Big Five spinoffs pursue organic growth
- By John Moore
- Sep 15, 2003
The federal integration scene isn't all about growth via acquisition. Two companies that have proven that point have their origins in the Big Five management consulting firms: Accenture (ranked 11th) and BearingPoint Inc. (ranked 16th). Those companies have seen federal IT revenue growth rates in excess of 50 percent in recent years, according to Federal Procurement Data Center data analyzed by Eagle Eye Publishers Inc. And neither company has resorted to acquisitions to build its business.
BearingPoint changed its name from KPMG Consulting Inc. last year. KPMG Consulting became a public company in 2001, at which time it severed ties to its tax and accounting parent, KPMG LLP. Accenture, formerly Andersen Consulting, followed a similar trajectory, also going public in 2001.
Robin Lineberger, senior vice president in BearingPoint's Federal Services practice, cited the company's management consulting heritage as a factor in its recent federal success. He said the company's consulting orientation resonates with government customers seeking to derive business value from their IT investments. Consulting companies have traditionally focused on a customer's industry-specific issues and business processes before delving into technology.
BearingPoint provides "a deep understanding of what [government customers] do and how they do it," Lineberger said. That knowledge gives the company an edge over government contractors that may try to apply technology to a "business they don't fully understand,"
For Accenture, customer demand for "speed to value" has been an important growth driver, according to Lisa Mascolo, managing partner of the firm's federal client group. Agencies "can't spend two or three years trying to modernize," she said. "They need to get there much more quickly."
Accenture's ability to rapidly deploy a human resources solution was the key to winning business with the Transportation Security Administration. The company was able to have the HR system up and running in 45 days, because the integrator was able to take advantage of its existing service.
In general, Accenture's government operation seeks to capitalize on assets originally deployed in the commercial market, such as the HR managed service, Mascolo said.
Financial management provides another example. Here, the company can tap into its private-sector experience with such enterprise resource planning vendors as SAP AG. The company recently completed an SAP installation at NASA.
BearingPoint, for its part, has been working with the primary ERP vendors for a number of years. Lineberger said that background comes to the fore in the federal space as agencies replace aging financial and logistics systems. The company's background in implementing its own federal financial management software also comes into play. BearingPoint no longer markets a proprietary product, but the experience contributes to its current business, Lineberger said.