Defence Renewal Annual Report 2014-2015 - Framework for Continuous Improvement

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6. The Reinvestment Framework and Business Planning

The Reinvestment Framework was briefed to DSX in March 2014 and provided the conceptual model for the reallocation of Defence Renewal reinvestments into the Defence Programme. This is a critical component of Defence Renewal as it is the first element in "operationalizing" Defence Renewal.

With the November 2014 submission of the updated reinvestment profile for IRMC review and the subsequent complementary review of Defence Renewal reinvestment with the IRMC Business Plan reviews in February and March 2015, a notional Reinvestment Model was exercised. DR Lead, CFO, C Prog and CFD will continue to document, refine and validate this model in FY 2015/16. The next update of the reinvestment profile is scheduled for summer 2015 in order to have DROC endorse and IRMC accept by November 2015 in order to be better integrated with the FY 2016/17 IRMC Business Plan reviews.

The process of "operationalizing" the activity of Renewal includes not only determining where the opportunities will be spent, but also includes the concept of incentivization, whereby Level 1s that identify opportunities are permitted -- with Level 0 review and validation -- to retain some of those opportunities internally and reinvest in higher priorities that privilege force readiness or capability development. This accelerates the reinvestment process and encourages innovative and forward thinking ideas within the Level 1s as part of the overall process of Renewal. This is critical as many of the opportunities that have been identified cannot be directly harvested and reinvested by IRMC.

Another key component of the Reinvestment Framework is incorporating Defence Renewal directly into the Business Planning process. For FY 2014/15, Level 1s submitted their comments on how Renewal impacted their Business Planning. As this nascent process continues to be refined, it will become a central component in the "operationalization" of Renewal. In future years, this process will ensure that Departmental leadership can take defined opportunities and reinvest those resources identified as part of the Reinvestment Framework into force readiness and capability development as baseline adjustments.

The next key step in the Renewal process will see the "institutionalization" of the activity. As we watch the success of Performance Initiatives through the creation of reinvestment opportunities evident in Business Planning, our current methods of innovation and continuous improvement will become more formally structured.