General Dynamics [GD] Information Technology (GDIT) will look to increasingly leverage Silicon Valley and smaller companies’ innovations in new technology areas, specifically automation, as government customers face tighter research and development budgets, company officials said Tuesday.
GDIT’s top technology officials told reporters during a roundtable the company is working to build up a supply chain risk framework to ensure its new partners meet stringent security requirements, including those working primarily in offshore development.
“It is a huge paradigm shift. Gone are the days where large companies on their own have a non-trivial budget to do research and development. I don’t think there’s an amount of money that I can ask for, even if you have deep pockets, that would do justice to our client base to bring innovation,” Yogesh Khanna, GDIT’s chief technology officer, told reporters. “Why would I spend tens of millions, or even hundreds of millions, in innovation when I can literally leverage billions of dollars of innovation that’s happening in the industry.”
Khanna pointed to automation as an area where government customers are looking to cut down on their largest cost drivers, while not necessarily having the flexibility to make large investments in R&D.
“On the people front, anything that can be automated is going to get automated. Whether we like it or not, it’s just the nature of how the industry is going to move,” Khanna said. “To come up with technologies that are specialized for each layer on your own is going to be very difficult. But if you look at it holistically and how I can reduce cost of delivering service, I have to rely on that partner ecosystem.”
Kristie Grinnell, GDIT’s chief information officer, told reporters the company’s is seeing an increased role to find smaller technology-focused companies developing new tools and match the innovation with government customer’s specific problem sets.
“The government doesn’t have the ability to go spend days and years in Silicon Valley, nor do they have the money to be able to do that themselves. Yet, you have these new new startup companies that are saying they have this really great technology and they just need a problem to solve with it,” Grinnell said.
To account for a growing “partner ecosystem” of startups and smaller companies that likely haven’t worked with the government before, Grinnell said GDIT has had to take more measures to ensure supply chain security.
“Just like we have a cyber risk framework, we have to have a supply chain risk framework. And we have to really work and mentor our suppliers of what it means to protect the data that we have,” Grinnell said, adding that the process often gets expensive for smaller firms. “Some of these suppliers say it’s not worth it. They can’t afford to do all of that, so I’m out. Now if it’s a sole-source supplier, we have to figure out a way to help them get healthy.”
Khanna acknowledged many of these smaller companies will develop technologies outside of the U.S. causing potential concern for data protection, while noting he has seen an uptick in firms willing to make investments in security requirements to ensure they can take on the new work.
“To make your dollar work longer and faster, a lot of the smaller companies do a lot of offshore development. As we take these companies through the filter, that becomes a question that we pose very early to them. We want to know where they’re developing, who’s working on the code and how are they creating those firewalls to make sure that their products are going to be secure,” Khanna said.