Request for Proposals - Digital Impact Alliance

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Jul 19, 2017 - The Digital Impact Alliance (DIAL) originated to bring together the public and private sectors to ... to
Request for Proposals

Financial Modeling Tool June 2017

Initiative Background Summary The Digital Impact Alliance (DIAL) originated to bring together the public and private sectors to realize an inclusive digital society that connects everyone to life-enhancing and life-enabling technology. DIAL’s role is to convene the community, discover what works and what doesn’t, generate insights to help strengthen ecosystem partners, and advocate best practice recommendations. DIAL is positioned to serve as a neutral broker, bringing together government, industry, and other development stakeholders to promote new solutions to old problems.

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DIAL focuses its work in three areas: •

Platforms and Services (P&S): DIAL addresses reach and capacity challenges, working to help digital service providers design and deploy their services faster, at a lower cost, and to a wider audience in development markets.



Data for Development (D4D): DIAL accelerates shared value scenarios in technology and economic models, working closely with MNOs and digital data holders. DIAL also supports discussions tackling sensitive privacy and security questions that hinder the public sector and development community’s access to and use of data to improve communications and services provided to the people they service.



Insights and Impact (I&I): DIAL produces, curates, and disseminates evidence-based good practices packaged in easy to understand guidance so that governments, technology companies, the development community, and other implementers can quickly use it to deploy digital services to more people. DIAL also convenes these groups to shape greater collective impact.

DIAL’s Insight and Impact (I&I) focus area has four main initiatives: •

Stewardship for the Principles for Digital Development. DIAL invests in a series of comprehensive, complementary global public goods for the digital development community to increase awareness and adoption of the Principles for Digital Development and maximize their impact.



Operational How-to Guidance. DIAL produces operational how-to guidance for digital development practitioners to improve implementation of digital deployments and digital development programs.



Exploratory Research. DIAL undertakes independent research and support the efforts of other actors to elevate new insights emerging from the digital development ecosystem.



Donor Collaboration. DIAL works closely with donor organizations to assess the gaps in funder investment and design approaches for better collaboration in digital development.

Scope of Work

Problem Statement DIAL observes a gap in knowledge among digital development practitioners on how to appropriately quantify and model the financial requirements of their digital development programs over time. This is based on discussions with digital development stakeholders as well as publicly available background

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research which suggests the limited leveraging of financial modelling tools evaluating IT considerations in digital development programs. The ability to identify, forecast, build and/or better leverage financial models that consider the unique aspects of technology deployments is uneven across digital development practitioners, who have strategic responsibility for enhancing efficiencies and ensuring the sustainability of in-country digital development programs. These practitioners may be based in government, an international/national NGO, or private sector company. Considerations of outcomes and choices related to total cost of ownership (TCO), market sizing, business modelling and value chain analysis are also imperfectly applied, or not applied at all.

Project Description DIAL seeks the support of relevant firms/expert teams to build a quantitative Financial Modelling Tool and draft accompanying guidance on how to use it. The quantitative Financial Modelling Tool will be a decision support tool, a template or shell that governments and digital development program implementers can adapt and customize to their specific digital development program needs. How the tool adds value for digital development programs: The tool is intended to be a planning device that considers certain scenarios. After inputting relevant information about their digital development program, digital development practitioners (the users) will receive output data from this template/shell on likely outcomes that can be used to make decisions for their program. The tool will support countries and implementers in analyzing which IT investments should be made and what should be their cost and revenue considerations in ensuring long-term financial sustainability. For example, the tool should help users understand for each relevant IT investment where they will hit break-even, what will be the sources of costs and how those costs will change over time, and account for different revenue scenarios. The results from the different scenarios will help users better understand ways in which their digital development program can be protected from financial risks in the longer-term. For example, what happens if communications costs drop dramatically (as we might expect, extrapolating current commercial communications cost trends), which would reduce the program’s operating expenses. In this situation, would a different type, or cheaper, IT platform/investment make sense, as a program’s communications strategy has dependencies on specific IT components (e.g. text messaging)? Or, what if digital service usage suddenly and unexpectedly increases, driving up program’s costs. In this case, how would that factor into the type of IT investments being considered by the digital development program? These are just illustrative examples and the selected applicant will be expected to identify the relevant scenarios with DIAL’s input. Tool functionality and design: Above all, the tool should be user-friendly. It should be a model in which users can plug their digital development program’s IT specific information into and which guides users through some choices on whether their existing IT investments make sense, or if they should consider other variables/factors such as a new IT platform of different capability.

