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©2014 Deltek, Inc. All Rights Reserved
Copyright Statement
2
Published by:
Deltek
2291 Wood Oak Drive
Herndon, VA 20171
© 2014 Deltek, Inc. All Rights Reserved. Printed in the United States.
The information provided in this report shall be used only by the employees of and within the current corporate
structure of Deltek’s clients, and will not be disclosed to any other organization or person including parent,
subsidiary, or affiliated organization without prior written consent of Deltek.
No part of the publication may be reproduced or distributed in any form, or by any means, or stored in a database
or retrieval system, without the prior written permission of the publisher.
Deltek exercises its best efforts in preparation of the information provided in this report and believes the information
contained herein to be accurate. However, Deltek shall have no liability for any loss or expense that may result
from incompleteness or inaccuracy of the information provided.
©2014 Deltek, Inc. All Rights Reserved
Table of Contents
3
Introduction
Purpose of This Report
Key Findings
Teaming for Growth
• Spectrum of Teaming Relationships
• Strategic Teaming and its Benefits
Environmental Drivers for Teaming
Critical Success Factors of Strategic Teaming
Government Perspective
Conclusions and Recommendations
©2014 Deltek, Inc. All Rights Reserved 5
Purpose of This Report
This report will help federal IT contractors:
Understand the spectrum of teaming relationships and the factors
affecting the current teaming environment in the federal market.
Identify internal and external applications of strategic teaming and
how these may benefit an organization.
Understand the critical success factors for utilizing strategic teaming
as a growth facilitator.
Gain understanding of the federal government’s perspective on
strategic teaming and their priorities and concerns.
Consider factors to successful teaming to increase Small Business
utilization.
©2014 Deltek, Inc. All Rights Reserved 6
Key Findings
Of the various types of partner relationships available to contractors
opportunity-based and strategic teaming arrangements provide some
of the most wide-ranging benefits in today’s federal marketplace.
Strategic teaming is an internal business tool that integrates long-term
thinking into opportunistic activities as well as an external relationship
tool where two complementary services providers proactively seek
opportunities of mutual benefit.
Critical success factors for strategic teaming includes top-to-bottom
buy-in across the firm; strategic thinking that is implemented at the sales
process level; a formal process for evaluating partners that uses
institutional knowledge; corporate self-reflection to evaluate your value
to potential partners; and pre- and post-engagement analysis to
determine fit and effectiveness.
Federal spending trends like increased use of GWACs, MACs and
Schedules, and tightening contractor addressable budgets make strategic
teaming more crucial in the current market environment.
©2014 Deltek, Inc. All Rights Reserved
Spectrum of Teaming Relationships
8
Merger/
Acquisition
Strategic
Sourcing Alliance Channel
Joint Ventures
& Consortia
Low Partner
Commitment
High Partner
Commitment
Ad hoc,
Opportunity-
based An arrangement
between two or
more companies
to perform on a
specific contract.
Strategic
Teaming A long-term
partnership
developed to
pursue multiple
opportunities.
Benefits of opportunity-based and strategic teaming include:
Trust- and relationship-building, along with management and administration streamlining of long-
term contractual arrangements without the formality of lengthy legal agreements.
Better flexibility than joint ventures and consortia.
A lower-cost, -visibility, and -risk alternative to M&A.
Alignment with the government’s view of teaming as a means for accessing the “best of the best.”
Opportunity-based and strategic
teaming arrangements provide
wide-ranging benefits to the
majority of contractors in
today’s federal marketplace.
