3. Defence Renewal

Alternate Formats

Defence Renewal comprises initiatives to strengthen both the performance and organizational practices of the Defence Team. The performance improvements are the business process renewal initiatives, whereas changes to organizational practices are the enhancement of our organization’s capacity to implement, embrace, and sustain improvements to performance over the long term. The following is a status summary of the 30 performance and organizational practice initiatives that were introduced in the Defence Renewal Plan. A more detailed review of each initiative is contained in Annex A of this report.

In addition, in this section there is a summary of the new initiatives being proposed for addition to the suite of performance initiatives, as well as a summary of the reinvestment framework and an update on governance.

3.1 Performance Initiatives

3.1.1 Operations and Training Initiatives

Summary of the Operations and Training Portfolio

1.0 Operations & Training Portfolio DOS SJS Improve the effectiveness and efficiency of the management of operational readiness and those activities in direct support of readiness such as operational training and maintenance execution. $97M–$190M
#InitiativeDescriptionReinvestment Opportunity
1.1 CAF operational force posture and readiness
SJS
Improve the management of Force Posture and Readiness by establishing a CAF wide framework for readiness, aligned to mandated missions of the Canada First Defence Strategy (CFDS) and integrated with a clear framework for efficient and transparent resource expenditure, the new Program Alignment Architecture (PAA). N/A
1.2 RCAF Simulation and Synthetic Environment
RCAF

Determine and implement the optimal mixture of live, virtual, and constructive training in order to improve “effectiveness”, the degree to which it improves operational performance, and “efficiency”,the degree to which an investment in simulation provides “good training value” for our applied resources.

$7M–$20M
1.3

CAF maintenance execution
SJS, RCH, CA, and RCAF

In support of mission readiness, the CAF will seek out improvements in the effectiveness and efficiency of maintenance execution within the environmental services.

1077-2000 FTEs1 
($90M–$170M)2
M (for million)

Notes:

1 The initial estimate produced through international benchmarking requires detailed analysis and validation. FTE reinvestment opportunities may represent effectiveness, cost avoidance or efficiency savings and do not necessarily indicate a change to actual positions.

2 Dollar value (shown in brackets) is a depiction of the value of the FTEs that is used to calculate the total reinvestment opportunity.

The Operations and Training Portfolio comprise three initiatives that are aimed at maintaining the readiness of the CAF to conduct Government-assigned missions. This includes making improvements to the management and costing of readiness, increasing the use of simulation technology for greater cost-effective operational training, and increasing the efficiency of front-line maintenance activities.

The CAF Operational Force Posture and Readiness (FP&R) initiative will improve the management of the framework which aligns the missions of the CFDS to specific readiness requirements. The framework will be integrated with the new Program Alignment Architecture (PAA) and ultimately provide clear linkages with resource expenditure. The framework is being refined to lead to a better cost capturing of FP&R and a validation of Force Generation (FG) commitments. The Implementation Plan was approved in February 2014 and the detailed task schedule is almost complete. Metrics have also been established to monitor progress.

The simulation initiative has focused on the upfront investment and capital project for the three fleets lacking ready access to simulators on their primary Royal Canadian Air Force (RCAF) bases: CC-150, CC-177, and CH-149. An indicative business case demonstrates net cost reinvestment opportunity after repaying the upfront investment, and is now being refined to include the important additional safety, training, and operational benefits. A combination of scope and staffing issues has delayed the anticipated Treasury Board (TB) submission, but the project is still moving rapidly through the capital project process.

Maintenance Execution made limited progress in FY13/14 due to delays in the provision of external consulting support. Ongoing efforts to improve the productivity of maintenance work continue, such as the CP140 Get Well (RCAF), Op Production (RCAF), and Equipment Movement Order Process (Canadian Army) reviews. However, external contractor expertise is required to bring about the systemic transformation sought through Defence Renewal. Over the next 12 months, efforts will focus on the analysis phase in order to identify the potential sources of efficiency/inefficiency, develop baselines and performance metrics, and estimate reinvestment potential.

Soldiers of the Arctic Response Company Group

Soldiers of the Arctic Response Company Group prepare to board a CH-146 Griffon helicopter during Operation Nanook. Joint training in challenging environments ensures readiness and inter-operability.