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The tool should provide the ability to adjust assumptions on both revenue and cost side to see how this impacts the investment’s viability/sustainability. The tool must detail out how to use market sizing, customer segmentation, and pricing decisions as well as illustrate what are the standard fixed and variable costs in technology deployments (e.g., hardware, software, SLAs, solutions support). Discussion and guidance of where to find this type of data, how to make reasonable estimates, and illustrative specific examples from a real program should be included in Deliverables 1, 2 and 3 (see deliverables section). The tool should be able to be used at any time in the lifecycle of the digital development program.

Why this approach? Many practitioners are being asked to scale programs with a digital component in the most efficient and effective manner, and ensure their sustainability in the longer-term. Alternatively, if financial sustainability is not possible, practitioners are being asked to shut down the digital service delivery. However, these practitioners may not have the requisite tools, templates, skills or knowledge to adequately make these decisions. A tool which allows them to effectively project their costs, as well as helpful data that could be used to judge the viability of their IT investments given changing scenarios, will reduce the effort and variability in the analysis. It should also increase the predictive quality of the analysis.

Who is the audience? As mentioned earlier, the target audience is digital development practitioners with strategic responsibility for enhancing efficiencies and ensuring the sustainability of in-country digital development programs. These practitioners may be based in government, an international/national NGO, or private sector company.

What is the minimum expertise required? We are seeking organizations/expert teams that have built global common financial modelling tools, ideally for technology. They should have experience developing tools and templates that have supported public and private sector clients, and specialized financial modelling skills to build a sophisticated and robust template that could simultaneously be intuitive, logical and user friendly from the front-end user’s perspective.

How would we know we are successful? 1) Digital Development Programs have saved time, costs and resources to build a financial modeling tool from scratch for their own respective digital development programs, as they can use what DIAL has already produced as a public good and simply adapt for their program’s particular context; this saves players in the digital development ecosystem time, effort and valuable resources. 2) Country implementers have significantly improved their capacity to identify, forecast, build and/or better leverage financial models that consider the unique aspects of technology deployments. By

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doing this better, the viability of their digital development program has been enhanced. As a result, there will be greater numbers of digital services worldwide with more efficient and effective design and deployment. This then increases the likelihood that benefits of digital society will reach underserved populations faster, cheaper, and in a more responsible way. A set of indicators/criterion to measure success will be developed in consultation with the selected firm in order to help validate and measure project success. Below are a few possible indicators: • • • • •

X% of relevant respondents have shared a positive testimonial of how the tool has facilitated their decision-making considerations, using a before and after comparison X # times tool has been cited and promoted as a key resource, through social media or relevant digital development gatherings Programs deploying and scaling digital technology have enhanced their performance, by increasing revenue by X and/or streamlining cost structures by X following usage of tool X # the financial modeling tool has been downloaded from relevant websites X # digital development programs have appropriated the shell, and further adapted and customized the tool for their particular situation and context

Scope and Methodology We have divided the scope of work into three phases. DIAL reserves the right to terminate engagement after each of the first two phases if DIAL deems the decision support tool, in the way envisioned, will not be technically possible given work completed to date, or sufficient ROI will not be realized. In this regard, DIAL will have two evaluation milestones (at the end of Phase 1, end of Phase 2) to consider whether the work should be continued. In the proposals, please break the costing down to reflect these possible termination points. Phase 1: Define the scope, nature, capabilities of the decision support tool; what it will and will not do. • •





