Fed Sources adds consulting business

Market research firm aims to find firmer footing in competitive field

Almost a year has passed since Washington Management Group Inc. bought Federal Sources Inc., and the firms are forging a new, combined identity intended to strengthen their standing in an increasingly competitive market.

FSI occupies a space at a crowded table of companies, such as Input and Eagle Eye Publishers Inc., which provide similar market intelligence and information services to technology companies targeting the government market. Officials at other firms say they too are expanding their offerings to strengthen the companies' positions.

One way FSI officials hope to maintain the company's market position is through a new consulting practice. Company officials built the business by providing market analysis reports and holding seminars to discuss the federal market. By expanding its consulting arm, officials are enhancing FSI's ability to work one-on-one with officials at businesses trying to break into or expand in the federal market.

"We're looking at how we can continue to add value for our clients," said Bill Gormley, president of FSI. The company provides market research information, while Washington Management Group brings expertise on the use of General Services Administration contracts. Consulting adds a third leg to the set of strengths, he said.

The merger has been good for FSI, which had been flagging under competition from other firms, said consultant John Ortego, president of Ortego and Associates.

"I think the turnaround is already under way," he said. "Input was making major inroads. Now I believe Input has a strong competitor in Federal Sources."

In July, Karen Wilson, a former Unisys Corp. executive, joined FSI as vice president of consulting. In August, David Pelehach left Booz Allen Hamilton Inc. to become a consulting principal at FSI.

"There are changes occurring in the government ...where a lot more of the government work is being purchased" through GSA contract vehicles, Pelehach said. "Another change is that more and more commercial companies are making a transition to the government market. There's a tremendous opportunity to work with companies that haven't been in the federal market but have a strong commercial presence."

Input has found the same opportunities, said Kevin Plexico, the company's executive vice president. "We really view consulting as a strategic part of our business," he said. "In the past, consulting hasn't been as big a focus for us, but in the past year, it's increased fourfold."

The market changes rapidly, he said, and information companies have to stay ahead of agencies' needs.

"The one thing that's constant in the market is that there are always new things coming out," Plexico said. "There's a lot of untapped opportunity and leverage that we can provide to clients."

"The landscape changes almost daily," agreed Amy Fadida, president and chief executive officer of A.M. Fadida Consulting and an FSI customer. Current information is "what gives me a leading edge, and it certainly helps my clients make the right decision at the right time."

But the information must be useful, pertinent to the client and current, said Harvey Ernest, president of Rivergroup Inc. and also an FSI customer.

"What I need to do is provide what I call indisputable evidence of opportunity," he said. "Many people can create ring binders full of reports with useless data."

Input, which is on the verge of bringing on its 1,000th customer, has introduced three major new information products in the past few months, Plexico said, including details on the labor rates for more than 500 vendors. The firm also launched a state and local bid notification service, formed a relationship with Carroll's Publishing to provide access to information on 250,000 corporate contact people and rolled out new services in Europe.

"We have a pretty aggressive schedule going forward," Plexico said.

Blending cultures and markets

The process of melding FSI and Washington Management Group is going smoothly, said Gormley and Ray Bjorklund, FSI's senior vice president and chief knowledge officer.

Weekly combined staff meetings help the leaders manage the process, Gormley said. "There should never be a problem more than 6 days old," he said. "On the seventh day, you get to bring it up."

The combined firm has been hiring rapidly, too, with 22 new employees joining since February, he said, bringing the total head count to about 60.

Some of the new employees are working to improve the company's market data, which shows potential contracting opportunities, Bjorklund said.

FSI's clients "are very frustrated trying to find all the opportunities," he said. "They want as robust a pipeline as possible."

Washington Management Group draws 60 percent of its customers from fields other than information technology, Gormley added. Combining the two firms created an entity with a heavy emphasis on IT, but also a reach into other industries.

The view from outside

Consultants are among those who use the data that companies such as FSI and Input generate. They are a "ready source of quick insight into situations," Ortego said. "Their people track agency activities if you need to know something quickly. You don't get a competitive edge, because everybody subscribes to the package [of information], but you get valuable information."

The value of the information is only increasing because it is becoming progressively more complicated and difficult for companies to sort through on their own, said Chip Mather, senior vice president of Acquisition Solutions Inc.

"It used to be if you had somebody competent, you could do some research," he said. "The information used to be readily available. Today, there's less information out there, so it's more labor-intensive."

Jim Kane, former chief executive officer at FSI, uses the company's services along with information from other sources in his new role as president and CEO of the Software Productivity Consortium.

"We're right in the middle of doing our strategic plan right now," said Kane, who left in the aftermath of the merger. FSI's data is "classic market intelligence."

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