Viewpoint Alastair Kett
The aerospace and defence sector is not deaf. It is well aware it has to mend its ways.
The press has been quick to admonish the industry for recent high-profile programme failures. Customers and suppliers, meanwhile, have told the sector that enough is enough. As well as developing programme controls and processes that seek to provide early identification of emerging risk, they now insist on contracts that set tight delivery times and allow little flexibility around scope and budget.
Nonetheless, many signs suggest that the sector is struggling to put its house in order. The US Government Accountability Office (GAO) says 10 of the 23 major defence programmes it assessed in 2006 are expecting development cost overruns of more than 30% or will be delayed by at least a year. The GAO also reveals that, on average, the cost of developing a weapon system exceeds estimates by 30-40%. In the UK, meanwhile, the Ministry of Defence's 20 largest programmes are forecast to cost 11% more than budget and are likely to be delayed by up to 33 months.
Why are programmes still going wrong? As the industry continues to move towards solution-based, rather than product-based delivery, the need for continuous measurement gets greater. In the past, however, programmes have suffered from a lack of programme delivery disciplines.
Under pressure to deliver more for less, contractors and customers have set unrealistic budgets. Weak leadership has resulted in a lack of direction and inadequately defined roles. Some programmes have paid a heavy price for poor planning and forecasting, while others have suffered as a result of a lack of buy-in from one or more stakeholders. Not all programmes have recognised the need to measure, track and advertise their successes, while many fail to confront risks in advance. Accountabilities are not always clarified or aligned to responsibilities. And many programmes start well, but lose their way due to continuous changes in design requirements from customers.
The challenge is twofold. First, programme leaders need to define which components need to be monitored. They must then decide how emerging risks can be identified and addressed.
Over the past year, PricewaterhouseCoopers' aerospace and defence advisory team has consulted widely within the sector and debated this issue with programme leaders, industry specialists, senior service personnel and academics. Everyone accepts that each programme is different and subject to regulatory and political pressures. Nonetheless, the considered view is that there are 12 core success factors that can be consistently applied to programmes (see diagram).
Behind each of these critical success factors lies a detailed, structured analysis that, when measured, provides the leadership with a snapshot of the programme's current health. It can also be used to provide a comparative benchmark against other programmes of similar magnitude within an organisation, or the wider sector.
Another clear message emerged. Regardless of process or structure or disciplines or culture, a critical component of effective programme delivery was leadership. All programmes can expect delivery challenges. Overcoming these requires a foundation of structured disciplines. Increasingly, the presence of a strong sponsor and anexperienced, high-impact,visible and robust programme leader are key.
Alastair Kett is Director of PWC's performance improvement consulting group.
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Source: Flight International