©2014 Deltek, Inc. All Rights Reserved 9
Strategic Teaming is…
A long-term partnership developed to pursue multiple
opportunities
An internal business tool
The integration of long-
term thinking into
opportunistic activities
…for actively mapping
strong partners to
market opportunities to
leverage past mutual
success
An external relationship tool
A non-contractual
agreement between two
complementary services
providers
…for proactively
seeking opportunities of
mutual benefit
©2014 Deltek, Inc. All Rights Reserved
Strategic Teaming is…
10
An internal business tool
The integration of long-term thinking into opportunistic activities
…for actively mapping strong partners to market opportunities to leverage past mutual success
A top-100 services firm formed a
strategic subcontractor team
Centralizing collection and
dissemination of subcontractor
data
Established plans to spread
success stories from good partners
out to capture teams
©2014 Deltek, Inc. All Rights Reserved
Strategic Teaming is…
11
A mid-tier SI uses a few, carefully-
chosen strategic subcontractors
Team pro-actively looks for
opportunities based on best
partners’ differentiators – not only
the other way around
Shared pipeline allows partners to
take part in the process
An external relationship tool
A non-contractual agreement between two complementary services providers
…for proactively seeking opportunities of mutual benefit
©2014 Deltek, Inc. All Rights Reserved
Know the Difference
12
….a contractual channel strategy for the better
management of the supply chain
….an alliance partnership between a services
company and commodity provider
….an exclusivity agreement for services or products
…. a “tell all and show all,” high-risk partner
relationship
….a commitment that lasts beyond the recognized
mutual benefit of both parties
Strategic Teaming is not ...
©2014 Deltek, Inc. All Rights Reserved 14
FY 2014 Contractor Addressable Budget by Segment Points to Tighter Competition
Declining contract
spending makes
it more crucial to
be on the right
contracts to be
competitive in this
market.
©2014 Deltek, Inc. All Rights Reserved 15
Greater Use of GWACs, MACs and Schedules Favors Broad Capabilities
MAC, GWAC, and Schedule use account for
60%+ of contracts, requiring primes to plan for
broad scopes rather than for narrowly-defined
specifications. This drives teaming demands.
Source: FPDS, Deltek
©2014 Deltek, Inc. All Rights Reserved 16
Importance of Teaming in the Federal Market
Source: FPDS, Deltek
Estimate of Small Business
Subcontracting Goal for
Large Primes
Large primes pursuing government-established
subcontracting goals may present teaming
opportunities for small business. Subcontracting
is at least as big as the market to compete for
work directly with the government.
©2014 Deltek, Inc. All Rights Reserved 17
Impact of Market Changes on Company Prime Contract Revenue Growth
Note: Excludes companies that did not generate at least $1M annually in prime contract revenue between 2008-2012
Source: USASpending.gov and Deltek
Teaming may
bring chances
for Small
Businesses to
prime more.
©2014 Deltek, Inc. All Rights Reserved
Critical Success Factors of Strategic Teaming
19
Top-to-Bottom
Buy-in
Playing the
Matchmaker
Strategic Thinking +
Sales Process =
Long-term Wins
Self-Reflection
Pre- and Post-
Game
Analysis
Companies that
succeed in
developing,
maintaining, and
leveraging strategic
teaming
relationships share
several common
characteristics.
©2014 Deltek, Inc. All Rights Reserved 20
Critical Success Factors Top to Bottom Buy-In
Top leaders
set the
teaming
agenda, but
ultimately it
ripples
throughout to
drive what’s
best for the
customer.
Taking a strategic approach to
teaming requires involvement from
all levels of the organization.
Management builds rapport
with partner counterparts and
encourages peer relationship-
building at all levels of the
company.
