What opportunities does the Defence Strategic Review provide to your business?

The public version of the Defence Strategic Review was released on the 24th of April by the Albanese Government—designed to assess Australia’s current defence capability, posture, and preparedness in light of Australia’s rapidly evolving strategic environment.

The Review poses a series of implications for the Australian defence supply chain and industry. It also offers a range of opportunities for those who are prepared for the coming changes. As a defence consulting firm, Systematiq finds itself uniquely positioned to address the many industry-focused concerns raised throughout the report.

Ultimately, the opportunities available for Australian defence industry, and the value Systematiq is primed to provide, are intrinsically tied to the DSR’s push for ‘new and accelerated capability acquisitions’.

Acquisition and a restructuring of priorities in the Defence Strategic Review

Amongst the many considerations made throughout the report, one particularly prevalent theme relating to capability acquisition was that of expediency: that ‘timely and strategically relevant capability acquisition is critical’ in Australia’s upcoming strategic circumstances.

In light of this refocusing of priority, the DSR points out that Australia’s current defence procurement policies, processes, and structure remain inadequate. It contends that there exists a clear lack of efficiency in Defence’s current approach to capability acquisition, which is preventing Australia from meeting current strategic demands.

An excess of ‘design changes’ and capability outcome ‘tinker[ing]’ has led to significant delays in major Defence projects; in a behaviour that the DSR has described as an ‘indulge[nce] in the quest for perfection. This has led to capability outcomes ‘not being achieved in a timely manner, or at all’.

The DSR proposes a new direction to resolve these issues: that Defence and the Government should ‘abandon its pursuit of the perfect solution or process’ and instead focus on ‘delivering timely and relevant capability’ in the most efficient manner possible.

For readily available capabilities, this entails a focus on ‘getting [the capabilities] into service without delay and achieving value for money’.

In essence, it is a ‘move away from processes based around project management risk rather than strategic risk management’, and a prioritisation of acquiring the ‘minimum viable capability in the shortest possible time’.

In order to capitalise on this new direction the Commonwealth is taking, businesses operating within the defence sector must first understand the problems the Review highlights with Australia’s current capability acquisition process.

A shift in focus from AIC

The Review attributes Defence’s capability acquisition inefficiencies to a range of systemic issues.

The first is an over-prioritisation of Australian Industry Content (AIC) from previous directions. The DSR asserts that the emphasis on meeting mandated AIC requirements ‘skewed the capability acquisition process’, insofar that capability outcomes became ‘secondary to creating opportunities for Australian industry’.

Whilst Australia’s sovereign defence industry capability remains essential and ‘supported’, this support is to be ‘balanced against timely capability acquisition’. In other words, AIC support is valuable, but only where it makes ‘strategic sense’ to the Australian Commonwealth.

According to the DSR, the Commonwealth is seeking to actively incentivise local Australian businesses to engage with Defence, through the streamlining of their acquisition processes. In essence, the goal for them is to ‘minimise the burden of working with Defence’, thereby making Defence contracts more accessible and appealing to Australian businesses.

The key, then, for these businesses (and in particular, SMEs) will be to align their efforts with the Commonwealth’s goal. If the Commonwealth seeks to reduce the complexities involved in engaging with a Defence contract, then SMEs must also look to improving efficiencies on their end, to make the entire process as straightforward as possible.

When it comes to streamlining the project delivery process for companies and alleviating the complexities of engaging with Defence, Systematiq has an extensive track record of success.

In the last decade, Systematiq has provided a range of services dedicated to expediating delivery and reducing difficulties for both Primes and SMEs across Australia’s defence industry supply chain.

Systematiq possesses the specialised capabilities in providing the ‘advantage of faster capability delivery’ to businesses, as the DSR advocates, whilst also ‘building depth in Australian defence industry’.

Systematiq Director of Strategy and Projects Brydon Johnson explains the value Systematiq can bring in light of the DSR’s new AIC expectations:

‘By working with Systematiq our clients are able to focus on their core business (quite often the “capability” being delivered), with Systematiq focusing on addressing the requirements from Defence for Introduction into service of that capability.’

‘This approach,’ he adds, ‘not only helps to achieve Defence requirements of ensuring timely delivery of capability, but allows the business to build AIC levels through the use of Systematiq’s services.’

A need for PMO specialisation

The second key reason for Defence’s acquisition inefficiency, the DSR asserts, is due the limited workforce in the Capability Acquisition and Sustainment Group (CASG); and especially in regard to the lack of skilled personnel when it comes to project delivery and management.

This is stated in Section 12 of the Review, where it is expressed that ‘the increasing volume and complexity of capability projects is overwhelming Defence’s capability system, its limited workforce and its resource base’.

In particular, the DSR highlights project management as the main area where CASG is lacking in experienced personnel. Key skills essential to the success of acquisition projects, such as ‘experience in project delivery’, and ‘commercial and industry expertise’, are ultimately lacking within the CASG workforce. This, the DSR asserts, is due to ‘the erosion of the APS workforce’ in CASG, which has ‘significantly degraded’ these project management skills, and thereby negatively impacted expediency.

In light of the clear deficiency of project management resources within CASG, enterprises on the side of industry must keep in mind their own Project Management Office (PMO), and the PMO capabilities they possess to expediate contracts with CASG.

With a lack of PMO resources in CASG, the Commonwealth will be more inclined to engage with enterprises that already possess robust project management and delivery capabilities, to alleviate the burden on CASG personnel. In addition, the presence of experienced project managers often keeps projects moving forward and on budget, which aligns entirely with the DSR’s push for expediency.

As such, there could not be a better time than now to focus on your business’ PMO. With renewed momentum from the DSR, CASG will likely prioritise your business over others if you possess demonstrable PMO capabilities.

This is where Systematiq can provide real value. By providing specialised support in the form of project management consultation, support, and personnel, Systematiq has successfully assisted defence businesses in their project management and delivery, allowing them to fulfil their contracts on budget, and on schedule.

Director Brydon Johnson provides some examples of the support Systematiq has provided to its clients:

‘As an example, Systematiq partnered with defence engineering firm Chemring on LAND 500, in which we provided a Project Manager to assist in the delivery of the project and a range of supporting services in ILS and Systems Engineering to address the requirements of the Statement of Work (SOW). Through our support, Chemring successfully delivered the full scope of LAND 500 along with helping to identify an additional $3M of scope for the project.’

Click here to learn how your business could benefit from Systematiq’s PMO services.

Systematiq facilitates timely capability delivery

The DSR has repeatedly highlighted the existing flaws of Defence’s acquisition process, and what needs to be done to resolve them.

It is now industry’s job to think about the role they can play in this picture. What qualities does your business possess that can aid the Commonwealth in achieving their new goals?

To gain a deeper understanding of how your defence industry business can capitalise on these changes, contact Systematiq today. Our experienced defence consultants can provide you with information and support on how you can reposition your business in light of the DSR.

If you wish to expediate your capability delivery through the implementation of robust PMO capabilities, Systematiq can provide you with advice, or immediate PMO support, to allow your business to deliver projects more efficiently and without delay.

As always, Systematiq is committed to keeping your business moving forward.