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Taking Advantage of the 2018 Defense Budget Influx

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Market Connections, Inc.
Market Connections, Inc.

With the passing of the 2018 Bi-partisan Budget Act, increasing the defense funding cap, how can your organization take advantage of the budget influx and maximize opportunities over the next 16 months? What are the priorities of defense IT decision-makers? Will current on-hold projects move forward or does this influx provide new opportunities to develop in key focus areas? Aaron Heffron, President of Market Connections and defense agency expert, Ray Bjorklund, President of Birchgrove Consulting as they discuss implications and recommendations based on the results from our recent 2018 Defense Budget PulsePoll. For webinar recording: https://marketconnectionsinc.com/webinar-taking-advantage-of-the-2018-defense-budget-influx/

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息 2018 Market Connections, Inc. Taking Advantage of the 2018 Defense Budget Influx May 2018
息2018 MARKET CONNECTIONS, INC. Todays Speakers TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 2 Aaron J. Heffron Market Connections, Inc. President Ray Bjorklund Birchgrove Consulting President
息 MARKET CONNECTIONS, INC. | 703.378.2025 Boy, Have the Times Been a Changin TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 3 With the passing of BBA 2018 in February, the defense discretionary funding cap was increased for both FY2018 and FY2019. Our past forecasts of federal spending did not anticipate such a growth rate due to concerns over deficit spending. On March 22, 2018 Congress passed a $1.3 trillion spending bill to run through the end of the fiscal year. Many of us heard throughout the first part of the year that various priorities are in place across defense agencies and that a lift of the spending cap should enable programs to move forward. BUT WHICH PROGRAMS WILL GROW FIRST (AND FASTEST)?
息 MARKET CONNECTIONS, INC. | 703.378.2025 What is Leadership Saying? TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 4 Speaking in Defense Departments budget hearing, Defense Secretary James N. Mattis recently highlighted three priorities of the defense strategy: Build a more lethal force Strengthen alliances and build new partnerships Reform the departments business practices for performance and affordability The strategy is the guidepost for all our actions, including this year's strategy-driven budget request, driving meaningful reform to establish an enduring culture of performance, affordability and agility. JAMES N. MATTIS SECRETARY OF DEFENSE UNITED STATES DEPARTMENT OF DEFENSE Defense.gov, April 26, 2018 WHAT DO THE BOOTS ON THE GROUND SAY?
息 MARKET CONNECTIONS, INC. | 703.378.2025 Target Audience: Defense IT Decision-Makers TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 5 A short survey of defense agency IT decision-makers was conducted in March 2018. Survey participants included members from all branches of the Armed Forces as well as a wide variety of defense agencies. All were involved in the technology decision making process in one way or another. 21% 44% 49% 52% 62% 0% 20% 40% 60% 80% 100% Make the final decision regarding information technology solutions Manage or implement information technology solutions Develop technical requirements for information technology solutions Evaluate or recommend firms offering information technology solutions On a team that makes decisions regarding information technology solutions Those Surveyed Were Involved Various Ways
息2018 MARKET CONNECTIONS, INC. What did we learn? 6
息2018 MARKET CONNECTIONS, INC. 7 Budget Restrictions Cause Hold On Current Programs TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 78% 16% 6% Do you have projects on hold due to budget restrictions? Yes No Unsure
息2018 MARKET CONNECTIONS, INC. 8 Budget Increase Will Move Programs Forward TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 65% 13% 22% Will the proposed spending increases move projects forward? Yes No Unsure
息2018 MARKET CONNECTIONS, INC. 9 Spending Priorities with New Dollars: Security, Modernization, People Among Top Priorities TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 9% 16% 26% 31% 32% 38% 39% 43% 47% 56% 64% 0% 10% 20% 30% 40% 50% 60% 70% Embedded systems Digital transformation Additional active-duty troops Cloud migration Hiring additional civilian personnel Maintenance of legacy systems R&D for emerging technologies (i.e., AI, hyper-sonics etc.) Overall network modernization Training Replacement of old hardware Cybersecurity
息2018 MARKET CONNECTIONS, INC. 10 Spending Will Impact the Next 18 Months TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 3% 3% 14% 57% 23% 0% 10% 20% 30% 40% 50% 60% Never Later Than FY2020 FY2020 FY2019 Immediately When will you feel the impact of the budget increase? 80%
息2018 MARKET CONNECTIONS, INC. What other factors should we be thinking about?
