While EVM has long been a US Department of Defense (DoD) requirement for defense manufacturers, it is becoming increasingly more common with commercial, non-defense, project-based manufacturing sectors. In fact, there are indications that many US federal organizations besides DoD (such as the Department of Transportation [DoT] and the National Aeronautics and Space Administration [NASA]) have been lowering the project value threshold which mandates the use of EVM reporting (from $50 million [USD] to $5 million [USD]). In 2005, the US Office of Management and Budget stated its intention to enforce EVM in IT projects at federal agencies, including compliance with American National Standards Institute/Electronics Industries Alliance (ANSI/EIA) standard 748. While defense agencies have been applying this standard for some time, the US Civilian Agency Acquisition Council and the US Defense Acquisition Regulations Council have proposed a revision to federal accounting regulations (FAR) to standardize use of EVM across the government.
These moves stem from the buyers' needs for assurances that they are using a contractor who can deliver; on the contractor side, these enterprises certainly will not stay in business if they can't deliver as required. Thus, EVM compliance may give both parties a measure of confidence that project goals can be met. However, the use of EVM is a major shift from the traditional project accounting practice of merely (and occasionally) ensuring that actual costs are in line with the estimated cost, and few companies outside the defense arena have sufficient knowledge and maturity to use it. By introducing the dimension of time (in addition to cost and performance elements, all integrated within the project scope of work), EVM attempts to prevent project cost increases, which are often due to scheduling problems, by highlighting the need to identify problems before they are past the point of no return, whence considerable delay and cost result.
Consequently, all project participants need to learn of variances immediately. They do not have the luxury of waiting until, say, the end of the month, to discover that a project is in jeopardy. To that end, an EVM solution must show variance to the estimate at completion (EAC) (although there is an overwhelming number of similar indicators) of a project as soon as a significant change occurs. In other words, EVM concretizes project progress so that one can look at project evolution and compare how much has been spent to how much should have been spent. Thus, EVM is good at exposing the fact that a contracting company does not have a good project plan, or that it has a good plan but may be unable to follow it. Again, although the private sector might benefit from harnessing EVM systems (both for improving competitive advantage and for internal risk management), implementation requires significant education and familiarity with the concepts, along with dozens of formulas, and key performance indicators (KPIs) and their meanings. Additionally, implementation requires everyone to start reporting their time and achievements, every day, by hour, against a set of activities—all of which is a major change management issue. For more information on the qualities and operating characteristics of EVM (some of which are described in ANSI 748), see Federal Contract Management and Vendors' Readiness.
In October 2005 the company also acquired competing financial management software firm Wind2, thereby increasing its customer base to 11,000 firms, and furthering its dominance in a number of key vertical markets. Both firms shared a focus on A/E/C companies (as well as government contractors, IT services firms, and management consultants), and have thus often directly competed in these markets in the past. The acquisition has allowed Deltek to strengthen its leadership role in the professional services market, while adding approximately $10 million (USD) in revenues. In fact, of Deltek's record 25 percent revenue growth in 2005, 2 percent was attributed to the Wind2 acquisition alone. In addition, this acquisition added more than 3,000 customers to Deltek's former base of 8,000 clients, including such marquee names as Custom Research, Inc., Apex Environmental, Inc, and MCW Consultants, Ltd. Deltek has also welcomed Wind2's over eighty employees from five locations, including a training facility in Fort Collins, Colorado (US), and four branch offices throughout the US and Canada.
Today, Deltek clients represent more than 81 percent of the 500 largest revenue-generating A/E/C firms in the US, as ranked by Engineering News Record (ENR) in 2005. Furthermore, nearly 65 percent of the largest federal government contractors are Deltek clients, as ranked by Washington Technology. Of Deltek's total install base, the A/E/C clients represent about 60 percent; government contracting represents about 20 percent; professional services or management consulting represent about 8 percent; and nonprofit organizations, IT services (or systems integration [SI]), and project manufacturing organizations contribute a few percentage points each.
Deltek has a history of successful and astute acquisitions in the space, starting with the 1998 acquisition of Harper & Shuman, Inc., formerly a renowned provider of accounting software to A/E/C firms. This acquisition, which included the Advantage and CFMS product lines, in addition to adding 2,800 firms to Deltek's install base, was a major step in supporting Deltek's strategy of providing comprehensive business solutions to firms in the A/E/C industries.
