This market is ‘just different.’ Adjust accordingly
Is there any concern about the rise of the federal systems integrator in the state and local IT market? A panel moderator at a recent conference posed the question, and a senior representative of a state and local solutions provider shrugged off any concern inasmuch as big systems integrators don’t know how to do IT.
Them’s fightin’ words.
I watched with amusement the incredulous stares in the room from some members of the big systems integrators. Neither side intended any harm, but the comment gave me reason to reflect. Why would a federal systems integrator be less than successful in the state and local IT market?
Experts are quick to remind us that conventional wisdom holds the state and local market is “just different:” different governmental cultures, procurement regulations, selling models, cost accounting methods, the list goes on.
In all this, however, implementation of technology itself is not a point of difference. And, clearly, large federal integrators know how to do IT.
Building a payload for a communications satellite, implementing ground processing stations to turn information into intelligence, enhancing data links to create a shared common operational picture among weapons platforms are as much IT as building a social services casework management system.
Federal systems integrators typically are known for their engineering and program management talent; they must use it extensively on large, complex programs to enable programmatic success and adequate government oversight.
The skill sets — programmatic as well as technical — of large systems integrators are brought to bear on some pretty tough problems in the state and local market, and they can contribute to the success of a complex weapons system.
But with the skill set to execute on large federal programs comes the inter-related need for a larger corporate infrastructure. To be one of the big players in the federal acquisition space, you need cost accounting systems, managerial structures, and legal and contracting people with strong federal experience to remain competitive.
Big can be good. But the bigger a company grows, the higher the risk that its increased overhead will inhibit its ability to respond quickly in a dynamic state and local environment. I’ve heard the same concern from federal government customers.
To survive the severely constrained budgets of the last few years, state and local governments have been amenable to exploring innovation, even public-private partnerships that rarely have worked well at the federal level. This creates an expectation for flexibility and agility in state and local IT.
Therein lies a key reason why a large federal integrator may not be as successful as the leaner provider whose business systems are more attune to the state and local IT market. I submit that those that do IT well have acquired or merged with a business unit that was well adapted to selling and delivering in the state and local environment. Or that they have significant segments of their overall business focused on purely commercial work, with a corresponding infrastructure that is more consistent with the way state and local governments do business. The business systems and operating methods of a traditional federal contractor often are less agile.
Are these fightin’ words? I think not. Ruling on my suggestion to consider replicating successful federal solutions in the state and local government market, several usual systems integrators have told me “no way,” because they are “not set up to deal with the disarray and risks of state and local acquisition.” Some big federal contractors have even taken steps to divest themselves of their state and local businesses because they’re too “different.”
Perhaps it all boils down to legacy and agility. Some companies are “just different” than others.
Ray Bjorklund is senior vice president and chief knowledge officer of Federal Sources Inc. of McLean, Va. He can be reached at bjorklundr@fedsources.com.