Participate in a workshop with DIAL staff to capture preliminary thinking, brainstorm, and identify appropriate next steps; DIAL will share an initial background research landscaping with appointed firm Conduct detailed background research landscaping to include: assessment of existing TCOs and a Strength-Weakness-Opportunity-Threat (SWOT) analysis of current models and provide rationale for each component of the analysis (including those used in digital development programs); identification and analysis of TCOs and other financial models leveraged in both public and private sector programs. This will help clarify how the proposed DIAL tool can address and fill critical gaps of existing models Conduct research interviews with practitioners responsible for enhancing the efficiencies, viability, and impact of a diverse range of digital development programs. These insights should gauge the feasibility of producing a useful tool that is sufficiently detailed, easy to use and adjustable to specific user needs. If there is confidence such a tool can be developed, these interviews should also feed into effective design and development of the financial modeling tool. Ensure rigorous feedback loops by conducting various forms of user-testing, including one-onone testing sessions.

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Develop, in conjunction with DIAL, various peer review mechanisms to be deployed throughout the development process to gain feedback from targeted experts who have experience building similar tools. Organize virtual workshops in which these peer reviewers can participate and share their insights. Conduct user testing sessions with a subset of the tool’s target audience to better understand feasibility considerations before a decision is made to build the first version of the decision support tool in the scope and nature that DIAL envisions ▪ As part of this, work with DIAL to identify and involve a subset of other external “customer” groups in designing the tool throughout. This could involve interviewing 510 “representative customers” (e.g., NGOs, country reps, who are one of the target audiences of the financial modeling tool) as a reference set who are involved with the project team throughout phases and would form part of the larger user testing group.

Near the end of Phase 1, ensure there is a clear and comprehensive sense of what is required to build the financial modeling tool, whether the tool is feasible, and how much it will cost to do the tool well Deliverables: Phase 1 Completion Feasibility Report

Phase 2: Build the first version of the decision support tool. • • • • • • • •

The tool should include input sheets for key revenue and cost sources. Specifically, it should have multiple fields that effectively and robustly account for the complexity and dynamics of different “revenue” considerations, as that is a key differentiator of this model from TCOs. The tool should include a sensitivity model sheet to enable users to run standard scenarios. The tool should also have some fixed cell inputs, identified and agreed upon in advance with DIAL. The tool should be easy to understand, intuitive and user friendly; e.g. a front-end user experience that is not intimidating. Conduct user testing with members of the tool’s target audience to solicit feedback on how to enhance the capability of the first version decision support tool Draft instruction guide and test the draft with the tool’s target audience; reflect comments into an updated version Write one draft blog post during this phase Deliverables: First version decision support tool, feedback from user testing, one draft blog post

Phase 3: Test and refine decision support tool; share update after each iteration (with 2-3 iterations) • •

• • •

Prepare and participate in virtual workshops in which agreed technical experts/peer reviewers offer substantive reactions and feedback for decision support tool improvement Conduct user testing with members of the tool’s target audience to test the functionality of the tool. In this phase, they should be able to input the customized data of their digital development program into the template. The project team should assess how valuable the tool is in providing actionable figures, based on reaction from these practitioners. Based on the user testing process and feedback, adjust and improve the tool. Write one draft blog post during this phase Finalize instruction guide for decision support tool

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Deliverables: Iterated, tested and final version of decision support tool; Instruction guides; one draft blog post

Please propose a comprehensive testing strategy as part of the bidding process. If bidders have any suggestions/modifications to the above phases we propose, they are welcome to share.

Assumptions Model Feasibility: • • •

The decision support tool, at least in the way we have envisioned, is technically possible The cost/investment of building the decision support tool does not outweigh returns and overall value creation A global common public good of this envisioned scope and nature does not exist and no other organization in the digital development space is pursuing similar projects

Model Specifications: •



The financial model should include both revenue and costing assumptions. Its closest analogue is a financial model that a commercial software company might use prior to entering a new market to estimate potential profitability. It should be designed to help users run different scenarios to understand the viability of their IT investments, for example where they will hit break-even as well as how different revenue scenarios based on different pricing schema (e.g., subsidy, consumer payment) might affect their long-term viability a. Components on revenue side; e.g., market sizing, pricing, sensitivity analysis, any others to be proposed for DIAL consideration b. Components on cost side; e.g. fixed and variable costs, any others to be proposed for DIAL consideration The tool will appropriately account for most or all the costs, revenue sources and risks associated with full-scale implementation of digital development programs.

