The strategic defence and security review and the national security strategy

Written evidence from the Project Management Institute

Introduction

1. The Project Management Institute (PMI) welcomes the opportunity to submit evidence to this Defence Committee inquiry into the Strategic Defence and Security Review (SDSR) and the National Security Strategy (NSS). As the world’s leading not-for-profit membership association for the project management profession, PMI strongly believes that programme and project management (PPM) needs to be at the heart of future defence decision-making by the Ministry of Defence (MoD) and the wider government if the outcomes and saving targets of the SDSR and NSS are going to be successful.

2. We further believe that defence capability and expenditure assumptions could be favourably revised if MoD and related agencies and departments instilled a universal commitment to effective project management across the piece. The body of our submission looks at the SDSR and NSS from the point of view of the discipline of project management. We also set out some key examples of where MOD should be considering the importance of PPM in future defence decision-making and cite some examples from our work in this sector with global defence organisations, governments and contractors.

3. Throughout our answers to the questions below we suggest that a potential solution to many challenges currently facing MOD would be to improve the PPM regime within the Department, and arguably more widely across government. By this, PMI specifically refers to a range of improvements to how projects are managed and how project managers are trained and recruited as follows:

a. Professionalisation: As a civil service profession, PPM should be afforded the status of a specialised discipline within the civil service. However in reality, projects are regularly managed by leaders without the relevant skills, experience and specialised training required to lead such a complex operation. As with other Civil Service professions such as law and IT, the status of PPM as a standalone discipline needs to be more strongly emphasised within MOD and across government.

b. Skills, training and CPD: Project management is a profession and discipline in its own right and as such project managers need to be afforded appropriate skills and training opportunities to support their professional development. PMI notes that web-based and distance training can be particularly effective options for quickly and efficiently upskilling large numbers of project managers in a range of specialised PPM skills.

c. Universalised credentials: MOD is a global operation with representatives all over the world. PMI believes that in order to ensure that officials are always able to deliver on key objectives on major projects, the frameworks, methodologies, standards and credentials that support MOD’s PPM approach need to be universalised – accessible in the same format all over the world. MOD’s current PPM approach is country specific to the UK market and we are aware that this leads to ‘translation’ problems for officials stationed abroad.

d. Talent management and churn: MOD, like other Departments, suffers from a loss of top talent to the private sector on a remarkably frequent basis, which in turn leads to a shortage of strong and expert leadership on major projects on the government side. This fact is exacerbated by the civil service tendency to rotate posts on a frequent basis; project leads are sometimes in place for a period of just months. PMI believes that MOD needs to act to attract, develop and retain the UK’s top project managers in order to make department-wide improvements in the long-term.

e. Planning, risk and slippage: Inability to appropriately plan, account for risk or manage time and budgetary factors on major projects are collectively responsible for the majority of MOD’s project failure and current budget circumstances. PMI believes that a greater focus on these factors and improved forecasting techniques would be greatly advantageous to MOD’s bottom line.

Answers to questions

Do the government’s decisions truly fulfill the stated intention of the SDSR as ‘set[ting] out the ways and means to deliver the ends set out in the National Security Strategy’?

4. While PMI recognises that difficult decisions had to be made as a result of the MOD’s budgetary circumstances and acknowledges that the government has made some progress in this regard, if the central intention of the SDSR was to deliver the NSS, PMI believes that it should focus more strongly on developing, professionalising and improving PPM throughout the department. We therefore cannot fully agree with the statement that the government’s decisions truly fulfill the stated intention of the SDSR.

5. The National Audit Office, the Public Accounts Committee, defence contractors and parts of MOD itself have made it known that this is a core area for focus and improvement in the short and mid-term, given that the management of the current portfolio of projects are directly responsible for budget overruns and scheduling challenges that directly affect MOD’s bottom line. It therefore follows that the authors of the SDSR could have more clearly recognised that improving and professionalising the discipline of PPM is key to delivering a whole range of other secondary and tertiary improvements.

How do the NSS and SDSR relate to each other as strategic and coherent documents and what added value has the establishment of the National Security Council (NSC) brought to strategic defence and security policy?

6. The NSS and SDSR complement each other well in terms of the former identifying the threats the UK faces and the latter structuring the UK’s defence assets to handle these threats, taking into account the difficult budgetary situation. However, PMI understands that both papers neglect to fully observe the importance of improved PPM practices in assisting the MOD in its reforms of the procurement processes. This in turn would help to avoid overspends on projects, both in terms of time and money, enabling the MOD to deliver equipment successfully to the Armed Forces.