In early 2000, Deltek unveiled its vision and launched its initiative to become the vendor of choice in the then emerging market for PSA software. To that end, Deltek acquired A/E Management Services, Inc., including the RFP GenTrak product line, which was a marketing, proposal, and opportunity tracking automation system for A/E/C companies. In late 2000, Deltek acquired Semaphore, Inc., a major developer and distributor of advanced financial and project management software and services for over 2,000 A/E/C companies and other professional services firms. That acquisition doubled Deltek's market share of the A/E/C industry, and gave it a 72 percent share of the firms listed in ENR's top 500 design firms.
These moves stem from the buyers' needs for assurances that they are using a contractor who can deliver; on the contractor side, these enterprises certainly will not stay in business if they can't deliver as required. Thus, EVM compliance may give both parties a measure of confidence that project goals can be met. However, the use of EVM is a major shift from the traditional project accounting practice of merely (and occasionally) ensuring that actual costs are in line with the estimated cost, and few companies outside the defense arena have sufficient knowledge and maturity to use it. By introducing the dimension of time (in addition to cost and performance elements, all integrated within the project scope of work), EVM attempts to prevent project cost increases, which are often due to scheduling problems, by highlighting the need to identify problems before they are past the point of no return, whence considerable delay and cost result.
Consequently, all project participants need to learn of variances immediately. They do not have the luxury of waiting until, say, the end of the month, to discover that a project is in jeopardy. To that end, an EVM solution must show variance to the estimate at completion (EAC) (although there is an overwhelming number of similar indicators) of a project as soon as a significant change occurs. In other words, EVM concretizes project progress so that one can look at project evolution and compare how much has been spent to how much should have been spent. Thus, EVM is good at exposing the fact that a contracting company does not have a good project plan, or that it has a good plan but may be unable to follow it. Again, although the private sector might benefit from harnessing EVM systems (both for improving competitive advantage and for internal risk management), implementation requires significant education and familiarity with the concepts, along with dozens of formulas, and key performance indicators (KPIs) and their meanings. Additionally, implementation requires everyone to start reporting their time and achievements, every day, by hour, against a set of activities—all of which is a major change management issue. For more information on the qualities and operating characteristics of EVM (some of which are described in ANSI 748), see Federal Contract Management and Vendors' Readiness.
In October 2005 the company also acquired competing financial management software firm Wind2, thereby increasing its customer base to 11,000 firms, and furthering its dominance in a number of key vertical markets. Both firms shared a focus on A/E/C companies (as well as government contractors, IT services firms, and management consultants), and have thus often directly competed in these markets in the past. The acquisition has allowed Deltek to strengthen its leadership role in the professional services market, while adding approximately $10 million (USD) in revenues. In fact, of Deltek's record 25 percent revenue growth in 2005, 2 percent was attributed to the Wind2 acquisition alone. In addition, this acquisition added more than 3,000 customers to Deltek's former base of 8,000 clients, including such marquee names as Custom Research, Inc., Apex Environmental, Inc, and MCW Consultants, Ltd. Deltek has also welcomed Wind2's over eighty employees from five locations, including a training facility in Fort Collins, Colorado (US), and four branch offices throughout the US and Canada.
Today, Deltek clients represent more than 81 percent of the 500 largest revenue-generating A/E/C firms in the US, as ranked by Engineering News Record (ENR) in 2005. Furthermore, nearly 65 percent of the largest federal government contractors are Deltek clients, as ranked by Washington Technology. Of Deltek's total install base, the A/E/C clients represent about 60 percent; government contracting represents about 20 percent; professional services or management consulting represent about 8 percent; and nonprofit organizations, IT services (or systems integration [SI]), and project manufacturing organizations contribute a few percentage points each.
Deltek has a history of successful and astute acquisitions in the space, starting with the 1998 acquisition of Harper & Shuman, Inc., formerly a renowned provider of accounting software to A/E/C firms. This acquisition, which included the Advantage and CFMS product lines, in addition to adding 2,800 firms to Deltek's install base, was a major step in supporting Deltek's strategy of providing comprehensive business solutions to firms in the A/E/C industries.
In early 2000, Deltek unveiled its vision and launched its initiative to become the vendor of choice in the then emerging market for PSA software. To that end, Deltek acquired A/E Management Services, Inc., including the RFP GenTrak product line, which was a marketing, proposal, and opportunity tracking automation system for A/E/C companies. In late 2000, Deltek acquired Semaphore, Inc., a major developer and distributor of advanced financial and project management software and services for over 2,000 A/E/C companies and other professional services firms. That acquisition doubled Deltek's market share of the A/E/C industry, and gave it a 72 percent share of the firms listed in ENR's top 500 design firms.
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