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New IBM strategy puts focus on partnerships

If your company is targeting traditional back office operations at government agencies that deal in the areas of human resources, finance and logistics, then you can expect IBM to be a fierce competitor.

But under a strategy led by Sam Gordy, general manager of U.S. federal and government industries, IBM is also looking to play more of a partner role in mission critical applications where it can leverage its deep base of cutting edge technology.

Gordy took over the top spot for IBM’s federal business about a year ago after a long career at Science Applications International Corp. and serving as a group president at Leidos. He also served in the U.S. Navy.

Sam Gordy

Sam Gordy, general manager, IBM federal and government industries

He took the position that was vacated by Anne Altman after she retired following a long IBM career. The hiring of Gordy was somewhat of a break in tradition for IBM, which is known to groom and promote leaders from within.

The break was intentional, Gordy told me. “They wanted a strong background in services,” he said.

Gordy has followed suit and hired Lisa Mascolo, a former Accenture executive and CEO of Optimos, to lead his federal services group. Mascolo also is responsible for services sold in the state and local and education markets.

Gordy has been spearheading a strategy to partner more with systems integrators who can tap IBM’s technology base, he said.

In fact, Gordy’s portfolio has been restructured. The government industries portion of his title is new and gives him responsibility for sales of hardware, software and services to other government contractors as well as federal agencies. In the past, sales to other companies were handled on the commercial side of IBM.

The change brings focus and attention to a segment of the federal market where the company sees growth potential, he said.

“There is a whole area of the market where we haven’t had a significant role,” Gordy said. “We can come in with our technology and be a tremendous differentiator.”

IBM invests about 6 percent of its revenue in research and development. In 2015, the company recorded $81.7 billion in revenue, so that’s about $5.1 billion in R&D.

A big focus of those R&D dollars and something that Gordy is pushing hard to leverage in the federal space is cognitive computing, or what IBM also likes to call augmented intelligence.

IBM’s Watson is at the heart of this as is the company’s cloud offerings, Gordy said.

“The federal government is very good at collecting data, but it can do a much better job of making use of that data,” he said. “My goal is to get our cognitive computing and analytics capabilities out in to the market as judiciously as possible.”

The value of Watson is that it can take all of what Gordy called "messy data" and make sense of it.

As part of his partnering strategy, Gordy wants IBM involved in more than just one-off projects.

For example, IBM is bringing Watson to bear as a partner to General Dynamics on a Census Bureau contact center contract.

Watson will be the first line of contact when people call into the center. “We’ll give out better information and lower costs,” he said.

But GD and IBM also are working together to pursue other contact center opportunities across the government, he said. “We want to be more than just a vendor.’

To help solidify the importance of partnering with prime contractors, Gordy named Jean White as sales manager, federal systems integrators. Her role is to development relationships with companies particularly the large defense contractors such as GD, Lockheed Martin, Northrop Grumman and Raytheon. IBM also is targeting other large primes such as Booz Allen Hamilton, SAIC, Leidos and CSRA.

Much of what IBM is offering these companies is a managed service, often with Watson at the heart of it, he said.

IBM, of course, isn’t backing away from being a prime contractor, and will continue to pursue a wide variety of opportunities, often competing with the same companies it partners with.

“It is a question of what do we want to be known for,” Gordy said.

He wants the business to be closer to the mission of its customers, and Gordy plans to do that as a prime and as a partner.

Watson and IBM’s cognitive computing strategy is the key to that, and it is gaining ground with some interesting projects. In addition to the Census call center work, IBM has been taking part in a pilot with the Air Force to improve acquisitions.

The computer has been loaded with Federal Acquisition Regulations, Defense acquisition regulations and all manner of procurement documents, guidances, and processes. Watson is acting as a procurement advisor, and one of its strengths is its ability to learn, Gordy said.

The success at the Air Force has IBM talking to the Army and General Services Administration about expanding its use, he said.

Watson is also part of IBM’s health care practice and is a integral part of its partnership with the Veterans Administration to bring precision medicine to 10,000 veterans with cancer.

One of the things to understand about Watson is that it doesn’t come out of the box full of knowledge. “Think of it as an intern. You ask it questions, you’ll get an intern’s answers,” Gordy said. But as data and information is loaded into it, it gets smarter and it learns from the questions it asked the feedback it gets.

In the case of health care, Watson has read more medical journals than any single doctor or team of doctors ever could read. Doctors can tap that knowledge base by describing symptoms and reactions to treatments to Watson and the computer can propose courses of action.

“Cognitive computing goes way beyond data analytics,” Gordy said.

To pursue these opportunities, Gordy has a leadership team with some people focused on solutions and technologies and others who focus on customers.

His team includes:

  • Lisa Mascolo, managing director, U.S. Public Service, Global Business
  • Sheree Jones, vice president and client unit executive, healthcare
  • Courtney Bromley, vice president, homeland security, law enforcement, treasury, finance and state
  • Lauren Craig, client unit executive, Departments of Agriculture, Interior and Transportation, FAA, GSA and NASA
  • Bob Merkert, vice president, systems sales
  • Jimmy Norcross, vice president, U.S. defense and intelligence
  • Jean White, sales manager, federal systems integrators

Posted by Nick Wakeman on Dec 08, 2016 at 1:09 PM

Reader Comments

Thu, Dec 8, 2016 Mel Ostrow

Interesting views. However, it is true that IBM Federal remains a very small part of the company at large. Its Federal revenues and profits have been in mostly no-growth mode for far more than a decade. This may change, but the corporation and its large institutional investors do not seem to favor putting a lot of money into it. Iron is out--long ago, and the services market in Fed govcon is very competitive and price sensitive. Both of those attributes have always posed daunting challenges for IBM. It would be neat for Watson to grab more Federal clients, but lots of folks claim it is too expensive and hard to buy in chunks.

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