Budget, Deliverables and Project Timeline DIAL has a notional budget range between $250,000 - $400,000 allocated for this project, with the variance dependent on the comprehensiveness of the work done. As noted above, there are decision points during the process at which the work may be terminated. In proposals, please break the costing down to reflect the possible termination points. Tangible deliverable(s) should be provided by September 30, 2017, even if the full work across different phases is not complete. The requested timeframe is provided below, but we are open to considering proposed suggestions/amendments by bidding firms.

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The detailed approach, timelines, deliverables and budget utilization is requested from competing firms/RFP applicants. Respondents should offer reactions, any amendments and timelines as part of their proposals, for approval prior to contracting.

# Deliverable

Description

Estimated completion date

1

Following the landscaping research, research interviews with digital development practitioners and user testing to ascertain feasibility per Phase 1 components, an analysis report should be developed which answers the questions –

Week 4

Phase 1 completion feasibility report

What are the summary observations from Phase 1? What is required to develop the financial modelling tool? Is the tool feasible? How much will it cost to do it well? 2

First version decision support tool

This will be the first draft of the decision support tool itself (the template), which has been built following various research interviews and peer review feedback mechanisms from technical experts (as noted in Phase 1)

Week 9

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Iterated, tested and final version of decision support tool

This is the updated version of the decision support tool following a comprehensive demo testing process with target users in digital development programs, and incorporating the comments from technical experts and reviewers. Within the course of contract with bidder, all gaps as raised in the research interviews, feedback from technical experts and user testing sessions should be addressed and built into an updated version of the tool.

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Instruction guides and other relevant notes/documentation for how to use it.

A draft of this document should be produced at the same time as the first version of decision support tool is produced (per Deliverable 1). This document should be edited/updated to reflect appropriately the updated version of the decision support tool (per Deliverable 2).

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Two Draft Blog Posts

The contractor will draft two blog posts to share out interesting learnings/insights emerging from the course of engagement on DIAL website, and a way to seek reactions from broader digital development community. Topics to be agreed in advance with DIAL

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Proposal submission and selection Proposal submissions, which may be created in Word, PowerPoint or a combination of the two, must include the following components. Respondents may include additional elements as needed. •









Proposed approach o Demonstrate understanding of the project objectives o Describe approach, methodologies and deliverable formats, as applicable. Please embed any relevant gender specific issues in the proposed work o Describe project management approach, including timeline and any recommended updates to timeline provided above, including timing and level of effort on the part of the DIAL team, e.g. to participate in scoping and requirements workshops, iteration junctures, etc. o Describe an envisioned impact story and/or scenario, once the Financial Modeling Tool has been developed. Show us how value was created in the form of a fictional story. Staff and team structure o Identify the team structure, including roles, responsibilities and level of effort of staff and any sub-contracted resources o Provide rationale and background on any sub-contracted firms or individuals Relevant experience o Demonstrate firm and key participants’ experience relative to the scope of work o Provide at least 3 examples of similar work o Demonstrate experience with developing financial models; quantitative decision support tools Budget o Provide a detailed budget, including assumptions and costs and level of effort for staff and any sub-contractors o Provide professional fees budget, including cost and level of effort per staff member o Provide separate line item for any sub-contractors o Provide expenses budget by type of expenses, e.g. travel, research, etc. Travel estimates should indicate the anticipated destination and duration of each trip References o

Provide names and email addresses of at least two prior clients willing to discuss their experiences working with you.

Submission format and timeline • All submissions are due no later than August 8, 2017 by 6:00pm EDT. Expression of Interests (EOI) can be in the form of an email expressing intent to submit a proposal. • We expect the submissions to be in the 7 to 10 page range but will not penalize submissions that are above or below this range.

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• • • •

Questions and clarifications will be communicated to Respondents between July 24 to August 2, 2017 with a kind request for prompt turnaround on part of the Respondents. The selected Respondents will be notified by August 18, 2017 at 7:00pm EDT Please send all EOIs and email submissions to [email protected] In case respondents encounter a problem submitting, please contact Wameek Noor ([email protected]).

