Name: Business Systems Maturity
Uploaded: 2026-04-30T19:31:08.039Z
Duration: 1 h 2 min 56 s
Description: Business Systems Maturity

Transcript for "Business Systems Maturity": Hello, everyone. Thank you for joining us today, today's presentation. I'm Alex Gallant. I'm the senior marketing manager here at Deltek. And before we begin, I have a few administrative items to note. For the best webinar experience, please use Google Chrome or Firefox. If you have a question, please type it in the q and a box anytime during the presentation. We will address as many questions as we can at the conclusion of the webinar. If we can't get to your question during the webinar, we will share your contact information with Baker Tilly so they can follow-up. Resources are available for you to download in the docs panel on the screen. You will also receive the on demand recording of today's webinar via email within twenty four hours after the webinar ends. Now that the administrative items are out of the are out of the way, let's get started. Great. Thank you so much, Alex. Nice to have everyone on the webinar this morning or this afternoon, depending on where you're at. My name is Derek Boyd. I'm a principal with Baker Tilly. I presented the first webinar in the series on the government contract maturity roadmap and, systems guide. So I wanted to, allow for everybody to make sure when Alex mentions, throw questions in the chat. We'd love to have questions. We do have a little bit of time at the end for questions, but definitely wanna take those, and we'll try to address them as we go. We even got some, pre submitted questions. So excited about that, and, thank you all for for listening today. With me to present today also is, Rob O'Brien, another principal of mine with Baker Tilly, and Tara Cannon, senior product marketing manager at Deltek. So Baker Tilly, my group and, some of what Rob's team does as well, we really position government contractors for success in the federal marketplace. So our focus of our 50 plus professionals is to help proactively address, the complex economic, regulatory, and competitive pressures that are truly facing, government contractors in this highly regulated industry. We have a suite of integrated service offerings delivering industry insights and tailored approaches that help clients mitigate compliance risk and make strategic and wise decisions to achieve long term success. We do this through our vast network of industry and government and contractor connections with a deep emphasis on directly engaging with the government contracting community as thought leaders and staying abreast of emerging trends, rules, and policy initiatives. Some of which we'll probably talk about today, and others we did talk about in our first webinar. So we encourage you to check out that recording if you haven't had a chance to see that yet. In addition, we have over a 150 digital advisory professionals that focus just on this marketplace. So one of which is I brought along with me here is, Rob. So, Rob, would you mind talking about Baker Tilly's digital team? Absolutely. Yes. Great. Thank you, Derek. Good afternoon and good morning for folks that joined. So I do work in Baker Tilly's digital advisory practice and what we focus on is digital transformation primarily. We provide strategy and, transformation advisory for companies that are looking to grow, right, take their, take their systems to the next level, or respond to changes in regulation and modern technologies. We also work with our clients to develop, data interfaces between systems, various portals, various data lakes, things of that nature. And then my specific team within digital is the government contracting technology, practice and we work with our peers in digital as well as Derek's team to solely focus on the, the government contracting landscape. We advise, clients on proper ERP setup. We are a, Deltek partner. We're actually Deltek's first partner back in 2003, and, twenty three years later, we are their largest system integrating partner. We've also been Deltek's partner of the year for the past, five years or so. So very integrated with Deltek. We work with Deltek to deploy cost points, to align cost point to those digital transformation and growth strategies, and ensure that, the technology is working in harmony with the the rest of our company's systems. And you'll hear us talk about systems a lot. That's gonna be kind of the combination of people, process, and technology. Tara, I'll kick it over to you. Hey, Tara. I don't know if we can hear you or for, you're not on. Maybe we, try to move on to the webinar agenda. Yep. I I just know it's gonna forget to go off mute. Hopefully, you can hear me now. Alright. We got you. Alright. Cool. So, in case you weren't aware, Deltek is a software company built for specifically for project based businesses, and we've been supporting government contractors for over forty years. I work specifically on Costpoint, which is our core ERP, and that's the accounting project management and compliance system that sits at the center of how so many GovCon businesses run their financials and contracts. What I love about my role is I get to sit at the intersection of product and strategy, and I work closely with the teams building cost point, which means I spend a lot of my time doing exactly what we're gonna be doing here today, which is understanding your most critical challenges and helping shape the tools that are designed to solve them. So I'm gonna hand this back over to Derek and Rob to walk through the maturity framework, and then I'll be back in a little bit to show you how this environment right now is really costing government contractors. Awesome. Thanks, Tara. Alright. So we got up here our agenda for today's webinar. So we wanna make sure we reframe and repromote the, maturity framework that was, provided. Hopefully, you guys can access that in the materials here along with the actual slides for this presentation. We're not gonna get to all the slides. There's a whole lot of good resources in the appendix to these and hopefully a link as well to the, maturity framework itself, which was, a guide that was a collaboration between Baker Tilly and Deltek, two organizations with market leading expertise supporting government contractors. And so we really developed this framework to help individual organizations grow with confidence and what kind of those market leader new entrants and market leader, growth stages. And so we'll talk a little bit about that in a minute. But the vast majority of today, we really wanna focus on contractor business systems and kind of the different definitions of those. Rob already previewed one talking about people and process and technology and the components that make up business systems. So we wanna really talk about why it matters, what they are, what they are to you as a contractor, what that means to the government, what some of those really requirements are, and and the practical realities of growing that infrastructure across a new entrant, an intermediate contractor, and an experienced or established contractor. And then, Tara's going to close out talking about, Hey, you guys talked a lot about compliance and meeting certain requirements. That's great, but how do we turn that into a competitive advantage? How do we use these things that we use to operate our business and actually continue to grow and progress across these stages? So, as I mentioned, the maturity guide, visuals of it right here, it's really a practical guide