Lejdborg Consulting

How to review the cost of a proposal

When reviewing a technical proposal you need to know:

  1. Your expected return on investment
  2. The risk you’re willing to take

Basically, you’ll need to figure out what the project is worth to you or your organization. These answers have everything to do with whether or not the project is worth pursuing.

If you don’t have these answers, you won’t know how to relate to the proposal. A knee-jerk reaction might be that the project sounds expensive – but you might find the return on investment outweigh the cost several times over.

For example: Is €100,000 expensive? What about €1,000,000? You react differently to those numbers, but without context we don’t know the answer.

If the project is likely to save your operation €500,000 per year at low risk, €100,000 is cheap. And a €1,000,000 investment will pay off in three years. If your savings will be ongoing for several years, that’s a good deal too.

Of course, the flip side is also true. An investment may seem like a good deal – but if there’s a risk of decreased productivity, you stand to lose more than the investment itself.

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Hi, I'm Christoffer Lejdborg! I believe software has tremendous potential to transform your business in amazing ways, but people are too focused on the technology instead of the business case.

I've worked with companies such as BDO, Grant Thornton, Nobina Technology, Run My Security and Whenever.

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