 

3.1.2 Maintenance and Material Initiatives

Summary of the Maintenance and Materiel Portfolio

2.0

Maintenance and Materiel Program
ADM(Mat)

Renew the maintenance and materiel program from end to end, with changes to how business is conducted across the full spectrum of the defence supply chain, from the strategic level to the CAF users at units, bases, and wings. $281M–$450M
#InitiativeDescriptionReinvestment Opportunity
2.1

Maintenance and Materiel Program
ADM(Mat)

Avoid cost of unnecessary items by optimizing the amount of inventory procured and held. $87M–$162M
2.2

Warehousing and Distribution
CJOC

Ensure warehouse facilities are right-sized and efficient, and that the distribution process is lean.

$9M–$17M
2.3

Maintenance Program Design
ADM(Mat)

Optimize weapon system performance and value for money through the implementation of sustainment best practices that leverage the capabilities of the CAF, DND and industry.

$25M–$75M

2.4

Departmental Procurement
ADM(Mat)

Apply best practice approaches to DND "spend" across the department, using all DND-controlled procurement levers to maximize value to DND. $160M–$196M

The four Maintenance and Materiel Program initiatives are maturing and progressing in accordance with their implementation plans. All initiatives have put into effect a robust governance framework and have stood up dedicated teams with project managers. Performance metrics have evolved and data collection has commenced for two of the four initiatives. Further analysis and development is required to determine a robust performance measurement framework that illustrates quantitative progress towards renewal objectives for each of the initiatives within this portfolio. ADM(Mat) has made a commitment to provide necessary funding for FY14/15 Defence Renewal investment requirements by prioritizing in-year program expenditures. Funding for subsequent years will be important to the progress of the Maintenance and Materiel Portfolio.

Naval Electronic Technicians

Naval Electronic Technicians perform radar maintenance on board Her Majesty’s Canadian Ship (HMCS) Fredericton. First and second line naval maintenance are being exam- ined to identify opportunities for improvement. Maintenance processes have an important and direct link to the readiness of the CAF.

RCAF technicians

RCAF technicians change a CF-18 aircraft engine during OP IGNITION 2013. Air maintenance execution is being reviewed to improve performance across the fleet.

The majority of gains realized for FY13/14 were seen in the Inventory Management initiative, which reduced and avoided costs associated with dormant, repairable and excess inventories or stocks by $62.6M. The Warehousing and Distribution initiative mainly focused on establishing the project team and scoping specific opportunities relating to third-line warehousing for implementation starting FY14/15.

Maintenance Program Design has expanded its scope to include In-Service Support (ISS) procurement and RCAF Engineering Flight Test rationalization. Four ISS pilot projects were launched in FY13/14 and work is ongoing.

Lastly, the Departmental Procurement initiative undertook extensive consultation to determine the state of procurement spending in the department, and is still scoping major courses of action. Nevertheless, the initiative found modest gains, starting in FY14/15, in the renegotiation of two service contracts.

It is expected that baseline data and preliminary performance results for all maintenance and materiel initiatives will be reported in the course of the next 12 months.

3.1.3 Information Management/Information Technology (IM/IT) Initiatives

Summary of the IM/IT Portfolio

3.0

IM/IT Portfolio
ADM(Mat)

The Information Management/Technology (IM/IT) renewal effort will provide Defence with a stronger capability to better plan and manage IT resources and investment while making the Defence IM/IT program more effective and efficient. $38M–$68M
#InitiativeDescriptionReinvestment Opportunity
3.1

Optimize IT service management

Develop an enterprise-wide IT Service Management capability: Consolidation of 120+ Service Management Centres to 20 or less Regional Centres supported by standard processes and a common software toolset. 85-104 FTE1 
($7M–$9M)2
3.2

Application portfolio management

Improve IT program efficiency by improving overall stewardship and maturity of application management practices across DND/CAF.

$12M–$36M
3.3

Rationalize Defence IM/IT program

Build upon Synchronized Planning to rationalize IT expenditure across DND/CAF, using procurement levers.

$19M–$23M

Notes:

1 The initial estimate produced through international benchmarking requires detailed analysis and validation. FTE reinvestment opportunities may represent effectiveness, cost avoidance or efficiency savings and do not necessarily indicate a change to actual positions.

2 Dollar value (shown in brackets) is a depiction of the value of the FTEs that is used to calculate the total reinvestment opportunity.


The three IM/IT initiatives are progressing with the most notable progress gained in the IT Service Management initiative, which will be ready to commence the implementation stage in FY14/15.

The IT Service Management initiative has implemented the enterprise tool at 11 sites, with the first site consolidation planned for FY14/15. The FY14/15 departmental budget allocation has included investment in this initiative to ensure progress is maintained and risks are reduced.

