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Costpoint Expedites Report Generation by over 83%
Nucleus Research Note by Samuel Hamway
The Bottom Line
Through end-user interviews, Nucleus identified key drivers for adopting Deltek Costpoint: compliance with government contracting requirements, comprehensive ERP functionality and robust support. Deltek meets DCAA, FAR, CAS, and other standards, essential for government contractors. It integrates ERP functions, streamlining operations and improving quality control. Users value its support network for enhancing experience.
Benefits cited in customer interviews following deployment include reducing report updating times from 1.5 hours to 15 minutes and automating 50 percent of accounts payable tasks.
Learn More About Deltek Costpoint
Deltek Costpoint is designed to cater to companies engaged with the US federal government across various industries, offering a comprehensive ERP solution that integrates business intelligence, contract management, human capital management (HCM), manufacturing, procurement, project management, time and expense, and subcontractor management functionalities. The platform is engineered to support both enterprise-level businesses and small to medium-sized businesses (SMBs), accommodating a wide range of service and product-centric use cases.
Costpoint is recognized for its scalability, facilitating growth for businesses of all sizes. A key feature of the solution is its robust security and compliance framework, which is specifically tailored to meet the stringent requirements of government contracting work. This includes support for Defense Contract Audit Agency (DCAA) requirements, Federal Acquisition Regulation (FAR), Cost Accounting Standards (CAS), Defense Contract Management Agency (DCMA) compliance, Accounting Standards Codification (ASC), and International Traffic in Arms Regulations (ITAR) support. Additionally, Deltek’s Costpoint GCCM offering supports Cybersecurity Maturity Model Certification (CMMC) Level 2 and 3 compliance, has implemented National Institute of Standards and Technology (NIST) 800-53 controls, and has completed its FedRAMP Moderate Equivalency assessment.
Key Reasons Why Government Contractors Choose Costpoint
Through end-user interviews, Nucleus identified the following selection drivers leading customers to adopt Deltek Costpoint over competitors:
Compliance with government contracting requirements
Organizations choose Deltek Costpoint for its ability to meet government contracting compliance demands. It supports DCAA, FAR, CAS, DCMA, ASC compliance, NIST 800-171 controls, CMMC Level 2 compliance by completing FedRAMP Moderate Equivalency assessment, and ITAR requirements. This support is essential for companies in the defense and civilian government sectors that need accurate management of billable rates audited by the Defense Contract Audit Agency (DCAA). The software’s capability to calculate and manage cost reimbursable rates ensures every transaction is compliant and audit ready. For instance, an interviewed organization has used Deltek Costpoint amid ongoing evaluation since 2007 for its ability to calculate indirect rates and apply them to Document Number: Y116 July 2024 NucleusResearch.com 2 projects, which is crucial for DCAA compliance. Another interviewed organization switched from Microsoft Dynamics to Deltek Costpoint due to its superior handling of government contracting requirements, particularly its focus on billable rates and comprehensive compliance certifications.
Breadth of functionality
Organizations select Deltek Costpoint for its comprehensive ERP solution that integrates business intelligence, contract management, human capital management, manufacturing, procurement, project management, time & expense and subcontractor management. This integration streamlines processes and improves quality control, supported by a quality tracking module for manufacturers. The ability to automate accounts payable tasks through its API increases productivity and efficiency. One organization chose Deltek Costpoint for its efficiency in managing operations of numerous subsidiaries, particularly with its intercompany reconciliation functionality. Deltek's ability to streamline operations and ensure compliance is critical for managing their large enterprise.
Support and community engagement
Organizations value Deltek Costpoint for its support network, which includes webinars, chat rooms and user groups. This network allows sharing best practices, product improvement suggestions, and learning opportunities, enhancing the user experience and ensuring customers maximize software benefits. For instance, an interviewed organization found value in Deltek’s support network during their transition to the cloud and in addressing challenges. The support network facilitated experience sharing and solution finding, contributing to smoother transitions and ongoing software improvements. Another interviewed organization highlighted Deltek’s partnership-oriented approach, especially in addressing cloud migration issues.
Key Benefits of Deltek Costpoint
Nucleus identified benefits in end-user conversations with Deltek Costpoint users including:
Streamlined compliance and regulatory adherence
Deltek Costpoint simplifies the complex landscape of compliance and regulatory requirements for government contractors. After transitioning from Microsoft Dynamics, one customer highlighted Deltek's superior management of billable rates as pivotal for DCAA audits, directly impacting the allowable charges on cost-reimbursable contracts. The functionality provided by Deltek was instrumental in maintaining compliance and operational efficiency across 40 subsidiaries. Another organization benefited from project-level indirect rate application, crucial for meeting DCAA and other regulatory requirements. The system's specialized functionalities have obviated the need to consider alternatives, underscoring its value in ensuring compliance and streamlining audit processes.