Top-to-
Bottom Buy-
in
©2014 Deltek, Inc. All Rights Reserved
Critical Success Factors Strategic Thinking + Sales Process = Long-term Wins
21
Strategic
Thinking +
Sales Process
The sales funnel is
kept filled, but the
sales force is
incentivized to think
strategically
Sales metrics are
constantly reviewed
Long-term customer
assessments are
ongoing throughout
the sales cycle and
implementation
©2014 Deltek, Inc. All Rights Reserved
Critical Success Factors Playing the Matchmaker
22
Playing the
Matchmaker
Use the Data
Use a formal process for evaluating partners
Do extensive due diligence
Create clear and user-friendly processes for receiving and collecting data
Integrate the Strategy
Go narrow and deep in partnerships Consider partners’ unique capabilities can be used further down the pipeline Evaluate the potential for technology sharing, joint solution development, etc. for opportunities far down the pipeline Match the partner contract structure to the customer contract structure
Keep an Open Mind
©2014 Deltek, Inc. All Rights Reserved
Critical Success Factors Self-Reflection
23
Self-
Reflection
How well did you articulate your value proposition to your partner and yourself? Not only helps in the development of team
“message” that will be consistently communicated to your customers, but…
There may be a strong partner who does something great that your organization does well.
Why would a company want to partner with you?
What do you bring to the table that your
competitors can’t?
©2014 Deltek, Inc. All Rights Reserved
Critical Success Factors Pre- and Post-Game Analysis
24
Pre- and
Post-Game
Analysis
Perform honest and detailed post-mortem
evaluations:
How well did the relationship work?
How well did we meet the needs of the
customer?
Are any strategy changes are warranted?
Decide before work begins
how you will measure
success, e.g. ROI,
customer satisfaction, etc.
Determine a shared set of expectations with partners before the real work begins
©2014 Deltek, Inc. All Rights Reserved 25
How Strategic Teaming Mitigates Risk
Partner’s Finances
Developing joint pipeline targets, sharing risk, and
providing business planning assistance.
Management/Governance
Providing the opportunity to fine-tune the governance model over time while building up a past performance history.
Financial Performance
Requiring long range planning that could
eliminate issues affecting performance, and therefore financial
gain.
Partner Mgmt Change
Developing relationships at all levels of the
organization.
Changes in Company Strategy Ensuring that strategic
relationships are part of the discussion when a
company is considering changing tactic.
Culture clash Presenting opportunities to
adjust to cultural differences.
©2014 Deltek, Inc. All Rights Reserved
Consider Company Culture
26
Diversity can make partnerships unique, IF there’s unity and adaptability!
Would we feel
good about
being a prime or
a sub to this
partner?
Would we feel
good about
sending our
people to work
for them?
Are they
talking more
than listening?
Are they
touting too
many “core”
competencies?
Are they
unfocused, e.g.,
and willing to
do something
for everyone?
Are they
generally
difficult during
negotiations?
What is their
staff retention?
Do people like
working for
them?
Organizational cultures strongly impact strategic teaming. They can solidify a newly
formed team or impede how well the team performs together. Consider the following
and other factors to determine if a culture clash is imminent.
©2014 Deltek, Inc. All Rights Reserved
Evaluating Teams: Will They Help or Hurt?
28
Government decision makers evaluating contract proposals
operate in a complex environment.
Rapidly changing missions and technologies translate into project
requirements that are increasingly complicated and difficult to define or
measure.
• Agile methods and modular development seek to address this.
Short supply of acquisition professionals means greater workloads,
increased risk, and demand for simplified acquisitions.
• Growth in LPTA is one ramification.
Agencies may ask particular questions that relate to teaming, but
companies need to be savvy enough to perceive what they are trying to
learn from those questions.
©2014 Deltek, Inc. All Rights Reserved
Agency Needs May Get Lost in Translation
29
Have you worked
together before?
Government Asks:
What
Government
Really Wants
to Know
Am I going to be the tactical
integrator of this team?
How do I know that I’ll be able to acquire the
knowledge that I’m buying from your team?
Agency Concerns
Teams with limited history
may create more work for
agencies in terms of
reporting and oversight.
They want to gain
knowledge from their
relationship with
suppliers. Transparency
among teaming partners
often leads to greater
knowledge sharing with
agency clients.
©2014 Deltek, Inc. All Rights Reserved
Lost in Translation, cont.
30
Do you know my
business?