息2018 MARKET CONNECTIONS, INC. A time for cautious optimism TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 12 FEW FEDERAL IT CONTRACTORS WILL BE FAVORED WITH A WINDFALL A budget agreement does not mean appropriations Appropriations do not equate to contract spending New contract spending does not directly lead to "new starts" Presidents Budget Congressional appropriations Executive Branch apportionment Addressability Procurement Administrative Lead Time OMB IT Capital Planning Category Management Policy Standard Investment Reports Major IT Business Cases FISMA, FITARA, Etc.
息2018 MARKET CONNECTIONS, INC. So, What Does This All Mean for Contractors? TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 13 Aaron J. Heffron Market Connections, Inc. President Ray Bjorklund Birchgrove Consulting President
息2018 MARKET CONNECTIONS, INC. What should YOU be thinking about in the next 18 months?
息2018 MARKET CONNECTIONS, INC. You have 18 monthsor do you have only 5? TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 15 FUNDING WILL HAVE AN IMPACT SOONER RATHER THAN LATER. All hands on deck. 2018 opportunities are out there. Leverage internal and external sources to identify needs and challenges. No time to waste, or wait. Results of the mid term elections could affect spending in FY2019. Be cautious in your projections for 2019. Investment should be front loaded to maximize 2018 commitments, including advertising, events and targeting on the ground efforts. Make sure you have identified you primary targets and gather as much information on their needs and preferences as possible.
息2018 MARKET CONNECTIONS, INC. Six Months to Spend for a Year! TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 16 HELP OUT YOUR FRIENDLY NEIGHBORHOOD PROCUREMENT OFFICIAL. With only 6 months left in FY2018, COs will be working overtime to make sure they meet procurement requirements, while also contracting more dollars. Communicate to them about how you can help. Procurement pain is your pain. The normal sales cycle will be compressed, so making sure you are delivering the necessary content will be critical. White papers and 3rd party studies are great as they are scoping out their need, but for proven technologies demonstrations may be most critical in the coming months because they have the greatest impact late in the decision process. Look to the Federal Content Marketing Review for the types of content feds seek during each stage of the procurement process.
息2018 MARKET CONNECTIONS, INC. Be Where They Live. TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 17 FOCUS ON PROJECTS HELPING AGENCIES WITH CYBERSECURITY, MODERNIZATION AND PERSONNEL DEVELOPMENT. There are both technical and personnel needs out there. Look at way to help with both to tap into multiple areas of concern. There will be many companies looking to make a splash. Make sure your messaging and outreach campaigns are living where your targets are living. Webinars and events still have an impact, especially if you can bring together many partners together at one sitting. Leverage resources like the Market Connections Federal Media and Marketing Study can help you differentiate by agency or need.