Application Portfolio Management (APM) has been collecting the baseline data required to analyze the Department’s inventory of applications. To date, the APM initiative has compiled data on 30% of the 5,000 departmental applications, with an aim to remit all 5,000 applications by October 2014. Following an analysis and categorization of the data, rationalization and transition of applications will begin in FY14/15.

To execute the rationalization of the IM/IT program, the methodology for IM/IT expenditure reporting was reworked and has resulted in improved fidelity and accuracy of the program expenditures. A new IM/IT planning template, together with IM/IT prioritization metrics, is being developed for FY15/16 IM/IT planning. In FY14/15, this initiative will develop strategies for IM/IT procurement efficiencies.

3.1.4 Infrastructure Initiatives

Summary of the Infrastructure Portfolio

4.0

Infrastructure Portfolio
ADM(IE)

Infrastructure renewal will provide Defence with an opportunity to reinvest towards a modern-day infrastructure portfolio that aligns to and supports the Canada First Defence Strategy. $104M–$179M
#InitiativeDescriptionReinvestment Opportunity
4.1

Centralize real property management

Centralization of Real Property (RP) management under a single authority (ADM(IE)) providing leadership, strategic direction and real property services. 140-170 FTE1 ($11M–$14M)2
4.2

Rationalize real property portfolio

Rationalize the real property portfolio to be efficient, effective, operationally relevant, affordable and sustainable and support the CFDS.

$69M-$127M
4.3

Optimize facilities management service delivery

Achieve efficiencies through consolidation of base and wing facilities management contracts at the national, regional or local levels.

$20M-$25M

4.4 Improve real property project delivery Improve acquisition delivery to optimize the allocated resources (personnel and financial) and the timeline in order to meet the project statement of requirements (SOR). $4M–$13M

Notes:

1 The initial estimate produced through international benchmarking requires detailed analysis and validation. FTE reinvestment opportunities may represent effectiveness, cost avoidance or efficiency savings and do not necessarily indicate a change to actual positions.

2 Dollar value (shown in brackets) is a depiction of the value of the FTEs that is used to calculate the total reinvestment opportunity.


The four Infrastructure initiatives are progressing according to their implementation plans. Analysis has been undertaken to ensure that potential overlap is identified between Infrastructure initiatives and other initiatives, such as Materiel, IM/IT and the Project Approval Process Review. Performance metrics have evolved and data collection has commenced for initiatives 4.1, 4.2, and 4.3, with initiative 4.4 requiring policy clarification as a next step. Baseline data and preliminary performance results will be reported for initiatives 4.1, 4.2, and 4.3 over the course of the next 12 months.

A major milestone in the Centralization of Real Property (RP) Management initiative was achieved in April 2014, moving the department from a nine-custodian real property management model to an interim four-custodian model, with an end-state, single-custodian model by 2016. This portfolio of initiatives has identified reinvestment gains early in the Defence Renewal program in the areas of focusing personnel on higher priority work, divestment of redundant infrastructure and optimizing facility management services. Looking forward, the Department’s first National Real Property Development Plan (NRPDP) is scheduled to be complete by the end of December 2014.

Real property project delivery is a longer-term initiative and is dependant on TB and Departmental Project Approval policy clarification, and thus will take longer to implement data collection and achieve performance results.

The Infrastructure and Environment Business Modernization (IEBM) module to the Defence Resource Management Information System (DRMIS) is a critical enabler to the success of the infrastructure initiatives. The Department will progress the IEBM project aggressively to ensure this essential business management system is in place to support Defence Renewal outcomes and, more importantly, to provide adequate management capability over the significant Defence infrastructure responsibilities.

Infrastructure

Infrastructure is more than just buildings, it includes complex facilities that support maintenance and readiness. An improved custodial model will result in more effective and efficient infrastructure that supports operations and the CFDS.

3.1.5 Personnel Initiatives

Summary of the Personnel Portfolio

5.0

Personnel
CMP/VCDS

The personnel renewal effort will provide Defence with an opportunity to reinvest towards a modern and responsive military personnel recruiting, training, and management system. $43M–$73M
#InitiativeDescriptionReinvestment Opportunity
5.1

Modernize CAF individual training and education
CMP

To provide a more sustainable individual training and education program within allocated resources. A pan-CAF IT&E architecture will reduce redundancies and stovepipes, with a view of creating efficiencies and enhancing program delivery. $11M–$20M
5.2

Modernize CAF career management process
CMP

To improve career management by examining procedures, policies and practices through business process renewal.

