Value for defence

Copyright © BRL 2013

Value for Defence

Dr Philip Boxer

1


Agenda

• Overview

• Variety of Demands/Threats

• Architecture

• Structure Modeling

• Cohesion Costing

2


Modeling basic relationships between Force Elements and Alignment Processes

Analyzing architecture of layering in relation to different geometries-of-use

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Costing Cohesion in Mission Situations

Defence Expenditure

Scenario 1

Alternative

Large Scale

Small Scale enduring

Scenario 2

Scenario 3

Medium Scale enduring


Small Scale one-off


Small Scale limited

Small Scale one-off

Monte Carlo Simulation of impact of Variations in Demand on range of possible deployment costs

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

0 75 150

225

300

375

450

525

600

675

750

825

900

975

1050

1125

1200

1275

1350

1425

Scaled Cost1 Scaled Cost2 Scaled Difference

Real Option Valuation of impact of changes in flexibility on range of costs

Value for Defence

Establishing the value of agility: the agility of a Force Package impacts on Value for Defence

What Price Agility? Managing Through-Life Purchaser-Provider Relationships on the Basis of the Ability to Price Agility, Navigator White Paper, Software Engineering Institute, Carnegie Mellon University, September 2008

3


Examples of results: a focus on economies of alignment generates significant savings

Domain Result

NATO AWACS Significant interoperability risks at alignment levels, both technical and organizational. Needed to evaluate cost impact, but crossing organizational boundaries (equipment costs vs operational costs).

NHS Orthotics Focus on Alignment Processes => 30% efficiency improvement and x10 payback over 10 years from improved patient mobility. But crossed organizational boundaries (impact on Social Services).

UAVs Interdiction of fleeting targets

Total savings of about 40% through focus on creating economies in the costs of alignment. Impact of UORs on cost of capability had doubled acquisition cost. Savings involved defining capability at different level.

e-Government Swine Flu Changed architecture of search capabilities combined with focus on creating economies of alignment across departments produced savings of ~80%, but crossed organizational boundaries.

BAE Systems Naval surface capability

More modular elements combined with focus on creating economies of alignment could produce savings of ~40%, but changed level at which purchaser-provider relationship had to be defined.

4


VARIETY OF DEMANDS/THREATS

5


The demand for operational agility: agility depends on the variety of geometries-of-use supported

• The demand for operational agility creates a demand for flexibility in the way a Force Element can be used.

• The demands on a Force Element for flexibility is driven by the variety of different forms of collaboration* demanded of it.

Traditional focus

Current focus

* Geometries-of-use

Variety of Mission Situations

Force Elements

X X X

XXX

X X

X

X

Inter-State Conflict

Non-inter-state Conflict

X

X

X

Threat met by use of single Force Element: a few very

capable platforms

Force Elements purpose built to

meet most demanding threats

1 2 3 4 5 6 7 8 9 10

Force Elements built to meet a variety of threats through

working together collaboratively

X

X

Threat met by composition of

many Force

Elements: different types of platform

and equipment capability able to

work

collaboratively

6


Substituting a TacticalUAV multi-sided platform: creating indirect benefits through greater flexibility

The Multi-sided platform

Mission Situations

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X Individual in Afghan-Pakistan border X X X X X X

X Disrupts terrorist command X X X X X X

X Individual in Kabul Blue Zone X X X X X X

X Disrupts terrorist command X X X X X X

X Stinger Missiles in Baghdad City Centre X X X X X X

X Neutralization of manoeuvrist threat X X X X X

X Shoot-and-Scoot in Tribal Lands X X X X X X X

X Neutralization of manoeuvrist threat X X X X X X

X Terrorist Escape by Sea X X X X X X X

X Disrupts terrorist command X X X X X X X

End-users

Controlling

issue Operational Capabilities

Composite Capabilities

Direct value through substitution





Indirect value through its impact on the way different

collaborations can be formed

7


Variety of Demands across Campaign Types: What is happening to the variety of demands?

• The larger proportion of operational time is spent in the top-right quadrant.

• The trend across the whole range of Campaign Types is towards encountering increasingly asymmetric threats, increasing the variety of demands.

