CSC resets with inward look

Computer Sciences Corp. spent much of 2012 adjusting some contracts and trying to hold onto others.

In March, CSC restructured its $3.7 billion, problem-plagued IT contract with the United Kingdom’s National Health Service to deliver healthcare solutions and services. And it corrected security problems in the cloud-based Google e-mail system CSC had been building for Los Angeles municipal workers.

This year CSC ranks No. 9 on the 2013 Top 100, with $3.2 billion in prime contracts, despite the Air Force cancellation of its $1 billion Expeditionary Combat Support System logistics management contract.

 “Twenty-twelve was not a quote ‘record year’ for anybody,” said David Zolet, executive vice president and general manager of CSC’s North American Public Sector, the successor to James Sheaffer, who retired midway through 2012.

Zolet prefers not to dwell in the past. He’s bullish on CSC because of the adjustments the company continues to make. “Transformation is a journey,” he said. “Right now we’re in the ‘get fit’ part of the journey and spending a lot of time getting our operating model in place.”

CSC is migrating from “a holding company mindset to an integrated operating mind-set company,” so it can more easily leverage CSC’s commercial capabilities for its government clients.

“Never in the years that I’ve been in the public sector space,” he added, “has the agenda of the public sector CIO been so aligned with the private sector.”

At the same time, CSC is looking inward. “We’re really looking at everything we’re doing, how we’re doing it and why we’re doing it, to take as much cost out of our business as possible,” Zolet said.

As an example, “We’re taking layers of management out of our organizational construct to improve our agility and also to improve our ability to communicate and drive decision-making closer to our clients,” he said.

But, Zolet added, no matter what is happening in the federal market now, whether it’s defined by sequestration, continuing resolutions or budget control, “our clients are going to have to learn to do more with less.”

And that of course applies to CSC as well.

“What we noticed about 2012 was the number of [contract] opportunities was about the same [as 2011]. They were just smaller,” he said, and procurement time was longer. “Because of the uncertainty in client budgets, things have been happening slower than usual. I think that’s really the big takeaway for us.”

CSC’s 2012 contract wins included:

• A two-year, $220 million task order from the Army Communications-Electronics Command for worldwide logistics support.
• An Army firm fixed price 10-year contract for simulator-based flight and related aviation training device upgrades worth $34 million. 
• A $91 million, seven-year contract for a software-as-a-service solution using Microsoft Office 365 secure cloud environment for the FAA’s Enterprise Messaging System.
• A three-year, $74 million task order, from the Information Technology Enterprise Solutions Services IDIQ contract to provide information management support to the U.S. Southern Command’s Command, Control, Communications, Computers and Intelligence Support Center.

CSC’s main focus in 2013 and beyond includes data center consolidation, cloud migration, and “as a service” activities such as Microsoft’s Office 360 applications.

 As for sequestration, Zolet said CSC for several years has been positioning itself and adjusting to government budget-cutting activities. “What’s interesting is that the threat of sequestration, I think, was a bigger issue than sequestration [itself]. The threat of sequestration caused our clients to slow down and not make decisions,” he said.

“I think now that we getting through the process – and I still think we have a ways to go – we’ll start to see that they’ll be able to make the plans that they need to make and then start doing the things they need to do. And I think the pace should pick up on the acquisition activity.”