$13M–$17M
5.3

MPM Capability Transformation
CMP

Military Personnel Management Capability Transformation (MPMCT) is a capital project to deliver a modernized and integrated military HR and pay capability.

200–380 FTE1 ($17M–$32M)2

5.4

Modernize CAF Recruiting Process
CMP

To restore CFRG’s ability to achieve 100% of the Regular and Reserve force intake, and to attract, process and enroll Canadians from all geographic regions of Canada. $0
5.5

Renewal of Cadet and Junior Canadian Rangers Programs
VCDS

The CAF will align and structure itself to deliver a relevant, effective and efficient community-based and summer (advanced) Cadet and Junior Canadian Rangers programs. $2M–$4M

Notes:

1 The initial estimate produced through international benchmarking requires detailed analysis and validation. FTE reinvestment opportunities may represent effectiveness, cost avoidance or efficiency savings and do not necessarily indicate a change to actual positions.

2 Dollar value (shown in brackets) is a depiction of the value of the FTEs that is used to calculate the total reinvestment opportunity.


The five initiatives under the Personnel Portfolio are progressing well and early wins have been seen in all initiatives, with the exception of the Military Personnel Management Capability Transformation (MPMCT) initiative, which has not begun its implementation yet.

The Individual Training and Education (IT&E) initiative is progressing with moderate confidence due to pending decisions on the level of departmental investments. Planned activities are progressing extremely well with a modest renewal gain being realised with the discount achieved on the App Store licensing for 2014.

In implementing the modernization of the CAF Career Management Process, modest gains were realized through the reduction of Temporary Duty (TD) costs for annual selection boards and using videoconferencing for Career Manager Interviews, with generally positive feedback. The Canadian Forces Personnel Appraisal System (CFPAS) refurbishment proposal was endorsed and implemented for the FY13/14 reporting period. The second phase of this initiative will focus on a career and succession management framework supporting Cost Moves prioritization and Policy, Procedures and Practices Review, and on the execution of the CFPAS renewal project.

MPMCT will transform personnel policies, processes, and procedures, realigning with current best practices, and implementing an up-to-date integrated human resources and pay information management system. The project is well-structured and supported to deliver its objectives and is aggressively following the project approval process. The project is currently in definition and approval of expenditure authority for Implementation of Cycle 2 (Initial operating capability of Guardian) is planned for July 2014.

The Modernize CAF recruiting process initiative reached 100% of e-application implementation in December 2013, the Application Implementation Management Cell was operational as of January 2014 and the Intake Management Section is being created. So far, this initiative has realized a 20% reduction in the time required to conduct applicant interviews and has reduced the time to conduct post-test counselling of applicants by 20 minutes for recruiting staff who engage thousands of applicants.

The Renewal of the Cadet and Junior Canadian Rangers (JCR) Programs initiative is progressing well. Fourteen Phase 1 Working Groups and staff tasks have been established and have commenced reviews. Through reducing full-time adult staffing, refocusing operating and maintenance budgets, plus deferment of specific Cadet, JCR and Cadet Instructor Cadre (CIC) training activities, $4.5M has been reinvested into the provision of Army Cadet Field Training Uniform and greater support for local physical fitness activities for corps and squadrons in over 700 communities.

Overall, the Personnel Portfolio is progressing very well and achieved extremely positive results over the last year. During the next period, the review and validation of the financial and non-financial reinvestment opportunity methodology as well as the validation of relevant metrics will be a key in assessing the progress and the full reinvestment potential of the Personnel Portfolio. In some cases, the reinvestment opportunity is extremely hard to identify as it is dependent on CAF system-wide synchronization.

##MCECOPY##A medical technician demonstrates the use of medical equipment to Army cadets.

A medical technician demonstrates the use of medical equipment to Army cadets. The CAF will align and structure itself to deliver relevant, effective and efficient community- based Cadet and Junior Canadian Rangers Programs.

3.1.6 Management Systems Initiatives

Summary of the Management Systems Portfolio

6.0

Management Systems Program HR Civ/VCDS

By rationalizing the number of managers at headquarters and modernizing management practices, National Defence will become leaner, with fewer layers and bureaucratic blockages, the decision making process will be expedited, and staff will be more empowered to accomplish their assigned tasks.

