BDM Initiates Product Strategy

P> C. Thomas Faulders knew that for BDM to increase its commercial market share, it must create products from its systems integration work -- and market them. In the argot of systems integration, he would have to learn how to "productize" services.

"Productizing is not a big deal. It's just a matter of getting the right kind of focus, [and it] has been done for years," Faulders said. "I worked at MCI for a number of years, and we had 74 different names for dial tone."

An MCI alumna as well, Seltzer was the sole candidate for the job at BDM International Inc., McLean, Va. She worked as director of product marketing for MCI Communications Corp. and then was vice president of marketing and sales access services for Bell Atlantic Carrier Services.

But marketing to the commercial world is different than marketing to the government. In the government arena, a firm is selected on the basis of its response to a request for proposals. Commercial businesses glean much more information from brochures and promotional campaigns centered around specific products.

And it's no wonder Faulders is focusing on commercial markets. They are BDM's fastest growing segment. In 1992, only 2 percent of its client base was commercial business, which generated $8.5 million. In 1995, it was 15 percent, with revenues of $135 million.

BDM's objective is to enhance its commercial capabilities, said Moshe Katri, senior equity analyst with Oppenheimer &amp Co. BDM is well-positioned in the commercial and government side, Katri said.

After a recent second public offering, BDM's stock has been hovering around $44.25, up from a 52-week low of almost $20.

Seltzer's first priority is to develop a marketing campaign for Cybershield, an Internet server BDM developed for government use. Faulders said the server is so secure that government cryptologists can't break it.

Next on the priority list is evaluating the reuse potential of system architectures the company has created. For example, a criminal justice system to track criminals is the perfect building block for a telecommunications customer care system that tracks individual order entries and billing. Reusing software will give BDM an edge because it will allow the firm to fulfill contracts more quickly and at a lower cost, said Faulders.

Product margins will increase and become more predictable, said Steve LeCompte, vice president of International Data Corp.'s Government Market Services in Falls Church, Va. Because it sells products and solutions at a set cost instead of billing by the hour, BDM also will face less customer scrutiny, he speculated.

"It's an innovative approach and a good idea," LeCompte said. More companies will need to start viewing their services as commodities, or they will lose business, he said.