2016 Defence Renewal Annual Report: Positive Momentum for Enduring Success

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2. Overview

Defence Renewal -- the Defence Team’s long-term effort to find better ways to conduct the business of defence and free-up resources for reinvestment in operational capabilities and readiness -- has reached the mid-way point of its five-year mandate.

The six-performance themed portfolios progressed through FY 2015/16. Most initiatives have matured considerably  and, according to April 2015 reporting, have generated $104.2million in reinvestment opportunities through cost avoidance (a reduction in the anticipated need or cost for future resources), efficiencies (achieving the same output or effect with fewer resources) or effectiveness (realising greater output or effect with the same resources).[1] When added to the two previous years of Defence Renewal activities, this represents a quarter of a billion dollars in reinvestment opportunities for the Defence Team.

These achievements include:

  • following a thorough bottom up examination, the Royal Canadian Navy (RCN), Canadian Army (CA) and Royal Canadian Air Force (RCAF) are poised, with stakeholder support, to implement a more effective approach to maintenance execution;
  • The four initiatives of the Materiel portfolio -- constituting close to 40% of Defence Renewal’s overall reinvestment opportunities -- have provided a total of $182 million reinvestment opportunities to date; 
  • a more accurate evidence-based means of forecasting parts and services that will help keep military systems and equipment operationally ready is about to be launched, and an analysis of how Defence performs maintenance suggests that test and engineering overheads can be reduced and result in more CF-18s and Griffon helicopters available to the RCAF;
  • an enterprise-level approach to IT Service Management -- including consolidation of some 169 IT Service Delivery organisations to as few as 20 points of service across the country supported by a single enterprise toolset -- is well underway. Defence is also seeing the immediate benefits of a renewed approach to IM/IT governance stemming from the introduction of a Defence Chief Information Officer (CIO);
  • how all infrastructure assets are managed has been successfully centralised under the Infrastructure and Environment Group, thereby allowing Commanders of the RCN, CA, and RCAF to focus on their core business of force readiness, and efforts to rationalise infrastructure assets -- resulting in long-term savings in O&M costs and payments in lieu of taxes -- continues through the demolition and divestment of structures on bases and wings across Canada;
  • work continues to review and update Strategic Documentation and directives as well as the Defence governance to ensure they are improved, coherent and effective; and,
  • the introduction of e-approvals -- aimed at facilitating a transition of compatible processes to be “e-enabled” starting in FY 2016/17 -- is supporting the long-term conversion to a web-enabled work flow at Defence.

Going into FY 2015/16, Defence recognised that, in addition to the need to maintain progress on ongoing initiatives, critical work was required to advance an effective performance management regime. The Defence Renewal Performance Management Framework (PMF) pilots will demonstrate the value and ability of the use of business intelligence and analytics to identify, implement, and track improvement opportunities going forward. At the same time, a means of operationalizing the Framework -- a lasting process that moves beyond simple identification of the strategic reallocation of supply to one that is responsive to prioritised demand -- has been developed. Reinvestment priorities for Defence Renewal savings continue to be established and integrated in the annual business planning cycle. Although the identified reinvestment to date has remained within the specific Level 1s, planning continues to determine recipients of future Defence Renewal reinvestment. Opportunities to promote force capability and readiness with Defence Renewal reinvestment are being examined.

Defence faces FY 2016/17 with positive momentum for enduring success: confident that we have increasingly taken further steps to move from targets towards a culture of continuous improvement -- finding better ways to conduct the business of defence -- and poised to further reinvest in operational capabilities and readiness.


Footnotes

[1] Annex A to this report details Reinvestment Opportunity identified thus far.