One Year Later at Deltek: More of the Same (And Then Some More) - Part III

Part I of this blog series explained Deltek’s ebullience despite a hostile and depressed environment, and also analyzed the recent developments (and anticipated future developments) at Deltek’s Professional Service line of business, which is largely represented by Deltek Vision [evaluate this product]. Part II then analyzed the recent developments (and anticipated future developments) at Deltek’s Government Contractors (GovCon) line of business, which is represented by Deltek Costpoint [evaluate this product] and Deltek GCS Premier [evaluate this product].

This final part will focus on Deltek’s Enterprise Project Management (EPM) line of business, which helps companies deal with the ever-growing reporting regulations being imposed by government agencies.

The Deltek EPM product portfolio [evaluate these products] offers the following three primary disciplines of program controls for government contractors:

  1. Planning & Scheduling via Deltek Open Plan;

  2. Cost and earned value management (EVM) via Deltek Cobra and Deltek MPM (to be explained soon); and

  3. Risk Management via Deltek WelcomRisk.

To be fair, estimating is another key program management disciplne, which Deltek does via third-party solutions. Regarding estimating partners for EPM, Deltek works with several vendors, including Galorath, ProPricer, and PRICE Systems. Users can basically import comma-separated values (CSV) files from those estimating systems into Deltek Cobra. While Deltek works with all of the above-mentioned estimating vendors, it doesn’t yet have formalized partnerships with any of them, and doesn't turn to one more than any other.

The “See Problems Before They Do,” “Share Program Information,” and “Trust the Data” Themes

As Deltek has built its EPM business and listened to its customers’ top priorities, it has focused its attention on building a technology roadmap that delivers features such as early warning indicators, automated reporting, "anywhere, anytime" access via the Web, and process controls to build consistency within the organization. The vendor continues to invest in EPM, and one recent highlight would be Deltek wInsight 6.4,  the tool for EVM reporting and collaboration, which was released in late May, 2008.

The release included enhancements such as early warning indicators that provide a proactive view of project performance to avoid costly budget and schedule overruns. In addition, wInsight 6.4 added two new "trip wire" metrics for the United States (US) Office of Secretary of Defense (OSD): the Baseline Execution Index (BEI) and the Critical Path Length Index (CPLI). These indices are used to measure and forecast programs' progress and are utilized by the US Defense Contract Management Agency (DCMA) for compliance audits.

The product also included faster US Office of Management and Budget (OMB) Part 300 reporting capabilities and simplified data integration. The latter was enabled via a United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) Extensible Markup Language (XML) data interchange to communicate EVM data to clients more easily.

Acquisition Further Bolsters EVM Leadership

As the second major move in the EPM space, in September 2008 Deltek announced the acquisition of MPM, Planview's former EVM solution.  Deltek received both software and key employees with this acquisition.

Prior to this acquisition, the two dominant EVM applications in the market were Planview MPM and Deltek Cobra. Now, Deltek becomes the industry-standard solution in the marketplace for EVM, since acquiring MPM effectively allowed the vendor to corner this market niche. This acquisition indeed extends Deltek’s leadership position as the largest and most comprehensive EVM provider.

Deltek MPM is an EVM application widely used by government contractors and agencies, including 8 of the top 10 aerospace and defense (A&D) contractors, to meet the complex compliance requirements of the US Federal Government. The solution competes directly with Artemis CostView and Dekker, and is used primarily by government contractors to comply with the ANSI 748-98A standards for earned value reporting.

Accordingly, MPM takes initial program budgets to an integrated baseline review (IBR) and then allows users to monitor and report on program performance. MPM produces 48 standard ("canned") reports required by the government such as contract performance format (CPR): Format 1-4 and NASA Form 533: Monthly Contractor Financial Management Report. On a high level, the product’s key capabilities are the following: program overview and initial setup, work breakdown structure (WBS), estimating, what-if analysis, planning & status reviewing, graphic drill-down, Microsoft Project integration, and reporting capabilities in terms of sample reports.

