1. Value for Defence
Dr Philip Boxer
Copyright © BRL 2013 1

2. Agenda
• Overview
• Variety of Demands/Threats
• Architecture
• Structure Modeling
• Cohesion Costing
Copyright © BRL 2013 2

3. Establishing the value of agility:
the agility of a Force Package impacts on Value for Defence
Modeling basic relationships between Force Analyzing architecture of layering in relation Costing Cohesion in Mission
Elements and Alignment Processes to different geometries-of-use Situations
traceventindividual_in_afghan-pakistan_border
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Monte Carlo Simulation of impact of Variations in Real Option Valuation of impact of
Demand on range of possible deployment costs changes in flexibility on range of costs
0.45
0.4
Large Scale 0.35
Scenario 1 Small Scale enduring 0.3
Defence Expenditure
Scenario 2
Medium Scale enduring
Small Scale enduring
0.25
0.2
Value for
Alternative Small Scale one-off
Medium Scale enduring
0.15
0.1
0.05
Defence
Scenario 3 Small Scale limited 0
0
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0
5
0
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0
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0
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25
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75
50
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45
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67
75
82
90
97
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Small Scale one-off Scaled Cost1 Scaled Cost2 Scaled Difference
What Price Agility? Managing Through-Life Purchaser-Provider Relationships on the Basis of the Ability to Price Agility, Navigator White Paper, Software Engineering
Institute, Carnegie Mellon University, September 2008
Copyright © BRL 2013 3

4. Examples of results:
a focus on economies of alignment generates significant savings
Domain Result
NATO AWACS Significant interoperability risks at alignment levels, both technical and
organizational. Needed to evaluate cost impact, but crossing
organizational boundaries (equipment costs vs operational costs).
NHS Orthotics Focus on Alignment Processes => 30% efficiency improvement and x10
payback over 10 years from improved patient mobility. But crossed
organizational boundaries (impact on Social Services).
UAVs Interdiction Total savings of about 40% through focus on creating economies in the
of fleeting costs of alignment. Impact of UORs on cost of capability had doubled
targets acquisition cost. Savings involved defining capability at different level.
e-Government Swine Flu Changed architecture of search capabilities combined with focus on
creating economies of alignment across departments produced savings
of ~80%, but crossed organizational boundaries.
BAE Systems Naval surface More modular elements combined with focus on creating economies of
capability alignment could produce savings of ~40%, but changed level at which
purchaser-provider relationship had to be defined.
Copyright © BRL 2013 4

5. VARIETY OF DEMANDS/THREATS
Copyright © BRL 2013 5

6. The demand for operational agility:
agility depends on the variety of geometries-of-use supported
• The demand for operational agility creates a demand for flexibility in the
way a Force Element can be used.
• The demands on a Force Element for flexibility is driven by the variety of
different forms of collaboration* demanded of it.
Traditional focus
Threat met by use of single
Force Element: a few very Force Elements Threat met by
capable platforms composition of
many Force
X Elements: different
Inter-State types of platform
Conflict X and equipment
capability able to
Variety of Mission X work
collaboratively
Situations X X X X
Non-inter-state
X X X X
Conflict Current focus
X X X X
1 2 3 4 5 6 7 8 9 10
* Geometries-of-use
Force Elements Force Elements built to meet
purpose built to a variety of threats through
meet most working together
demanding threats collaboratively
Copyright © BRL 2013 6

7. Substituting a TacticalUAV multi-sided platform:
creating indirect benefits through greater flexibility
Controlling Mission Situations Composite Capabilities
issue End-users Operational Capabilities
Hard to see, effects difficult
Easy to see, effects difficult
Soldiers on the ground
Arrest synchronization
Strike synchronization
Medium Altitude UAV
Hard to see, effects easy
Indirect value through its impact
High Altitude UAV
on the way different
Search Helicopter
Attack Helicopter
Communications
Fast Patrol Boat
collaborations can be formed
Space sensors
Tactical UAV
Intelligence
AWACs
Fast Jet
Ship
X Individual in Afghan-Pakistan border X X X X X X
X Disrupts terrorist command X X X X X X
X Individual in Kabul Blue Zone X X X X X X
Direct value through
X Disrupts terrorist command X X X X X X substitution
X Stinger Missiles in Baghdad City Centre X X X X X X
X Neutralization of manoeuvrist threat X X X X X
X Shoot-and-Scoot in Tribal Lands X X X X X X X
X Neutralization of manoeuvrist threat X X X X X X
X Terrorist Escape by Sea X X X X X X X
X Disrupts terrorist command X X X X X X X
The Multi-sided platform
Copyright © BRL 2013 7

