Defence Innovation Redesigned: Actions for Infrastructure and ICT providers

Defence Innovation: Actions for Infrastructure and ICT

Infrastructure providers have been asking Defence for a clear plan. with the 2016 Defence White Paper, the onus is now on them to grow the capacity and capability to deliver against it.

Partner, Advisory

KPMG Australia


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Like the Primes, the Integrated Investment Plan (IIP) makes the planning and costing analysis work for Infrastructure (i.e. engineering, construction and building) and ICT providers supporting Defence a little harder. A consequence of the IIP is that the flexibility normally enjoyed by those Defence officials responsible for facilities and IT will be reduced.

While this DWP invests in the enablers (25% of the AU$195 billion), additional funds limited by a more restrictive process may not be welcomed by all in this segment. For more than 10-years, the building and construction industry has been asking Defence to publish a plan. The onus now appears to be on industry to grow the capacity and capability to deliver against it.

For established industry players, this means continuing to invest in recruiting and retaining talent into the sector. For others, there’s a plan to support the investment required to enter the sector and certainly room for more players.

Through the 2016 IIP the building and construction and ICT sectors now have transparency on planned future Defence projects over the next decade. Like the ‘Green Book’ of past, the plan retains appropriate budget and schedule flexibility, with the value of most projects expressed in a band over a longer period of time than would appear necessary to deliver them. Outside of the forward 10-year period, the 2016 IIP also flags significant, longer-term infrastructure priorities.

The trade-off of increased budget and schedule transparency is likely to be less flexibility in how Defence prioritises its infrastructure investment, compared to what the Major Capital Facilities Program has had in the past. So while the publication of the investment program creates opportunity, it also poses challenges for the building and construction industry.

Actions for infrastructure and ICT providers

  1. Build capacity to deliver against the program. Established industry providers must attract and retain new talent from other sectors to meet the clearer demands of Defence.
  2. Establish a culture of costing realism not optimism. Provide the highest quality advice on the cost of a project, and the cashflow required to implement and deliver against it. Conservative estimates unnecessarily quarantine budgets which could fund other projects driving down the sector’s overall productivity.
  3. Look for opportunities to collaborate. The scale and complexity of the programs creates opportunities to work more closely with other ICT and Infrastructure providers, plus the Primes to ensure the infrastructure is developed and delivered in unison with the capability.

Defence innovation redesigned

Defence innovation redesigned

What the 2016 Defence White Paper means for industry.

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