Home' Defence Magazine : White Paper 2009 Contents 15
strAtegIC reForM ProgrAM
ithin two working days
of the release, more than
300 members of the senior
leadership group from
around australia gathered at
parliament house in canberra for
a comprehensive briefing on both
the white paper and the associated
strategic reform program (srp).
The focus of the meeting was to equip senior
leaders with the information and tools to enable them
to brief their own personnel, and to provide a sound
understanding of the Government’s vision for the
entire Defence enterprise, its planned direction and
the impact the SRP will have on the organisation.
In his messages to staff and the SLG, the
Secretary of the Department of Defence, Nick
Warner, said the future of Defence depended on
the successful and complete implementation of the
Strategic Reform Program.
“The Program will give Defence a genuinely
strategic and national advantage – all the savings will
be reinvested in capability and our call on national
resources will be constrained,” Mr Warner said.
“The future of every Group and Service, of the
DMO – of all our ‘tribes’ – depends on the SRP
savings and the changes that underpin them."
With hundreds of Defence members contributing
to the creation of the White Paper, the companion
reviews and the SRP, it is clear all areas of Defence
have played a role in the planned reforms.
In his addresses to the SLG and recent staff
presentations around Australia, the Secretary has
emphasised the significant contributions by all areas
into the development of the Strategic Reform Program.
“We have worked as a group to put this
together. That means that there is a buy-in, in
Defence, for this reform program,” Mr Warner said.
The Chief of the Defence Force, ACM Angus
Houston, has also been forceful in his support of
the SRP and like the Secretary has started the ball
rolling with a series of staff presentations on the
White Paper and the SRP.
"This White Paper is a very good outcome. It
is exactly what we need to ensure we have the
long term guidance, planning and force structure
to provide Australia with a military that has the
capacity to protect Australia and her interests in an
uncertain future,” ACM Houston said.
“However, this commitment from the
Government requires a return commitment from
Defence to improve the way we do business. I fully
endorse the SRP — it is essential to delivering
the White Paper’s Force 2030 and improving the
Defence Organisation we have today."
The recently-appointed Deputy Secretary
Strategic Reform and Governance, Margot
McCarthy, said the SRP will provide the savings
necessary to deliver Force 2030 while improving
the Defence force of today.
“Sustainable reform will flow from every one of
us asking ourselves the question, ‘how can I improve
the way I do this?’, whether we are developing
policy, delivering internal services or maintaining
Defence equipment,” Ms McCarthy said.
The SRP is based on rethinking how Defence does
business and includes a comprehensive set of reforms
that will overhaul the entire Defence enterprise,
produce efficiencies and create significant savings.
It draws on a detailed analysis of almost
every aspect of the Defence business including:
strategic planning, capability development,
the estate; information and communications
technology, intelligence, sustainment,
logistics, non-equipment procurement,
preparedness, personnel and operating costs,
science and technology, shared services, and
workforce management. These reforms will
generate savings of $20 billion in the next 10
years to fund the White Paper and fundamentally
reform the way Defence does business.
When the 2009 Defence White Paper was launched
on 2 May, it made headlines around Australia.
A Strategic Reform and Governance Executive
has been established to coordinate the reform
program, report on its progress, and ensure that
the reforms are implemented in a sustainable way
that will deliver the savings required.
In addition to this, a Defence Strategic Reform
Advisory Board with a mix of public and private
sector members will provide advice on how the
reforms should be implemented and report to
Government on the reforms.
The SRP will be delivered through 15 key
areas or “streams”. Out of these streams, six will
produce the majority of the savings. These are:
workforce and shared services
In workforce and shared services alone, it is
anticipated about $3.3 billion of savings will be
made. This will be achieved by focusing on three
• civilianising military support positions
• converting contractors to APS members, and
• creating a leaner, more effective business
support model across the whole of Defence.
Workforce reform will see savings of about $1.9
billion during the next decade. And in a first for the
Defence organisation, the Government has agreed to
allow Defence to manage its workforce in an integrated
way based on the funding available rather than specific
targets and caps for individual categories.
“This means Defence will be able to manage
its military, civilian and contractor mix in its
own way, which will not only deliver savings,
but provide a far more flexible and adaptive
workforce,” Mr Warner said.