息2018 MARKET CONNECTIONS, INC. Additional Resources: Study page: www.marketconnectionsinc.com/2018-dod-budget-poll/ 2017 Federal Content Marketing Review: www.federalcontentmarketing.com 2017 Federal Media & Marketing Study www.marketconnectionsinc.om/fmms2017study Join the Conversation: FedPulse LinkedIn Group https://www.linkedin.com/groups/8572167 Government contractors: Participate in 2018 survey https://www.surveygizmo.com/s3/4311280/Surveys
息2018 MARKET CONNECTIONS, INC. INSIGHTS IN RECRUITMENT AND RETENTION IN A HIGHLY COMPETITIVE MARKET 19 Aaron J. Heffron, President 703.966.1706 AaronH@marketconnectionsinc.com www.marketconnectionsinc.com Ray Bjorklund, President 301.602.1438 Ray.bjorklund@birchgrove-consulting.com www.birchgrove-consulting.com

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Taking Advantage of the 2018 Defense Budget Influx

  • 1. 息 2018 Market Connections, Inc. Taking Advantage of the 2018 Defense Budget Influx May 2018
  • 2. 息2018 MARKET CONNECTIONS, INC. Todays Speakers TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 2 Aaron J. Heffron Market Connections, Inc. President Ray Bjorklund Birchgrove Consulting President
  • 3. 息 MARKET CONNECTIONS, INC. | 703.378.2025 Boy, Have the Times Been a Changin TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 3 With the passing of BBA 2018 in February, the defense discretionary funding cap was increased for both FY2018 and FY2019. Our past forecasts of federal spending did not anticipate such a growth rate due to concerns over deficit spending. On March 22, 2018 Congress passed a $1.3 trillion spending bill to run through the end of the fiscal year. Many of us heard throughout the first part of the year that various priorities are in place across defense agencies and that a lift of the spending cap should enable programs to move forward. BUT WHICH PROGRAMS WILL GROW FIRST (AND FASTEST)?
  • 4. 息 MARKET CONNECTIONS, INC. | 703.378.2025 What is Leadership Saying? TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 4 Speaking in Defense Departments budget hearing, Defense Secretary James N. Mattis recently highlighted three priorities of the defense strategy: Build a more lethal force Strengthen alliances and build new partnerships Reform the departments business practices for performance and affordability The strategy is the guidepost for all our actions, including this year's strategy-driven budget request, driving meaningful reform to establish an enduring culture of performance, affordability and agility. JAMES N. MATTIS SECRETARY OF DEFENSE UNITED STATES DEPARTMENT OF DEFENSE Defense.gov, April 26, 2018 WHAT DO THE BOOTS ON THE GROUND SAY?
  • 5. 息 MARKET CONNECTIONS, INC. | 703.378.2025 Target Audience: Defense IT Decision-Makers TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 5 A short survey of defense agency IT decision-makers was conducted in March 2018. Survey participants included members from all branches of the Armed Forces as well as a wide variety of defense agencies. All were involved in the technology decision making process in one way or another. 21% 44% 49% 52% 62% 0% 20% 40% 60% 80% 100% Make the final decision regarding information technology solutions Manage or implement information technology solutions Develop technical requirements for information technology solutions Evaluate or recommend firms offering information technology solutions On a team that makes decisions regarding information technology solutions Those Surveyed Were Involved Various Ways
  • 6. 息2018 MARKET CONNECTIONS, INC. What did we learn? 6
  • 7. 息2018 MARKET CONNECTIONS, INC. 7 Budget Restrictions Cause Hold On Current Programs TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 78% 16% 6% Do you have projects on hold due to budget restrictions? Yes No Unsure
  • 8. 息2018 MARKET CONNECTIONS, INC. 8 Budget Increase Will Move Programs Forward TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 65% 13% 22% Will the proposed spending increases move projects forward? Yes No Unsure
  • 9. 息2018 MARKET CONNECTIONS, INC. 9 Spending Priorities with New Dollars: Security, Modernization, People Among Top Priorities TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 9% 16% 26% 31% 32% 38% 39% 43% 47% 56% 64% 0% 10% 20% 30% 40% 50% 60% 70% Embedded systems Digital transformation Additional active-duty troops Cloud migration Hiring additional civilian personnel Maintenance of legacy systems R&D for emerging technologies (i.e., AI, hyper-sonics etc.) Overall network modernization Training Replacement of old hardware Cybersecurity
  • 10. 息2018 MARKET CONNECTIONS, INC. 10 Spending Will Impact the Next 18 Months TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 3% 3% 14% 57% 23% 0% 10% 20% 30% 40% 50% 60% Never Later Than FY2020 FY2020 FY2019 Immediately When will you feel the impact of the budget increase? 80%
  • 11. 息2018 MARKET CONNECTIONS, INC. What other factors should we be thinking about?
