Firm sets strategy for government market

In a large, airy room divided by moveable walls and tables, a group of about 50 information technology executives gathered last month to map out a strategy for Cap Gemini Ernst & Young S.A.'s entry into the U.S. government market. Scattered around the room were business books, stuffed animals, dolls and other toys. Classic rock pounded in the background,

Throughout the day-long session, the group -- which consisted of CGEY executives and board members, representatives from prospective business partners and experts on how the government operates -- identified trends in the government market and sought out potential matches between agencies' needs and the company's established strengths in the commercial marketplace.

By the end of the day, company officials were uncovering ways to use their extensive client base to carve out a government niche. "There were a few 'ahas,' a few creative ideas and a few confirmations of going in the right direction," said Bob Patton, chief executive officer of CGEY's U.S. public services group.

The company calls this exercise an "accelerated solutions environment," which refers both to the place and the hands-on brainstorming session. The process is something CGEY usually conducts for clients to help them draw on shared expertise and stimulate insights. But the company, aiming to establish CGEY in the federal market, decided to use the process on itself.

"We eat our own dog food," said Mark Hauser, the chief executive officer of CGEY's North American business.

Patton said the company considers itself "an $8 billion start-up," because it is such a newcomer to the government market. Paris-based Cap Gemini, a global consulting company, purchased the consulting arm of Ernst & Young, the American accounting firm, less than three years ago. Cap Gemini had a long tradition of public-sector services, while Ernst & Young had stayed out of the government space. As the organizations have combined into a single entity, global CEO Paul Hermelin, who originally came out of the public sector, has encouraged the link between the public and private sectors.

The company won its listing on the General Services Administration's Schedule 70 in July 2002, and in September it was one of five recipients of a $500,000 contract from the Naval Sea Systems Command for the deployment of rapid, low-cost enterprise solutions. And, Patton said, "We have five contracts in process with [government] customers to do an ASE event, a collaborative approach to solve their problems."

The methodology for the accelerated solutions environment is patented, said Tom Kehner, senior manager in consulting services, who served as the "sherpa" for the day's event.

The company has conducted ASEs for more than a thousand clients in the past several years, said Rob Evans, CGEY's global leader of ASEs. There are 20 such centers around the world right now; the Washington ASE is the most recent addition, but new centers are soon set to open in Munich and Copenhagen, he said.

The basic steps in the process are these: Scan the company and the current political, economic and social climate; focus on specific factors that will affect the company's success; and develop a strategy and an action plan to carry it out. It sounds simple, but each session requires considerable preparation and the days can be grueling.

"We normally take one complex problem, like how to set up the Homeland Security Department, and you scan it, focus it and [design how to] act on it," Patton said.

Two new CGEY board members, former Undersecretary of Defense for Acquisition Jack Gansler and Michael Bayer, vice chairman of the Defense Business Board, were able to see how the process works. Patton said he wanted Gansler and Bayer to see the assets the company could bring to government, and for them to have confidence in introducing CGEY to their network of business and government contacts. At the same time, each man shared his knowledge of the government market.

[IMGCAP(2)]Executives from the company's commercial business, such as Hauser and Fred Crawford, executive vice president of sales and marketing, acquired a taste of how the government operates and how it differs from other sectors. Company executives drew upon their familiarity with the company's expertise in such areas as health care and technology to help develop a plan for addressing government needs.

"I wanted Mark Hauser to appreciate the complexity because I want him to step up and [provide the resources]," Patton said.

Representatives from potential industry partners -- including Honeywell International Inc., Hewlett-Packard Co., Science Applications International Corp. and SRA International Inc. -- helped shape the strategy, while also seeing firsthand how the unique brainstorming process could be used by their own customers.

"They invited me because [they] are looking to find better ways to enter the federal government ... how to do this from the commercial side, bringing their best practices," said Bruce Klein, vice president of Hewlett-Packard [Co.'s] federal unit. "They're coming to us as a potential partner to go to market with."

Among those most familiar with the government's current thinking were Mayi Canales and Debra Stouffer. Canales, the former acting chief information officer and assistant deputy secretary for information systems at the Treasury Department, now heads her own consulting firm, M² Strategies LLC. Stouffer, after serving as the Environmental Protection Agency's first chief technology officer, is with DigitalNet Inc.

"I think what they learned is to get to know the market and what [agencies need]," Canales said, adding that health care process re-engineering could be a big strength for CGEY.

For example, one group that brainstormed ideas for gaining entrée in the developing homeland security market suggested using the company's well-established role with private hospital systems to design an emergency resource allocation system that ties into first responder and government teams at the scene of a disaster or attack.

After listening to many of the participants with government experience, the entire group concluded that, in the face of institutional resistance to change, it is important to reach the thin layer of young, aggressive chief information officers who support the president's five-point management agenda.

Participants also concluded that CGEY should get closer to its target agencies, as other successful companies in this space do. The company should know its government customers so well that not only will it know what criteria they're using to evaluate proposals, but CGEY can influence development of those factors much earlier in the process.

Several days after the Feb. 20 brainstorming session, Patton said it would take him a little time to go through the ideas and strategies developed, but he was satisfied with the results.

"The lack of trust in this market is amazing. The number of bad partners is amazing," he said. "We wanted the partners to get a feel for how collaborative our [process is]." *

Staff Writer Patience Wait can be reached at pwait@postnewsweektech.com.