How to Create Sales Quotes using Dynamics CRM Project Service

Project Service for Microsoft Dynamics is an end to end service that provides a single system of engagement for project sales, resourcing, delivery and billing teams.

Previously we covered how this solution helps Resource Managers to handle their billable resources and in this post I'll focus on how the Project Service module applies to the sales quoting process.

Once this solution is deployed, sales teams at project based organisations can apply these functions to increase engagement with project teams and optimise their quotes.

In this example, I'm using the scenario of a web design agency, that are quoting for the implementation of a new website to a prospective new client, Berkshire Steam Tours.

To get started, the account manager has created a new opportunity on this CRM account.

On first appearance not much has visibly changed on the Opportunity record compared to the regular CRM sales opportunity functionality, but as well as the appearance of a defined Account Manager field this form also features a Contracting Unit.

If an organisation has different divisions there may be different Contracting Units enabling users to select the relevant one for their quote. Each Contracting Unit might have its own price list and data for each unit would be reported separately. In this example, for simplicity I've used the default Contracting Unit for this organisation:

Another crucial item here is the Product Price List as that will drive all the prices throughout this process.

Further down the opportunity form, the Project Service module has added product-based lines and project-based lines.

In this example, we don't have any products to be quoted which leaves us with just one project-based line for the work that will be quoted on a time and material basis.

As an alternative, project based items can be quoted on a fixed price basis and each opportunity quote might consist of multiple lines for different components some on a combination of time and materials basis and fixed prices:

A new project quote record can now be created from the opportunity record.

By implementing CRM Project Service the quote form includes a lot of additional information, this includes profitability metrics and budget comparisons but before looking at these I first need to build out the quote...

The next step is to create a quote line for this project work.

In this case we've included expenses and fees in our project total but the solution can account for these separately. As previously defined, this quote line will be billed on a time and material basis.

The Account Manager understands that the client's budget is £8000 and has initially positioned their quote at this level but using the project service tools they can engage with the project team to quote with better insight into the actual resource needed to complete the work, and the cost of this:

Next, the Account Manager needs to link this Quote to a Project record.

The Quote can be linked to an existing Project, or they can create a new record from this interface.

At this stage one of several pre-defined Project Templates can be applied. In this example, the Account Manager has selected a template that most closely reflects the work that needs to be delivered for this customer...

Project templates are an excellent solution for organisations that deliver projects that involve large amounts of repeatable work.

While each unique project will differ slightly there will often be common structures. By saving these formats as templates they can be easily replicated by sales teams during the quoting and negotiation process.

The screenshot below shows the work breakdown structure for our default web design Project Template record:

This reflects 8 key delivery steps and requires 6 different role types. Read our earlier post for detail about Project Roles, Competencies and Costs.

In total this standard template quotes the project being delivered in 235 hours. This will incur a delivery cost to the web agency of over £4500 so the Account Manager is aware that they need to quote more than this to ensure it's a profitable deal.

More detail about the breakdown of the project cost is shown on the Project Estimate screen:

This is just a foundation for developing a new quote as some changes compared to the template version will likely be needed but it's a quick way to get started.

Before an Account Manager can begin making these revisions this project estimate template must be imported into the new Quote Line Record.

To complete this select the Import option from the Quote Line menu and follow the wizard steps to import:

Upon completion these items from the Project Template have now been applied to the Quote Line:

This immediately flags a problem because the quoted amount has been updated on the basis of the defined price list and this exceeds the customer's budget now that these project items have been imported.

To win this business the Account Manager will need to look at these figures.

From the Quote Line record select Chargeability View:

This brings up all prices for each resource role and confirms the defined CRM price list that we are working from.

From this screen Account Managers have the flexibility to adjust individual prices, or even make some roles non-chargeable.

For example, they could waive the cost associated with one or more of these roles by unticking the 'Applicable' button (Microsoft will soon rename this to 'chargeable' for a rather more helpful title!):

In this example, the Account Manager will just lower the price of Developer sales price from £40 to £35.