$176M–$217M
#InitiativeDescriptionReinvestment Opportunity
6.1

Lean Headquarters
HR Civ/VCDS

Determine opportunities to optimize spans of control to the appropriate levels, to minimize cost and improve business agility and efficiencies. 846–1034 FTE1
($85M–$103M)2
6.2

Project Approval Process Review VCDS

To reduce the cycle time of the Process for departmental expenditures by half while doubling the throughput and ensuring these processes are Treasury Board policy compliant.

$90M–$110M
6.3

Modernize HR Civ Management
HR Civ

Review of DND civilian HR programs and HR service delivery to maximize efficiencies and effectiveness while aligning with the Government’s 2020 agenda.

17–53 FTE1 ($1M–$4M)2

Notes:

1 The initial estimate produced through international benchmarking requires detailed analysis and validation. FTE reinvestment opportunities may represent effectiveness, cost avoidance or efficiency savings and do not necessarily indicate a change to actual positions.

2 Dollar value (shown in brackets) is a depiction of the value of the FTEs that is used to calculate the total reinvestment opportunity.


The Management Systems portfolio examines the structures and processes that govern how National Defence Headquarters (NDHQ) operates on a day-to-day basis.

The success of Lean HQ will be largely dependent upon the supporting expertise of a contractor; this was originally projected to be in place by the late fall, but was delayed due to issues in the contracting process, and is now expected to be in place by September 2014.

The Project Approval Process Review initiative has progressed significantly over the past several months: the working group has been re-established, and multiple simulations indicate that this initiative may produce significant time and throughput savings. It is expected that the working group will complete process analysis, risk framework, funding and prioritization mechanisms, templates, metrics, and concept of operations by July 2014, allowing for the pilot phase to commence in October 2014.

The Modernize HR-Civ Management initiative has established a project office to integrate all change activities, including those fulfilling government imperatives such as Strategic Review (SR) and the Deficit Reduction Action Plan (DRAP).

3.1.7 Proposed New Initiatives

The Defence Team leadership continues to receive good ideas for renewal opportunities. Townhalls, engagements with networks, such as the Defence Youth Network and Defence Managers’ Network, as well as from members of the Defence Team at large, have demonstrated organizational interest in continuous improvement.

The following two proposals have been selected to be added to the Defence Renewal portfolio:

  1. Ammunition & Explosives (A&E) Requirements Management: In support of Operations and Training, this initiative would institute a revised and improved process for the governance and management of CAF A&E requirements that supports both training and the conduct of operations. These requirements include the in-year management of A&E allocations, the approval of yearly requirements, and the coordination of planning for contingency stock commodities. Initiatives for Inventory Management and Warehousing and Distribution will harvest the reinvestment opportunity of this initiative as this initiative constitutes a cost avoidance strategy through improved management of the inventory.
  2. Regionalize Emergency Communications and Dispatch Services: The Emergency Communications and Dispatch Services (ECDS) are currently decentralized and segregated at 32 locations at the base and wing level through the organization structures of the Canadian Forces Provost Marshall, Canadian Forces Fire Marshall, Director General Health Services, and Directorate Environmental Engineering Management. The objective of this initiative would be to business process re-engineer (BPR) the ECDS to improve safety and security, eliminate duplication of effort, reduce overhead, and achieve re-alignment of the dispatch function to support a new business model. In particular, this new model with streamline processes, systems, tools and training to deliver an efficient, robust, multi-layered, responsive and bilingual service.

3.2 Organizational Practices Initiatives

This aspect of Defence Renewal involves adjusting our organizational culture in ways that build capacity for continuous improvement and which support performance initiatives. A commitment to enhancing both performance and the practices that underlie an organization’s ability to align, execute, and renew itself is essential for any transformational change effort to succeed.

Defence undertook a three-month, contractor-led exercise to identify which of 37 practices were most important to the long-term success of the organization, and then rate their degree of presence. This exercise resulted in members of the Defence Team identifying three key organizational practices to be the focus of Defence Renewal: Strategic clarity, disciplined business execution, and openness and trust.

Strategic clarity involves the translation of strategic priorities into goals and actions in clear and compelling terms. It deals with communicating intent in ways that allow employees and personnel at all levels to understand how they contribute to the Defence mission. Disciplined business execution is about enhancing our performance management culture and business practices by using clear objectives and by closely monitoring progress. Openness and trust initiatives are aimed at sustaining the transparency, goodwill and knowledge transfer upon which performance and continuous improvement depend.

