Diversifying Revenue Streams for Private Company

¶ … Saic The two proposed changes for Science Applications International Corporation (SAIC) include diversifying its revenue stream to include a growing customer base in the private sector, and streamlining its operations by attempting to reduce costs while still maintaining its profits. The problem addressed by these two solutions is that approximately 90% of SAIC's business is attributed to the Department of Defense (DoD), and that in the wake of governmental budgetary cuts SAIC would likely endure a commensurate reduction in its business.

In assessing the impact of both of these options it is important to realize that, according to Clemmer (2001), change is inevitable and "We can choose to anticipate and embrace changes or resist them." In fact, this basic distinction provides one of the most eminent ways of stratifying the impact of the aforementioned two options. The former creates a scenario in which SAIC has the potential to expand its business and fully embrace change.

The latter creates a scenario in which the organization is actually trying to lessen the effect of change, and thereby resist it by adhering to its same processes: yet doing so in a manner that reduces cost. Both of these impacts upon the organization will become even more pronounced when they are considered in the long-term.

Viewed from this perspective, seeking entrepreneurship activities in the public sector impacts the organization by attempting to take advantage of change, while merely reducing costs is just a way of trying to prevent change -- which implies the former is more beneficial. The impact of reducing costs perhaps is most advantageous when it is analyzed from a short-term perspective.

There is the distinct possibility that finding ways to reduce costs can perhaps widen the profit margins of SAIC in its immediate future -- until the DoD begins to stop spending as much with the company as it traditionally has. Another impact of this strategy in the short-term is that it can possibly alienate employees, some of whom may have to endure layoffs.

With some of the negative publicity that SAIC has recently received due to scandals in New York, additional negative press regarding layoffs may make this option not so attractive in the short-term after all. The short-term ramifications for attempting to embrace an increasingly diverse clientele in the private sector may also initially yield some undesirable consequences. SAIC will have to restructure its marketing and advertising departments in order to compete with several other companies for IT work in the public sector.

However, the company is sure to utilize good experience in doing so, and can very well refine its approach over time so that it is able to succeed in this endeavor In this respect, the change implemented by SAIC can actually lead to progress, which will happen if SAIC "heads in the right direction and its intentions become reality" (Kent, 2001). After considering the aforementioned impact identification, it seems advantageous for SAIC to pursue a strategy in which it.