Why This Acquisition?

I think Deltek made the MPM acquisition for two reasons. For one, as mentioned earlier on, the purchase solidifies Deltek’s standing as the leading EVM vendor in the world.  These numbers are only estimates, but it is my belief that MPM and Cobra’s combined install base gives Deltek about 70 percent of the market share for EVM applications.

MPM’s former parent Planview is focused on the information information technology (IT) governance side of the project portfolio management (PPM) market and felt that selling its EVM solution to Deltek would re-focus the company on what it is good at, and gives it additional resources to focus on the strategy.  For Deltek, the vendor gets a solution that fits into its EVM product set, which was the second reason it made this move.

Namely, MPM gives Deltek an EVM solution that complements the overall EPM portfolio.  MPM is a great fit for organizations that have decentralized EVM processes where EVM is managed on individual programs.

It is a desktop application that is relatively easy to use, intuitive, quick to implement, and requires few IT resources.  In that sense, while it will be sold to and used by the largest companies in the world (Northrop Grumman Corporation and Raytheon Company are MPM customers), it is an ideal fit for small to midsize government contractors that want to get up and running on EVM quickly.

The application is capable of handling only one project at a time (although it can store multiple projects). For instance, WBS can only be done on a project-by-project basis, since there is no concept for centralized enterprise project structure (EPS). There is a summary level WBS with roll-up assignments of WBS to owners (or contract account managers [CAMs]). The product also does not offer some critical reports such as the Functional Cost Hour Report (DD Form 1921-1 Part 1) and OMB 300.

Thus, MPM is not focused on enterprise-level deals due to lack of enterprise functionality, and this is where Cobra plays. Deltek Cobra, though it is also used by small companies, is a great solution for organizations that manage EVM on a centralized enterprise-basis, and these tend to be larger firms.  For companies like Lockheed Martin that have centralized EVM functions, the scalability and "roll-up" capabilities of Cobra make it a better solution than MPM for centralized EVM management.

Since MPM has been used by hundreds of customers, and it is a tight fit for small to medium sized government contractors that need to implement EVM on a program-by-program basis, Deltek will not be sun-setting the product and will continue to support/sell MPM to customers.  As the vendor assesses the EVM needs of its customers and prospects, it will sell Cobra or MPM depending on how EVM is managed inside relevant customer organizations.

Due to MPM's architecture, it is not difficult to push/pull data to and from the application.  In that sense, EVM data can be transferred between MPM and GCS Premier, Costpoint, and Vision.  However, Deltek is exploring deeper integration plans and will reveal those to the market as they are developed.

What Might the Future Bring?

For the future, Deltek’s ambitious goal within the EPM suite is to unify all the various applications it owns on one common technology. Since a few years ago, when it first acquired a number of functional point solutions from multiple sources on various technologies (and with little to no integration at all), Deltek has made great strides in this area. But the vendor wants to eventually offer an Integrated Program Management framework from a single vendor, on a single technology, and with a strong application integration framework to interact with any outside systems, not just to Deltek's (where it is already integrated today).

Deltek is well down this path already, although serious work remains. For example, Deltek Cobra's upcoming release, as an EVM solution targeted to large government contractors (that need to standardize on EVM practices across multiple programs within their complex organizations), will likely feature Microsoft .NET Framework-based more scalable architecture.

The upcoming CAM dashboard would be another exciting innovation, since on major programs, CAMs act as specialists for specific components of that program. But at this stage, I am only at liberty to hint that this functionality should greatly enhance (dare I say revolutionize?) the way A&D firms manage program performance. In the meantime, we will have to stay tuned for more product's details and the official availability announcement by Deltek.

Dear readers, what are your views, comments, opinions, experiences with particular product(s), and so on? Do you think Deltek is going in the right direction?
comments powered by Disqus