Questions and answers Please forward any questions to [email protected] by August 2, 2017. DIAL will make every effort to respond to questions within 72 hours, and will share the questions and answers on the DIAL website. Selection approach DIAL will review all written proposals, and may request a phone or in-person interview and/or updated submission to address questions or provide clarification. The selection decision will be based on the following criteria: • The quality of the approach • The quality of the proposed project management approach • Demonstrated, relevant firm, sub-contractor and individual capabilities and experience • Quality and fit of sample work • Value for money

Evaluation Process DIAL will review all written proposals, and may request a phone or in-person interview and/or updated submission to address questions or provide clarification. The evaluation committee will use the following criteria to evaluate candidates’ response. The selection decision will be based on the following criteria:

Criteria

Score (1-5)

1. Approach The proposed analytical framework and methodology is capable of answering the project’s key questions and deliverables. 2. Subject Matter Expertise Solid understanding of the key dynamics and trends in the relevant substantive areas

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Criteria

Score (1-5)

Appropriate level of understanding of the key stakeholders and dynamics within the ecosystem Key participants can speak with authority and credibility on the key project issues Experience working across both the public and private sector Experience working in emerging markets and the field of global development 3. Project Management Achievable action plan that will deliver the project on time and on budget Effective staffing and/or team structure (gender balanced teams preferred) Thoughtful risk identification and mitigation strategies 4. Capabilities and Experience Demonstrated firm experience with similar projects Team members with demonstrated skills and experience with similar projects and activities High-quality sub-contractors and external advisors, if relevant 5. Value The proposed pricing is within budget The proposed pricing demonstrates a competitive price and good value for the money

Intent and disclaimer This RFP is made with the intent to identify a consultant to deliver results as described in this RFP. DIAL will rely on Consultant’s representations to be truthful and as described. DIAL assumes it can be confident in Consultant’s ability to deliver the product(s) and/or service(s) proposed in response to this RFP. If DIAL amends the RFP, copies of any such amendments will be sent to all Respondents.

Contract terms DIAL will negotiate contract terms upon selection. A copy of the contract terms and conditions will be provided upon selection. All contracts are subject to review by UN Foundation’s Business Services Budget Reporting (BSBR) team. Once a draft contract is reviewed by BSBR, DIAL’s Grants Manager will contact the Consultant. The project will start upon the execution of the contract. The contract will outline terms and conditions, scope, budget, and applicable flow-down terms.

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Release Consultant understands that DIAL has chosen to solicit an RFP for consulting services, and that Consultant’s response does not guarantee that DIAL will enter into a new contract with Consultant or continue any current contract(s) with Consultant. Consultant agrees that DIAL may, in its sole discretion: • Amend or cancel the RFP, in whole or in part, at any time • Extend the deadline for submitting responses • Determine whether a response does or does not substantially comply with the requirements of the RFP • Waive any minor irregularity, informality or nonconformance with the provisions or procedures of the RFP • Negotiate with all consultants UNF deems acceptable • Issue multiple awards • Copy the responses This RFP is not an offer to contract. DIAL assumes no responsibility for Consultant’s cost to respond to this RFP. All responses become the property of DIAL. The Consultant, by submitting a response to this RFP, waives all right to protest or seek any legal remedies whatsoever regarding any aspect of this RFP. Consultant represents that it has responded to the RFP with complete honesty and accuracy. If facts provided in Consultant’s response change, Consultant agrees to supplement its response in writing with any deletions, additions, or changes within ten (10) days of the changes. Consultant will do this, as necessary, throughout the selection process. Consultant understands that any material misrepresentation, including omissions, may disqualify it from consideration for a contract award. Consultant understands it may receive proprietary and confidential information from DIAL during the RFP process (“Confidential Information”). Consultant agrees to not use Confidential Information for any purpose other than its participation in the RFP process and to not reveal Confidential Information directly or indirectly to any other person, entity, or organization without the prior written consent of DIAL. Consultant further agrees to exercise all reasonable precautions to maintain the proprietary and confidential nature of Confidential Information where it can best demonstrate its value and capacity to delivery ecosystem-wide, meaningful value.

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