Concurrent Campaign Types (aka Defence Operations)

D

H

A

F

G

E

B

C

Enduring medium scale Military Assistance to

Stabilisation & Development

Enduring Medium Scale peacekeeping

OROR

Enduring small scale PK

Enduring small scale PP

OR

Limited duration SS (MS) Power Projection

Limited duration SS (MS) Peace

enforcement Limited duration SS (MS) focused

intervention

AND

One-off large scale

deliberate intervention

OR

AND

Standing Overseas

Commitments

J

I

A Vignette/ Mission Situation

A Campaign/Effects Ladder relates each Vignette to its larger Campaign context

low high

few

many

Variety of different types of Mission Situation*

Number of managerially and

operationally independent Actors

D

H

AG

E

BC

J

I

Insertion, reconnaissance,

ISTAR

F

* Variety of geometries-of-use

8


The capability envelope: The variety of defence outputs demanded are increasing

• “It is clear that the challenges of the future will demand even greater institutional agility in the face of major resource constraints and some profoundly worrying indications that the West may be losing the initiative in terms of dictating the way war is fought” (MoD, Future Character of Conflict, in Strategic Trends Programme2010.)

Variety of different types of Mission Situation*

Number of managerially and operationally

independent Actors

low high

few

many

collaborative operations

‘special forces’

operations

conventional war-fighting

Envelope spanning full range of Campaign

Types

Envelope for Campaign Types defined by ‘most

demanding’ Situations

* Variety of geometries-of-use

9


ARCHITECTURE

10


Architecture for increasing agility: Increases reliance on systems-of-systems external to Force Elements

• Proposed changes in architecture introduce:

– Increased modularity of Force Elements

– Increased reliance on systems-of-systems external to Force Elements

• Value for Defence is ability to meet variety of Mission Situations across range of Campaign Types at reduced cost

– Value of changes depends on specific nature of variety

Force Element

Alignment Process

Equipment capability

Architecture 1

Systems of Systems internal to Force

Element (endo-systems)

Systems of Systems external to Force

Element (exo-systems)

Architecture 2

Reduced cost of Force Elements

Reduced cost of Force Elements

Reduced costs of Alignment

11


STRUCTURE MODELING

12


Operational agility, aligning composite operational capabilities to mission demands

Acquisition agility, generating operationally available capabilities across the DLoDs

Balancing acquisition and operational agility: Achieving a double agility demands a layered architecture

• Balancing these two forms of agility and their corresponding costs involves spanning a number of different layers of organization.

Suppliers

Institutional Forces

Operational Forces

Theatre Command

Mission Command

Skills, Assets & Equipment

1

Fielded assets & equipment

Force Elements

2 3

Composite operational capabilities

Mission synchronization

4 5

Scenario Effects

6

Demand/ Threat Tempo

Alignment Tempo

Acquisition Tempo

13


Modeling Approach: There is no such thing as agility in general…

• Projective analysis is an approach to modeling and analyzing the relationships across all six layers with respect to a chosen variety of demands

Skills, Assets, Equipment &

Platforms

1

Fielded Assets, Equipment &

Platforms

Force Elements

2 3

Operational capabilities


4 5

Effects

6


Alignment Tempo

Acquisition Tempo

1

2,3

4,5

6

Domain of interactions

Organization

Realization

Supply-side Demand-side


Platforms

Organization of TEPIDOIL generating

Force Elements

Orchestration of Operational Capabilities

& Mission Synchronization

Effects within Mission Types across

Campaign Types

Effects Ladders

Analyzing multi-sidedness

Supporting organizations and

infrastructures

Supporting organizations and

infrastructures

14


Structure Modeling: Five aspects span the different levels of detail

1

2,3

4,5

6

Domain of interactions

Organization

Realization

Supply-side Demand-side


Platforms

Organization of TEPIDOIL generating

Force Elements

Orchestration of Operational Capabilities

& Mission Synchronization

Effects within Mission Types across

Campaign Types

Social & Data Synchronisation

Demand

Accountability Hierarchies

Structure & Function of physical and digital systems

Circular Dependencies

15


Architectural Analysis of Layering: Systems-of-systems architecture is layered

• Analyzing the Alignment Processes separately from the individual Force Elements makes it possible to analyze the interoperability risks across the different layers

Modeling of basic relationships

Analysis of patterns of Alignment

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16


COHESION COSTING

17


Cohesion Costing: Cohesion cost = Cost of using Force Elements + Cost of Alignment

• A different costing model is needed to identify the total operational costs of responding to particular types of mission situation – cohesion costing.