Renewal in all three of these practices will help build the right conditions for improving performance. As part of renewal, we identified and launched eight initiatives aimed at putting National Defence on the road to strengthening these three organizational practices. These eight initiatives are as follows:

Organizational Practices

 

Strategic Clarity

Disciplined Business Execution

Openness and Trust

7.1 Enhance understanding of strategic intent

Ensure that strategic intent the goals and priorities that flow from it are both clearly articulated and commonly interpreted by DND/CAF strategic-level leadership

8.1 Enhance performance-based decision making

Enhance use and rigour of Defence’s performance measurement system, including by empowering a group to develop, evaluate and vet performance metrics.

9.1 World-class Knowledge sharing

Establish mechanisms for integrating information across the Defence Team and incentivizing knowledge sharing.

7.2 Defence governance review

Renew top-level governance structure and processes to enable more effective and efficient decision making.

8.2 Encourage and leverage front-line innovation

Establish an accessible idea generation program that identifies, leverages and celebrates front-line ingenuity.

9.2 Coaching on leading transformational change

Provide ongoing leadership coaching to managers and leaders with a view to driving two-way communication and problem-solving.

7.3 Change alignment program

Institute a program to internally communicate change and to translate strategic objectives into individual responsibilities for every member of the Defence Team.

8.3 Policy and procedures continuous improvement

Routinely update and review Defence Administrative Orders and Directives (DAOD) to ensure they are coherent, widely known, continuously improved and followed consistently.

 

 

To advance Enhance understanding of strategic intent, a means to better convey strategic intent to internal audiences is being developed. As a first step, a draft framework of all reports and plans containing strategic intent has been created. This effort will result in better synchronization and, therefore, greater understanding of strategic intent across the Defence Team. In FY14/15, this initiative will produce a clear framework to facilitate a common interpretation of strategic intent.

The Defence governance review is an evaluation of the mechanisms by which Defence is governed. The first step is an examination of strategic-level accountabilities, responsibilities and authorities. The results of this work will enable the refinement of committee structures and supporting staff processes.

As organizational governance is refined and the ways in which we frame strategic intent are adjusted, a Change alignment program is being designed to provide leaders with internal communications tools for translating strategic intent and communicating change within their organizations. We expect to launch this program in 2015.

Enhance performance-based decision making has leveraged ongoing work on the PAA. A modified departmental PAA was approved by the TB and an associated Performance Management Framework (PMF) instituted. The stage is now set to integrate use of these tools to give all levels a unified means to plan against resources and track and report performance. The next step in this initiative is the integration of the PMF with departmental enterprise resource systems.

Efforts to Encourage and leverage front-line innovation have begun with the development of a framework to identify, assess and share ideas. This initiative aims to ensure that we have the means to harness our collective capacity for innovation in ways that make sense for the organization.

Encouraging Ideas

Renewal at Defence is evident in the Defence Youth Network’s #Ideation program, which has the goal of harnessing ideas from the Defence Team. Three innovation events culminated in an exciting "Dragon’s Den-type" finale, in which eight ideas were presented to a panel of senior leaders, including the Deputy Minister and the Vice Chief of the Defence Staff. All ideas were well received with two being selected for further assessment:

  1. Digital signatures; and
  2. Online Podcast Library.

Winners of the Defence Youth Network’s #Ideation Program

Significant progress has been achieved in Policy and procedure continuous improvement. As of May 2014, a total of 65 Defence Administrative Orders and Directives (DAODs) out of 254 were being reviewed, five DAODs were cancelled, 10 DAOD reviews were completed, 12 new DAODs were published, and 41 Canadian Forces Administrative Orders (CFAOs) were cancelled. A new DAOD creation process has been instituted and an online development tool launched, with the aim of cutting in half the time required to create or update policies. DAODs will continue to be reviewed in the next year to ensure they align with business goals and include direction on compliance and consequences. There will be a corresponding reduction in contradictory or redundant CFAOs, and alignment and reduction of other related, second-tier directives and orders.

Progress on World-class knowledge sharing has focused on a preliminary assessment of the current Defence environment and identification of initiatives that will enable knowledge-sharing. Efforts on Coaching on leading transformational change have been limited. In FY14/15, there will be significant progress on the development of a knowledge sharing program, based on comparative programs within the public and private sectors and on existing Defence best practices. Additionally, development will commence on an integrated program for coaching on leading transformational change that is aligned with organizational mandates and cultures.

