New structure prepares Northrop for growth

Merger of IT and Mission Systems units creates broader business base

The government market in the United States and abroad is changing rapidly, and Northrop Grumman Corp., the No. 3 company on the Top 100 list, knows it has to change to keep pace.

The company demonstrated its commitment to evolving in early 2009 when it merged its Information Technology and Mission Systems units to create Northrop Grumman Information Systems. The combination created a business unit with $10 billion in revenue and 35,000 employees. It is the largest of Northrop Grumman’s five business units.

“The realignment creates additional mass, agility and resources to respond to our customers’ needs,” said Linda Mills, corporate vice president and president of Northrop Grumman Information Systems. Mills led the company’s IT business before the two sectors were merged.

Governments around the world are changing their strategies and funding to address issues of security, stability, the economy, energy and the environment, and Northrop Grumman officials believe those changes present new growth opportunities.

“This is especially true here in the United States,” Mills said. “The economic stimulus package and [Defense] Secretary [Robert] Gates’ new budget priorities reflect this trend.”

The new Information Systems unit will help Northrop Grumman address those trends and help agencies meet new mission requirements, she said.

The company can now bring together expertise more quickly in areas such as cybersecurity, which is an issue for all the company’s customers, Mills said.

The new business is structured around four divisions: defense systems, intelligence systems, civil systems and advisory services. The latter provides analysis and advice for all of Northrop Grumman’s customer sets.

“We’ve structured our new sector with one overarching goal in mind: a laser-like focus on our customers’ enduring needs,” Mills said.

For Northrop Grumman’s customers, the biggest challenge is doing more with less. “Already tight budgets are spread against growing and shifting requirements,” she said. “And our customers, as well as their contractors, are depending on an aging and retirement-ready workforce.”

The challenge for the government lies in designing, buying and managing large integrated information systems. The government is also accepting what Mills called 75 percent solutions to get new capabilities delivered on schedule.

“This will mean more upfront investment and different approaches to customer solutions than might have been adopted previously,” she said. “Our customers will be looking for quicker and more efficient ways to achieve their mission objectives.”

Northrop Grumman shares one challenge with its competitors and customers: finding qualified people. Mills said the company expects to hire 5,000 people in the coming year, similar to the number it has brought on board in previous years.

“We need talented and highly skilled people to help us meet our customers’ needs now and well into the future,” she said.

The new structure will help the company pursue opportunities created by the economic stimulus law. “These new priorities — like climate change, health care, energy and cybersecurity — present opportunities perfectly suited for our new sector,” she said.

Beyond the stimulus package, Northrop Grumman officials said they believe the current economic and security environment will also create opportunities. “We are right in the sweet spot when demand by the Defense Department for command and control and mission support services is growing,” she said. Company officials also see a rising demand for intelligence systems, data fusion and data interpretation.

“This new combined sector has a capability suite that places us at the forefront of industry,” Mills said.

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About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

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