The economic downturn forced organizations large and small to tighten their belts and maximize efficiencies. One organization in particular that has faced pressure from all sides to run a leaner ship and cut waste is the federal government. Raj Sharma, CEO of Censeo Consulting, and recent author of a chapter on rethinking government supply chains in the book Governing to Win . Sharma says inefficiencies in government procurement leave billions of taxpayer dollars on the table each year. He also talked about his how his firm, a recent Consulting Magazine Small Jewel, has attracted talent from top-tier firms, and Censeo's expansion into more private sector work.
Consulting: Why is the government purchasing process so inefficient and what is being done to fix it?
Sharma: The federal procurement process is dictated by the federal acquisition regulations, the primary intent behind which is to ensure public dollars are used prudently with transparency the way the process is run to make it fair and competitive. The overall outcome the government is seeking to ensure is the best use of government dollars with the most output. I think while the intent is correct, the regulations and process potentially have an inverse effect. The process has really led to an excruciating amount of detail in terms of the way federal procurement should be run. In many ways the scrutiny put on the process has led to a culture where people are mostly ensuring they're checking the box in terms of the process but not necessarily applying business judgment and really taking educated risks. So we have a process now that's very lengthy and cumbersome, some of the simplest things take a long time to purchase and it's become costly for government as well as for industry. It imposes a lot of excessive costs to both sides.
Consulting: Has the economic downturn had an effect on the need to work smarter with available resources?
Sharma: Not just the downturn but the government's budget. There's been lot of pressure on government to reduce costs across government and budgets are going down as agencies look for areas to reduce costs and operate more effectively. Procurement is one of the areas that has been identified across the board, by the White House as well as congressional leadership, so there's a broad recognition. The government spends over $550 billion [on procurement], based on estimates I did, there's about $400 billion over a 10 year period, $40 billion a year that can be saved. There's a huge opportunity for government as a whole to save a lot of taxpayer money, but it sounds simpler than it really is in terms of how do you get to those savings.
Consulting: What are some of the market opportunities out there for Censeo?
Sharma: We see while the overall government market may be declining in terms of the budget for professional services, we see our part of the market expanding from areas where agencies and large, complex organizations really need to reduce cost, improve operational efficiencies and operate more effectively and in a lean manner. That's really focusing on what we do as a firm, it's not just about procurement and supply chain but broadly it's about operations improvement, so we're really seeing the market as being very ripe. I think a lot of the customers in the government also recognize that consulting firms know where the opportunities are, but how do you get to those opportunities and help agencies realize real results? The firms that are able to do that versus others that just develop opportunity analyses or plans I think that still leaves a lot of money on the table and aren't driving any tangible change.
Consulting: Censeo was one of our Seven Small Jewels a couple of years ago, any exciting updates to share?
Sharma: We've had a lot of growth since we last spoke. We broadened as a firm from procurement and supply chain work to operations improvement and organizational alignment. We've been bringing in some really talented people from firms we've all heard of: from Bain, from BCG, from AlixPartners and others. We're really developing a broader footprint of capabilities all focused on helping our clients in the private sector and government operate more efficiently. We are continuing to evolve our business model from the standpoint of scaling all the capabilities and processes and more broadly the culture and business model that we're really known for in terms of being very people-focused, giving our people a really balanced lifestyle while giving them challenging work.
Consulting: Where are you at in terms of headcount or revenue goals?
Sharma: We had approximately 30 percent growth last year, and are headed for another 30 to 35 percent this year. Headcount is lower, which is always good, we're running a smarter business. We definitely see a lot of growth potential but we've never really built Censeo with a focus on growth. From the beginning, our goal and measure of success has been to have a meaningful, positive impact through our work on our clients, our people and society as a whole. Our work in the public sector, for instance, touches issues that affect all citizens. We also continue to invest in community service and other broader impact areas .
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.