Nurturing What Works

Indeed, what has not changed much is the fact that Deltek remains a company with project DNA strands pervading all its products (either developed in-house, or acquired and maintained) and corporate culture, which has been helping it in terms of focus, and in terms of fending off generic enterprise applications providers (in spite of their typically larger size, higher global profiles, and market clout). In other words, having designed all its products with project ID/No. as the key field in all system database tables (as opposed to the order ID/No., account ID/No., or item ID/No. of traditional generic ERP systems), Deltek is a natural fit for several project-based market segments. Moreover, large generic ERP systems typically require serious customization and retrofitting to achieve the required functionality. Possibly less known and expected is also the fact that scalability is also what enables Deltek to compete successfully, even against the likes of Oracle and SAP, in larger deals, such as with organizations with 60,000 employees (the vendor is glad to demonstrate load test results upon inquiry).

Most ERP systems have been tailored for businesses handling physical products. In order to follow well-defined, often high-volume and repetitive production cycles and traditional supply chain management (SCM) principles, these systems typically do not have to (and thus cannot) provide an estimate of completion for accounting (in other words, there is no interim snapshot basis for revenue recognition, job costing, cost allocation, and so on). The same holds true for shipping processes, which typically do not allow a percentage of completion, and cannot be ongoing and specific; they are rather binary (either the process is completed, or it isn't). Conversely, project-based businesses have to follow project lifecycles varying in length and complexity, and have to rely on a snapshot "estimate to complete" value for job costing, revenue recognition, and cost allocation. In a manner of speaking, project business is SCM "for people" (in terms of scheduling and resource management); the same "inventory" can be shared across multiple projects and processes. Customer relationship management (CRM) can also be viewed in this way, since project-based CRM solutions do not focus on call centers but rather on pipeline generation and opportunity and lead tracking.

Project-oriented organizations require the ability to perform many other project-specific business and accounting tasks, including tracking costs and profitability on a project-by-project basis; providing timely project information to managers and customers; and submitting accurate and detailed bills or invoices, often in compliance with complex industry-specific and regulatory requirements. Many project-oriented organizations provide products and services under government contracts, and project accounting for these organizations often requires the use of sophisticated methodologies for allocating and computing project costs and revenues. There are many different types of contracts used by government contractors (such as cost-plus, fixed price, time-and-material, and so on), and within each of those there are dozens of variations or more; each variation drives its own type of billing, revenue recognition, and requirements for reporting back to the customer. For more information, see Project-oriented Software: Many Choices, Many Differences.

For over twenty years, Deltek has been a recognized leader in providing systems (and built-in controls) for firms that do business with the US federal government. Its solutions provide capabilities that enable customers to maintain their accounting records in a manner approved by the Defense Contract Audit Agency (DCAA) and other governmental oversight sets of rules such as federal accounting regulations (FAR) and cost account standards (CAS). The US government requires its contractors to collect and allocate cost in certain ways. For example, according to DCAA rules, labor costs must be recorded daily. Also, a contractor is required to keep track of several contracts simultaneously, meet the rules for different types of contracts, and be consistent in accounting for a number of indirect costs. Thus, of 11,000 Deltek customers, over 2,100 are federal contractors, and they account for more than half of the vendors' revenue. The remaining customers are from the commercial sector, which Deltek started to target quite a bit later in its existence.