Chapter 5 Materiel reform

The DMO's six key themes have become the underlying values that the DMO work from to effect cultural change, become more business-like, and to improve the efficiency and effectiveness of the DMO. These are outlined in Chapter 2, Business Improvement.

The DMO has continued to focus on improving its acquisition and sustainment core business and ensuring the effective implementation of enhancements to its business processes and systems.

Strategic Priorities

A standardised approach to schedule management to reduce slippage in major projects

In an effort to overcome the acute shortage of professional schedulers available in the market place, the DMO has designed and implemented a competency-based Scheduling Career Pathway. The learning and development underpinning the scheduling career pathway has been aligned to the Diploma of Project Management and scheduling workplace competencies. At three career points of the framework, schedulers can apply for a nationally accredited qualification in Project Management. The first intake of 13 trainee schedulers graduated in May 2008. This will go a long way toward augmenting scheduling skills and resources in the DMO.

The DMO has developed a standard set of milestones that it has incorporated across all its acquisition projects to monitor schedule performance. This initiative will enable project performance to be measured consistently using a common set of project acquisition-phase milestones.

The DMO has introduced a standard scheduling tool called 'Open Plan Professional'. This tool is also widely used across Defence industry. Furthermore, a schedule analysis and review tool has been developed to assess the level of compliance of DMO's acquisition project schedules against best scheduling practice. Reports generated by the tool are used to inform senior management on schedule development during project governance reviews.

Improved cost estimation and budget forecasting through the development of robust analytical, predictive and modelling tools

The DMO continues to work with the Capability Development Group to ensure that costs for new major projects are based on the best available processes and sources using the most suitable cost analysis tools. Recent cost estimation activity has focused on supporting investment analysis for the upcoming Defence White Paper. Of the 236 major projects completed over the last 10 years, on average these projects were completed within 96 per cent of their approved project budgets. The DMO has also undertaken analysis of the historical trends in the cost of weapons systems to inform the development of estimates for future capability.

Predicting through-life support costs is a more complex undertaking but essential to minimising the cost of ownership. The DMO has committed to a goal of $200m a year savings over the next 10 years in sustainment of the ADF's current inventory of warfighting assets. In-year expenditure performance and prediction of expenditure in outer years still remains less than satisfactory due to schedule slippages on the delivery of major projects and work is progressing to develop predictive modeling tools to assist in analysing areas where budget forecasting can be improved.

Enhanced Internal and External Contract Management

The DMO seeks to review and improve Defence- and DMO-wide procurement processes in order to comply with higher level legislation and procurement policy and provide best practice advice to contracting officers and industry. Key achievements during 2007-08 include:

The new templates will assist Defence and Industry to better manage arrangements for low-value low-risk goods and services respectively.

These and other reforms will continue throughout 2008-09.

Integrated workforce planning, including more effective management of the workforce as a whole and a review of military staffing policy

During 2007-08, the DMO progressed a whole-of-DMO approach to workforce planning so that the DMO has the workforce it needs to achieve and sustain its business outcomes. The DMO Workforce Planning Capability Maturity Model was introduced in 2007 and provides a benchmarking tool to drive workforce analysis and planning. The Military Workforce Agreements between the DMO and the three Services have been renegotiated, with the reiteration of alternative labour arrangements for military vacancies and the continuation of the contestable filling of key project management roles. A Reservist Talent Pool has been created to increase the availability of reservists with specific skill sets to offset military vacancies.

Broadened workforce professionalisation to build on the significant achievements to date in attracting, developing and retaining skilled people

The DMO has continued to develop professionalisation programs to ensure that its workforce has the requisite skills and knowledge to deliver business outcomes. The DMO job families are now supported by skilling and development frameworks of vocational, tertiary and postgraduate programs. In 2007-08 the focus has been on developing a materiel logistics framework, with new national competencies and qualifications developed and accredited. Other key activities have focused on the procurement and contracting job family through a suite of contract risk modules and an advanced negotiation program. The current and future need for project managers to manage the most complex acquisition and sustainment projects has seen the introduction in 2007-08 of the Executive Masters in Complex Project Management. This program, developed by the Queensland University of Technology and launched in January 2008, aims to accelerate development in anticipation of future skill needs. The requirement for skilled personnel has been addressed through continuation of the DMO's successful graduate and cadet programs, and the introduction of vocational trainee programs. The latter has targeted trainees in critical skills areas of scheduling, technical disciplines and logistics.