When Deltek bought Centurion Research Solutions last month, it was generally greeted as a positive by most people, including me.
It fit well with the company’s strategy to build on its base and expand its offerings to its customers. They picked up on an interesting analytics ability in Centurion’s Opportunity Assessment Now tool for helping companies decide whether to pursue a contractor.
Deltek CEO Mike Corkery was clear that this wasn’t about taking out a competitor. That’s likely just a bonus.
With the purchase of Centurion, Deltek has now acquired all the major market research firms in the government market. They started with Input in 2010, followed by FedSources in 2011.
It was on this roll up of the major market research firms that a friend in the market wrote to me and expressed a concern and a warning that I think is worth thinking about.
He compared the Centurion acquisition to the concept of technology obsolescence in procurement:
When contractors essentially bid the same system architecture or technology platforms to the government, because of a variety of reasons, the government receives much less innovation in the submitted proposals, which creates less price competition.
The concept being that if the bidders propose similar technology, design and implementation, pricing by definition will be remarkably similar. Each bidder’s proposal should be unique and offer an approach based upon truly independent technical and business analyses. When technology obsolescence occurs in procurements, it is neither in the government’s nor the taxpayer’s best interests.
A similar danger exists with market research data. My friend continued:
When you have one primary source of customer and competitive information, that is, one view of a procurement opportunity, we have ‘market obsolescence.' Companies that subscribe to the same source of market information will have a common customer perspective and perceive common hot buttons. Having a common view of the customer’s priorities will dampen innovation and in turn create similar pricing models.
It reminds me a lot of the concept that if you want to be well-informed about current events, you need to read multiple news sources. Obviously, I want you to read Washington Technology, but I can’t tell you how many times I read stories on similar topics in other publications and slap my forehead with a “D’oh, I wish I had thought of that.”
This isn’t to say that I think Deltek’s acquisition is a bad idea or bad for the market, but I think my friend has a point that relying too much on a single source of information can be a risky proposition.
In other words, Deltek’s market information should be one source among many. But the risk for contractors and customers is that many companies have reduced their investment in marketing, including market research, in recent years. They have become dependent on too few sources of market information, which limits their perspective on the market and the solutions they can deliver to customers.
Of course, there are other smaller providers of market research such as Govini and GovTribe, and it is also important to remember that much of the data used by market research firms is public information, so anyone can access it.
The best strategy is that, regardless of your source of research, you need to combine that with your own leg work. And that leg work has to include direct contact with your customer.
So, subscribe to a market research service, do your own in-house research and analysis and always talk to your customer; then, you need to compare and contrast what you are learning from these different sources and synthesize your own view on the market.
A unique view of the market, backed by data and research, is a key to differentiation.
But relying on a single source is the quickest way to developing a generic, vanilla view and generic, vanilla solutions for your customer, and in today’s market, that’s the quickest route to failure.
Posted on Dec 03, 2013 at 11:02 AM1 comments
The claims and counter claims are flying between TechAmerica and Information Technology Industry Council ever since TechAmerica filed a lawsuit over ITI's hiring of its lobbyists last month.
The battle began when Trey Hodgkins, Erica McCann, Pam Walker and Carol Henton left TechAmerica and launched the Information Technology Alliance for Public Sector. TechAmerica filed a $5 million lawsuit in D.C. Superior Court against Hodgkins, Walker and Henton claiming breach of contract and the taking of proprietary information.
ITI asked that the lawsuit be dismissed, describing the TechAmerica complaint as “nebulous” and without standing. ITI clams that no trade secrets were lost, and that TechAmerica couldn’t show how it was harmed. Read the FCW story for more details.
TechAmerica pushed back, with its president and CEO Shawn Osbourne saying it is “preposterous” for ITI to say that no proprietary information had been accessed or was being used by ITI.
TechAmerica also outlined in an email to board members several actions that it claims the departing members took. These charges include taking documents, deleting documents on a TechAmerica server, trying to recruit TechAmerica members, and providing membership information to ITI.