to help contractors assess their current capabilities, understand where they might have gaps in those, and what good looks like. And and the the challenge we have, right, is that there is no one good for any individual organization. Depends on your industry. It depends on your geography. It depends on your size. It depends on your risk tolerance. It depends upon your overall federal sector strategy. And all those things come together to help form a, well, what does new entrant look like? What might an intermediate look like? And so we and what does an experienced contractor look like? We try to bucket those things, define these stages in in broad terms, but allow contractors to understand where they might be at now. And then how do we align to make sure that our strategy is gonna help us continue to grow in the federal space. Realize that also a lot of contractors might also work in commercial areas too. And so this truly is meant to focus just on the federal business and understanding that, hey, you might be a new entrant in the government contracting or federal contracting space, but you're still a multi billion dollar commercial business. But the needs, the requirements, the infrastructure, it really varies and is different when you start talking about, working in this highly regulated environment. The first webinar was all about introducing this guide. So really today and and also talking about some of the market happenings, things that are going on in the space over the last, you know, six to twelve months or so, of which there are many, and we'll obviously take questions on those as well. But really, this webinar is all about building your operational infrastructure to support all of that. Right? So, what do I mean when I talk about business systems talking about the contract lifecycle? And we'll talk about this even more with some of Tara's conclusions. But this is kind of how Baker Tilly thinks about how we make sure everything is connected throughout the government contract lifecycle. If you know, we start at the top right here talking about opportunity management, proposal pricing, proper, proposals and preparation forward before you even have a contract, right? The analysis and the pre work done before a contract is even awarded. And then winning that contract is obviously important. Right? And then you need to be able to perform on that. There's different requirements there. And then as you're working it, you wanna make sure that you're managing it appropriately. Right? You have a con accounting, billing, and reporting that supports the requirements that are gonna be part of these business systems that we're gonna talk about today. And then you can actually monitor and evaluate your performance with all of those. Right? You're interfacing with your customers, your oversight agencies, you're complying with your contract terms and conditions. Again, some of them we're gonna go into today. And all of those things are aligned to your federal sector strategy because you have the infrastructure in place to support that strategy. And and then kinda going now back to the left side here, this is what we're talking about. We're saying a contractor's business system. We're not just talking a single piece of software. We're not even talking multiple pieces of software and how they connect. The business system is the manifestation of all of your business activities. What you're experiencing and what is driving those, how you document things and policies, procedures, process flows, desktops, and job aids, all the things that say what you do. And then what you actually do in process and controls, controls being a key element of this. That's kinda how the government looks at at business systems, and we'll talk about that a little bit later. Clear roles and responsibilities, who's involved in all of these things, and, obviously, yes, the technology that supports all of this and the tools and techniques that we make sure that, our systems are producing in a way that allow us to continue to compete, win, not manage our contracts. And then, you know, as compliance people, I wouldn't be I'd be remiss to not talk about, hey, we're actually going back to make sure that what we say we do is actually happening. The system is operating as designed, and we've tested those controls that are are inherent in our business processes. Hey, Derek. Quick question for you on that. You know, if we're talking about new entrants, right, and I I might be jumping ahead a little bit, but the need for, you know, documented processes, right, and procedures, what's an what's an area where some of the new entrants typically don't document enough in in an area where where they may be over document? And if that's coming up, by all means, I'll apologize you can take it forward. Yeah. Well, let me let me address what we mean by a new entrant versus intermediate established contractor, and then I'll get into the question for sure. So, you know, to us, you know, in writing this guide, Bakersfield and Deltek together, we we really wanted to reflect on how can an organization think about where you stand today, what are your organization's short, medium, or long term growth goals in the federal sector, and understanding that this is not just a size. Right? This isn't just small, medium, and large for the three columns here. It's about a series of categories and how you fit into them versus just top line revenue. Right? So when we wrote to this, we really thought about, you know, categories to think about could include your the government's acquisition approach and what they're buying, how they're buying it, the contract types that then come along with it, which then come across as some specific requirements. Other specific requirements in contract clauses, which again, we'll get into here in terms of size of the actual contract itself. And then all the risk factors that you might take on in being an entity is one of these categories. Because to me, as you progress here, the risk inherently rises. Right? Financial risk, audit risk, performance risk, subcontracting risk, security risk, all the risk elements continue to progress as you go on. So I would say that there's no risk in in a new entrant category, but it's just significantly different versus an established contractor. Specifically, we're talking about documentation. Right? But I think we'll talk about this later, Rob, for sure. But, you know, there's a there's a balance between not over engineering but also not under engineering. You know, I I always think about it as true policies and procedures and what the government expects you to have. And those can be pretty limited. Right? It's just on the core business processes. And we'll also talk about later what we mean by core business processes. It really just describes what you do. Right? A practical way to think about it is if you brought in someone new to the organization, could you at least get them, you know, started 10% of the way there to know what are our systems, what do they accomplish, what are the key elements or or steps within that, and does that get them enough of the way there to ask a lot more questions. Right? It's not detailed job aids with screenshots, click this, click that. It's truly more of an overarching view of your business processes, which again, we'll get into what we we mean when we say that later on. Rob, I don't know if you have anything to add to that. No. That makes a lot of sense. I mean, I I'm just thinking about, you know, what it's like to be in that kind of new