  • 12. 息2018 MARKET CONNECTIONS, INC. A time for cautious optimism TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 12 FEW FEDERAL IT CONTRACTORS WILL BE FAVORED WITH A WINDFALL A budget agreement does not mean appropriations Appropriations do not equate to contract spending New contract spending does not directly lead to "new starts" Presidents Budget Congressional appropriations Executive Branch apportionment Addressability Procurement Administrative Lead Time OMB IT Capital Planning Category Management Policy Standard Investment Reports Major IT Business Cases FISMA, FITARA, Etc.
  • 13. 息2018 MARKET CONNECTIONS, INC. So, What Does This All Mean for Contractors? TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 13 Aaron J. Heffron Market Connections, Inc. President Ray Bjorklund Birchgrove Consulting President
  • 14. 息2018 MARKET CONNECTIONS, INC. What should YOU be thinking about in the next 18 months?
  • 15. 息2018 MARKET CONNECTIONS, INC. You have 18 monthsor do you have only 5? TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 15 FUNDING WILL HAVE AN IMPACT SOONER RATHER THAN LATER. All hands on deck. 2018 opportunities are out there. Leverage internal and external sources to identify needs and challenges. No time to waste, or wait. Results of the mid term elections could affect spending in FY2019. Be cautious in your projections for 2019. Investment should be front loaded to maximize 2018 commitments, including advertising, events and targeting on the ground efforts. Make sure you have identified you primary targets and gather as much information on their needs and preferences as possible.
  • 16. 息2018 MARKET CONNECTIONS, INC. Six Months to Spend for a Year! TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 16 HELP OUT YOUR FRIENDLY NEIGHBORHOOD PROCUREMENT OFFICIAL. With only 6 months left in FY2018, COs will be working overtime to make sure they meet procurement requirements, while also contracting more dollars. Communicate to them about how you can help. Procurement pain is your pain. The normal sales cycle will be compressed, so making sure you are delivering the necessary content will be critical. White papers and 3rd party studies are great as they are scoping out their need, but for proven technologies demonstrations may be most critical in the coming months because they have the greatest impact late in the decision process. Look to the Federal Content Marketing Review for the types of content feds seek during each stage of the procurement process.
  • 17. 息2018 MARKET CONNECTIONS, INC. Be Where They Live. TAKING ADVANTAGE OF THE 2018 DEFENSE BUDGET INFLUX 17 FOCUS ON PROJECTS HELPING AGENCIES WITH CYBERSECURITY, MODERNIZATION AND PERSONNEL DEVELOPMENT. There are both technical and personnel needs out there. Look at way to help with both to tap into multiple areas of concern. There will be many companies looking to make a splash. Make sure your messaging and outreach campaigns are living where your targets are living. Webinars and events still have an impact, especially if you can bring together many partners together at one sitting. Leverage resources like the Market Connections Federal Media and Marketing Study can help you differentiate by agency or need.
  • 18. 息2018 MARKET CONNECTIONS, INC. Additional Resources: Study page: www.marketconnectionsinc.com/2018-dod-budget-poll/ 2017 Federal Content Marketing Review: www.federalcontentmarketing.com 2017 Federal Media & Marketing Study www.marketconnectionsinc.om/fmms2017study Join the Conversation: FedPulse LinkedIn Group https://www.linkedin.com/groups/8572167 Government contractors: Participate in 2018 survey https://www.surveygizmo.com/s3/4311280/Surveys
  • 19. 息2018 MARKET CONNECTIONS, INC. INSIGHTS IN RECRUITMENT AND RETENTION IN A HIGHLY COMPETITIVE MARKET 19 Aaron J. Heffron, President 703.966.1706 AaronH@marketconnectionsinc.com www.marketconnectionsinc.com Ray Bjorklund, President 301.602.1438 Ray.bjorklund@birchgrove-consulting.com www.birchgrove-consulting.com

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