3.3 Reinvestment Framework

Renewal initiatives are not aimed at cuts but rather at avoiding costs and improving effectiveness and efficiency. "Cost avoidance" is a reduction of the anticipated need/cost for future resources. "Efficiency" means achieving the same output or effect with fewer resources, and can be expressed as either a monetary value or in terms of units of work by people (military or civilian) expressed in FTEs per year, while "Effectiveness" speaks to achieving a greater output or effect with the same level of resources in support of assigned objectives. Whether a cost avoidance, effectiveness or efficiency, the estimated renewal value for a given initiative can be expressed as a "Reinvestment Opportunity."

Initial assessments indicated that the renewal program could generate a substantial reinvestment opportunity for Defence. While not expected to be significant in the first couple of years, this opportunity is projected to be incremental, and cumulative, and include both money and personnel. Our global reinvestment opportunity is projected be in the range of $750 million to $1.2 billion annually by FY17/18. This includes the potential for internally re-focusing the work of between 2,800 and 4,800 military and civilian personnel to higher priorities within Defence, or in producing greater operational output from these personnel by reducing unnecessary or unimportant administration and restrictions. It is important to note that the total monetary reinvestment opportunity was calculated using anticipated financial efficiencies and the equivalent dollar value of FTEs. As noted, cumulative reinvestment opportunities are not targets, but rather initial estimates of the total improvement goal that may be achieved through "Defence Renewal. These cumulative values represent an as yet undefined mixture of increased output efficiency, cost avoidance, and savings. They are also expected to evolve over time as implementation unfolds and detailed analysis allows us to validate, confirm, or refine potential opportunities, timelines, and define the efficiencies and savings.

3.3.1 Framework Summary

To ensure that opportunities are appropriately identified, actively pursued, strategically monitored and judiciously invested and to encourage broad engagement in renewal, the Defence senior leadership has endorsed a Reinvestment Framework of Investment, Incentive, and Reinvestment which aligns with business and investment planning activities through the fiscal year cycle. This framework is illustrated in the diagram below:

Defence Renewal Reinvestment Framework

Defence Renewal Reinvestment framework image description:

The Defence Renewal reinvestment framework establishes a mechanism that allows for resources (financial and human) to be redistributed within the Canadian Armed Forces and Department of National Defence.

Resources identified as a reinvestment opportunity may be found within:

  • Our existing major business processes;
  • Our Defence Renewal Organization Practices initiatives; and
  • Our Performance Initiatives.

These opportunities for reinvestment will be discussed and analyzed at the Defence Renewal Subcommittee Governance level and at the Defence Management Committee using the principles of invest, incentivize and reinvest. If these opportunities are deemed to viable, they will be reviewed and authorized at the Investment Resource management Committee and the Defence Executive Steering Committee.

 The goal of the reinvestment framework is to redistribute resources in a manner that contributes to force readiness and capability development. This will be a continuous cycle that will allow us to maximize the value of every defence dollar.


Investment in change is an important aspect of Defence Renewal initiatives. This can be achieved either through reprioritizing the operating budget in one or many fiscal years through the Business Plan process, or through capital investment through the Investment Plan process. In order to meet the FY14/15 budget allocations, the Defence Renewal Investment process commenced in August 2013. Based on submissions from DND/CAF organizations, approximately $40M was prioritized in the FY14/15 budget allocations to progress key renewal activities in the areas of Information Technology development, Enterprise Resource Planning system support, Infrastructure rationalization, and Military Personnel management activities. Additionally, the governance bodies for Defence Renewal have reviewed and prioritized the capital investments needed to enable renewal in RCAF Simulation and in Military Personnel Management Capability Transformation.

Across the entire organization, Defence senior leadership is committed to recognizing and encouraging the commitment to change. As part of the framework, eight incentive principles have been developed and endorsed by the Defence Executive Steering Committee. These principles are designed to allow organizations to keep a percentage of Defence Renewal gains, encourage other change and transformation activities, ensure gains support readiness and capability development, reward cross-organization cooperation and goodwill, and balance investment and accountability.

The outcome of the efforts to change and improve practices and performance is the reinvestment in force readiness and capability development. At the end of each fiscal year, DND/CAF are expected to consolidate and report their reinvestment gains. The activity to review, reconcile and report through the subcommittee governance for 22 initiatives in six performance areas occupies the April to June timeframe. By end-June each year, a report of overall reinvestment opportunity from the previous fiscal year and a revised forecast for future years will be submitted to DRT for consolidation and review by IRMC. In October IRMC will use this information to make in-year adjustments to budgets and direct changes to budget baselines for future fiscal years, as part of the business planning process. IRMC will also initiate the review of potential employment position changes, as appropriate, for military personnel through the Multi-year Employment Plan and for Public Service employees through the Civilian Workforce Management Board.