Enhanced operational efficiency
Deltek Costpoint automates critical processes, significantly reducing manual workload and improving operational efficiency. A user credited the automation of 50 percent of accounts payable processes to Costpoint and referenced the native integration with Deltek’s GovWin IQ as enhancing organizational productivity substantially. The automation and integration capabilities of Deltek Costpoint have been pivotal in streamlining operations and supporting the company's business model. A second user reported a reduction in process time from 1.5 hours to 15 minutes for running report updates after moving to cloud-based Costpoint.
Customer Experiences
Nucleus interviewed Deltek Costpoint customers and partners to investigate the value delivered by the platform.
American Professional Services Provider
This American professional services provider, with a workforce of approximately 3,000 employees and generating $1 billion in revenue, has been utilizing Deltek Costpoint since 2007. Although it has investigated the market, the organization has not seriously considered alternative solutions due to Costpoint's unique capability to calculate indirect rates and apply them directly to projects, a feature critical for compliance with DCAA and other regulatory requirements. This functionality was found to be a more straightforward and efficient solution to its regulatory needs compared to other systems evaluated by the company, such as Peoplesoft and Oracle, which do not offer project-level indirect rate application. Automated 50% of accounts payable tasks with Costpoint
The decision to migrate to the cloud was driven by management for IT security reasons, necessitating additional security measures. The transition, completed in February 2024, took two years primarily due to the need to rebuild the system's extensive customizations. Despite encountering numerous bugs during the initial phase post-migration, Deltek has been actively working with the company to address these issues, ensuring smoother operations in the future. The cloud migration has significantly improved process efficiency, reducing the time required for running report updates from 1.5 hours to 15 minutes and facilitating nightly report generation. The provider has noted improved user support from Deltek throughout this transition.
Technology & Engineering Services Provider
This provider, specializing in services for defense and civilian government agencies, employs approximately 3,000 individuals and operates 40 subsidiaries. The organization transitioned from Microsoft Dynamics to Deltek Costpoint, driven by the latter's superior capabilities in managing government contracting requirements. Deltek's focus on billable rates, crucial for adhering to DCAA audits on cost reimbursables, presented a significant advantage over Microsoft's offering. Deltek's suite, centered around these rates, proved indispensable for the regulated industry in which the company operates, where every transaction is subject to audit.
The complexity of managing operations across 40 subsidiaries highlighted the need for a software solution that could ensure DCAA and DCMA compliance seamlessly. Deltek Costpoint distinguished itself with its intercompany reconciliation functionality, outperforming alternatives like Microsoft Dynamics and NetSuite, and enabling the organization to complete its closing processes by the 15th of every month.
An added benefit came from Deltek's new Shop Floor Time module for quality tracking for manufacturers, enhancing the company's ability to maintain high standards. Deltek’s GovWin IQ, integrated with Deltek Costpoint, emerged as a critical tool for the business, facilitating the matching of opportunities from bid to financials and underscoring Deltek's partnership-oriented approach. The implementation of Costpoint enabled the automation of 50 percent of accounts payable processes, marking a significant improvement in operational efficiency. The organization's ongoing evaluation reaffirmed Deltek's unmatched position in the market, particularly for productivity and efficiency in the government contracting sector.
Best Practices
Through comprehensive analysis and customer interviews, the following best practices have been identified for government contracting organizations to maximize their ERP investment returns:
Leverage full range of features
Leverage the full suite of features available in the ERP system to maximize productivity and efficiency. Engage in continuous learning through webinars, user groups, and forums to understand and apply best practices and product improvements. Implement and utilize the business intelligence component of the ERP to gain daily operational insights and make informed decisions. Regularly run and update reports to ensure data accuracy and relevance, facilitating strategic planning and operational efficiency.
Plan with compliance and security in mind
Prioritize early and ongoing assessment of compliance and security requirements. Ensure the ERP system is configured to meet DCAA, FAR, CAS, DCMA, NIST 800-171, CMMC Level 2, ITAR, and FedRAMP Moderate standards. Regularly update system settings to align with changing regulations and security protocols.
Ensure customization continuity if moving to the cloud
Before migrating to the cloud, thoroughly test all custom processes and extensions. Rebuild customizations with security and cost considerations in mind to leverage the cloud's benefits fully, without the loss of functionality.
Adopt a phased approach for system expansion
When scaling or adding new functionalities, start with focused pilot projects to validate the benefits and ensure smooth integration with existing processes. This approach allows for adjustments before wider rollout, minimizing disruption and ensuring that each new module or feature delivers the intended value.
By adhering to these best practices, organizations in government contracting can derive the most value from their ERP platform, ensuring strong returns on their investments.
