ITT consolidates IT units to sharpen focus

ITT Corp. trims its business units to three in a move that it says better positions the company for growth in the government market.

Earlier this year, ITT Corp. reorganized its $6.3 billion defense business by consolidating seven product-oriented business units into three integrated units that will focus on electronic systems, geospatial systems and information systems.

That move positions ITT for the future and is already having a significant impact on the company’s ability to serve its customers and win new business, said John Shephard, vice president of strategy and business development at ITT Defense and Information Solutions.

ITT finished in the No. 14 slot on the 2010 Top 100 list, with $2.1 billion in 2009 prime contracting revenue dollars.

During the past 10 years, the company built its success on providing point solutions to critical problems that the military services faced in their war preparations and campaigns in Iraq and Afghanistan. Those solutions included night vision goggles, jammers and security tools.

“However, looking forward, we have learned as we’ve been supporting them just how critical it is becoming to provide ever more capable and integrated systems because the enemies that our forces are fighting are becoming more sophisticated as well,” Shephard said. The company has already won several new opportunities in 2010, including a $125 million award from the Army Contracting Command to support its operations in Qatar. 

“These are the needs going forward not just in the next couple of years but the next couple of decades,” he said.

ITT hopes to build on its 2009 success, which was marked by record earnings. “We increased our productivity, made a lot of headway in new markets and spent a good deal of time developing strategies for long-term growth,” Shephard said.

One of the most significant wins was a $363.1 million, two-year award to provide another 58,000 Single Channel Ground and Airborne Radio System radios and related products and services to the Army’s Communications-Electronics Command. The company also celebrated the delivery of its 500,000th Sincgars radio.

ITT’s growth in 2009 also was fueled by a 30 percent jump in international sales. “As all of us who are in the defense business are looking at the plateauing of U.S. defense spending, we’re looking forward and looking out for opportunities,” Shephard said. “We had a record year internationally, and we’re shooting for another year of very vigorous growth as well.”

The company’s international performance was buoyed by an award to build imaging systems for two geostationary satellites for the Japan Meteorological Agency and unprecedented demand for ITT's night vision goggles. “It was a record year for our night vision goggles in international markets," Shephard said. "But as great as that was, we’ve already broken that record this year, and we’re not even halfway through. So that’s pretty exciting.”

ITT will take advantage of its new consolidated business units to pursue a number of major awards this year, he said. They include the data communications leg of the Federal Aviation Administration’s Next Generation Air Transportation System; the recompete of the Enhanced Night Vision Goggle award, which ITT already holds; an opportunity to support the Army Corps of Engineers in Afghanistan; and at least two sustainment and logistics opportunities in the Middle East.

Shephard said ITT expects modest growth this year but is focused more on looking further down the field. “We’re really looking to develop our pipeline and look at good acquisition opportunities so that we can build in areas with long-term growth for the company beyond the surge of the war effort," he said.