7. Despite this omission in terms of a real focus on PPM, PMI welcomes the appointment of Bernard Gray as Chief of Defence Materiel. Gray’s 2009 report contained some valuable observations and critiques of the MOD and DE&S’ management of major projects, and PMI is keen that this appointment is seen as the first step in bringing in more effective PPM on major defence projects. PMI also welcomes the creation of the NSC. Such a body will bring the leadership necessary to ensure that the MOD delivers effectively for the Armed Forces, and PMI hopes that the body will also be receptive to new suggestions on how to effectively manage major projects.

8. Taken together, Gray’s observations of how major defence projects are managed throughout their lifecycle suggests an urgent need for root and branch reform of the system, yet the SDSR and NSS apparently do not heed that recommendation and as such are coherent, but not fully suited to the task for which they are designed.

What is the role of MOD, the Defence Reform Unit, other Government Departments, the national Security Council, the Armed Forces and other agencies in the development and implementation of the NSS and SDSR?

9. PMI believes that these and other organisations (such as OGC/ERG and Cabinet Office) will all play a major role in the implementation of the SDSR and NSS. In addition, such bodies will need to work jointly to ensure that a robust PPM regime is implemented throughout parts of government where major projects are being procured and undertaken. Given the known facts about the current systems in place and how they interact with one another and with contractors, the key would be to introduce universality and simplicity to a more integrated PPM profession in government. This in turn will drive down costs and provide greater value for money and efficiency on major projects.

10. The role of HM Treasury should also be noted with regard to this question. At a time of difficult financial circumstances and budgetary cutbacks across the board there is an ever greater need, especially at the MOD, for departments to demonstrate that they are utilising their budgets well and delivering value for money. Effective PPM is one of the more straightforward methods of achieving this.

11. PMI, as the world’s largest global organisation for the PPM profession, has worked with multinational organisations and governments all over the world to deliver such approaches and understands the direct benefits that can be derived from such a change. Many of our members who represent such organisations – including many who supply goods and services to HM Government, subscribe wholly to the PMI approach to project management simply because its universality means that it does not require industry-specific or market-specific ‘translation’.

12. Our case study at Annex 1 shows how our work with NASA enabled them to overcome the challenges of working with several different agencies and organisations in order to successfully deliver a milestone project.

What capability gaps will emerge due to the SDSR, how were they assessed as part of the development of the strategies and what impact will they have on the UK’s defence planning assumptions and ability to adapt to changing threats or unforeseen circumstances.

13. While PMI is not in a position to comment on specific capability gaps that will emerge as a result of the SDSR, we can offer reasons as to why such gaps are emerging in general and suggest specific measures to ensure such reasons do not occur in future. Capability gaps have emerged as a result of numerous current platforms or future projects having to be withdrawn or cancelled as a result of the budget overspend at MOD.

14. PMI would suggest that this is due to a lack of attention to and implementation of PPM in two key areas; developing PPM skills in MOD’s existing and future staff base and improving the management of projects throughout their lifecycle to reduce overruns and overspends. It is evident from the difficulties and controversies experienced in the Queen Elizabeth class aircraft carrier programme that MOD can lack the industrial awareness and effective PPM capabilities to cope when such large-scale programmes experience difficulties. Greater PPM expertise at the MOD would go a long way to avoid such problems in future.

15. PMI is not aware of any specific assessment of the MOD’s PPM capability in the development of the SDSR and NSS in addition to any internal undertakings currently underway, which we believe may prove to be a potential shortcoming in the long-term as pressure mounts on the Government to turn the promises made in the SDSR into concrete results and permanent improvements, particularly with regard to delivering equipment on time and to budget.

Will the prescriptions of the SDSR allow MOD to balance its budget and make required efficiency savings?

16. PMI is not in a position to make a full, informed judgment on whether the SDSR will allow MOD to balance its budget and make required efficiency savings, but do assert that one additional way the organisation can meet the required efficiency savings is by investing in the long-term skills base of its corps of project managers. While MOD has managed to stay within budget each year, it does struggle to control its budget effectively in the long term. It is PMI’s view that the SDSR did not give explicit detail as to how this long-standing gap between defence spending and the department’s allocated budget would be addressed.

17. The lack of prioritisation of spending to date has in the past resulted in a review of the entire organisation every time savings need to be made. The result is often short-term decisions to delay or reduce the scope (e.g. number of units procured) of programmes, even if contracts have already been signed with industry. This is one reason for the large amount of compensation the MOD would have been required to pay BAE Systems, for example, if the Queen Elizabeth class aircraft carriers were cancelled. A procurement programme that is mapped to strategic priorities such as those identified in the NSS and SDSR would enable the determination of where savings should take place when it is first apparent that funding has fallen short.

18. It should be emphasised here that investing in PPM capability refers specifically to in-house training of project managers, rather than extensive spend on importing external consultants and interims with the specific skillset to temporarily take on PPM tasks. We note that an annual spend of £71m on such external hires [1] could be invested much more wisely if a portion of it had been diverted to in-house training and development.

