Compass Partnership Yields Business

By Marianne Dunn Staff WriterCompass America Inc., Reston, Va., has gotten its foot in the door of the federal market by partnering with Performance Engineering Corp., Fairfax, Va. on an outsourcing contract for the Office of the Joint Chiefs of Staff. "One of the avenues into the federal marketplace is through alliances," said David Burkett, president of the Guildford, U.K.-based Compass. The performance improvement consultancy, which specializes in information technology and business operations, serves commercial and state and local government customers.For now, Compass will rely on partners for introductions to government customers. But Burkett said Compass eventually may carve out its own place in the market. "I would not rule it out, but it would require us to change our business model and set up a federal division. When the time comes, we will evaluate that decision," he said.Jerry Grossman, a director with the investment banking firm Houlihan Lokey Howard & Zukin of McLean, Va., said the company has an "interesting business model" because it focuses solely on providing high-end consulting services for information technology efficiency in large organizations.Compass analyzes clients' hardware, software and operating procedures, then compares the data to information gathered from its Fortune 1000 clients. The comparison, said Burkett, reveals areas of inefficiency and offers recommendations for improvement. Burkett said the privately held company does not release revenue figures. However, a company official said revenue grew 25 percent from 1998 to 1999. Company officials project a 24 percent growth rate for 1999 to 2000. During the past five years, he said, the average growth rate has been 35 percent.Compass employs 200 people in 13 offices worldwide, including U.S. offices in Chicago, Reston, Va., and San Francisco. Burkett works in the 35-person Reston office, which was responsible for making the connection with PEC on its first federal award."We found that Compass' extensive benchmark database brought a best-of-breed comparison capability that would help us meet the Joint Chiefs' specific requirements," said Joe Simpson, director of PEC's enterprise analysis center. "We think combining Compass's strengths with PEC's extensive experience in building and analyzing federal IT systems was instrumental in securing the contract."PEC is the prime contractor on the Joint Chiefs' $327,000 contract. PEC will conduct a performance-level assessment of the Joint Chiefs' information systems, gather data and perform an analysis of future office functional needs with a focus on office automation.Compass will analyze components of the Joint Chiefs' desktop infrastructure, including hardware and software costs, personnel productivity, service levels and work loads. The results will be compared against the performance of commercial organizations selected from the Compass global database to identify areas of strength and opportunities for improvement. PEC will then combine the data and present hardware and software acquisition options for future support and development of the Joint Chiefs' information technology infrastructure.A Compass spokesman said the company expects the Clinger-Cohen Act of 1996 to open more doors for federal business. The act focuses on capital planning and performance-based measurement and requires federal agencies to integrate their information technology investment plans and performance measures into the budget process. Each agency is required to submit a report on program performance for the previous fiscal year by March 31, 2000."That requirement would play directly to their strengths," said Grossman. "The act would seem to provide an excellent opportunity for them in the government market."Although the project with PEC marks Compass' federal business debut, Burkett said 25 percent of the company's North American business comes from state and local governments. In Canada, he said, all 10 provinces contract Compass services.State and local governments, he said, seem to recognize the need to improve the efficiency of their information technology efforts. "One of the common themes with state and local governments that is problematic is that there are a large number of departments acquiring IT services, and they are very fragmented. Each department has its own peculiar approaches and interests," said Burkett. Compass analyzes the equipment and processes of all departments, then offers recommendations on how to improve efficiency throughout the organization.In the United States, Compass has worked with Los Angeles County, Calif., Marion County, Ind., and Mecklenburg County, N.C.The Marion County Office of the Chief Information Officer awarded Compass a contract in February 1998 to analyze 3,500 PCs and 65 servers, looking at the total cost of ownership of the desktop environment and help-desk service levels. The objective was to promote a more efficient help-desk response time and decrease user downtime, a Compass official said. Compass found that few users were calling the help desk, but that average down time per user was higher than it should be, he said. "We made recommendations on support staff and end-user training," he said. "This was a good example of how drilling down to look at details allowed us to understand what was going on."Compass also has worked with the states of Alaska, Colorado, Florida, Michigan and Minnesota. The Alaska study was awarded by the state Department of Administration's Division of Information Services in August 1996 and continued until July 1997. Under that contract, Compass analyzed the state's data center, wide area network and client-server environments, then issued a report with recommendations for improving efficiency.On the commercial side, Compass has won business from Ameritech Corp., Bell South Corp., Chrysler Corp., Ford Motor Co., General Motors Corp. and Mobil Corp. For these projects, Burkett said Compass competes with Deloitte & Touche LLP of Wilton, Conn., Ernst & Young LLP of New York and the Gartner Group of Stamford, Conn. "[Competing companies] don't focus on our type of work, so this is an incidental part of their work, it is not their focus," said Burkett. As Compass moves into the federal space, he said he expects to see these three companies among the competition, as well as the established systems integrators, such as Computer Sciences Corp. XXXSPLITXXX-: 1979: Guildford, U.K.: Chicago, Reston, Va., and San Francisco: 200: Los Angeles County, Calif., Marion County, Ind., Mecklenburg County, N.C., and the states of Alaska, Colorado, Florida, Michigan and Minnesota, Office of the Joint Chiefs of Staff