entrance stage and you're growing really quickly. Right? You might be you might be on a team of two or three. You might be wearing many hats. Things change a lot. But, I mean, I think what you're what you're walking through here shows how how critical it is to still keep adequate documentation so that as you grow and as more people come into the fold and need to understand what you're doing, you you have that ready and available. Yeah. Exactly. So, you know, kind of just finding what business systems are, what do we say when we mean business systems, and how do they relate to those market entrants? I also would be remiss to not talk about, well, why? Why are we talking about this? Right? So some opportunities actually don't permit you to bid on them unless you have some of these. Right? So we've seen a lot of, solicitations over the past two, three, four, five years that actually say you must have an approved accounting system. And every solicitation seems to be a little bit different because every government agency might interpret that a little bit differently. But, you know, when you talk about an accounting system and the government contract descends, it's not just, hey. We are you know, we have GAAP financial statements. It's no. We have a government contract accounting system that meets the required criteria for a pre award survey, which we'll talk about more in a little bit. Right? So, you know, this isn't just a, hey. We we wanna have this because the contractor says we have to. No. This opens up additional addressable markets that you might not have otherwise been able to bid on unless you are going down this path. Right? And even if it's not a gating system or a gating requirement where it's, you know, you're not even allowed to bid on it, it might affect your ability for certain scorecard requirements. Hey. We get additional points if we have an approved purchasing system as an example. We see those a lot. We might get more credibility and less risk in auditing our proposals if we have an approved estimating system. The the government agencies that are reviewing our our proposals believe we have credibility because someone else has looked at this system. They've audited this system. They understand how to work it. Right? And some of this is just good business practice. Right? It's ability to, continue to process in such a way that you can scale. You can, not worry as much about some other of those risks that I was mentioning about earlier. And you can truly, you know, fit your systems and processes together to work this throughout the life cycle, and it's not just catch as catch can. So, you know, in our view, this really matters because it's not just, you know, compliance for compliance's sake, but not to steal your thunder in a in a minute, Tara, but it's kind of that competitive differentiation that we're talking about. And again, even within those systems, it's not just, okay. Well, we have the software. We wrote a policy. We think we're good. But it's also how you use those systems. So so, Rob, you know, maybe it's a good time for you to talk in and and tag in about not just why they matter, but why the architecture and implementation approach to business systems matters. Yeah. Absolutely. Yeah. Sorry. Was that Tara? That's you, and then I'll I'll turn it back over to Tara. Okay. Apologies, having a little internet issue here but yeah, happy to talk about architecture and how it relates to the technology and the systems. As you're going to hear throughout the presentation, Delta Costpoint is primarily made for government contractors. Tara will talk a lot more about the features, functionality, and, alignment to industry. But the system itself can either be significantly restricted in its effectiveness in aligning to procedural documents, or it could fail across the board if there isn't proper architecture. And when I talk about architecture, right, it's it's really designing that whole system. Right? What are the people going to do? What are people going to be responsible for? What access will they then have to the technology to allow them to do the tasks that they are responsible for doing? Right. So one of the biggest things we wanna make sure of is we don't give we don't give, you know, inappropriate access to the systems, but also we need to be able to architecture or sorry, architect the the data that we will be capturing in the system. Right? So if we're moving on to a, higher technology weighted process for, say, lower one that might be leveraging spreadsheets and, other offline actions. Right? We need to ensure that, we have the appropriate rigor in how we do things to align to something that's kinda built for the long term. Right? When you're in spreadsheets, when you're in other offline processes, right, you can flex those with with how you're growing. But when it comes to, implementing, in this case, freight and ERP and accounting system, we we really wanna make sure that, that we're doing that very mindfully to allow, the technology to work in harmony with the people and the processes. So, you know, think about direct project structures, right, how we define those so that we're capturing costs in billing actions consistently, right, so that we're able to invoice against specific funding requirements. Also collecting that information in a way that allows us to, be able to track past performance in a unified way as we continue to bid on new work. We want to make sure we have systems in place so that we can accurately correct data and then accurately interpret and use that data to strategically grow and evolve. Yeah. Great points. And and to add to that, Tara, maybe you can jump in on, you know, we're talking about this and the the why they matter. It's also the environment that's so unique that is, you know, the federal marketplace and the highly regulated highly regulated environment. Maybe you can kinda talk about the industry that that all of us operate in here. Yeah. For sure. So no matter what stage of your business right now, there is a lot going on in GovCon, where we see we're seeing sort of four simultaneous forces putting a lot of pressure, especially on your business systems. And if your business systems aren't set up right to begin with, it's gonna make an even bigger impact. Those cracks are gonna start to show. So the first thing is around budget uncertainty, appropriation volatility, tariff on impact on cost of goods, global unrest. Your cost structures need to flex faster than a quarterly budget cycle allows. Second is acquisition policy. It's being rewritten in real time right now. OTAs, CSOs, contract consolidation, commercial preferences. If your systems can't keep pace, you're gonna miss out on a lot of opportunity or even fall out of compliance without even realizing it. The third is cybersecurity, CMMC compliance, the proposed FARS UI rule, supply chain requirements. These are active and imminent. If your systems can't document your compliance, you are definitely exposed. And the last one is around AI. 79% of contractors rank that as their top technology priority, And the window to get ahead of that is open right now, but not for very long. The contractors who thrive aren't gonna be the ones that just react. They're gonna be the ones whose systems give them the visibility to move first. So the date on this slide comes from Deltek's Clarity government contracting industry study. So this is our annual research. It's in its seventeenth year now, and it surveys over 900 government contractors. There should be a link up in, your resources to check that out. We have a first look webinar coming in mid May for that, so definitely bookmark that. But Clarity documents what contractors are actually experiencing, not what we think they are. And what this year's Clarity data is telling us is that systems are under serious strain. 