Complexity of the Acquisition and Sustainment Business of DMO

1.18 The DMO manages some of the most complex project acquisition and sustainment activities in Australia. The key findings of a review of project complexity conducted in 2009 by the Helmsman Institute include:

• Defence projects are a level more complex than projects in Australian organisations in other sectors (as shown in Figure 1.5):

- Frequency of complex projects in Defence is higher than other organisations and industry sectors.

- Defence project performance is better than most other industry sectors.

- The high level of complexity and the number of projects managed requires unique project management capability in Defence.

• The current complexity is likely to continue and may increase;

• Some of the major drivers of complexity are in aspects of business that are not traditionally Defence's core skill areas; and

• Some complexity is self imposed through decisions made by Defence and Government policy160.

Figure 1.5 - Helmsman Analysis of DMO Project Complexity Versus Industry

1.19 The Helmsman Institute also conducted a similar review to benchmark complexity of DMO sustainment activities. Key findings of this review include:

• Inherent complexity of capability systems, which are integrated with multiple (often high end technology) subsystems, is greater than systems supported by Australian organisations in other sectors as shown in Figure 1.6.

• The level to which a capability system employed by the ADF is isolated from the global supply network, results in a corresponding increase to indigenous engineering demand and management oversight.

• As a capability system ages and comes closer to its original planned withdrawal, obsolescence of parts becomes a factor in increasing costs. If a planned withdrawal date is postponed, sustainment requirements (engineering, maintenance and inventory level of spare parts) need to be reviewed, and re-baselined and extended; all of which adds to the cost of sustainment.

• The theatre of operations for deployed capability systems (locations, type of mission and number of capability systems, as experienced by the fleet of Bushmaster protected mobility vehicles) creates a high degree of complexity in ensuring operational effect is sustained161.

Figure 1.6 - Helmsman Analysis of DMO Sustainment Complexity Versus Industry

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160 A Comparison of Project Complexity between Defence and other Sectors, The Helmsman Institute, 2009.

161  The Helmsman Sustainment Complexity Review, The Helmsman Institute, July 2010.