"Our sales force was primarily set up to work through and focus on the resellers," said John Guy, general manager for HP's federal sales/computer products organization in Rockville, Md. "We didn't have too many sales resources that worked toward the end-user environment. The new environment requires us to be there for the end user and realize what their needs are. We don't think we're at a time where you just comb through Commerce Business Daily to find out where the business opportunities are." There is considerably more focus now on government customers, especially their feedback. Sales staff are using e-mail, direct marketing and personal contact to get a handle on whether HP's products suit customers' needs and see if they can be marketed to other agencies. The goal is to parlay greater end-user awareness into a savvier knowledge of federal marketplace opportunities, company officials said.
The nation's second-largest computer company, HP ranked 66th last year among infotech companies doing business with the federal government, with more than $49.3 million in contracts. However, that accounts for only HP's direct government work. HP estimates its entire federal government business revenue, including products sold to resellers which end up at agencies, at $1 billion.
Procurement reform is the spark for the company's latest moves. A leading supplier to the General Services Administration, HP officials depict a blooming forecast for its reseller partners with government customers, noting that the GSA's increased price and product flexibility has sparked a favorable commercial-like environment.
New procurement procedures that encourage government contract arrangements among agencies - slicing interagency purchasing fees - puts HP in a good position as well. The company's inkjet and laser printers, network scanners, digital audio-type drives, servers and other products are used by the U.S. Air Force and Navy, as well as NASA, among others.
HP's relationship with Government Technology Services Inc., Chantilly, Va., and AmeriData Technologies Inc., Minneapolis, to provide LaserJets and Vectra PCs for the Navy Tactical Advance Computers program in San Diego should springboard into sales opportunities with other agencies, officials said.
"What's happening is that you're getting a big plate of spaghetti," Guy said. "All of these things can intertwine and relate to the others. We really needed to get someone who really understood this."
In this vein, HP appointed Alan Lawrence to the new position of strategic programs manager in Falls Church, Va. A former GTSI vice president of strategic development, Lawrence will improve communications with federal customers and energize contract strategies.
Guy's unit, which accounts for about one-third of all federal government revenue, is eyeing 20 percent growth for this year. That's why the federal sales arm is being expanded from a regional to a national presence, Guy said.
Staffing has increased by 30 percent, and just under 30 people work there now. More sales staff will be added in the Midwest, South and Southeast as well, for example. The result: When a reseller partner or end user in those regions has a question for HP, they'll have someone with federal contract sales expertise, as opposed to a staffer more familiar with the commercial side of business.
HP is considered a company that stays ahead of the curve, so its recently launched plans for federal sales make sense, said David Wu, an analyst for ABN-AMRO Chicago Corp. in New York. The typical salesperson, once equipped with computer, cell phone and other support, costs $100,000 a year, Wu said. So a company should expect $1.5 million in sales business per staffer every year to remain profitable.
The federal government is tired of being inefficient, so HP has to realign with what the customer is doing," Wu said. "You need a strategy. You need the most effective way to deal with the customer."