– Cohesion costing combines the costs of use of particular Force Elements with the costs of aligning their use in combination in relation to particular types of mission situation.

Skills, Assets & Equipment

1

Fielded assets & equipment

Force Elements

2 3

Composite operational capabilities


4 5

Scenario Effects

6

Costs of use Costs of alignment

Costs of Cohesion


Alignment Tempo

Acquisition Tempo

18


Analysis of Value for Defence: Reducing both the average and the variation in total operational costs

• The value of an architectural change is the impact of both the reduced average and the reduced variation*

• ‘Real Option’ pricing allows a value to be assigned to the change in spread/variance

a’b’

Value for Defence from: 2. Change in spread/variance

in levels of defence expenditure, based on the

difference between the two curves ‘a’ and ‘b’

Probability

Levels of total operational expenditure on Concurrent Campaigns

The total operational cost of approach ‘b’ across the variety of mission situations

b

a The total operational cost of approach ‘a’ across the variety of

mission situations

Value for Defence from: 1. Reduction in average level of

defence expenditure through impact of trade.

* Agility = property of the force package enabling it to do more things with the same underlying force elements.

19


Modeling basic relationships between Force Elements and Alignment Processes

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Costing Cohesion in Mission Situations

Defence Expenditure

Scenario 1

Alternative

Large Scale


Scenario 2

Scenario 3



Small Scale one-off


Small Scale limited

Small Scale one-off

Monte Carlo Simulation of impact of Variations in Demand on range of possible deployment costs

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

0 75 150

225

300

375

450

525

600

675

750

825

900

975

1050

1125

1200

1275

1350

1425

Scaled Cost1 Scaled Cost2 Scaled Difference

Real Option Valuation of impact of changes in flexibility on range of costs

Value for Defence

Establishing the value of agility: the agility of a Force Package impacts on Value for Defence

What Price Agility? Managing Through-Life Purchaser-Provider Relationships on the Basis of the Ability to Price Agility, Navigator White Paper, Software Engineering Institute, Carnegie Mellon University, September 2008

20


Examples of results: a focus on economies of alignment generates significant savings

Domain Result

NATO AWACS Significant interoperability risks at alignment levels, both technical and organizational. Needed to evaluate cost impact, but crossing organizational boundaries (equipment costs vs operational costs).

NHS Orthotics Focus on Alignment Processes => 30% efficiency improvement and x10 payback over 10 years from improved patient mobility. But crossed organizational boundaries (impact on Social Services).

UAVs Interdiction of fleeting targets

Total savings of about 40% through focus on creating economies in the costs of alignment. Impact of UORs on cost of capability had doubled acquisition cost, but involved defining capability at different level.

e-Government Swine Flu Changed architecture of search capabilities combined with focus on creating economies of alignment across departments produced savings of ~80%, but crossed organizational boundaries.

BAES Naval surface capability

More modular elements combined with focus on creating economies of alignment produced savings of ~40%, but changed level at which purchaser-provider relationship was defined.

21


SUPPLEMENTARY MATERIAL

22


Agility: The variety of capabilities that can be generated at threat tempo

• The operational agility of a Joint Capability Package is the variety of capabilities that it can generate at demand/threat tempo.

• The acquisition agility of a supplier is the variety of Force Elements that it can provide at acquisition tempo.

