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The Perfect Fit
By Eric Martinis
From the September 01, 2007 issue of GovernmentVAR
Midsize contractors often have roots as regional integrators:
companies that have established a stronghold in a particular geographical
area and grown as they added next-generation technologies to their
portfolios. They're typically integrators in the $100 million to
$1.5 billion range—no longer small businesses and not large
enough to be considered "mega systems integrators." Some
may have just surpassed the $500 million mark—the point at
which many of the benefits of being a small business start to fade
away.
Without the status to win the set-aside contracts
or the nationally recognizable name that comes with being a top
20 defense contractor, these companies are often left in a bit of
a quandary. But that's changing. Many government organizations have
embraced the values of the midtier integrator, which offers broad
technology portfolios aided by strong specializations in particular
advanced technologies that are critical to an agency's growth.
Obviously, the midtier has the same challenges as any other contractor:
long sales cycles, procurement red tape and changes in project scope.
In that respect, all providers are on the same playing field. But
what does distinguish the midtier—as a general rule—is
an aggregate of traits that agencies have found to be the recipe
for a great partnership. Here are a few of those traits:
1. Agility: Midtier providers, as a rule, remain
comfortably below a "threshold of bureaucracy" that afflicts
many of the mega systems integrators. When an agency needs its provider
to move into rapid ramp-up mode, the complexity of the mega systems
integrator—many tiers of approvals, layers of management and
the need for multiple sign-offs—can delay start times and
bring progress to a halt. But the midtier, by and large, is not
burdened with these large-company ills. As one example, Presidio
was faced with the challenge of updating 65 Air National Guard bases
with LAN infrastructures after 9/11. Execution was the key; we estimated
it would take nine to 18 months to complete the job, but our client's
response was "you have 90 days." What might otherwise
have entailed extensive site surveys, design phases and reviews,
and exhaustive Gantt charts was compressed into a matter of days,
enabling us to bring all 65 of the sites up in 90 days. This can
only be accomplished when the team has the full support of top management
to accelerate processes.
2. Technology certifications: Agencies are also
looking for proof that their contractors have raw engineering talent
and experience, which often comes via the engineering certifications
that the contractor is awarded from its equipment-vendor partners.
Small businesses may not have the resources to earn these certifications,
and large integrators that tend to emphasize services won't always
have the wide area possessed by midtier players.
3. Total ownership: An integrator with a broad
technology portfolio, along with supporting services such as leasing
and financing, has a natural advantage; it can "own" an
entire network-architecture upgrade project and take direct responsibility
for its success—end to end. By reducing its reliance on smaller
subcontractors, it also reduces the risks, such as performance shortfalls,
budget overruns or blame-shifting. And the contracting agency benefits
in other ways: The engineering team that installs the network infrastructure
is more likely to be the same team that will support it as the agency's
needs change over time.
When midtier integrators possess those three characteristics, an
agency can be certain that it's dealing with a partner that makes
its business the highest priority and can get the job done.
What are the challenges to the midtier integrator? The No. 1 concern
is the recruiting and retention of skilled engineering personnel.
With the growth of advanced technologies, that need is becoming
even more acute. Those midtier integrators with the best capital
funding are the best equipped. Why? Because strong capital funding
allows them to launch and build an internal organization, keep tighter
control over it than external agencies and reap the advantages as
they reach the break-even point.
All in all, midtier integrators may have advantages that few of
the largest integrators can claim. Now they need to manage their
growth and maintain their competitive edge.
Eric Martinis is managing director of the federal region for Greenbelt,
Md.-based Presidio Networked Solutions.
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