Times are changing, and the way we used to sell into the federal government is not the way we will continue in the future. As we gear up for busy season, it is important to highlight these changes. On EDGE360, we recently featured the panel discussion that took place at the Comstor Federal Executive Summit. The panel was comprised of industry veterans who gave their thoughts on the changes in selling IT solutions to the federal government.
In this post, we’ll focus more on how the federal government has changed its procurement process and the many factors that will make an impact. Alan Balutis, Director of Federal IBSG, Cisco, hosted panel members David Wennergren, Senior VP of Technology, Professional Services Council; Jim Williams, President, Williams-Schambach; and Dave McClure, Chief Strategist, Veris Group.
According to the panelists, there are several inflection points of which IT solutions providers must be aware. Wennergren says some are coming quickly and others more slowly, but “they make for a different value proposition in terms of how government has to buy things and how industry has to offer them.” As he pointed out, the federal government used to buy things such as hardware, software, IT systems, and professional services separately, but now there is a blurring of those lines.
“You see more awareness around the idea of consumption-based buying,” Wennergren shared. “This is important because finding capabilities as a service is a great way for government organizations to minimize current capital expenditures by avoiding depreciation and error and allowing them to scale down any uncertainty.” Cloud computing is a case study in point, but it goes far beyond infrastructure as a service to server virtualization and business process outsourcing of a function. This is a change, and you need to be able to talk about how these types of services are today’s “right tool for the right job,” which is the lens through which many government buyers are looking.
Wennergren also focused on the recent move from IT centralization in state and federal agencies, to an increasing push for more modular, agile types of acquisitions. “You see people moving into smaller, bite- size things that they can do,” he said. “This idea of consumption-based buying and defraying expenses by buying by the drink is a way for the government buyers to start thinking about how they can get more done in their return on investment.”
A large part of the discussion centered on the fact that the government IT workforce is aging rapidly, but hasn’t retired. For every IT professional 30 years and younger in the federal workforce right now, there are 10 who are 50 years old and older, according to Wennergren, and the gap gets wider every year.
At the same time, the contracting officer workforce is exactly opposite. Those government professionals did retire, so half of the contracting workforce in the fed government has less than 10 years of experience. Half of those have less than five years of experience. In addition, there has been a shift in who makes decisions about IT spending.
“Going forward, the contractor must understand that there used to be a laser-like focus on the program manager for the award to move the program forward to get the program done, but that is not nearly enough these days,” Wennergren shared. Panelists said that federal government contracting offices have become separated from program management teams through efficiency initiatives. They also said that CFOs have tighter control over money as they “fret about sequestration.”
“The calculation when you approach the federal government now has to include an independent contracting office, a financial manager and a program manager in order to deliver the work,” Wennergren pointed out.
Williams talked about how these workforce changes are coupled with conflicting mandates that can create more hurdles for government contractors. “For example, the government wants innovation, but we have to deal with legacy systems. The Administration puts an emphasis on speed, but FITARA is about increments and delivering something every six months. It is your job as a contractor to understand how to position your solutions – network services, the cloud, etc. – in a way that meets both requirements.”
McClure agreed that today’s agencies have a great deal of interest in very adaptive, agile, modular, quick development projects that are designed to reach into and correct pieces of problems, but not, perhaps, correcting an entire problem. “We’ve seen a lot of quick fixes, but some of the core infrastructure and mission area support systems have not had a lot of light shining on them.”
Yet, in light of these changes, there is hope for those who want to sell to the federal government and do it successfully. To do so requires you to stay in the know and sell in a way that the customer is looking to buy. Here are some tips:
• Know the budget. Unlike any other industry, the federal government tells us exactly what money they have and how they plan to spend it. You can be successful, if you know who to approach and can approach in a way that they can see how your solution will integrate into the legacy systems they must maintain.
• Become an advisor. There is an opportunity for you as a provider to educate an agency on how to adapt new technologies. While they are looking for modular, agile and quick development solutions, many in the federal government IT workforce are not trained in agile development. They are trained in building big projects with big budgets that they ask for all at one time and then implement over time.
• Demonstrate an understanding of the financial model. The federal government works in a budget process that hasn’t changed since the 1990s. That is when they created the capital planning investment control process through which all IT projects have to go. The process is largely based on a capex approach, not an opex approach.
The federal government needs your solutions to better serve constituents and to maintain scalable, efficient and secure data. To help them do that, providers must understand who they need to approach and how to approach them to be effective solutions partners in today’s wary federal government buying market.