Spend enough time among Defense and military services customers, and you know: The Joint Information Environment (JIE) and other associated information management initiatives are very dynamic. Few understand this reality like RJ Kolton, Senior Vice President of Business Development for Data Systems Analysts, Inc. (DSA).
Backed by 22 years of military service, Kolton has spent the past few years at the employee-owned information management company leading corporate growth and helping to shape technical solutions for Defense customers, including the U.S. Army, Air Force, Navy and DISA. Those areas of expertise touch on cyber security, big data/business intelligence, knowledge management, software development, business process reengineering, cloud, mobility, applications and the Internet of Things.
The intersection of all those areas is where the JIE environment gets complicated.
“You have Moore’s Law as it applies to one specific technology,” says Kolton, “and then, if you compound those technologies, and they interact with one another, there are even more complexities, related to how quickly things are changing and how touchpoints in one area impact on others.”
Recently, Kolton spoke with WashingtonExec about those touchpoints – and offered his assessment on how the dynamics of the Joint Information Environment and related DoD initiatives are influencing industry. He offers four major observations relative to professional services:
Divestments Will Continue
First, large integrators, particularly publicly traded ones, will continue to divest themselves of services they deem insufficiently profitable, predicts Kolton. “We’ve seen that with a number of corporate announcements and a number of related actions; for example, CSC and SRA merging and other companies divesting themselves of IT professional services,” says Kolton.
That M&A activity will, in turn, produce new firms focused on defense services. “Some of them will be pure play,” says Kolton. “You have a lot of private equity, venture capital, as well as big and small firms seeking to use M&A to gain more mass via M&A.”
At the same time, recently graduated small businesses will continue to struggle to redefine themselves as larger businesses. “Everybody in this business knows that once you exceed the $27.5 million size, it gets harder to compete,” says Kolton. “You are no longer eligible to compete in most small business categories and you are now competing with the larger companies — it is harder to compete and that is going to lead the smaller firms either to seek to be acquired, acquire other companies, and/or struggle to compete to gain strength and size by winning work,” says Kolton.
Companies Will Enhance Offerings
Second, the more successful companies will enhance their offerings during this period as they seek to find discriminating value propositions.
“That may be done,” says Kolton, “through internal company investment, teaming, strategic alliances, joint ventures, M&A, and other business approaches.”
Regardless of how implementation occurs, in the end, he adds, “companies must figure out how to differentiate themselves in specific areas if they are to succeed in growing.”
DoD-Focused Companies Will Need IDIQs
Third and concurrently, DoD-focused companies must win IDIQs in order to be positioned to support DoD customers. “Having IDIQ contracts in today’s world is critical because the government awards most work as task orders under IDIQs; not always, but quite a bit,” says Kolton.
Hastening the need are the realities on the ground.
“We are witnessing significant global upheaval and conflict that pose great risks to our nation and to our friends and allies. On any given day there can be a crisis that will lead to the mobilization and deployment of US forces. When that occurs, defense companies must be prepared to support our defense customers,” says Kolton.
“The companies possessing the right IDIQs and the optimum market position and market penetration vis-a-vis specific DoD customers when a crisis occurs will be the ones that are best positioned to support our DoD customers in accomplishing their missions.”
Building Corporate Capacity Will Be Paramount
Fourth and equally important in the coming year, in the context of the convergence of those major technological dynamics, will be building corporate capacity.
“During the coming year, successful companies will have optimum capacity to meet DoD customer needs,” says Kolton, adding, “this includes having technical offerings that address specific customer requirements.”
These offerings will range from basic services, such as providing tech support for help desks to supporting advance research and development. “Capacity also includes proven ability to provide innovative solutions at the lowest possible cost,” says Kolton.
“In addition, capacity means having an effective process for recruiting and positioning subject matter experts to satisfy specific customer needs, on schedule and on budget … finally capacity includes having relevant experience and past performance, which a company must have in order to win IDIQs and associated task orders.”
DSA, for its part, will continue to focus on these four factors and on those technological touchpoints where its niche expertise can be applied individually or in partnership with other companies to support customer needs.
“The challenging and exciting part of developing business in this sector includes finding the best ways to support our Defense customer and grow our company; this includes creating or enhancing offerings, building corporate teams and alliances, M&A, and winning contracts, ” says Kolton, “that’s what we do.”