Facing a dwindling defense market for technology consulting firms, the two Bethesda-based technology centers of Booz, Allen & Hamilton Inc. have consolidated into a single operation with its sights set on new commercial and environmental arenas.
Once almost entirely devoted to Pentagon contracts, these technology units of the New York-based consulting giant provided the government with advice on the design, development and implementation of everything from weapons to telecommunications systems.
The Applied Sciences Center and the Information Technology Center had combined revenue last year of $259 million, up from $244 million the year before.
But about five years ago, changes in the Defense Department and the growing importance of other government and commercial markets forced the two units to start working together and focus on new markets, said Gary Mather, the new president of the local Booz, Allen Technology Center.
William Stasior's promotion in May from head of the Information Technology center to president of Booze, Allen & Hamilton was the catalyst for the consolidation, Mather said.
"We knew there would eventually be a downturn in defense," Mather said. "Our data indicated that defense-driven budget cuts had much less of an effect on research and development than on procurement, so we made a conscious decision to focus on the research and development portion."
To stay competitive, government agencies continue their involvement in research and development even if they do not produce a product, Mather said, adding that the center's primary source of business still will lie with the government.
Space research is another area the technology center is approaching, he said, and that required a reorganization of its employees into different working groups.
The center also will work more with the traditional management consulting division of the company in New York to approach the commercial industries and expand into international markets, Mather said.
"Classic management consulting ... is designed to serve commercial clients on projects that are business analysis-oriented," Mather said. But increasingly, commercial firms need consultants with technical skills to help choose and develop such high-tech products as computer networks and information systems.
Booz Allen also saw an opportunity in another growing field -- environmental services -- that would require combining its resources, Mather said.
For example, as American factories are modified to meet tougher pollution standards, he said, they will need help from environmental, technical and management consultants to make the right technical decisions and then manage the changes.
"The two tech centers were very suitable for a while. We were organized against the market as it was then constructed," Mather said.
"But as the market changed and as information systems became part of everything, the organization that we had put in place had outlived its purpose," he said. "Firms need to maneuver with the changes."