In the area of shared services, there will be
savings of about $1.4 billion during the next decade.
This will see an improved level of core business
processes, including things such as payroll, HR, and
financial services and procurement.
CDF emphasised that the workforce reforms
would be achievable and sustainable through
careful planning and a phased roll out of the
reforms during five years.
“These reforms will impact on all areas of
Defence – in some areas it will lead to increased
job opportunities, while in other areas roles will
go,” ACM Houston said.
“But overall, the workforce will grow by an
additional 3000 military and 300 APS during the
next 10 years.”
An interview with Head Defence Support
Operations, Defence Support Group, MAJGEN
Liz Cosson, focusing on shared services is
featured on page 30.
In the area of sustainment, the maintenance of
military equipment and inventory and supply chain
management will be made more efficient.
By focusing on eliminating waste and reducing
inventory costs through smarter procurement
processes and reducing the size of inventory
holdings, about $5 billion will be saved.
CDF said that not only did these reforms
involve the Navy, Army, Air Force and the Defence
Materiel Organisation, but that industry suppliers
to Defence would also play a large part in the
success of the SRP.
“The sustainment reform stream will be
undertaken in a planned and structured way
over the next five years. All major fleets of
military equipment across the three Services
will be carefully scrutinised to identify possible
efficiencies,” ACM Houston said.
“But I want to make it clear that the reform to
this area will not compromise capability, safety or
quality to save costs.”
Defence spends about $5 billion a year across the
23 categories of non-military goods and services
from external suppliers such as travel, building
maintenance, professional services, clothing,
training, research and development, advertising,
freight and cartage, health services and removals.
The comprehensive reforms in this area will
see an estimated saving of about $4 billion during
the next 10 years.
The Secretary said Defence had attempted
to reform the non-equipment procurement arena
for many years with only partial and short-lived
success – working smarter would be one of the key
ways in which the reforms would be achieved.
“The first step will involve smarter and more
commercially savvy procurement and negotiation
of contracts to deliver real value for money,” the
Secretary said. “This will be done through a centre of
procurement and contracting excellence based in DSG.”
This stream will also drive changes in the way
we use services to ensure we constrain demand
across the organisation.
A flexible and responsive logistics system is vital
to support military capability. It must be able to
provide integrated end-to-end management to
maximise effectiveness and minimise costs.
The Strategic Reform Program will see Defence
improve its logistics infrastructure network – its
planning, management and execution.
ACM Houston said currently Defence’s
logistics was far behind commercial best practice.
“We are not exploiting available technology,
our processes are outdated - the SRP will see an
investment in logistics technology that will give
greater visibility of the whole supply chain,” ACM
An article focusing on logistics reform is
featured on page 27.
information communication and
Defence personnel will see significant improvements
to ICT services from the planned ICT reforms.
The new Defence Information Environment
will support both Defence war fighting and
business reform objectives through to 2030.
Staff will find that the DIE, which will be one
network connecting fixed and deployed locations,
will include all security levels and be able to
determine the right person has the right authority
to access information. Secure voice and video
will be available to the desktop in most fixed and
A feature article on Defence’s ICT future is
available on page 28.
Part-time members of the Australian Defence Force
are critical to the organisation’s operations – both
at home and off-shore.
Defence will grow its High Readiness
Reserve capability. Other changes under the SRP
will generate about $380 million in savings during
the next decade.
As part of the SRP, Defence will develop a
plan to ensure an improved and more effective use
of part-time members.
This will include investigating the use of
Sponsored Reserves in the ADF. A feature article
on Sponsored Reserves in on page 24.
The other eight streams will increase
effectiveness and efficiency across Defence,
placing downward pressure on costs. More detail
on these reforms can be found on the DefWeb.
The other streams are:
• Strategy-led planning
• Capability Development
• Output-focused Budget Model
• Preparedness, Personnel and Operating Costs
• Science and Technology
• Procurement and Sustainment (Mortimer)
By Rana Rowland
defence magazine ›
left: defence's senior leadership group listens
intently during its most recent gathering at
parliament house in canberra. right: secretary
nick warner addresses the senior leadership
group. Photos: Kevin Piggott
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