If you build it, they might come

Accenture launches aggressive plan to boost defense contracts

Accenture Ltd., known primarily as a global
consulting company, has set its sights on
becoming equally well known as a Defense
Department contractor.

To meet that goal, the company,
based in Reston, Va.,
bought three information technology
providers that have worked with the military
and has developed a multimedia IT solution it
hopes to sell to command-and-control

After Accenture split from Andersen
Worldwide in 2001 and became an independent
company, its defense contracts consisted
primarily of designing and building financial
and human resources systems, including a
major implementation for the Defense
Logistics Agency.

As a result, Accenture realized annual
growth rates of 40 percent to 60 percent.
However, about two years ago, its military
contracting began to level off, said Eric
Stange, chief executive officer and president of
Accenture National Security Services LLC.

Company officials conducted a comprehensive
growth strategy exercise that concluded that
command and control, or C2, was a defense area
"where our core competencies still applied and
were quite relevant," Stange said.

The exercise also concluded that Accenture
had two options to win C2 customers.

"We could take the slower path of trying to
earn our way in over time, which we had been
doing for a couple of years anyway without
much success," Stange said. The other strategy
was to rapidly increase Accenture's defense
capabilities through acquisitions.

"We convinced ourselves that the time was
right," he said. "We were ready to go, and we
essentially selected three target companies to
go after. Happily, we were successful in getting
all three of them in very rapid succession."

Between August 2007 and January,
Accenture bought George Group, a private
management consulting firm in New York;
Maxim Systems Inc., a San Diego defense contractor;
and Gestalt LLC, a defense consulting
company in Camden, N.J.

The trio will be rebranded and fully integrated
into Accenture's Defense Group this
summer, Stange said. They will strengthen the
company's marketing strategy as it competes
against major contractors such as IBM Corp.,
Raytheon Co., Lockheed Martin Co., Northrop
Grumman Corp. and BAE Systems Inc., he

Perhaps even more important to potential
sales, the acquisitions give Accenture a critical
nationwide presence near major military
installations. "The buying commands like to
see that you are committed to the local area,"
he said.

Maxim Systems and Gestalt especially "give
us domain knowledge because they are on the
ground today working with these buying commands,"
Stange said. The acquisitions might
also give Accenture more credibility with the
commands' procurement officials, "maybe
enough to help them make that final decision
to contract with us," he added.

While the acquisitions were still in the
works, Accenture asked its commercial Media
and Entertainment Group to design and build the Command and Control Multimedia
Solution, which builds on the commercially
available software that film and TV companies
use to create on-screen graphics and displays.

The Accenture solution fuses battlefield
information, data from numerous other
sources, and online audio and video so commanders
can collaborate and make critical
battlefield decisions in real time and in a
secure network environment.

To ensure that the multimedia solution
meets the needs of the military involved in the
war on terrorism, Accenture hired William
DelGrego, a retired Air Force fighter pilot with
command and control experience, notably in
the Gulf War of 1991.

"There is an insatiable appetite for video,"
DelGrego said of C2 requirements. There's a
need for big-picture views from the skies
above Iraq and Afghanistan and for detailed
images taken, for example, by soldiers with a
helmet-mounted video camera
patrolling the streets of Baghdad or

Creating a real-time multimedia
solution that includes archived audio
and video presentations and pertinent
text material, he said, helps commanders
make moment-to-moment decisions about
targets, avoiding enemy ambushes and protecting

"Across the globe, all these folks [can] work
collaboratively on the same problem,"
DelGrego said, and create video briefings for
the next shift rather than lengthy paper
reports that are time consuming to read and
often out of date by the time they are read.
Accenture's solution also includes cybersecurity
elements that block viruses and lock out
hackers before they can get into a user's

"Given that I have a valid user ID and password,
I can get into my applications, but anything
else running on this machine won't be
able to see inside that encrypted bubble," said
Peter Westcott, Accenture's director of public
service technology consulting. When the session
ends, the encrypted data is destroyed,
leaving nothing in the computer for an intruder
to detect, he said.

Now Accenture must prove the value of the
solution to C2 procurement officials, many of
whom are averse to risk and often more comfortable
with well-established contractors,
Stange said.

"It's a leap of faith to a degree," he said, "for
someone to sit there and listen to Accenture's
view on how this problem could be addressed
and then make the decision to eventually
award us a contract to go do it."

Some analysts also are skeptical. "I'm not
that optimistic about that solution," said Mark
Kagan, research manager at IDC Government
Insights. "It is a way of getting themselves in
the market and showing that they're trying to
be innovative. But I think that in the long
term, acquiring those companies ? and any
more down the road ? is going to be more
useful to them."

In addition, Kagan said he believes several
major defense contractors are developing or
have similar solutions. "That's pretty heavy
competition for someone who's a newbie in
this, so I don't know what their chances are of
selling it."

Accenture might succeed if it can sell the solution
for less than its competitors' offerings
and if it can be integrated into the
Defense Department's net-centric warfare
program, which is where the military
is spending its money, Kagan said.

Accenture will pursue every opportunity
to sell the solution, Stange said, and
added that it can be a valuable tool for first
responders, including state and local health
care providers, power grids, fire and police
departments, and civilian emergency management

"Where we might have been bit players individually,"
Stange said of Accenture and its
acquisitions, "now we are targeting either significant
[subcontracting] roles or priming a
couple of them ourselves."

David Hubler (dhubler@1105govinfo.com) is an
associate editor at Washington Technology.

About the Author

David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.

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