Commerce vs. Defence
Irreconcilable Differences?
Matt Minshall
CSL Defence Interest Group
27 April 2005
IntroductionIntroduction
The aims of defence and industry are fundamentally different. With acceptance of this premise democratic governments try
to manage a defence capability in which the armed forces, the administration and
industry work in synergy to the mutual benefit and satisfaction of all parties.
AimAimThe aim of this short presentation is to
highlight the fundamental differences between defence and industry – based on the current situation in the UK - and to suggest ways of bringing the elements together in a way that
satisfies all requirements.
Four ElementsFour Elements
The First ElementThe First Element
1. The Government is the first element - being the ultimate owner of all defence
matters. It provides a defence ministry as the agency which attempts to bring the
elements of Industry and Defence together for mutual benefit and satisfaction
The Political DilemmaThe Political Dilemma
• The Government tries to be all things• Provide a defence capability• Support UK Industry • Maintain the manning levels of the civil
service• Allow open competition• Satisfy the need to spend less• Key player in global peace brokerage
The Two Central ElementsThe Two Central Elements
2. Defence3. Industry
Requirement of Defence CapabilityRequirement of Defence Capability• Aims
• Protection of the Mainland• Protection of interests overseas• Support of foreign policy• Support to NATO• Support to the UN• Support to Allies
• Means• Deterrence• Operations Other Than War• War
• Needs• Proper funding and support• Relevant equipment
Overview of Industry RequirementsOverview of Industry Requirements• Aims
• Profit• Reputation• Increase or maintenance of business• Expansion
• Means• Saleable credible and reliable products• Good marketing
• Needs• Money• Contacts• Client base
Divergence of InterestDivergence of Interest
Product Defence = Peace and security£ Industry = Profitx Common ground = Nil
The AimThe Aim
The Aim is the Key
Defence ProcurementDefence Procurement
• C Concept
• A Assessment
• D Demonstration
• M Manufacture
• I In-Service
• D Disposal
From the Concept comes the aim
Military Military ConceptConcept Analysis Analysis
Let A = Task Let B = Threat Let C = Requirement
So A + B = C
Government Concept Development
Let C = Committee Let H = Hiatus Let N = Nugatory Let O = Omnidirectional
After at least seven committees Creating five hiatuses Three nugatory studies And six changes in direction The Government has changed the simple military
requirement - C - to make: C7 H5 N3 O6
The Government MalaiseThe Government Malaise
DefenceRequirement
Industry SolutionGo to
MOD/DPA/DERA/QINETIQ/CIVIL
SERVICE/TREASURY/
PROTECTION OF SELF INTEREST/
FAIR COMPETITION/JOBSWORTH
FIREWALL
Defence solution
ComplexIncomplete Compromise
Why is there Divergence?Why is there Divergence?
Measures to protect the system from itself creates the Malaise
Defence Misspending and Mismanagement Defence Misspending and Mismanagement Symptoms of the MalaiseSymptoms of the Malaise
• Strategic• Technology vs. Credible Land, Air and Sea
Forces
• Tactical• Future Command and Liaison Vehicle
Defence Misspending and Mismanagement The Malaise - Strategic
•Following the US lead billions of pounds have been allocated and spent on technology
•Aim by 2020 is for the forces to have1000% the effects
•50% of the size
•10% of the logistics
•50% of the cost
•How?
•Distancing the battlefield
•Robotic weaponry and logistics
•Long Range Smart Munitions
•Computer Management
Defence Spending Defence Spending ComparisonComparison
0
5
10
15
20
25
30
35
40
45
UK USA
Percentage of WorldGDP
Percentage of World'sDefence Spending
Sources: New York Times; Le Monde; World Bank; Stockholm International Peace Research Institute
Defence Misspending and Mismanagement The Malaise
Tactical
AFV 430
CVRTSAXON
Land Rover
Future Command and Liaison Vehicle - FCLV
Defence Misspending and Mismanagement The Malaise
Tactical
FCLV – Mobile, Armoured, 5 seater, BOWMAN compatible and within a limited budget
Worst Trial VehicleWithin Budget
<50% CompliantNew vehicle
Best Trial VehicleWithin Budget
>85% CompliantReliable proven pedigree
Requires trailer for many rolesUnder armoured
3 Seater (with BOWMAN)So far cost is around 20% over Best Trial Vehicle cost
9% cheaper – Purchase cost
When C is confused the aim is When C is confused the aim is lostlost
Results are a loss of synergy
Loss of SynergyLoss of Synergy
• Aims• Management• Demands on Time and Money• Consultants
The Fourth ElementThe Fourth Element
• 4. Sound consultancy can be the solution
Defence requirements
Defence Capability
Needs
CommercialNeeds
Defence Solution
Government
Industry
Armed Forces
Sound
Consultancy
Irritants to The MalaiseIrritants to The Malaise
• Budgets• Technology• Outdated mindsets• Non SMEs• The Committee Syndrome• Innocent Quangos• The need to be “fair” – Open competition
The Return to Synergy and the Way The Return to Synergy and the Way
ForwardForward • Courage• Reaffirmation of the aims• Lateral thinking• Positive support• Constructive criticism• Integrity• Accountability
Future Roles for Defence ConsultantsFuture Roles for Defence Consultants
Helping the MOD to help itselfHelping the MOD to help itself
• Pre-emptive assistance at the right level
• Acting as the honest broker
• Filling the gaps
SummarySummary
• Identifying the malaise• Working with the system
• Shaping the future
Questions?
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