19. With in-house, best in class project managers who are better-skilled and better equipped to manage the complex change, risk and budgetary constraints that characterise many major MOD projects, MOD may find that an investment of this nature would greatly help it balance its budget in the medium to long-term.

20. Another problem presented by the SDSR, and indeed any defence review, is that it does not account for unforeseen events that would require a change in policy direction. Although this is a constant concern for MOD and the Government to incorporate into its day-to-day activity, we note that the extremely tight budgetary constraints of the current strategies make this type of rapid shift very difficult. PMI has worked with many organisations facing similar challenges and knows that effective project management can help to overcome these unforeseen obstacles and requirements with minimal effect on budgetary and time constraints. The case study at Annex 1 of PMI’s work with the US Department of Defense sets out how a key project responded to increased urgency and new requirements following the events of 9/11.

Does a funding gap still remain? How significant is it and how will it impact on defence capability?

21. PMI is not in a position to comment on the presence or extent of a funding gap at the MOD, but is confident that improved skills and capability for managing major projects would help to close such a gap. The NSS and SDSR have together offered MOD the opportunity to restructure itself around the realities it now faces, balance its ambitions with the resources allocated, and place itself on a firm footing for the future. However, its greatest challenge will be to maintain this balance to ensure that such problems do not arise in future. PMI believes that this can be most effectively achieved through the installation of a competent PPM regime which will allow MOD’s project managers, and MOD as a whole, to be equipped and resilient to manage future procurement and budgetary challenges.

About PMI

22. PMI is the largest global association and a leading advocate for the project management profession. Our goal is to advance the practice, science and profession of project management around the world. Since 1969, PMI has helped to improve the project management practice of more than one million governments, businesses, practitioners, students and training organisations. Today, PMI has over half a million members and credential holders working in more than 185 countries, and there are more than 8,500 PMI members and credential holders in the UK alone.

23. PMI’s products and services range from world-class standards for project, programme and portfolio management to their five professional credentials, including the gold standard Project Management Professional (PMP)®. The PMP® recognises demonstrated knowledge and skill in project management, and holders of the PMP credential are respected both in the UK and around the world. Governments have utilised it on an international basis to drive efficiencies within their organisations.

24. PMI is also a global leader in project management research, investing £11million in research since 1997. We currently fund PPM projects at Cranfield, Manchester, UWE, Southampton, UCL and Strathclyde Universities. Working with universities across the UK, Europe and the USA, PMI’s research informs the practice of project management, and its real-world application sparks further research, creates new knowledge, enables development of best practice throughout the profession and ultimately advances the discipline of project management.

25. PMI also helps organisations around the world to share project management best practice through its Global Executive Council, which engages an unrivalled community of multinational businesses and government organisations from around the world in endorsing the value of project management. This counts amongst its members BAE Systems, EADS, Deloitte, Fujitsu, NASA and the US Department of Energy.

26. PMI’s guiding principles are enshrined in PMI’s A Guide to the Project Management Body of Knowledge (PMBOK® Guide), more than three million copies of which are in circulation worldwide. The PMBOK® Guide is a project management standard for organisations across all industries, and typifies PMI’s approach to advancing the practice, science and profession of project management around the world.

February 2011

ANNEX 1: NASA AUTONOMOUS ROTORCRAFT PROJECT

Project Background

Part of NASA’s mission is to consistently develop innovative flight technologies to help advance America’s prowess in aerospace and aviation. NASA embarked on the Autonomous Rotorcraft Project (ARP) as part of that mission. The project goal was to develop an unmanned helicopter (rotorcraft) that would operate with the decision-making skill of a piloted aircraft.

Facing technological complexities, management challenges and the coordination of multiple organizations, NASA used project management competencies to meet its goals while staying on-time and on-budget.

Background

The ARP posed several challenges. Representatives from the Army/NASA Rotorcraft Division, the NASA Exploration Technology Directorate and the Flight Projects Office (FPO) made up the ARP team, which was comprised of experts in aeromechanics and flight control, autonomous executive software, helicopter dynamics and vehicle health management.

Challenges

Coordinating the ARP project team was one of the initial challenges as it was comprised of people from various organizations with different experience, backgrounds and working styles. The project manager also had to report to two supervisors-NASA and the Computing, Information and Communications Technology Program (CICT)-which sometimes had different priorities for the project or ways they wanted information relayed to the team.

Solutions

To keep team members informed and ensure stakeholder expectations were met, the ARP manager used project management to define the project scope. The team then presented this project scope to stakeholders, who then discussed and negotiated all points with team members. Team members could then incorporate the changes and agree on responsibilities. This allowed them to carry out their tasks in a more efficient manner with a clearer picture of the end result.