Threat

CapabilityCoalition

ContributionPhysical

Environment

Joint Capability Packages

Force Elements

Organisation

Infrastructure

Logistics

DoctrineInformation

Personnel

Equipment

Training

Audit Process

http://www.aof.mod.uk/aofcontent/operational/business/capabilitymanagement/capabilitymanagement_whatis.htm

Demand for operational capabilities at demand/threat tempo

Demand for Force Elements at acquisition tempo

Alignment Processes orchestrating and synchronizing the use of Force Elements at alignment tempo

23


Current Approach: Capability acquisition is largely stovepiped

• The MoD’s acquisition focus has been on the Force Elements capable of countering the most demanding threats, encountered primarily in inter-state conflicts.

– The acquisition and deployment of a Force Element includes its systems-of-systems that can be assumed to reside under a single operational1 and managerial2 authority.

– The costs of operational use are established through activity-based costing, focusing on the costs across the DLoDs that directly contribute to the operational use of the Force Element.

• The costs of aligning the use of multiple Force Elements to the demands of particular mission situations either remains implicit in the use of particular Force Elements, or belongs to another type of enabling Force Element providing the capability for Information Superiority (viz CCII and ISTAR).

1 Authority over the way the Force Element is used as a part of an operationally deployed Force Package. 2 Authority over the way the Force Element is made available for use by operational authority.

24


An example of high-level capability trading: Trading off the functionality of Force Elements and External SoS

Reaper

Alignment dependent on external SoS (exo-systems)

Alignment dependent on

internal SoS (endo-systems)

Directed/ Acknowledged SoS:

CCII architecture Star-connected

Collaborative/ Virtual SoS: CCII

architecture fully networked

Capabilities that a Force Element is built to create

acting alone

Capabilities that a Force Element is built to create by acting together with others

Cost of operational use of the capability

Interoperability Risks

Fast-jet strike package

The Force Element is designed to operate within a Task Force with its

own CCII, such that the Task Force can act like a single Force Element

1

Armed Tactical

UAV

A subset of capabilities can be deployed that are more dependent on external SoS

2

UAS-enabled strike package

Capabilities are created that are independent of the platforms on which they are deployed

3

25


This is not a question for Defence alone: Focusing on value-for-the-customer means moving strategy to the ‘edge’

Change Drivers Variety of demands

Domain Problem

NATO Uses increasingly joint and out-of-area

Mission Situations x range of Campaigns

AWACS Value for Defence => Interoperability Risks

NHS Patients’ increasingly chronic conditions

Conditions x patients’ lives

Orthotics Value for Patient => alignment (less under-use)

UAVs Uses increasingly tactical and collaborative


Interdiction of fleeting targets

Value for Defence => need for tactical agility

e-Government Citizens increasingly Questions x Issue Swine Flu Value for Citizen => responsiveness

BAE Systems Increasingly asymmetric threats


Naval surface capability

Value for Defence => need for agility

26


Early Systems Engineering: Agility is directly impacted by Software Architecture

• 2. External Interface Complexity – The interaction of multiple systems that were not designed together (e.g., military satellite

communications [MILSATCOM]), often termed “systems of systems,” also can greatly increase the difficulty of creating a stable requirements base for a new system.

• 3. System Complexity – The downside is that these new capabilities can tempt designers into unnecessarily complex concepts and

designs that impose a “cost of internal complexity” similar to the external complexity costs described above. In particular, there can be a tendency to assign poorly-thought-out functions and options to the software.

• 4. Incomplete or Unstable Requirements at Milestone B – As the missions and user communities have become more complex, the government is finding it much

more difficult to resolve competing views of system concepts and performance requirements.

• 6. Reliance on Large Amounts of New Software – Large, complex software elements have been the source of high costs and long development times on

many programs. The committee believes that most often this is not due to the difficulty of the software design, but rather reflects an inadequate definition of the software requirements prior to initiating the software development effort. Poorly-thought-out and ambiguous requirements seem to be an even greater addiction in software than in systems as a whole.

Pre-Milestone A and Early-Phase Systems Engineering: A Retrospective Review and Benefits for Future Air Force Acquisition. Committee on Pre-Milestone A Systems Engineering: A Retrospective Review and Benefits for Future Air Force Systems Acquisition, National Research Council. ISBN: 0-309-11476-4, 150 pages, 6 x 9, (2008)

27


END

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