Inside Booz Allen's systems delivery strategy

Booz Allen Hamilton’s recent acquisition of the software services unit of SPARC is just another step in a multi-year strategy that the company calls Vision 2020.

The SPARC unit has become part of Booz Allen’s systems delivery business headed by Gary Labovich.

I spoke with Labovich earlier this fall about the systems delivery business and how it represents an evolution that has been taking place at Booz Allen in recent years.

“When I came here 11 years ago, we didn’t do a lot of technology development work. It was relatively small and it was in pockets across civilian, defense and intel,” he said. Labovich joined Booz Allen from AMS.

Booz Allen was doing its consulting work and over time was adding more and more implementation work.

“Then you wake up one day and go, “Holy cow, we have about a billion dollars in systems deliver business,’” he said.

The systems delivery work includes software development, requirements development, integration work and operations and maintenance.

When the company realized how big that part of the business was, it also realized it didn’t have a good handle on the risk profile of that work, so it turned to Labovich 18 months ago to get things organized.

The company has a variety of contract types doing systems delivery including fixed price, time and material and cost-plus. It’s a very different risk profile from the company’s traditional consulting work, he said.

One of the first steps was building the infrastructure to support the systems delivery business. This meant putting in processes, procedures, risk management practices and getting better insight into the kind of systems delivery work Booz Allen was doing.

“We’re doing literally thousands of projects. Some big, some small, some medium,” Labovich said. “We have to make sure we have the appropriate oversight and insight into what we’re doing.”

Over the last year, Booz Allen has been moving toward more projects based on cloud development, Agile methodologies and what many call DevOps (development and operation).

“The old model was you interviewed 20 people, you got the requirements and you went away for six months,” he said. “Then you show up and say, Here’s your system.”

The customer’s reaction was often, “What? That’s not what I asked for. Or I’ve changed my mind,” he said.

The new model means closer collaboration with the customer and working in tandem with them. “What that requires is great consulting skills, real sensitivity to organizational change, and adaption and adoption,” he said. “That only comes from a firm that has a consulting heritage, which we have.”

The company also has come to understand that its sweet spot in the market isn’t necessarily to go after huge projects, but projects that can bring in $10 million to $50 million a year.

For example, the IRS awarded the company to build the engine for determining the tax credit for people buying insurance through the federal or state health insurance exchanges.

“That wasn’t a $100 million program. It was much smaller than that, but from a mission perspective, it was the highest priority for the agency,” Labovich said.

More recently, the company won a $202 million contract from the Centers for Medicare and Medicaid to be the marketplace systems integrator for the federal health insurance exchange. The contract means Booz Allen will be working closely with Accenture, which is responsible for the HealthCare.gov website.

Labovich described Booz Allen’s role as more of a program management role. “We’re helping to coordinate testing that gets done on new releases… and making sure the work Accenture is doing syncs up with the work on a number of other systems,” he said.

For example, when the state exchanges put in new insurance plans that information needs to be fed into Accenture’s system. “We’re coordinating all that,” he said.

The CMS and IRS contracts are examples of high profile, high priority projects. “If we dropped the ball, the impact would just be severe, but the thing is, that’s the kind of work we want to do,” Labovich said.

As Booz Allen began getting its arms around the systems delivery business, it didn’t pull the people and pieces together into a single organization. It’s kept a structure as one primarily defined by markets, not functions. Labovich said his organization is relatively small, but it provides the processes for how the customer accounts get the systems delivery work done.

“Each of the accounts has a set of folks focused on doing this kind of work,” he said. “We provide a risk review process. Our reps will sit down with the various accounts and say, ‘Let’s look at this job. What are the risks? What are the things we need to think about as we get ready to bid it?”

The discussions include how are they are going to address the customer’s need? How will they protect themselves if things go wrong?

“We have people assigned to each one of the accounts who provide oversight and review, both pre-award and during execution,” he said.

Labovich’s organization is also trying to build the company’s intellectual capital. For example, they’ve created playbooks on how to do Agile methodology, write secure software code and do devops.

“We share that intellectual capital with each of the accounts so that everybody has a common methodology for how to do this work,” he said.

The group’s pipeline is growing because customer demand is on the rise, he said. Labovich’s organization is putting a lot of attention on work that involves digital, social media and cloud technologies. But it also is still doing a lot of legacy systems work as well.

“Five years ago, [the IRS] didn’t have the ability to take an iPad and go into the field for an audit, but today they can,” he said. The information from a mobile device than can feed into the IRS’s legacy mainframe systems. “We’re helping them get into that new world, while preserving the old,” he said.

The company has identified the systems delivery business as a growth platform and has been investing in new technologies around cloud, mobile and Agile. The acquisitions of the SPARC unit brought more Agile development capabilities.

Booz Allen also is a partner with Amazon Web Services. In October, it announced a partnership with Splunk for predictive security analytics and threat intelligence.

“These new technologies are opening up a new world of alliances and new opportunities,” he said.