Companies adjust tactics to meet emerging requirements.
U.S. Army officials describe the Joint Operations Center for Joint Force Headquarters–National Capital Region as a “piece of transformation” because it is a redesigned Army administrative facility that has been changed into a joint and interagency operational command. Information systems companies must anticipate these types of transformational initiatives to be able to take advantage of business opportunities.
Changes in the U.S. armed services’ force structures and acquisition processes are causing a ripple effect that is rolling into the commercial sector. Company officials are finding that business as usual can’t be business as usual anymore if they want to satisfy today’s requirements, capture a share of a burgeoning defense budget or expand into the relatively new but potentially lucrative homeland security market. Firms must be as agile and responsive as the new military they are vying to support.
Information technology companies that regularly work with the military are facing some fundamental challenges as the services transform. They no longer can wait for requirements to be enumerated but instead must work more closely with the services and the U.S. Defense Department to anticipate customer needs. Simultaneously, firms must be careful not to head in the direction they believe the military is going only to find out that they are going down the wrong path. Some are partnering with companies they did not even consider collaborating with in the past; others are restructuring to position themselves better to capitalize on new business opportunities or to improve customer response. Company officials also must adjust their business processes to new contracting vehicles such as performance-based contracts. All of these variables compel firms to view business procedures and product development from what the military calls a “campaign level.”
Brad Curran, an industry analyst with Frost and Sullivan, San Antonio, submits that firms are just beginning to realize that they have been spending millions of dollars developing products before defining or managing customer requirements. “They’re finally figuring out that the focus is on the warfighter and those concepts of operations. Instead of simply putting out a widget, they’re saying, ‘Here’s your problem; we understand it. Here’s how our widget can fix your problem within your concept of operations,’” Curran explains.
Changes in acquisition methods also are influencing how companies operate, he adds. Some firms are hiring acquisition specialists to help navigate the new environment. Recognizing that there are two defense budgets—the approved budget and the supplementary budget—and that Congress is scrutinizing spending, businesses are turning to these experts to take advantage of opportunities, he says.
Although the armed forces will continue to purchase commercial products, Curran points out that some requirements cannot be fulfilled with off-the-shelf solutions. One way that firms are ensuring they hit the mark when developing specialized products is by working with organizations such as the Defense Advanced Research Projects Agency and military laboratories. These groups identify the gaps that exist, Curran observes, so companies go to them for seed money as well as for assurance that a market exists for the technologies they develop.
In addition to this approach, companies today recognize that certain criteria have become critical to transformation efforts. Interoperability, for example, has long been the battle cry of military leaders. Companies now view it as essential and recognize that products must support not only joint but also coalition environments if they are to be considered seriously by the Defense Department. In the same vein, more firms are putting their products through military certification processes such as those offered by the Joint Interoperability Test Command so they can assure the services and defense agencies that the solution meets Defense Department requirements.
And experts agree that the push for transformation influences the way businesses go about ascertaining military requirements. Company executives are spending more time with military leaders and discussing their vision of the future so they can align their product development efforts with upcoming needs. They are establishing not just new offices but entire divisions near military locations such as the Pentagon and installations that focus on information technology systems. In addition, firms are joining organizations and consortia that explore the technology needs of both military and government agencies in depth. These efforts contribute to their understanding of the problems these organizations are trying to solve.
The influence of military transformation is being felt within companies as well. Some are restructuring internal units, breaking down the stovepipes to facilitate information sharing within the company. These initiatives lead to the types of solutions the military is searching for today: integrated systems, heterogeneous information technology environments, systems that support multiple types of missions and simplified systems management.
At the same time, software and hardware companies are partnering with firms they never considered teaming with in the past, including firms that are not traditionally associated with the military. While mergers and acquisitions continue, transformation is coloring this activity as well. Increasingly, the solutions the services are looking for require companies to find firms that specialize in niche capabilities, and now foreign companies are getting involved, Curran says.
Non-U.S. firms are influencing the business landscape in another way, he adds. The Defense Department is conducting foreign comparative testing, which involves examining how foreign and domestic products match up. “They say, ‘How does this widget work compared to one made in the U.S.? Well, it’s better and it’s only a couple of dollars more.’ And [Secretary of Defense Donald] Rumsfeld and the current Defense Department would be very happy to get foreign companies involved mostly because they have good ideas and because they’re our allies and we want to cooperate with them,” Curran states.
Another acquisition transformation is the growing number of capabilities that are being developed incrementally. Although spiral development has been around for several years, businesses are learning how to adapt their processes to it. Experts agree that companies must be as flexible, agile and quick as the military troops of the future. Because they are actively staying on top of changing military requirements, they are making every effort to change their solutions as needs change. In addition, they are creating products that can be modified quickly or that allow developers—both military and commercial—to revise a current solution in days or weeks rather than months and years.
Both mid-tier and large companies see their firms changing in response to military transformation. Lt. Col. Glenn Davis, USA (Ret.), vice president of defense sector operations, STG Incorporated, Reston, Virginia, says his company is dealing with transformation on a daily basis. The firm is analyzing Defense Department requirements to ensure it is able to match the tenets of transformation: flexibility, speed and jointness.
