotbedisclosedor publishedbyINPUTforanyotherclientthanHitachiDataSystems. DURATIONOFTHISPROPOSAL'SVALIDITY Thisproposalwillremainvalidforaperiodof15days. (Thisspacedeliberatelyleftblank.) PHATAC1.DOC Page5of6 Propertyof-INPUT