Multi-£billion savings through transforming Defence Acquisition
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The UK MOD established a major change programme - Customer Design - to commercialise its approach to the acquisition and support of military equipment.
The aim was to massively improve the efficiency of procurement and in-service support of military capability.
Project background
As part of defence reform, the Defence Board had set an objective for the MOD and the military services to radically improve the efficiency and effectiveness of defence acquisition. There was a particular focus on reducing friction between the commands - Navy, Army, Air Force and Joint Forces Command (JFC) - and the MOD’s acquisition organisation - DE&S (Defence Equipment and Support).
The aim was to drive stronger commercial acumen, experience and processes into the procurement and support process for the full range of military capability, which includes ships, aircraft, land vehicles, weapons systems and a vast array of other equipment, materials and commodities.
Key problems and challenges
The MOD and military services faced a range of major challenges at the outset of this programme.
A very tight set of deadlines had been set for the delivery of change, with challenging financial, organisational and other performance targets.
The MOD had recently been through several rounds of re-organisation and cost reduction. This had led, amongst other things, to there being very limited resources available, particular in the commands, and with the right skills to deliver a programme of this scope and complexity.
Also, at the outset of the programme there was an imbalance of focus, with several internal teams and consultancies already supporting the DE&S “supply” side of the interface. There was an urgent need to match this on the “demand” side, i.e.the commands. Also, where external support was already in place, this consisted of a variety of big brand and specialist consultancies but with a heavyemphasis on strategic, financial and analytical skills.
The MOD and military services needed practical, hands-on experience and skills focusing on organisation, process and people change in order to deliver this transformation programme.
Our Solution
Steve Bannister of Monro Consulting was engaged to recruit and lead a team of change agents to support the MOD in designing and implementing this major change to the Defence acquisition system.
Specifically, Steve and his team took the lead role in supporting the Commands – Navy, Army, Air and Joint Forces Command (JFC) – in designing and implementing a new interface with the Defence Equipment and Support (DE&S) organisation.
The work was carried out in key phases over a twelve-month time frame. The initial phase involved the business-architecting and top-level design of the Command side of the interface, which included the definition of three key process areas: Planning, Tasking and Acceptance; Performance Management; and Configuration and Change Control. This initial phase also involved establishing relationships with each of the four Commands and Strategic Programmes in Head Office.
At this stage, the team started to develop an understanding of the ‘as-is’ position, including organisation structures, numbers of existing staff involved in acquisition, their knowledge skills and experience (KSE) and their attitudes and level of resistance to change.
In the second phase, a more in-depth Capacity Maturity and Readiness (CMR) survey was developed, using detailed questionnaires, in-depth interviews with senior management and staff, and an online KSE survey of all Command staff involved in the interface with DE&S. This CMR survey also involved a qualitative assessment of the Commands and Strategic Programmes’ level of maturity, using a classic 5-level maturity model and assessments made in a range of key maturity areas including: process, organisation, governance, management information and infrastructure.
The next phase had to be carried out under very tight timeframes – nine-weeks in total. This involved supporting the Commands in the high-level design of their new organisation structures and developing estimates of the number of new staff and range of additional skills needed to face off to the new ‘commercialised’ D&ES organisation, which at that stage was planned to be outsourced under a Government Owned Contractor Operated (GoCo) model. Steve and his team gave intense support to the Commands during this period.
This included developing and implementing a tailored organisation design methodology, and creating and populating a detailed business-case input template.
All Commands and Strat Programmes delivered their “nine-week campaign” outputs on time and to the level of fidelity required for the business case.
The final phase of the programme focused on supporting the detailed development, negotiation and implementation of a new customer-supplier interface mechanism between the Commands and DE&S – known as SMART Contract 14. This involved a wide range of activities including:
• helping the commands to develop a fact-base of historical procurement and support information,
• developing and refining metrics for performance management and helping the Commands to set specific performance targets
• supporting an initiative to implement new management information tools,
• helping the Commands to design new governance and management structures, and
• supporting the actual drafting and negotiation of the SMART Contract 14 documents.
Above all, the key aim was to ensure that the Commands and DE&S could effectively operationalise the new, more disciplined interface from the start of the next financial year.
Results
The Customer Design programme delivered the first wave of major planned outcomes on plan for the start of the new financial year. Specifically, each of the services - Navy, Army, Air Force and JFC - had established their new Requestor organisations, with the planned processes, tools and personnel in place.
The SMART Contract 14 documents for all four Commands and, and the Strategic Programmes at MOD Head Office, were all developed successfully and went live as planned at the beginning of the new year.
Client testimonial
“I am very grateful to Steve and his team for the crucial role they played in the success of the Customer Design programme. They were very much in the front line of the campaign, helping the Commands produce their key outputs: the capacity maturity readiness (CMR) assessment; the Command interface design blueprint; the organisation designs and costings for the business case; and the implementation of SMART Contract 14 – the critical link between the Commands and the Defence Equipment and Support (DE&S) organisation.
Steve himself also fulfilled a critical challenge role in my Senior Team, often pointing out uncomfortable truths but always standing ready to find pragmatic solutions. I valued his advice immensely”.
Major General Peter Fox CBE, Programme Director,
Customer Design Transformation Programme, MOD