“Businesses such as ours need to take this approach, and we must be equally positioned to be adaptive and design products that are cost-effective and efficient. It is a concept that is emerging with the holistic change from the traditional statement-of-work to performance-based contracts,” Col. Davis says. But understanding the requirements is only the first step. Companies also must be sure they can meet scheduling, cost and personnel management needs, he adds.
STG’s Army program manager is Chief Warrant Officer 5 Jack Hrubick, USA (Ret.), and he relates that while it is important to build good relationships with military leaders, it is equally important to keep in touch with information technology users. The chief warrant officer makes it a point to ask corporals and sergeants about the problems they experience with products and systems to determine where improvements can be made. “If you take two E4s, give them any software product, put them in a big warehouse, lock the door so no one can come in and leave them there for two weeks, when you open that door up, you’re going to find that they’ve found everything that system won’t do, what it will do and some capabilities you never thought it would do. And that’s where our company needs to be focused,” he relates.
The point, Col. Davis says, is that functionality and design architectures must be consistent and efficient across a much broader scope today because transformational initiatives center around breaking down stovepipes and creating large enterprise environments. “From a company perspective, we have to look hard to be sure we have the right combination of skills across the breadth of the company and to see where additional capabilities are needed to fulfill this enterprise view,” the colonel explains.
When companies find themselves lacking in some area, many turn to partnering with other firms. But Col. Davis points out that military transformation is even influencing this area. “We’re involved with companies that we didn’t think would be an integral part of the solution five years ago. For example, DHL has become critical in a solution set and engineering efforts in overseas locations. We have to ship items, and DHL already has this capability and is omnipresent, so we work with them. We wouldn’t have done that five years go. We would have gone with military transit. We’re also looking at the commercial telecommunications and construction companies [for partnering]. We look not just at the equipment but also at the location the equipment will operate in, how it is secured and how to build and sustain it. It really has dramatically changed the way we partner with other companies,” he maintains. Military transformation requires these new arrangements with many and nontraditional partners, and the repercussions include added management responsibilities and the need for a dynamic infrastructure to expand and contract almost daily to handle multiple tasks, he adds.
|The Force XXI Battle Command Brigade and Below system is one of several capabilities the Army is testing in its transformation efforts.|
Microsoft is garnering military business in other ways. Gen. Dees reveals that the firm’s joint development program allows customers and partners “to move upstream” in the technology design process, get involved early in the product development stages and offer valuable input. In addition, the firm has worked within specific military organizations, including the Electronic Systems Center at Hanscom Air Force Base in Massachusetts, to develop capabilities that meet commanders’ demands quickly. Speed and agility in development are crucial, Gen. Dees says, because the capabilities that support transformational approaches are needed immediately in current operations.
Like STG, Microsoft also is teaming with companies they did not work with in the past. Michael Bradshaw, director, Department of Defense accounts, federal district, Microsoft, says the company is beginning to discuss lines of business products it did not consider five years ago. “We’re much more involved with companies that have worked with the Defense Department in the past. There is a much tighter relationship between Microsoft and, say, Northrop Grumman because they have the industry expertise. They know what the DOD needs because they’ve worked with the department for a long time. We have the software. We’re growing into a different space as a company while the DOD is growing. It’s a very dynamic, exciting time,” Bradshaw maintains.
But Adm. William A. Owens, USN (Ret.), chief executive officer and vice chairman, Nortel Networks Incorporated, Brampton, Ontario, Canada, contends that partnering with defense contractors whose primary business is platforms rather than information systems is the wrong way to go. His company is focusing instead on developing the knowledge systems he believes the military needs to truly transform the way it operates. Rather than being a subcontractor to companies like Boeing or Northrop Grumman that provide the ships, tanks and airplanes, Nortel’s approach turns a traditional paradigm on its head.
“We are organizing ourselves to be ready not just to be a sub[contractor] to a Lockheed Martin or Northrop Grumman. We’re setting ourselves up, over the long term, to be the prime of those contracts because I believe those contracts are the core of security and a homeland security capability and not add-ons to other large defense contractors like Boeing or Lockheed. They really are stand-alone capabilities, and they can only come in their finest form from a company that does this for a living around the world,” Adm. Owens explains.
The admiral notes that the military transformation debate has encouraged many information systems companies to concentrate on what they need to do to shift their business focus to government requirements and contract opportunities. To this end, Adm. Owens, like many other chief executives, spends more time with high-ranking officials in Ottawa; Washington, D.C.; and other nations’ capitals. During these meetings, the admiral spreads the word about the importance of knowledge systems to the military and to homeland security. At the same time, his company is involved in related activities such as debates about frequency spectrum allocation.
Changes are taking place within Nortel as well, Adm. Owens admits. More than in the past, senior staff meetings involve discussions about the makeup of the marketplace and how Nortel can contribute to solving current military and security problems. “I think that you would just find us much more engaged. It isn’t just all to find more business. It is also because we think we have a profound capability. I guess you just have to take that on faith—it’s what you’d expect me to say—but talking to others I think you’d find that I really have a strong belief in that,” he says.
