MEETING EXPECTATIONS & ENSURING READINESS IN IN TODAY'S DEFENCE ORGANIZATION
BY SUZANNE NICKERSON
Canada’s new defence policy, “Strong, Secure, Engaged”, will increase annual defence spending from just under $19 billion to over $32 billion by 2027. Total defence spending is estimated to be more than $530 billion over the next 20 years. Central to achieving the strategic outcomes of the policy will be obtaining the full value from our defence spend.
As National Defence works with Aerospace and Defence (A&D) companies to achieve the objectives of the new policy, they must work together to effectively manage the investment of resources, and integrate and coordinate actions and monitor progress. A revitalized approach will help enable a sustainable and effective defence program that aligns to and meets Force Posture and Readiness requirements. Indeed, it demands greater visibility and transparency of the resources used and the contributions to military capability.
FOCUS ON COST
It’s a familiar story around the world. Policymakers and government leaders face growing demands to optimize resources, operate more effectively and efficiently, and continuously improve operations to fulfil their mandate in an uncertain world.
The defence sector is no different and already puts significant focus on cost – starting from project definition through approval stages, funding strategies and procurement. However, the ongoing management from acquisition to the full operational life cycle of defence assets continues to challenge both government and industry.
Government and defence teams currently lack organizational capacity (skill, expertise, and right information at the right time). When combined with inadequate cost and pricing frameworks, they face daunting challenges such as:
• Managing costs escalation through the life cycle of defence assets;
• Maximizing value of the output by adopting a problem-solving and preventative approach to production, delivery and service problems; and
• Pursuing innovative solutions that might reduce capital costs or increase efficiencies during the operational phase.
THE NEED FOR GREATER VISIBILITY
While new financial resources will help advance Canada’s priorities, defence leaders must be better-positioned to answer critical questions, including:
• Are resources optimally allocated to achieve the operational requirements for Canada’s defence policy? Are they being used efficiently?
• Will defence be able to deliver the full military capability articulated in Strong, Secure, Engaged?
• If resources are reallocated what are the impacts or risks, and how should they be reallocated?
• Is annual reporting accurate and how much is it costing to fulfil reporting obligations?
• How are the multiple projects and initiatives aligned and how are you ensuring full value of the investments?
The reality is that current performance systems are not designed to manage but only to report. Information lags and costly manual processes introduce inaccuracies in reporting, hindering the ability to make real time decisions and take corrective actions. While defence organizations place a premium on capability planning to meet military readiness requirements, they are challenged to provide critical information on a real time basis to enable the business of defence.
A new approach will help provide visibility across the defence organization to enable a more sustainable and effective defence program.
TAKE PLANNING AND ANALYSIS TO THE NEXT LEVEL
KPMG’s Enterprise Performance Management (EPM) solutions help public and private organizations meet the challenges associated with setting the right environment for efficiency, visibility, openness and trust.
EPM provides a consistent and standardized approach to better align strategies, plans and actions. It enhances planning, measurement, risk assessment and, ultimately, lead to better outcomes. Adopting EPM significantly improves business performance across the organization, while also ensuring the optimal use of resources and aligning strategies with plans and actions.
By embedding an outcomes-based, metric and indicator-driven approach to align and execute on visions, KPMG’s EPM solutions apply a consistent, standardized approach to meeting defence policy requirements.
Defence agencies are modernizing the business of defence to better enable and support operational readiness in order to respond to changing and increasing demands. They also look to optimize the value of the defence spend. Indeed, an EPM approach can provide the necessary visibility across the whole of the defence organization. In doing so, they will know that they are meeting the policy expectations and that the defence team is ready to fulfil its missions