38% of contractors are losing bids due to pricing defensibility, not because their price was too high, not because they mainly because they just couldn't defend it. Ninety six percent of contractors expect compliance cost to stay the same or increase, and there's 26 audits average that contractors are reporting every year. That's an audit every two weeks. That is crazy. And they're spending eighteen to a hundred and twenty hours preparing for these audits. That's weeks of capacity lost not lost to prep. 61% of contractors take more than seven days to close their books. And if you're waiting a week to understand your financial position, you're always making decisions on yesterday's data. I want you to see each of these as a report card, not a report card, but as a road map. Every single one of them is a business systems security, what that can actually do to help you solve that. So in this next slide, I want you to take a screenshot of there are two groups of contractors in the market today. They're not separated by size, not by years in business. They're separated by fragmented systems versus integrated system. The scoreboard at the bottom says it all. Win rate on average for most contractors is 40%. It's 69% of top performers. Top performers is a metric within Clarity that we use to, really dive into how contractors that have the best KPIs, they're winning the most contractors. What are those things that they're doing that's different from everybody else? So you'll see me talk about that a little bit more, why top why we're tracking those metrics around top performers. Profit and loss margin, that actually took a big hit across the board this year as Clarity reported. On average, contractors are seeing about a 17% profit loss margin, but top performers are showing 41% profit loss margin. That is a crazy high difference. Month in close, top performers are closing quicker. Basically, every metric across the board is better if they have integrated systems versus fragmented systems. So I'm gonna hand it back to Derek and Rob again to go inside exactly what those systems are doing. Yeah. Actually, I wanna jump back to this one you were talking about, Tara, because we had a question on that. You know, the question, we got was, how does the FAR, DFARS changes going to well, two part question. How are the DFARS and the FAR changes going to benefit nontraditional vendors and attract them to be part of the NDS National Defense Strategy on shoring a supply chain, reinventing Freedom's Forge, Freedom's Forge with easier, more responsive entry points? That's part one of the question, which I'll answer now. And what maturity frameworks or systems will help best facilitate those changes? So, you know, one thing I I do wanna point out, we touched a little bit on it in webinar number one, last month. But, specifically, in December, the FY '26 National Defense Authorization Act was passed, and there's a specific carve out, section eighteen twenty six that is related to exemptions for nontraditional defense contractors. And in the code of federal regulations, nontraditional defense contractors are those that are not covered by any CAS covered contracts. We'll talk about that about what that is in a minute. But really what it exempts them from is all six DBARS business system requirements. Again, what we're talking about here as well as, truthful cost for pricing data. The actor Tina, special cost for pricing areas and no longer withholds and then consideration for, FAR part 31 or the the FAR 31 cost principles. So not necessarily a challenge that is easy to overcome. And how does that work if you have a cost side contract that's not cash covered, which of which there are many? But there is for sure the pendulum swinging away from this is a rapidly changing industry where we want speed to procurement. We wanna break down barriers. We wanna increase the defense industrial waste. So, you know, if you're one of those listening that is a new market entrant or or even contemplating a new market entry, this is truly a good time to get into the federal space, increasing budgets, less pressures. But again, the risk all comes down to what is it that the government is buying, how are they buying it, and what are the clauses that are being included in those contracts and solicitations so you can monitor to that. Derek, do you feel like the with, having some of those requirements not be perceived as strict, what are some of gotchas that contractors might need to be aware of? Like, just with the speed of things, what are some things you think for their compliance stance that they need to be aware of and they're not just thinking that, oh, gosh. We don't you know, it's it's not as strict as it used to be. Yeah. I I think, again, it just really comes back to what's in your contract. Right? It's not what's what's the industry trend. It's what are you signing up for. So if you're gonna sign your name on a contractor, if you're gonna bid on a contract that has those solicitation terms and conditions already outlined, you should know what that is before you sign up for it. Right? So I I I kind of say it's the micro view that matters there, not necessarily the macro trends that we are seeing. Yeah. And the whole purpose of those is to move really quickly. Right? So they're gonna wanna make sure that if you have a clause in your contract and you don't need it on day one, they can't wait around for that. You have to be CMMC compliant, for example, from day one. You can't wait they can't wait for you to get that compliance. That's right. And there's additional new executive orders over the past four, five, six months, multiple of which, but they're all centered around, promoting fast, proper quality delivery of what it is that the government's buying and potential penalties for not doing as such. Right? So penalties around stock buybacks, executive compensation. Those clauses are gonna be new and coming. Penalties around lack of quality of delivery. Penalties that are gonna be, again, baked into specific contract clauses. So those are the things that you wanna look out for. Make sure that you're, you know, just fighting the government saying, hey. Yeah. That's right. You don't have to have an approved accounting system per the DBARS clause. Oh, but if you don't deliver this specific deliverable on time regardless of any other conditions, we're going to penalize or do withholds. Right? There's these additional new risks that are emerging that we haven't contemplated before. Don't forget that DCA is getting smarter along with everybody else, and they're doing things more efficiently as well. And they're learning how to focus their audits on those that are the riskiest. So if you're perceived as risky, you're gonna have that microscope on you even closer because DCA is getting better at doing their job. They're using AI as well. So, definitely, you know, they're gonna be honing in on those businesses that they perceive as risky. Yeah. So pressing on here, you know, we wanna make sure that we're talking about the context of these business systems. Right? So we described business what is a business system earlier, but this chart is meant to contextualize them or or describe them in a more practical