COMMENTARY

Time for system integrators to adopt a new business model

Defense Secretary Lloyd Austin recently laid out his strategic initiatives, where he emphasized teamwork as one of the top three priorities.

The Covid-19 pandemic has forced the government to prioritize teamwork and collaboration as well as modernization, and Secretary Austin makes clear that the pace of innovation will accelerate as the DOD divests itself of legacy systems.

Part of this focus means that the age-old debate of buy versus build has shifted. The government wants to invest in and deploy tech solutions that will best meet their strategic needs and bring efficiency to their missions. Government organizations are improving ways to bring emerging technology in the door through modernized procurement methods and innovation hubs.

To continue to thrive, traditional government contractors must also embrace a new business model, in which emerging technology is at the core of everything they deliver, demanding that they too modernize their approach to teaming partners. When these partnerships are executed properly, the traditional and nontraditional contractors will be better together, in turn, helping the government better meet their missions.

Government contractors play a critical role in helping the government modernize. In recent years, we’ve seen these contractors make investments in innovation labs and venture arms intended to help the government identifying emerging technologies. But in the spirit of true teamwork, there are strides to be made as well. How can legacy government contractors lead in this shifting landscape?

Lead by teaming with emerging tech companies

Historically, some systems integrators may not have teamed with emerging technology companies, instead focused on building the solution themselves.

But as the government demands a faster pace of innovation, it’s become critical for SIs to bring cutting-edge technology companies into their initial solutions development. Often this requires the traditional government contractors to lead these government newcomers through the nuances of working with and deploying software in the government environment.

Many of the technology companies coming out of Silicon Valley, Boston, Austin, Texas, and other innovation hubs are eager to support government missions but don’t have the relationships or past performance to get started.

To develop stronger teaming relationships and bring cutting-edge tech to government missions, it’s critical that traditional contractors facilitate introductions and provide transparency between their government clients and these tech companies. For example, Dcode’s mission is to accelerate emerging tech companies into the federal market, and part of the tech companies’ success is being able to work well with large, incumbent SIs.

Government contractors have worked within the walls of the agencies they support for years, giving them the perspective that new emerging tech companies may lack. This knowledge-base is a key ingredient to ensuring that emerging tech companies can make it through the gauntlet of checkboxes required to be deployed within an agency.

The more integrated emerging tech companies can be with the government program and contracting staff, the more they can drive mission outcomes. The contractor community also brings a range of skill sets and capabilities that are important to successfully move a system from prototype to production.

A great example of the tech industry, traditional contractors, and the U.S. government working together is one that Dcode is helping to facilitate. DHA is looking for commercial tech solutions to modernize the Defense Healthcare Management Systems Program Executive Office (PEO DHMS). This is a multiple-award $500M-plus opportunity open to nontraditional tech and government contractors, and the solicitation gives strong incentives for prime contractors to include nontraditional vendors in their proposal teams.

The evaluation requirements aim to make the request for proposals more accessible for nontraditional vendors, deemphasizing past federal performance, which we know can be a major deterrent to even submitting proposals for some non-traditional companies who haven’t worked with the federal government before.

The same way government organizations are improving ways to bring innovative tech in the door, traditional players need to learn how to be better teaming partners with those cutting-edge tech companies.

Better support government customers

Tech startups are entering the government market at a much faster pace than in the past, due in large part to the government’s focus on leveraging Other Transaction Authorities (OTAs). When the government first introduced OTAs, the goal was to bring the agile methodology of Silicon Valley to the Pentagon and DIU pioneered this new way of thinking.

Now there are more innovation hubs to count. So as Secretary Austin asks for both innovation and teamwork from industry, the broad ecosystem of traditional contractors must pitch in.

The same way the government is striving to bring new technology into their agencies, SIs need to be focused on how they can lead with technology innovation. This will require a shift to operate more like a startup and the ability to vet new technologies the same way venture firms vet emerging tech, which is what government leaders are learning in various ways like Dcode training.

Large government contractors are starting to recognize the need to shift their cultures, train their teams, understand the changing procurement landscape, and lead with emerging tech, which will ultimately allow them to move in a more agile fashion.

The technology landscape is changing at a dizzying pace. To stay ahead of our adversaries, this teaming between traditional and non-traditional contractors has become an imperative.

About the Author

Monica McEwen is a strategic advisor for Dcode.

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