3.3.2 Reinvestment Gains to Date

Defence Renewal commenced formal implementation in October 2013, roughly halfway through the 2013/14 fiscal year and when FY14/15 business planning was well underway, requiring concurrent development of initiative plans and the Defence Renewal Reinvestment Framework. As organizations completed their FY13/14 analysis of gains, many have reported either productivity or potential budget gains in the early stages of Defence Renewal. For the FY13/14, approximately $74M in recurring reinvestment gains have been identified as outlined in Table 1.

Table 1 - Defence Renewal Reinvestment Gains FY 13/14

 

InitiativeTitleCategoryDescription
1.3 Maintenance Execution Efficiency The Canadian Army, by changing its inspection requirements for transferring and moving military vehicles will reinvest 32,000 hours of technician labour into performing repairs.
2.1 Inventory Management Cost Avoidance The Material Group has continued to build on its DRAP commitment of reducing cumulative overbuy in the Supply System and has measured a further cost avoidance of $62.6M for FY13/14.
4.1 Centralize RP Management Effectiveness The Infrastructure Group has reorganized in FY 13/14, reinvesting $2.5M worth of FTEs from non-core to core business functions.
4.2 Rationalize RP Portfolio Efficiency To date, the Infrastructure Group has realized a renewal gain of $2.3M through divestment.
4.3 Optimize Facilities Management Service Delivery Efficiency $1.5M in efficiencies has been achieved in contracting and Service Level Agreement management.
5.2 Modernize CAF Career Management Process

Cost Avoidance

Efficiency

A $0.6M reinvestment opportunity has been achieved from Career Management Video Visits.

Due to performance report process improvement, 9,000 hours of estimated increased productivity of supervisors has been achieved to dedicate to higher priority efforts.

5.4 Modernize CAF Recruiting Process Efficiency

Increase of on-line applications to 37,909 Canadians.

20% reduction in the time it takes to conduct interviews of potential recruits.

Post-aptitude test counselling reduced from 40 minutes to 10 minutes.

5.5 Renewal of Cadet and Junior Rangers Programs Effectiveness Reinvestments of $4.5M were achieved through reductions in military pay and Operations and Maintenance (O&M) and the suspension of several training activities. This reinvestment facilitated the issue of an Army Cadet Field Training Uniform and greater support for local physical fitness activities for corps and squadrons.

 

In the August–September 2014 timeframe, each of these potential opportunities will be closely assessed. Using the incentive principles as guidelines, and in keeping with DM/CDS priorities for force readiness and capability development, these reinvestment gains for example will be used to: reduce vehicle off-road rates for the Canadian Army, sustain operational materiel stocks by the Materiel Group, increase engineering efforts to improve infrastructure on bases and wings, and procure field training uniforms for Cadets in support of their training.

3.4. Governance

Defence Renewal follows a committee-based governance structure as outlined in the Charter and the Plan. Building on the extant governance structure currently within the DND/CAF, Defence Renewal governance roles, responsibilities and reporting needs were established in the period since Roll-out.

3.4.1 DND/CAF Intenal Governance

This structure has been set up at the senior executive level through the Defence Strategic Executive (DSX) Committee, Investment and Resource Management Committee (IRMC) and Defence Management Committee (DMC), while the Performance and Organizational Practices portfolio sub-committees have focused on Defence Renewal initiatives and are gaining traction and momentum.

Defence Renewal is embedded within the Department’s strategic reporting. The initiatives are profiled internally in the Defence Priorities Document and the Annual Performance Report; and Defence Renewal is considered in the Report on Plans and Priorities, and the Departmental Performance Report.

3.4.2 Advisory Committee

The Departmental Audit Committee (DAC) was asked to provide an oversight and audit mechanism for renewal to ensure renewal initiatives generate the expected reinvestment opportunities. It will validate anticipated or captured efficiencies and reinvestment opportunities through the renewal process. Since the Defence Renewal Roll-out, the DAC, in consultation with the DRT, has held discussions on how it will execute this role. Although final details remain under development, it is envisioned that Defence Renewal progress will be briefed regularly to the DAC by the DRT and be accompanied by an arms-length assessment from the Chief of Review Services.

An External Advisory Committee was envisioned in the Defence Renewal Charter. This committee has not yet been established; however the DND/CAF is in the process of establishing clear terms of reference and identifying candidates for this committee in conjunction with relevant legal advice.