But Nortel is doing more than just talking about making its capabilities known to federal agencies. Earlier this year, the company reorganized and set up Nortel Federal Solutions headquartered in Dulles, Virginia, near Washington, D.C. “The organization is prepared to go into a new kind of world of government accounting and government accountability. We will probably do an acquisition that is a pure U.S. company because we’re a Canadian company … and therefore it is necessary to have a U.S. stand-alone entity,” Adm. Owens reveals.
Col. Davis maintains that the changes occurring in the military and in industry today mirror the current state of the world. “The transformation effort is truly a reflection of where we are as a military and as a nation. If you look at the evolving threats to internal security and external security, the concept of transformation will never become a legacy. It will always be a future they’re moving toward,” he says.
Retired Admiral Questions Authenticity of Military Transformation
Despite all the hoopla, not everyone believes the U.S. military is in the midst of transforming. Or if it is, it’s not occurring fast enough. Adm. William A. Owens, USN (Ret.), chief executive officer and vice chairman, Nortel Networks Incorporated, contends that the current structure of the U.S. armed forces—and the budget configuration it carries with it—results in four stovepipes that are “terribly strong and powerful.”
Adm. Owens is not offering his opinion as a casual bystander. Before retiring in February 1996 after 33 years of service, the admiral was the vice chairman of the Joint Chiefs of Staff, where he was responsible for reorganizing and restructuring the armed forces in the post-Cold War era. In 2000, he authored a book titled Lifting the Fog of War, which details the extent of the crisis in the military and proposes solutions to revolutionize the armed services.
The admiral challenges the rhetoric about efforts to create a joint force. Although he does not propose merging the United States’ military branches, he maintains that a military force designed today would not comprise a navy, an army, an air force and a marine corps. “You have to realize that when you go into it that way, you build four stovepipes that are terribly strong and powerful because the budgets belong to the services, and therefore they will protect those budgets at all costs. Jointness, à la Goldwater-Nichols [Act], has not fixed the budget side very much. You can point to some products and some projects, but you find very few, in terms of big percentages of the defense budget, that are driven by joint initiatives,” he says.
The Joint Strike Fighter is a prime example, Adm. Owens notes. Although it is touted as a joint program, the U.S. Navy, Air Force and Marine Corps each has its own final design idea. “So the services want their own Joint Strike Fighter, and the military would say, ‘But, it has a very strong joint component—85 percent of the plane is common.’ Well, we’ve been through those discussions before, but you can be sure that the three services will wind up in the final deployed version with three radically different airplanes,” he states. “I think that’s the way these programs tend to go, and it is because the four services want their own airplane and want their own program manager. So, jointness does not exist in any real way in the joint programs that make up our military today,” he says.
Although the admiral uses a military platform to illustrate his beliefs about a lack of jointness, he says one fundamental problem is that the department continues to speak about transformation in terms of platforms. “My belief is that a real transformed military is far less platform-centric and much more knowledge-centric. It is much more oriented to bandwidth and precision navigation and an umbrella to see every element of the battlefield—every soldier, every tank, every airplane—to know where it is with very accurate coordinates 24 hours a day, seven days a week,” he says. A knowledge-centric force would be able to identify enemy vehicles immediately, to sort out blue vehicles from red vehicles and to prevent blue-on-blue engagements, the admiral adds.
“It is the knowledge base of the military in the future that will be the real transformation,” Adm. Owens states. “As long as it’s left to the services—that is the Army, Navy, Air Force and Marines—you’ll see a focus on vehicles, and that is my issue. I just want to lay out my continuing angst because my belief is you could have a better military at two-thirds the cost of today’s military, and we have not and are not transforming fast enough.”
Commercial technology in the knowledge warfare area is of utmost importance, the admiral maintains. “The military cannot produce or deploy communications systems anywhere near like the ones we and our competitors in the commercial world are producing. And yet, they do not import those systems for their own use. And you wind up with a situation like we have in Iraq today where the soldiers in a battlefield, whenever they can, use commercial communications technology because it’s much more reliable and much more available than the system that we spend 10 times the money for.”
But whether the military and homeland security agencies go the route of commercial solutions or continue to develop their own systems, Adm. Owens believes strongly that capturing and sharing knowledge is essential. “If we had had knowledge systems in the United States, I would suggest we would not have had 9/11. I just have to ask, do we have knowledge systems in place today to preclude another 9/11. I’m afraid the answer to that is no, and we may have to have another 9/11 before we believe we must do something to take advantage of the commercial technology that we have on the shelf today to really fix this problem. It’s very much in the category of something we can do,” he states.
The admiral acknowledges that network-centric warfare is a primary topic for military leaders today but states that this is not enough. “I’d say, ‘Yes, there are some great speeches, but how much money is going to it?’ Show me the money. Show me the dedication. Show me the general. Is there a four-star general or an admiral in each of the services who is heading up that kind of activity? Or are they still focused on ships, tanks and airplanes? And I think you find the money still goes to the platforms, not to the knowledge,” he says.