“I must emphasize that the above statements are facts, not allegations or conjectures; each one, and many more similar ones, are clearly documented and verified by information that remains on TechAmerica’s systems,” Osbourne wrote.
When I read one side, I think, wow, they have a strong case. Then I read the other and think, well, it’s not so clear. Hmmmm.
Interestingly, both sides make a point that they want to settle, but each is claiming the other isn’t cooperative.
TechAmerica has gone so far as to ask that ITI fire Hodgkins, McCann, Walker and Henton.
I see the digs at each other about settling as a signal that a deal will get done. It’ll probably include the exchange of money, but I can’t see anyone getting fired – unless the firing includes a nice cash settlement.
I also wonder if this case is headed for an arbiter. It seems like the kind of case that could benefit from that. Such a move would likely remove a lot of the activity from the public eye, something I’m sure both associations would favor.
Posted on Dec 03, 2013 at 12:57 PM0 comments
My jaw dropped a bit this morning when I saw the Washington Post’s front page story about Deltek. It was right there next to the paper’s story on the 50th anniversary of John F. Kennedy’s assassination.
Given recent stories on MicroTech and CGI as well as other stories, it appears that the federal government’s hometown paper has discovered that contracting is a big business in the area.
Overall, I thought the Deltek story was good; it gave a good history of the company, but there were certain phrasings and word choices that gave me pause. With so much of this recent coverage, there seems to be a naiveté about how the real world works.
The Deltek story is part of a Washington Post special report called: The Insiders’ Game, Getting rich in the new Washington.
I think it is good to examine how the drivers of a region’s economy operate and evolve over time, but the tone of these stories comes across as disparaging to companies and executives who have become successful. The Post's point of view seems to be that it is wrong to be a successful business in the government market.
How else do you explain the end of the Deltek story, which relates how companies have been launched to provide support services to contractors implementing Deltek’s software:
“Those companies feed off Deltek like little birds riding on the back of an elephant, which stands in a vast river of government money, drinking deeply.”
That’s some pretty prose, but it's meaningless and misleading.
What's wrong with being a successful company in the government market?
Specific to the Deltek story, the Post fails to talk about how half of Deltek's revenue has nothing to do with government contracting, but comes from work with architecture and engineering firms and other project-oriented businesses outside of public sector. At least half of the Deltek success story has nothing to do with government spending.
The Post stories on contracting go on about how much money companies make providing services to the federal government, but they make it sound like these companies are stealing the money instead of providing critical goods and services to the government.
And what about what these companies contribute? In Fairfax County, which the Post says receives a “disproportionate” share of government spending, contractors create jobs and support a tax base that goes to support schools, parks and other things that contribute to a good quality of life for everyone.
According to the Fairfax County Economic Development Authority, seven of the county's top 10 employers are government contractors, and they provide tens of thousands of jobs.
Wouldn’t looking at the entire economic impact help paint a more well-rounded view of what government contractors contribute?
Instead, you read the Post’s "getting rich" series, and you think these companies are sucking us all dry instead of being positive participants in the local economy.
Again, I don't understand what's wrong with being a successful business?
OK, I’ll end my media criticism there, but I want to leave you with a message: People are watching, but this isn’t all bad; there is an opportunity, as well.
I’ve felt for quite some time that contractors have done a poor job telling their story and explaining to the general public the important contributions they make to the country.
As the scrutiny from the Post and others increases, companies and executives should seize the opportunity to explain what you do when they call. Don’t just tell feel-good stories or the usual blather about being “the leading provider of X, Y, Z.”
Instead, really explain what you do; explain how you keep the system running that delivers the payroll to 10,000 government employees and their families, or how you support the network for a VA hospital that makes sure doctors and nurses have the latest health information on 500 wounded warriors they are caring for. There are tons of other examples.
Will you always get your story out? No, but being proactive and articulate will only benefit your company and the industry as a whole.
The term "government contractor" has become a dirty word, but contractors play a critical role in addressing some of the toughest problems our society faces. Are contractors perfect? No, but you should wear that moniker with pride and not be afraid to show it.
Posted on Nov 22, 2013 at 11:07 AM5 comments