context. Specifically, these columns across, you know, that that's our Baker Tilly way of thinking through system implementation, reimplementations, or even upgrades in order to make sure the practical realities of running a business are addressed. Right? Think of these as the end to end business processes, and they touch a variety of people and systems and controls, various sub processes in order to make sure that overall life cycle activities are achieved. Right? This is how we think businesses think about systems, or should think about systems, right? So, when we talk about implementing business systems, we want to make sure that we're addressing all the various elements that come along with that. But that's different than those gray rows that are going across. This is how the government is defining a business system. This is what they audit to. Specifically, these six are the DFARS business system clauses that may come in as contractual requirements. DBARS meaning DOD, so specifically those doing business with the DOD and depending on certain conditions and volumes and contract sizes, which we'll talk about in a minute. So, we'll talk more on some specific slides on what these are, what they include, but we wanna think about them in these horizontals and these verticals. Right? The systems that the government is going to audit against, but also how do we actually practically implement and run these to just make ourselves a more stable and and, agile business for processing all of this data that we're gonna deal with for these big government contracts? Yeah. That's a really good point, Derek. And, I mean, it, it does align to a question that we received, as well. So, the question was how do mature organizations structure ownership of business systems across functions such as finance, IT, sales, legal, governance, export controls, and compliance to ensure accountability without creating silos, gaps, and regulatory responsibility, which is a super well structured great question, by the way. So kudos to whoever reached out with that. One thing I'd like to say is, you know, mature organizations, structure the ownership of the systems similarly to how some of the less mature should be thinking about it as well. It really comes back to a framework like this. One thing you're not going to see listed here under business systems and contexts is a specific piece of technology. If you look through all of these work streams, you're not going to see cost point, you're not going to see Deltek, you're not going to see ERP necessarily. That's because mature or forward looking businesses aren't going to assign technology to one specific role. We have product owners who are typically responsible for the technology itself. We have technical resources that are typically aligned to operations of the infrastructure, servers, the network, etc. Then we have various roles that are responsible for the business outcomes, which is one of the most important areas here. We're talking about the folks that align to these end to end business processes here. That are responsible for sub processes that might not holistically align to one specific function in a technology solution. But through working together in all these different segregated areas, right, you you have a proper, you know, board of governance to allow the technology to mature as a part of the overall system, not just specifically empowering one group or one role to own the technology and make all of the decisions for the entire business. For sure. Anything to add, Tara, before I move on to to the different stages of the maturity? Nope. I think I'm good. I I will say that we have seen sort of a a turn, I would say, from enterprise businesses. Like, I think there was this trend to select, like, whatever the best software it is in that particular, functional area. And now we're seeing more of this trend of we just want everything to be integrated. So it's more valuable to us to have all of our systems talking to each other seamlessly than it is to have, like, the best of the best of the best, for each of those functional areas. For sure. So, on that note, let's, move on to the kind of different stages and what business systems typically look like for each of these and some of the requirements that you might need to be aware of. So for new entrants, right, we're talking manual processes, limited visibility, that fragmented nature that Tara was just talking about. But really just you need to have some level of foundational compliance for certain things in doing business with the federal government. Right? Some of that might be cybersecurity, code of business ethics and conduct, things that might not even be necessarily within a system, but are gonna come with pretty much any government contract. You know, and and manual processes and and systems isn't necessarily a bad thing. Right? Sometimes this is a necessary step for smaller or scaling businesses so that there's, you know, mitigation of lost investment dodge. You're not spending too early or overbuilding too early. Obviously, though, that manual disparate systems and processes can create that limited visibility point here. We did get a question on this for a new entrance stage. For organizations transitioning from primarily commercial operations into defense and or nuclear contracting? What are the first three to five foundational system and governance actions you would prioritize in the first 12? One of the things that we talked about in the first webinar was really just an overall risk assessment of your organization and understanding the federal sector strategy and the alignment of those two things. Right? What can we or can't we do today? What gaps are existing today, which are, you know, again, reasonable gaps, the things that we haven't necessarily focused on. And that's to build a roadmap to actually close those gaps and what does that look like for specific opportunities. What can we unlock at different stages? So we talked a lot about that in that first webinar. Right? And then, Terry, I think you just touched on it. One of the second ones, I would consider, data and cybersecurity. Right? Those are gonna be foundational and it's an area where, the government is expanding oversight, right, with CMMC and then expansion of that into even civilian areas in the future potentially, and and FedRAMP. And so those things are are more of the case now versus less. And so that's something that you definitely wanna consider. What is your overall information security environment look like? So I'll I'll plug in a throw a quick plug in for our last webinar of this series, where we're doing one in several weeks, May 28 to be exact, where we'll be talking about FedRAMP and CMMC in a lot more detail. So definitely, Alex, if you're listening, please throw that link in the chat for people to sign up to that webinar as well. Derek, could you make a quick connection between, especially for those newer entrance? It why is cybersecurity matter for, your ERP or for your business systems? What what does that have to do with it? Yeah. So the government's really keen on protecting, various types of information. Right? It's federal contracting information of which is often going to exist in your ERP and controlled unclassified information. Those are two types that exist that are not even classified. Right? You know, people think of information security in the government parlance as, oh, I'm dealing with secret or top secret work. Right? No. There's an entire separate classification of anything that is