An ARP Project Web site was created to keep NASA Computer, Information and Communications Technology Program upper management and stakeholders aware of the project’s progression. The team also provided project updates to potential customers of the finished rotorcraft, including the Department of Homeland Security, the National Technology Transfer Center and other NASA researchers. This offered the dual benefits of marketing the rotorcraft and maintaining team morale by cultivating project support. In addition, all material presented in the updates was accessible to the team via the Web site, including flight plans, authorized documents, scheduling, photographs and videos.

The Safety of Flight Review Board was also active in the project by making periodic approval checks throughout the process. Having these approvals completed throughout the project meant there would be no significant delays. Flight plans were also tested and reviewed by peers to ensure the results were meeting NASA’s goals. The ARP manager was able to select these reviewers from a pool of highly qualified NASA researchers. In order to combat risk, the project manager found potential weaknesses in plans and prepared responses to any major delays or crises. All of these risk management strategies were shared with the team in weekly meetings, and therefore, the entire team knew how to respond to any incident that could occur.

Results

The project manager learned early to meet the needs of each team member and communicate individual responsibilities, ensuring deadlines were established and met. The manager also sought each team member’s opinion to find the best possible solution; team members felt they were truly a part of the team. The ARP project also helped serve as a stepping stone to the following fiscal year and future NASA projects. Without the extremely disciplined project manager on the ARP team, the project would not have given NASA the knowledge they sought in the autonomous field.

ANNEX 2: PROJECT MANAGEMENT HELPS THE DEPARTMENT OF DEFENSE PROTECT MILITARY AND CIVILIANS FROM HAZARDOUS MATERIALS

Project Background

Prior to the terrorist attacks of 9/11, the detection of hazardous materials in the environment was a primary concern to the United States military only during wartime or combat situations. However, 9/11 illuminated the potential for terrorist activity involving chemical or biological weapons, and placed a priority on the early identification of dangerous environmental hazards.

To help speed the government’s response to potentially catastrophic situations affecting the military or general public, the Department of Defense (DOD) began development of the Defense Occupational and Environmental Health Readiness System-Industrial Hygiene (DOEHRS-IH). Treating patients who had encountered a dangerous substance often proved difficult as their medical histories and other paperwork were not always readily available. Developed as a web-based application, the DOEHRS-IH would provide nearly real-time environmental monitoring capability and would eliminate the need for patients’ paper records.

Challenges

Scheduling posed a challenge on the DOEHRS-IH project as teams for government sponsored projects must often coordinate their schedules with those of other government initiatives. An urgent deadline also contributed to scheduling challenges. The project had been delayed for nearly three years and was at risk of being shut down altogether as users of the would-be system disagreed about minimum system requirements. Following 9/11, however, the potential for additional terrorist attacks placed a new urgency on the project.

Communicating with the project’s stakeholders also presented a challenge. The DOD, Army, Navy and Air Force required prompt and accurate communications on the project’s progress. In order to prevent scepticism or frustration, the project team needed to ensure that each of these groups received the appropriate information at the appropriate times.

Project Management Solutions

In order to successfully navigate these challenges, the DOEHRS-IH team used project management knowledge areas and methodologies described in A Guide to the Project Management Body of Knowledge (PMBOK® Guide). In addition, the DOEHRS-IH project benefited from the expertise and knowledge of its team and its manager - a certified Project Management Professional (PMP®).

The team used schedule and scope management processes to overcome scheduling challenges and to compensate for time lost during previous delays and setbacks. The project team also reused many components of the web-based system when creating the mobile system, saving significant development time and eliminating the need for user training on an entirely different system.

To overcome budget challenges, the team used change control methodologies, which enable project teams to closely monitor activity to ensure that each action is the most efficient means of reaching a project’s goals. By using these methodologies, the project team was able to re-evaluate the scope of work and successfully execute what was expected, and remain under budget.

Results

The result of the project teams efforts is the near real-time availability of information crucial to the safety of military personnel and civilians. By eliminating the need to manually enter personnel records or retrieve thousands of paper copies of exposure records, industrial hygienists for the Army, Navy and Air Force are able to access more accurate and current data from the online system for patient care, or to respond to potential crises.

Project management practices did not cease upon deployment of the DOEHRS-IH.Once the project team completed the development and deployment of the system, the project management office began conducting regular meetings with the DOD working group to review the status of the system and re-evaluate any further changes or necessary updates. The DOEHRS-IH system is capable of supporting 2,000 users but is scalable to as many as 70,000 users. By enabling the on-demand retrieval of patient medical history and local environmental conditions, DOEHRS-IH not only saves lives, but also reduces medical costs by helping to prevent widespread health issues.