4 steps to a more successful government business
Our panel of experts offers more tips on succeeding in a changing market
EDITOR'S NOTE: This is the third in a three-part series on how to succeed in the federal IT business in 2011, in which our experts give away their best advice.
Part one is here
part two is here
Pulling yourself up by your bootstraps is a fine part of the American tradition, but nothing says a company can’t accept some no-strings help when it’s offered. That's especially true in today’s tough economy.
Washington Technology asked for some of that business advice from Ray Bjorklund, senior vice president and chief knowledge officer at FedSources Inc.; Philip Kiviat, partner at Guerra Kiviat Inc.; Kevin Plexico, senior vice president of research and analysis services at Input Inc.; and Warren Suss, president of Suss Consulting Inc.
In the first and second parts of this series, they told us what to avoid and where to start building a plan for success. In this final installment of the series, they suggest where to look for that extra edge. 1. Be ready to move
Sure, there are significant business challenges today, Kiviat said, “but behind every problem there’s an opportunity.”
For example, he said, the "controversy [as to whether to continue the 8(a) set-aside for Alaska Native Corportions] that arose earlier this year will likely be killed by Republicans. The Democrats were on their way to doing that, but the Republicans will finish it.”
When that happens, he said, it will create opportunities, because then “the market they had will be available to everyone else.”
“It’s time to re-examine your position in the marketplace,” Suss said. “You may be able to offset some losses by expanding into other agencies, other opportunities than you have traditionally been in.”
Take the Future Commercial Satellite Services Acquisition (FCSA), he said. “It’s a good example of where government is looking to enable easier direct purchase of commercially available capabilities.”
It’s also an expanding opportunity. Its original ceiling estimate of $5 billion over 10 years has recently been upped by 30 percent, including not only the Schedule 70 transponded capacity part of the vehicle but also the five-year multiple-award, indefinite-delivery, indefinite-quantity portion of the acquisition, Custom Satellite Communications Solutions (CS2) and CS2 Small Business. Certain FCSA consulting services are available only on CS2-SB. 2. Watch the tech trends.
Chief among these may be the migration to the cloud, starting with software as a service, but progressing toward platform or applications as a service.
“Opportunities will be great, but different”, Kiviat said. In the federal IT market, “large resellers once dominated, but now they’re getting out [of that business] because that’s not where the money is anymore; now it’s in services,” he said.
Companies need to retool — fast — to make that switch. “If you don’t pay attention and change, you’ll be left behind," he said. "That happened to GTSI. It was a very profitable and efficient reseller, but it took too long to figure out how the market was changing and switch to services."
The push to put wheels on everything has an allure that makes for great headlines and sales pitches. It’s also making inroads that companies cannot afford to ignore -- some more than others.
“As the idea of using mobile applications becomes more widespread, it opens the market to smaller firms,” Kiviat said. IPods and iPhones alone have hundreds of thousands of applications, he said. “There are a lot of new people building these applications and making fortunes selling them.”
A strength in such new skills can set a company apart from its competition. “If you’re a small company that’s been developing iPhone apps, say, anyone who wants to go that way would be seeking someone with your skills,” Kiviat said. “I just read where Mercedes is using iPads in their dealerships, and I know the Army is looking at using them.”
Although most of such applications may still be focused on the consumer market, they will branch out, he said. “Today, these developers may not know the business of government, but they will learn,” he said. “All they need to do is find or identify things that agencies need to do and figure out how to put that into an application. I’m not saying it will grow quickly, but it’s inevitable.”
Bjorklund is less convinced that mobility is much of a techno-juggernaut. It’s “an issue,” he said, “but I think, to a great degree, it’s generational.”
A greater driver is cost, he said. “Companies are using it to cut costs, to cut overhead,” he said. “One big company I know wants to close down some of its real estate to save money. It’s almost forcing people to telework to make the company more competitive.”
While the debate on whether to go mobile continues, Bjorklund advises companies to go slow in investing in cutting-edge mobile technology and organizations to go slow in committing to using it. “You lose something with it,” he said. “That hallway collaboration that happens when people meet face to face [is missing]. And that’s something you lose no matter how good your social network is.” 3. Price it, pitch it right.
“With the budget challenges of the past few years, many agencies are just getting by,” Plexico said. “And with the continuing resolutions in place now, a lot of the new work they’ve planned has to be held up until they get the money to do it.”
For example, DOD has been pushing to consolidate and unify data centers. “In the past, it hasn’t been unusual to have different branches of the military on the same base, but using different data centers,” Suss said. “Tomorrow we’ll really start to see pressure to unify data centers not only within DOD,” he said, but also on the civilian agency side.
Operating under a continuing resolution rather than an official budget makes implementing — and getting paid for — any major new initiative, even data center consolidation, problematic, Plexico said. “It’s difficult to make headway without the funding,” he added.
Price becomes the point in more ways than one. Not only is there “going to be real pressure to sharpen your pencil,” Suss said. “It’s going to be important to reconfigure your approach to the marketplace.”
For example, he said, “as important as cybersecurity and information assurance have been and continue to be, they’re also a significant cost driver, so we’ll see a significant effort to achieve cybersecurity objectives while reducing some of the bureaucratic costs, overlaps and inefficiencies.”
Here also, the ubiquitous cloud casts its shadow. “Cloud is not just a new technological approach,” Suss said. “It also will allow government to, in effect, pay by the drink rather than pay upfront.”
Beyond changes in the pricing model and the technology, cloud will introduce a shift toward more consumer-driven types of services, he said. “Agencies will be giving users a wider choice of applications and platform options, which in turn will give users a more direct role in determining the services” the agency will be buying, he said. “This is another change in model." 4. Help can help
Finally, (you knew this one was coming), “employ people like me,” Kiviat said, laughing.
Seriously, he said, “you need good business development people with good customer contacts to find out what agencies are doing and what they wish they could do. You need someone in tune with the federal IT market.”
Too often, companies have what is more a rote reaction to events and trends in the market than a reasoned strategy, he said. “Companies have to figure out where they want to be and have a good strategy to get there,” he said.
With the new environment opening opportunities for nontraditional players to become new entrants in the federal market, it’s not going to be an easy transformation,” Suss added.
“Today, a lot of contractors are trying to migrate into this space, and though they won’t all succeed, enough will succeed to take a little market share,” Bjorklund said.
Here, also, help can help, he said. “The more adept you are in understanding where your competitors’ heads are, the better able you’ll be to succeed.”
You’ll also need to keep a close eye on Congress, especially the new Republican majority in the House of Representatives, Plexico said. “It will be interesting to see how they do or don’t work together” with Democrats, he said.
But in the end, he said, “it comes down to the two biggest challenges the country faces: Get the economy going and reduce the deficit and the debt. If we can help do the first, that’ll go a long way toward dealing with the second.”
Sami Lais is a special contributor to Washington Technology.