controlled but unclassified information. And there is an entire rubric and framework, specifically NIST eight hundred one seventy one, that requires specific, 110 internal controls that will allow the government to rely on your systems and specifically get approval in certain instances, for the ability to work. Right? The back to the concept of why business systems matter and some of it being a gating criteria. Right? The accounting system is a gating criteria. For those in the defense space, CMMC is going to be the biggest gating criteria you will see now and and and even more so into the future. So you're you not trying to protect just the specs on how to build this next generation weapon system. They're, you know, things that are in your ERP, like your bill of materials and stuff. That's the kind of stuff that they also wanna protect. Right? Because it could be used or reengineered to find out how some things might be built, for example. Precisely. You know, that that's a couple things. Are those the foundational system requirements actions for foundational compliance that I would think about? Rob or Tara, anything else to add to that list that I didn't touch on? A few things. I mean, one one thing that that I typically encounter when I'm working with, a client that's, kind of moving from the new entrant to intermediary, is is on billing, right, for a very specific example. Right? If you're at the new entrance stage and you you have simple contracts with simple billings, you know, you you might not have an an integrated billing module within your ERP or within your your workflow, which is totally fine. However, you know, the need for proper records and procedure is crucial not only for audit, but to to help you move to that next step. Right? If you were to implement, say, a cost point. Right? The the need to have a a team that is used to working under defined procedures as well as having data available to load in the cost point. Right? Even if that was captured in spreadsheets or SharePoint or whatever. Right? Having that in a structured format, makes the, the implementation and specifically kind of the data conversion process much more straightforward. What you don't wanna do is hit that point and have to pull a team together to structure the data in a unified way. You want it done when it's fresh, right, when when it's when it's being worked on, when the people that are working on again, this is an example of billings. Right? People working, to capture their labor, capture their expenses to generate those bills are still around. Yeah. That's a great example and wanted to add to it with, like, why do we care also about it? The risk associated. Right? A bill is a claim to the government. And there are regulations in place like the False Claims Act that say if you're, improperly billing the government, you are now at risk for penalties against that. Right? So, you know, you're as soon as you claim taxpayer dollars, you're immediately on a a higher level of risk threshold regardless of contract type. And so, obviously, this definitely matters. It doesn't matter if it's manual, but you gotta make sure the bills that go out the door are right because of the inherent risk associated with that. And here, again, you know, is just some other ideas for foundational viewpoints. This is an example or a simple example of some of the things that new market entrants might need to think about. But again, it's: what's the data excuse me. How is that data being processed? How is the government going to look at it? And what can we do internally to identify or test that to make sure that it's we're monitoring it and doing it appropriately? You know, when we're thinking about, like, what does good look like or what some other areas, you know, Rob mentioned billing. Here, we have a couple more. Right? The chart of accounts that accurately identifies things. If you bill stuff that's hitting your accounts, but you never knew how it got there, that's obviously a problem. Right? You wanna make sure that the labor is hitting those projects. Right? Government contract is very much government contracting is very much a project based business. The project being the contract or or line items within that contract. So you wanna have those clearer, you know, abilities to identify that and segregate those items and make sure that you're billing against those properly. And then moving on from this, right, you're thinking about flexibly priced work. If you're maybe working under a prime where there's less oversight or compliance requirements that are being flowed down because you're a lower tier sub or, you know, you're not worried about, you know, certain procurements. Right? You're limiting your addressable market or not worried about fast growth. Right? Those are the things that you might stay in that new entrant, bucket. But if you're starting to move into those categories, that's really where we'd move on to that intermediate contractor bucket. So in that vein, you know, this is what that stage looks like. Right? We talked to some of those on the on the prior slide. But really thinking through the the, systems and, proposals and and how your different, evaluations of your contracts and proposals are gonna affect or how your business systems affect those. Right? How does it affect your ability to bid? How does it affect your ability to account and manage the the contracts that you work? Right? It now becomes much more of a significant, barrier to entry if you're in this bucket. And some of the compliance considerations that you really wanna think about here, right, now we're talking about cost principles, the ability to segregate allowable from unallowable, billable from unbillable, and, you know, what is specifically going to be focused on if you're now being audited against these things. Right? You might be triggering the, CAS or cost accounting standards applicability. And now we're worried about consistency in measuring, allocating, and accumulating costs and, different allocation types that the government's gonna look at you from your full wrap rate perspective, not just a fully burden rate and look at the bottom line. When you bid, you might now be subject to truth of the cost of repricing data act requirements or for previously was, truth of negotiations act. Right? And now you need to disclose information so that you're on an evil even, playing field with the government where they're gonna have the same information that you do to be able to negotiate a final, fair, and reasonable price. And that's gonna be applicable to cost type and fixed price requirements. Right? But the size of these contracts, the lack of competitive nature of these, contracts are going to create that additional, concern for you again unless you're exempt from those. And then now we're gonna get into some of those kind of DBARS business system criteria. So to us, you know, the four criteria that we talked about in the intermediate stage is the accounting, estimating, purchasing, and property systems. These are the bigger ones that come up more often. What do we mean when we talk about the accounting system? It's multiple, actually. We talk about the SF 4,208, the standard form fourteen oh eight, which is is pre award survey of a prospective contractor's accounting system. It's all about the design of the accounting system. It's it's about are you set up in a way to do segregation of direct or indirect costs? You have a standard timekeeping system with labor distribution. And those indirect costs allocate to final