This is the largest resourcing requirement in the project and by reducing the unit item it will hopefully bring the total quote within the customer's budget.

Success! By offering this special rate on the development cost the Account Manager has reduced their quote down to £7880, just within budget.

Let's go back to the top level of the Quote record to see what impact these changes have made:

Firstly, the record has updated the gross margin so the account manager can assess how profitable this deal is, and how much commission they are likely to make.

If it is a highly competitive situation and a prospective client has a very limited budget yet has a very demanding requirement this screen will enable the sales user to evaluate if this would be a profitable project, or perhaps if it would be one to walk away from...

In this case, CRM confirms the quote total now falls within the client's budget and based on their stated completion date it is due to be delivered ahead of this deadline.

Elsewhere on the Quote record form further detail is shown confirming the total cost that will be incurred by organisation in delivering this project (based on the defined resource costs). This will be split between costs that are charged to the client and any costs that are waived. In this example, we are billing the client for all items so there aren't any non-chargeable values:

These metrics are supported by embedded charts. This includes the distribution between revenue and cost over the timeline. In this case, the project will be completed over two months:

Included in other available charts is an analysis of the cost incurred for each role on this project.

This is especially useful if an Account Manager is considering making some costs non-chargeable to make their quote more competitive as it helps them understand the financial implication of this action.

For example, if they were considering waiving one role element of the project e.g. Design work (assuming they had the authority to do so!) they can clearly see in this example there is £480 cost to the agency of fulfilling this part of the quoted work.

Finally, the Quote record also depicts some analysis of the comparison to the customer's budget.

In this basic example, our quote only consists of one line item but where multiple lines are used these values are rolled up and compared to the total project budget:

Each line item is plotted on a chart to quickly visualise how each quoting line compares to budget:

Depending on the complexity of each quote the above chart could show separate lines for multiple quoting lines that might comprise time and materials items, fixed price components and any product lines.

Apart from offering the client a discount on the developer cost this quote hasn't been adjusted from the original project template but in this case the work schedule will need to be tweaked.

The Gantt chart work schedule from the template that I applied to this new project has already been imported which means that in collaboration with a Project Manager the Account Manager can adjust this in line with each unique project they are quoting on by revising the inline detail and precise timings.

For this example, we've adjusted the chart to allow more time at the Wireframe and Copywriting stage by increasing these hours and halving the time needed to configure PPC campaigns as this client only wants to run a small scale initial ad campaign, as a result a PPC Consultant is only needed to work for 5 hours on this project:

Now these changes have been applied to the Project Schedule the quoted amount has again been updated but the total amount is still within client's budget.

As with any non-project quote, CRM sales users can use reports or document templates to send a formal quote to a contact at any time, and then make revisions to the quoting record as a result of their negotiations.

Once an agreement is reached and an order is signed the quote record is converted into a Sales Contract record and this will be used as a the basis for creating an Invoice which we'll cover in a separate post.

As part the quoting process the Account Manager has already created a CRM Project Record so the process now passes to the Resource Manager and Project Manager to find and book the resources needed to deliver this work and we'll cover this in a separate post.

As this example has demonstrated, Project Service for Microsoft Dynamics CRM enables sales teams to:

  • Quickly create quotes using project templates that reflect the organisation's proven delivery structures
  • Flexibly combine quote lines for time and materials, fixed price and products
  • Easily adjust quoting line elements to ensure the total cost is within customer budget
  • Collaborate with project manager's to fine tune schedules consistent with the work that need to be delivered
  • Gain cost insight and ensure efforts are focused on profitable projects
  • Determine if the work can be realistically delivered to meet the client's deadline
  • Instruct finance teams to send invoices for won quotes
  • Communicate agreed project schedules to Resource Managers and Project Managers

The new Project Service module is available as an extended module for Microsoft Dynamics CRM Online (requires 2016 update 1).

We'll be sharing more content about this new module for CRM so keep following our blog to read more about this and the other latest developments in the world of Microsoft Dynamics CRM.