Government Asks:
Do you know my problem
and what it means for me to
be successful?
What
Government
Really Wants
to Know
Agency Concerns
They want vendors to
value their public service
and support them in
being successful.
Competing or misaligned
incentives between
government and industry
will translate into conflict.
They need this team
choice to reflect positively
during procurement or
project reviews.
©2014 Deltek, Inc. All Rights Reserved 31
Agency Small Business Preference is a Strategic Teaming Opportunity
Government values diversity in the acquisition environment, making Small Business
utilization a priority. Medium and large firms that focus on small business teaming
are able to increase sales and diversity simultaneously.
Success Factors in Small Business Teaming
Drive the
directive for
strategic
teaming to be
integrated into
ALL relevant
areas of the
organization,
but with an
emphasis in
sales.
Proactively
support the drive
for raising the
profile of Small
Business
teaming to one
of strategic
importance.
Provide the
necessary
resources to
expand the
Small Business
program role
beyond
procurement
into more of a
business
development
role.
Match sales
representatives
with Small
Businesses that
can help them
to win new
awards, thereby
benefiting the
parent firm and
their Small
Business
partners.
Emphasize the
importance of
Small Business
utilization as a
strategic tool in
order to spread
its priority
throughout the
organization.
©2014 Deltek, Inc. All Rights Reserved
Conclusions
33
Strategic teaming improves competitiveness by…
• Turning a strong relationship into a competitive advantage for both
partners
• Creating opportunity to add unique expertise and innovation
• Attracting customers looking for vendors with an established history
• Improving outcomes
Enhance scoring
Boost win probability
Increase closure rates
Implementing strategic teaming in a proactive, thoughtful
manner helps sustain market potential in a changing market
Strategic teaming is increasing in importance to small
businesses and to agencies looking to increase their use
©2014 Deltek, Inc. All Rights Reserved
Recommendations
34
Think strategically while acting tactically by aligning
strategies and processes across the organization
Consider new processes for evaluating partners against your
strategic goals
Take culture into account without stifling diversity and
innovation
Look for ways to leverage ad hoc teaming into strategic
benefit for all involved
Remember that sales teams need the right incentives to
think and perform strategically
Use strategic teaming to test the compatibility and
capabilities of a company you are considering for acquisition
©2014 Deltek, Inc. All Rights Reserved 35
About Federal Industry Analysis (FIA)
Small Business Insights: Strategic Teaming in a Competitive Federal Market is published by Deltek’s Federal
Industry Analysis team. Its analysts harness Deltek’s wealth of data, interviews with government and industry decision
makers, and other strategic resources to provide a comprehensive view of the federal IT marketplace and the trends,
drivers, priorities, budgets and legislative issues influencing it. With a top‐down perspective on all of Deltek’s information
and analysis capabilities and resources, FIA is able to provide broad, long‐range strategic insight on the federal
contracting industry and its various sectors that focus on technology.
Deltek’s analysis focuses on market trends and drivers, policy/legislation impact, agency budgets and priorities, market
sizing, the competitor landscape and market forecasts. Our goal is to help your company achieve its peak potential by
preparing you for future market trends.
About GovWin
GovWin from Deltek is the essential source for information, teaming and software solutions to help organizations find,
manage and win government business. More than 2,800 companies, including small businesses, new entrants to the
public sector, and the largest government contractors, rely on GovWin for the latest and most comprehensive information
solutions, including market intelligence, consulting, sales management tools, teaming solutions, and educational and
networking events. Deltek is the leading global provider of enterprise software and information solutions for government
contractors and professional services firms. For decades, Deltek has delivered actionable insight that empowers our
customers to unlock their business potential. Over 14,500 organizations in approximately 80 countries around the world
use Deltek to research and identify opportunities, win new business, optimize resources, streamline operations, and
deliver profitable projects.
Get started today at GovWin.com.
Deltek – Know more. Do more.® www.deltek.com.