cost objectives in a logical and consistent way. Right? It's all free award. And that's what typically you will see in those solicitations that say you had to have an improved accounting system. Has someone come in from the government or a third party CPA firm and done an accounting system, assessment using these 15 criteria? It might also mean the DFARS, the business system cost, $2.52 $2.42 7,006, which is 18 system criteria, many of which are similar duplicative to the 14 o eight criteria. But it's it's it's post award. It's are you doing this in performance of the contract? It's operational in nature. It means, you know, when we talk about you maintain that audit trail and record integrity on that last bullet there, it's actually going to be tested as part of that accounting system audit. Right? So, you hear accounting system audits. This is some of the things that might be, a focus area. In the intermediate sent, or sorry, in the, new to intermediate when we talk estimating systems, the DFARS clause, now we're talking, that might have a requirement for an adequate estimating system. These are subject to for contracts, again, DOD because it's DFARS, but you might see it in a civilian contracts as well if it's just referenced. But you'll have applicable it's applicable to contracts subject to CAS or might have certified cost or pricing data requirements from Tina. But it allows it creates 17 specific functions and activities that need to be performed for an adequate estimating system that is audited against. A big component of those are having adequate basis of estimates. Tara mentioned this in the statistics from the Delta Clarity survey, but not being able to support proposed pricing is a huge reason why contractors are losing deals. So, this is when I say, Hey, it's great to have an approved estimating system or an adequate estimating system. What's better is just to be able to support your pricing as a good business practice and it'll put you in a better competitive position. So, while we talk about maturity here in the context of the cost estimating system from the government stance, it's the overall business system and the beginning of the contract life cycle that allows now a more competitive differentiation. Purchasing system, also a really important one, and it's also not necessarily just a DVARS thing. But specifically in the intermediate sense, when we talk about it here and the government talks about it, I'd say contractor purchasing system, or that's coming from DBARS 262244Dash7001. So, that's, again, a set set of 23 system criteria that are going to be relevant to you. It goes through the entire, procurement life cycle. Right? For you as the prime when you are procuring subcontractors. Essentially, you need to put yourself in the government shoes and to make sure that there is, fair and reasonable pricing for all of your subcontracted, components and and, subcontractor labor. So having a full life cycle around the procurement of subs is gonna be a huge deal for this. And again, this is specific to DVARS, but you still could have FAR part 44 contract clauses and requirements coming into play. One of which might be, hey, if you don't have an approved purchasing system, you might be required to get government permission or consent to subcontract prior to actually awarding subcontracts. Right? It adds barriers or or, steps to make sure that you are spending the government's money appropriately, and you're able to monitor and manage your subcontractors. Last one I'll hit on here in the intermediate sense is, for government property. And and ultimately, a lot of this comes back to FAR fifty two two forty five dash one. So while there is a defars clause, it actually just points directly back to that. Focusing on the 10 outcomes of government property, which is through the whole full government property life cycle, acquisition through disposal as you, make sure that you are good stewards of government property in your possession, which is a huge area of focus for DOD, DOW right now. And then that also will address other things that the government will look at as part of property management system analyses or PMSAs. So, it's not even just those 10 outcomes. It is some criteria within each of that, some of which are mentioned on the right side here. And that you're ready for that PMSA or or review. So, what does good look like in this stage? We talked about what business systems are. It's documentation, it's controls, it's systems and processes in place. It's clear roles and responsibilities, making sure that your evidence exists, and then that monitoring activity that we were talking about. Realize we're getting close on time here, so I wanna move on to the experience contractor section. You know, really, this is what we're talking about when we say larger, more complex areas. You might have multi year contracts, full Casentina, all six DBARS business systems. I'll talk about MMAS and EBMS in a minute. Right? Ultimately, that your ability to scale, that last bullet point is what we're gonna really emphasize, depends on precision, scalability, and overall strategic foresight or alignment with your overall government contracting strategy. So, you know, we talk about this from business systems and the different components here, but Rob, anything to add here from your perspective for for intermediate or experienced contractors, kind of thinking about those success criteria from a system architecture implementation perspective? Yeah. I mean, I'll I'll be really quick, but, an analogy I'm really fond of is thinking about city planning. So, you know, if if anyone's ever driven through Boston, my apologies. You know, Boston Boston roads were the result of, you know, cow paths from the early sixteen hundreds. Not a lot of planning going on there. Right? But the city grew, and the infrastructure had to support that city, which, as most of us probably know, led to the big dig, right, at the end of the nineties, early two thousands, which at that time was the most expensive, infrastructure project in history, I believe. And then think about a city like Washington, DC, right, which was very thoughtfully planned out, and designed by, I think, the Marquis de Lafayette. Right? And knowing where DC was going at that time kind of allowed allowed the planning to accommodate, right, ease of ease of use, right, public spaces, areas for monuments, right, the grid. Thinking about where you need to go and understanding, you know, what that looks like helps you plan, right, plan for the growth. Right? Put in that put in that, roadway for future condo development or whatever. Right? Make sure you have the space in your system to Great. Great analogy. evolve. Thank you. So, yeah, I think that scalability, right, is important. It's not just the initial paths, but where can this grow and expand, and how do these integrated set of systems mitigate some of these compliance areas or risks that are pointed out here, right? Defective pricing risk, CAS compliance risk, forward pricing proposals, and ability to rely on forward pricing rates for scalable growth for for, a consistent set of pricing practices. A couple of two new areas to call out here. And, again, some of this is in the, maturity guide that you should download, but, you know, I wanted to make sure we talk about it here and and definitely reach out for more information. But for those of you that are in manufacturing industries, or specific components of materials, there's a material management and accounting system