Reston, Va.-based government services firm MAXIMUS entered new phase of its history in April when the company closed the $300 million cash acquisition of program management and technology contractor Acentia.
MAXIMUS initially announced the transaction in March and said it sought to add new work for civilian and health agencies and increase access to contract vehicles with multiple awardees.
ExecutiveBiz recently spoke to Tom Romeo, MAXIMUS’ federal services president, for an in-depth conversation on the deal and potential growth areas post-transaction. We also discussed how industry can help agencies use technologies to give citizens direct connections to government and trends to watch in the data and analytics space.
ExecutiveBiz: Now that the buy has closed, what’s next on the agenda?
Tom Romeo: We are thrilled to have Acentia and their IT services as part of the company. First of all we are going to continue to serve our customers and make sure that there is no disruption to any of our business. We look to growing the IT services business and to developing a culture between MAXIMUS Federal and Acentia that leverages our capabilities throughout the full service range of business process management to IT service support.
ExecutiveBiz: Which federal market areas and contract vehicles does MAXIMUS have more access to as a result of the deal?
Tom Romeo: The match between the two companies is a really good one. Acentia brings a breadth of additional customers in both the federal health civilian markets. The addition of contract vehicles such as CIO-SP3, TIPPS4, EAGLE and others opens up new market opportunities for the combined entity. Additional customers like IRS and NOAA are great matches that give us a much broader reach into the federal civilian market.
ExecutiveBiz: How do you see the use of contract vehicles evolving over the next year?
Tom Romeo: We will continue to see a strong use of vehicles in enhancing the customers’ ability to buy more quickly and with less logistical issues around terms and conditions. There is a trend in the longer term over the next few years to have fewer vehicles with broader reach. We will see some consolidation of some existing vehicles into the larger vehicles.
ExecutiveBiz: What is the role of industry in helping agencies with this customer service functions and the overall theme of connecting citizens to government?
Tom Romeo: There’s a whole variety of roles that industry can help the government in redefining the citizen experience. The expectation for service is set outside of the government now. We deal with our bank online. We buy things from Amazon. We make reservations through OpenTable. The agenda is being set by others already in the industry.
MAXIMUS has a lot of experience in dealing with citizens and programs the government provides to citizens. We understand how to make the experience better for them and how to make sure that they get the benefits they are entitled to through the government.
Industry can play a role all the way from helping define the customer experience to outsourcing the work so that we are actually providing the service for the government to support their mission or down to helping implement technology that enables them to do more on their own to improve the citizen engagement.
ExecutiveBiz: Where can data analytics and processing be applied in customer service and citizen connections to their government?
Tom Romeo: Analytics plays a tremendous role in customer and citizen engagement. It is not only about predicting the patterns, the usage and the preferences of the citizens but it also involves tracking and reacting to them. If you were servicing a Medicare contact center, the way the population wants to interact with the government is going to be much different than if you were dealing with student loans and their expectations.
Data can be used to analyze the population one is dealing with, types of data they need to access, the type of access they prefer and the effectiveness of those channels in servicing customers. We spend a lot of time focused on data, analytics and metrics as it is the foundation for improving the citizen engagement and citizen services we provide.
ExecutiveBiz: What other areas of federal IT do you see opportunities for collaboration between industry and government?
Tom Romeo: There is a lot of opportunity to move to a partnership model in the way the government buys IT services. A lot of our work on the BPM projects is based on outcomes-based or value-based metrics. When processing a case for the government a lot of times the metrics are timeliness and quality of delivery, while the payment is determined by the management of the case, the quality and timeliness.
IT services like operation and maintenance of an existing software application, management of a customer’s infrastructure, management of their desktops and IT helpdesk, can be moved to value-based payment and pricing. The government would get more out of what they spend because the supplier would be driven to meet outcomes the customer is trying for.
I would contrast that to cost-plus-fixed-fee contract or a time-materials contract where by definition the government is paying you to supply labor and they tell you the number of people. It limits the vendor’s ability to bring innovation into the equation and to drive enhanced productivity, better outcomes and a better experience.
There are opportunities from the IT services work, to product implementation that improves case management and process all the way to BPM outsourcing.