4 steps to controlling your destiny in 2011

Our panel of experts offers tips on how to work with customers and understand your competitors if you want to be successful in 2011.

EDITOR'S NOTE: This is part two of a three-part series offering advice for success in the government market. For part one, click here .

You’re a realist, you’re resigned to the harsh facts of life in this economy: It’s unlikely your business will hit a historical high in 2011.

But what if it could? What if you could pick the brains of some of the top consultants in the federal IT market — for free — and build a strategy that would leave your competitors in the dust?

Washington Technology asked Ray Bjorklund, senior vice president and chief knowledge officer of FedSources Inc.; Philip Kiviat, partner at Guerra Kiviat Inc.; Kevin Plexico, senior vice president of research and analysis services at Input Inc.; and Warren Suss, president of Suss Consulting Inc., for their best stratagems to help a company in the federal market best keep its existing customers and add new ones in the coming year. Here’s what they said.

1. Get the message

“The advice we give companies depends to some extent on whether they’re a startup or a big aerospace company,” Bjorklund said, “but for anyone, we recommend taking a careful look at the [federal] budget to get a sense of where the emphasis is shifting.”

In his 2010 budget, President Barack Obama paid attention to the “Main Street” economy, Bjorklund said, “but the difference for 2011 is that Main Street is now the focus.”

The 2010 White House budget also showed a concern with energy efficiency, health care reform and better education.

“All of those same themes are back for the 2011 budget,” Bjorklund said, “but with a job spin. It’s not just the Main Street economy, but creating new Main Street jobs; it’s still energy, but skewed toward creating more clean energy jobs; it’s education, but concerned with retaining jobs for teachers,” he said.

Reading between the lines of the White House budget to detect shifts in emphasis isn’t enough. Nor is adapting the way you present yourself to reflect those shifts.

“You also have to pay attention to what’s happening on the Hill,” he said. “Those messages may not be consistent, but businesses have to be able to discern their subtleties and get in line with them. If you’re resonating with those messages as well, you’re likely to be more successful.”

2. Map your goals

“Especially for smaller companies, it’s important to make sure you’re very thoughtful about what your capabilities are and where they fit in the competitive landscape,” Plexico said.

Of late, “the big growth has been largely in agency-specific contracts such as [the Army’s Enhanced Army Global Logistics Enterprise] Eagle,” he said.

That’s likely to continue, Suss said. “The FBI just established a new IDIQ vehicle, IT Supplies and Support Services, for the FBI and other Justice Department offices.” No agency wants to get a call from a congressional oversight committee or the Government Accountability Office. “I think from a political point of view, use of these contracts will draw less attention,” he said.

“Agencies like having their own contracts,” Plexico said. “It lets them deal with statements of work and other issues upfront and award task orders without renegotiating. It also gives them a bit more control in that they can break work into smaller pieces and make awards to different contractors, so they can be seen to not be wedding themselves to a single contractor and not draw unwanted attention to themselves.”

That can mean opportunities for small companies, both to get a slice of the pie and to get an in with an agency. But the shift from big, single-award contracts that open opportunities for small companies will mean that mid-size and especially large companies “are going to need new strategies and tactics to go after that business,” Suss said.

Small companies will have to decide whether it’s better to try to get on an agency-specific contract on their own or land a partnership with a large prime.

That’s where mapping company goals to market topography — having a well-thought-out strategy — is vital to effective decision-making, Plexico said.

“Companies need to choose which opportunities to go after and think about which customers they want,” he said. Look at your long-term goals to help “target which acquisition vehicle, which prime contractor can help you accelerate your development, and which agencies are the best fit,” he said.

Making those decisions first lets companies put their resources into pursuing opportunities where returns for them likely will be greatest.

3. Know thyself

Mapping goals is an important part of a company’s long-term business plan, but it can’t be a merely academic exercise. A strong dose of rough-and-tumble market reality is also called for, Kiviat said.

“Knowledge of an agency or a skill that fills a niche are the only way you’re really going to get in,” he said. “You can’t ride on anyone else’s business development plan.

“If you’re a smaller company, you have to realize that people are only interested in you if you have some specific agency knowledge or maybe your sister-in-law is CIO of an agency, or you did work for the agency before or developed some special technical capability that the agency needs.”

Knowing where your company’s strengths and weaknesses lie, as well as where market demand is growing, are essential to selling yourself to prime contractors as a potential — and valuable — subcontractor.

The days when IT companies can create a channel relationship and use it to help nurture a business relationship with an agency over the long term are pretty much over, Plexico said. “It’s hard to start from scratch. Today companies will buy their way into the market, agency or contract vehicle.”

That generally requires deeper pockets than most small, even mid-size companies have. “But there are going to be losers” among federal IT market players, Suss said. As the year progresses, opportunities to grow by acquisition are likely to increase, he said.

4. Know thy competition

With global and U.S. economies limping along, especially in private-sector markets, the federal IT market is seeing an influx of “new players competing for fewer dollars,” Bjorklund said.

The increased competition is good for government because it’s likely to keep overall prices lower, he said.

“It’s not so good for industry, because industry would like to see increased margins on federal contracts, and that’s not likely to happen in the next couple of years. So companies will have to further tighten margins that are already pretty tight, which they tend to be in federal contracting.”

Tighter profit margins mean less margin for errors in judgment and more need to know your competition.

Bjorklund isn’t what you’d call sold on social networking tools for offering that insight. “You can use some technology to keep an eye on competitors,” he said. “But the data they generate shouldn’t be taken at face value.”

Rather than yielding any useful insight, “some technology tools out there are being used by individuals to express personal thoughts and report personal activities rather than those of the company,” he said. “And there are other cases where it’s just another marketing tool.”

In any case, they are no substitute for ongoing research into your competition. “The more adept you are in understanding where your competitors’ heads are, the better able you’ll be to succeed,” he said. “To compete successfully, you have to understand where they [as well as your company] stand in the ecosystem.”

Continual oversight of your competitors will help you know when they stumble or their relationship with a customer starts to sour and react. “You have to think ahead; if they’ve annoyed their customers, how will I take advantage of that?” Bjorklund said.

Looking inside — inside your company, your goals, your competition, the works of those who control the purse strings — is where you start building a successful business campaign. And then you widen the circle, our experts explain in the final third of our special feature on smart strategies for success in the coming year.

NEXT: In part three, our experts explain four critical strategies to compete in today’s market.