component, that might come into play for certain size contracts where they're, you know, typically around major weapon systems, but there's obviously other areas too. There's 10 system criteria, several of which have sub criteria. All around the goal have good material management practices aligned with industry standards, focusing on proper ordering, cost control, and then things like comparison against master production schedules, all to promote early identification of cost or schedule delays. A lot of this is just good business practice. Right? We think about economic order quantities. Right? We wanna buy the right amount at the right time with minimal care inventory carrying costs and taking advantage of discounts. Right? The government wants the same thing. Now you're just, agreeing to do it as as the contractor. Similarly, earned value management systems or EVMS is kind of the souped up program management, and this could come in with a DFARS clause, which will incorporate the 32 guidelines as established by the EIA standard seven forty eight for earned value management systems. Right? It's integrated project management schedule, comparison against what you've done versus what needs to get done, advanced ETCs and EACs, not just on cost, but on schedule and delivery, identifying and and forecasting and reporting out to the government in very specific forms and formats what the information is that they need to do to manage the program just as you as the contractor would. And here's some additional governance kind of ideas in cybersecurity. I'll move past this for purposes of time. But, you know, really, in this advanced stage, a lot more risk and a lot more requirements. But a lot if you've thought it through and built up to this, it can be really a scalable, infrastructure for overall government federal sector growth. So, Tara, I'm gonna turn it over to you and talk about, you know, why this matters more than just meeting contractual requirements. Yes. And definitely, I think that was a great lead in that compliance is not just a checkbox. One of the things that we've seen through Clarity is that contractors for the last few years I mean, it's been a tough environment for I don't know, ever since I've been at Deltek, which has been almost five years. So, every year we're seeing that contractors are cutting back more and more. They're trying to be more efficient, more lean, quicker, all of that stuff together. And to be honest, they're cutting cutting to the bone. So what else can they cut? What we're seeing is sort of this reframe around contractors looking at compliance as a competitive differentiator. There's only so many things that you can control, but compliance is one of them. And if you make this your compliance posture a priority, you're gonna see how that helps you to turn around and really benefit your competitive strategy and bring in those contracts, easier and in more compliance and really just overall have, a better positioning to win more government work, especially in the environment that we are in right now. I'll go through these last few pretty quickly. They're self explanatory, but, just as we mentioned earlier about Deltek, we're based all around the project life cycle. So we have solutions that range from GovWinIQ to cost point to project and portfolio management, to propricer that basically help you win and execute, plan, analyze your entire contract life cycle. So we have it. And I have a few more slides that you can look through all of those to find out more information about sort of what the benefits of those are altogether. And let's see. What do we have time for? Governance and control is built in. This should be the headline, over every Deltek product because that is so important integral to really what the product the solutions were designed for and the overall Deltek platform is designed for. So it's not just these individual applications that are running off on their own. They're all built on the Deltek intelligent platform, which has those security controls built into it, not bolted on, that has the amazing applications in the middle, and then we also, in the last few years, have this intelligence AI lever layer on top of all of that. Keep going. Oh, audit readiness. So this is a pretty, key slide here. It's specifically for Costpoint, but, really, any solution that you're looking at, even if it's not Costpoint, you should be making sure that you're able to, get all of these four things out of that solution. So you wanna have a way to document your approval workflows, super important, and that's something an auditor might look at. How do you know this got approved? How is it is it is it meeting your your, contract clause requirements? You need to have a way to document that approval workflow. You need everything about your purchasing data. You need invoices, RF RFQs. All of that stuff has to be ready and accessible in your solution so that you can pull it right up as soon as an auditor asks for it. Now here's the important part, the audit trails and traceability. Those are really hard to go back in and try improve. So if you're just running your business like normal and then you have an audit come up and suddenly you have to go back and trace all of these different purchasing decisions or, calculations back after the fact, that is gonna be so difficult. So having it already built in, that trail is being created just in the process of you doing your business with Costpoint. So you're not having to go back in and try and document that after the fact. That is probably one of the most, important things Costpoint does around compliance. The other thing is just this adds to it is having that digital threat. So everything's in one system. Everything is connected. Everything is tied back to your contracts and two specific contract line items, and you can see that traceability, to your different contract clauses. I've already mentioned gov win and propricer. They really help to round out that project life cycle bringing in the, winning more contracts, winning more work, winning more profitable work, and then protecting your profit margins. So as you're executing your contracts, project and portfolio management helps to make sure that you're on schedule, that your risks are mitigated, all of that good stuff, and then tip technologies comes in for your QA. So when I mentioned earlier about how, there's 26 average audits, a year that contractors reporting on. Some of those audits were actually quality assurance, and that's super important right along with your, with your compliance around accounting. So that's all I have. Turn it back over to you, Derek, if we have any last minute questions. Well, we're already over by a couple of minutes. I don't think we'll be able to get to any. But, obviously, if you submitted them, we will definitely reach back out to you with providing answers. I certainly wanna thank everybody for attending the webinar or listening if you're listening to this after the fact. And, please check the, webinar, cycle in for Tuesday, May 28 to learn more about FedRAMP and CMMC. And and also please download the maturity guide if you have not already. So thanks everybody for listening. I hope you all have a great day. Thank you, Derek, Rob, and Tara. Before we officially conclude, I just wanna remind everyone that you're going to receive the on demand recording of today's webinar via email within twenty four hours. And with that, thank you for joining us. Please visit deltek.com for more upcoming Deltek events. Have a great day.