Outsourcing: Read between the lines
- By John Inkley
- Oct 02, 2000
The ongoing Defense Department effort to determine the feasibility of
outsourcing its $400 million printing organization appears, on the surface,
to be nothing more than a divestiture of "old information technology" whose
time and value have been super-ceded by the Internet, e-mail and other state-of-the-art
information dissemination technologies.
Most high-tech and integration companies have written off this A-76
initiative as something of interest to only a Xerox or a Kinko's or a Hewlett-Packard.
But this could be the first big mistake of the new millennium as far as
business with DOD is concerned. This privatization effort might contain
more infrastructure and profit potential than many of the solicitations
that major integrators and suppliers have declared a "must win."
Look at what the Defense Document Automation and Production Service
(DAPS) could be in the hands of the private sector, and we find an existing
infrastructure unique at DOD. No single DOD organization has a physical
presence on every major military installation.
Here is an information provider (albeit toner-on-paper-oriented) that
has a physical infrastructure that would be the envy of any corporation
doing business, or wanting to do business, with DOD. A presence on every
significant base worldwide has a potential value far beyond the existing
revenue base of the current DAPS.
What could or would an aggressive, private service provider do with such
an asset? How valuable would a local presence be to potential Internet providers
and application service providers? How important would it be to have a worldwide
network of locations — potential server sites — providing local wireless
access for Palm platforms and other handhelds?
The potential boggles the mind. Imagine what could be done with a customer
base of almost 2 million DOD military and civilian employees with around-the-clock,
easy and local access to their services. What an opportunity. Or is it?
There are still some unanswered questions. Will DOD allow the winning vendor
to exploit this infrastructure, or will the winning vendor be limited in
what services it can provide? Is potential revenue limited to what is, or
what could be? Can DOD prevent a private company — assuming that is the
result of the A-76 effort — from marketing goods, services and capabilities
to on-base customers?
Perhaps DOD doesn't realize the value of the asset it has, or maybe
it does. Perhaps the Pentagon would enjoy the aggressive marketing of IT
goods and services to its employees at a local level by a private company
without the rules, regulations and politics of being a DOD organization.
Perhaps DOD would be burying the hatchet with Congress and the Government
Printing Office by allowing them to take over the "as is" (printing and
copying) functions of these hundreds of "franchises" while allowing the
winning vendor to build an infrastructure for DOD that is second to none.
—Inkley is manager of federal sales at Palm Inc. He can be reached at [email protected]