Knowing Your Economics Before Moving to the Cloud: LMI Shares Its Decision-Making Journey

An Interview with Jim McNabb, Project Manager at LMI  

LMI is used to solving tough problems for its federal customers. The government consultancy consists of more than 1,800 thinkers who are well versed in solving complex problems, but about a year ago, the firm needed to address an issue of its own. How should the organization approach its goal of growing to a value of $750 million to $1 billion, and approximately 3,500 employees, by 2025, and what are the solutions that will help make this aspiration a reality?

Considering New Finance Systems

LMI had three objectives when the search for a new finance system began.

1. Scalability – Gain a better understanding of where the firm is from an information technology (IT) cost perspective down to the employee level for allocation and contributions to wrap rate, information that aids with project bidding.
2. Reliability – Solutions need to address Cybersecurity Maturity Model Certification (CMMC), the federal mandate from the Department of Defense (DoD) that addresses the protection of federal contracting information (FCI) and controlled unclassified information (CUI), and provide levels three and four adherence.
3. Economics – System built on a cloud infrastructure that meets the credentials for International Traffic in Arms Regulations (ITAR) – a United States regulatory regime to restrict and control the export of defense and military-related technologies to safeguard national security.

"When we started this process, we were looking specifically at making sure all our systems scale to support our growth plan, LMI 2025, in headcount and revenue generation. We also had concerns about the CMMC requirements. In addition, we wanted to keep our cost of operations stable and not increase our headcount to maintain our [on-premises] system. A SaaS product was the ideal solution because it had a whole lot of infrastructure work that we didn't have to worry about."

– Jim McNabb, Project Manager, LMI

As a firm that engages with the highest levels of government through the service areas of digital and analytics solutions, logistics, and management advisory services (organizations and financial management), LMI was getting bogged down in the day-to-day IT operation and maintenance for their on-premises legacy system. The IT staff spent the bulk of their time manually managing patches and versioning. Considering a cloud solution became an obvious choice for the firm because of the agility, flexibility and mitigation it offers.

Weighing the Options

Based on LMI’s enterprise resource planning (ERP) needs, the primary decision-makers within the firm looked at solutions available in the market and realized there was one clear choice to meet all of their business requirements.

“We really didn’t consider any other systems,” disclosed McNabb. “I’ve been in the government contracting world doing finance and IT systems support for finance and ERP systems for almost 20 years. Deltek Costpoint is the leader. There aren’t many options out there with that core accounting, cost accounting functionality. It’s pretty much an industry standard. Our overall approach was to think about the management of it from an IT perspective, a cost consolidation aspect of having fewer systems and the employee experience of having fewer systems. We’re bringing all of our main back-office business functions into Costpoint, and what’s exciting about it. Now from a capture perspective, a contracts perspective, an execution perspective and an accounting perspective, it’s all in one system.”

An additional economic consideration in play for LMI: levels three and higher CMMC compliance. Without a move to Costpoint in the cloud, a large amount of resources devoted to bringing their previous system up to compliance standards would have been required. Dollars would likely have been allocated for consultants, physical maintenance demands, and headcount for support and teams focused on low-value support activities.

LMI’s journey was not without reservations, however. The firm conducted extensive research into not only the available solutions themselves but the process of migrating. Many of the reservations for moving had to do with the fear of the unknown. McNabb says that temporary loss of control over LMI’s data for the migration and fully understanding the management process for versions, updates and patching were of concern. All of which required much of the process to be characterized to senior leadership through other Deltek customer experiences to ultimately achieve buy-in.

The Road to Launch

LMI’s turnaround for go-live timing was fully intentional. Because the federal government’s expectation and enforcement of CMMC mandates was set to roll out during the final months of 2020, they wanted to align with this timeline and the availability of Deltek’s GovCon Cloud Moderate for offering Costpoint in the cloud. Equally important, many of LMI’s customers also use Costpoint, which would make everyone ready to address the requirements simultaneously.

In terms of the advice LMI’s McNabb would give another government firm looking to move from an on-premises solution to the cloud, he stresses truly knowing every angle of the short- and long-term costs and weighing those costs against company goals is vital.

“Look at what your compliance requirements and needs are, and how you plan on managing them,” says McNabb. “Review your on-premises hardware and software costs, specifically the hardware part of it. Fully know the labor associated with on-premises infrastructure. Make sure you don’t have to hire anyone extra to support that and be assured your current administrators will have their time freed up to work on other projects so they won’t be required to perform those ongoing patching and testing processes for CMMC purposes and day-to-day operations. We felt even with the upfront investments and costs needed to make the move, it really comes back again and again to compliance and the secure nature of Deltek’s government contracting cloud.”

Learn more about how Deltek has addressed the cybersecurity concerns of government businesses like LMI with the launch of Deltek’s GovCon Cloud Moderate for Costpoint in the cloud.