A Conversation with James Ballard, SVP & Chief of Global Services Group for 21st Century Systems
As we embark on 2010, and this new decade, we ponder the question: how will government contracting change? Will the priorities shift at all? We had the opportunity to speak with James Ballard, Senior Vice President and Chief of Global Services Group for 21st Century Solutions. He shared with us his thoughts on who will be hit hardest by insourcing, some 21st Century Solution’s goals in the next 12-18 months, and what the future of government contracting looks like in his opinion. Take a look at this video to hear his thoughts.
ExecutiveBiz: Who is going to be hit hardest by insourcing?
James Ballard: I think the real question is what insourcing will end up being when the dust settles. There are policies that are being developed and there are some procedures already in place, but I don’t think anybody really knows exactly what the ultimate impact will be. I believe that at the end of the day those large companies that perhaps have diversified broadly across government, not just a particular vertical such as services or products are going to be impacted the most. I see perhaps a throw-back to the old days where budgets were cut 10% for those that can survive such cuts. I think this could result in some benefits to the smaller to midsized companies – maybe this is one of the times that mid-size companies are going to gain some advantage out of this process.
ExecutiveBiz: Deconflicting is going to produce winners and losers. Who will be the winners and who will be the losers?
James Ballard: I’ve been surprised by how aggressive the government has been with addressing the whole OCI issue. Ultimately the winners may be those companies that are in the position to build their portfolio by gaining business that must be divested by the large companies that are going to have to change because of what they provide on the hardware side. This need to deconflict may actually become the new market for mergers and acquisitions and its going to become the new market for the middle sized companies looking to find a path to enter the government professional services marketplace. In the past the perception has been that industry growth was only driven by the large companies and small companies hence the discussions about the mid-market squeeze – and a growing concern that mid-size businesses would survive. I think the deconflicting process could potentially put business back into the middle market where large companies are going to have to get rid of a sizeable part of their services portfolio. A recent example is Northrop Grumman having to divest TASC, another example is when General Dynamics bought Anteon there was a sizeable portion of the services business that had to be divested. I believe that this process will occur more often in the future.
ExecutiveBiz: What are some of your company’s top goals for the next twelve to eighteen months?
James Ballard: I’m just about ready to launch a small professional services business, potentially taking advantage of the new Service Disabled Veterans Owned business initiatives but certainly looking to capitalize on the shift to greater emphasis on small business set-aside goals. Typically the first goal of any small business start-up is to survive and be around eighteen months from now. Probably our greatest opportunity will be in the government professional services area. I see opportunity in those markets because even though there is a push to insource; there is a push to bring more people into civil service to try and fix the government’s human capital crisis. At the end of the day it is a very, very tough road to go down in terms of the government being successful in meeting those hiring goals. They are still going to need subject matter experts who really understand what is going on with a particular mission or a particular agency to help the government get through that transition even if they ultimately get back up to the number of people they need. For us the goal in the next twelve to eighteen months is to get into that professional services market niche, find those agencies that have small business set aside policies that are a little more aggressive in enforcing them than other agencies, become a great partner to large businesses who need the small business set asides for the contracts they won or are bidding. This multi-front approach will be our key to continued organic growth.
ExecutiveBiz: We are on the edge of a new decade. What do you think government contracting is going to look like in ten years?
James Ballard: I think the real question is going to be how much insourcing will happen in the interim. How many industry middle managers are going to go ahead over into civil service and is the government really going to be able to hire young people out of college or after two or three years in industry and have them want to spend their career in the government. If they can do that . . . I think what we will be seeing in the future is going to be a very, very competitive market in government services where companies with strong niche capabilities are going to be successful. The bigger companies that provide a broad range of services to many agencies may be struggling. Realistically I do not believe the government will be able to insource the number and the skill set mix it needs. I believe we are going to see a continuing dependence on contractor support. In the past it would not be unusual that when a major program office was created in DOD the program office would have a senior military person in charge; a lawyer, because there is always a lawyer; and some government contracting folks. For the most part the balance of the office would be contractors who have expertise to manage the day to day operations of the program. In this more likely scenario the government is going to have to improve the skill sets of their people who are managing the contractors. How do you manage blended workforces and make sure that OCI doesn’t exist? These are some of the issues they started to face a couple of years back when the human capital crisis was worsening and they will need to solve these issues when there is a return to more outsourcing.
ExecutiveBiz: What emerging markets are you going to pursue in the next couple of years?
James Ballard: I think one of the important emerging markets will be assisting government in the area of continuity of government and the continuity of operations market. This market only really emerged after 9/11 when people realized that continuity of government didn’t mean that you just moved all of the laptops and key people to another building. You really had to do a lot more than that. I think government agencies are starting to realize that . . . Katrina, 9/11 and the potential for further disasters manmade or natural is going to force agencies to be a lot more attentive to really having a solid COOP/COG plan if, god forbid, another catastrophe occurs. I believe that the agencies that are truly thinking about this challenge are realizing that taking action now will put them in a much better position to survive and continue key government activities if all of a sudden something happens in Washington, DC. They need to be thinking can my agencies operate successfully from a remote location like Kentucky or Missouri or wherever? That is an emerging market that may not be as interesting as areas such as cyber security but at the end of the end of the day it is sort of the equivalent of blocking and tackling critical for government reliably carrying on operations.
Posted by Ellen Scott
on Tuesday, January 19th, 2010. Filed under Executive Spotlight.
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