8. Variety of Demands across Campaign Types:
What is happening to the variety of demands?
• The larger proportion of operational time is spent in the top-right
quadrant.
• The trend across the whole range of Campaign Types is towards
encountering increasingly asymmetric threats, increasing the variety of
demands.
Concurrent Campaign Types
(aka Defence Operations)
J
OR
many
AND H
Standing
OR Overseas
Commitments
OR
OR AND I
J
Limited Limited
Enduring medium Enduring I
duration SS duration SS
Medium Scale
(MS) Power
Projection
(MS) Peace
enforcement Limited duration
SS (MS) focused
scale Military
Assistance to peacekeeping
Enduring Enduring small
Number of D
Stabilisation &
intervention Development small scale PP scale PK One-off large
scale
H
managerially and
deliberate
intervention
operationally
independent Actors B
C
A Insertion,
G
reconnaissance,
G
ISTAR
F F
E
C E few
A
A Campaign/Effects Ladder
B
D
A Vignette/ relates each Vignette to its
larger Campaign context
low high
Mission Situation
* Variety of geometries-of-use
Variety of different types of
Mission Situation*
Copyright © BRL 2013 8

9. The capability envelope:
The variety of defence outputs demanded are increasing
• “It is clear that the challenges of the future will demand even greater
institutional agility in the face of major resource constraints and some
profoundly worrying indications that the West may be losing the initiative
in terms of dictating the way war is fought”
(MoD, Future Character of Conflict, in Strategic Trends Programme2010.)
many Envelope spanning full
range of Campaign
collaborative Types
operations
Number of managerially
and operationally Envelope for
independent Actors Campaign Types
‘special defined by ‘most
conventional forces’ demanding’ Situations
war-fighting operations
few
low high
Variety of different types of
Mission Situation* * Variety of geometries-of-use
Copyright © BRL 2013 9

10. ARCHITECTURE
Copyright © BRL 2013 10

11. Architecture for increasing agility:
Increases reliance on systems-of-systems external to Force Elements
• Proposed changes in architecture introduce:
– Increased modularity of Force Elements
– Increased reliance on systems-of-systems external to Force Elements
• Value for Defence is ability to meet variety of Mission Situations across
range of Campaign Types at reduced cost
– Value of changes depends on specific nature of variety
Reduced costs of
Systems of Systems Alignment
external to Force
Element (exo-systems)
Alignment Architecture 1 Architecture 2
Process
Force
Element
Equipment capability
Systems of Systems
internal to Force Reduced cost of Force
Element (endo-systems) Elements
Copyright © BRL 2013 11

12. STRUCTURE MODELING
Copyright © BRL 2013 12

13. Balancing acquisition and operational agility:
Achieving a double agility demands a layered architecture
• Balancing these two forms of agility and their corresponding costs involves
spanning a number of different layers of organization.
Institutional Forces Theatre Command
Suppliers Operational Forces Mission Command
Fielded assets Composite Mission
Skills, Assets & Force Scenario
& equipment operational synchronization
Equipment Elements Effects
capabilities
1 2 3 4 5 6
Acquisition agility, generating operationally Operational agility, aligning composite
available capabilities across the DLoDs operational capabilities to mission demands
Demand/
Acquisition Alignment Threat
Tempo Tempo Tempo
Copyright © BRL 2013 13

14. Modeling Approach:
There is no such thing as agility in general…
• Projective analysis is an approach to modeling and analyzing the
relationships across all six layers with respect to a chosen variety of
demands
Domain of interactions
Organization of Effects within
Effects
TEPIDOIL generating Mission Types across Ladders
Organization Force Elements Campaign Types
2,3 6
Realization 1 4,5
Orchestration of
Skills, Assets,
Operational Capabilities
Analyzing
Equipment & multi-sidedness
& Mission
Platforms
Synchronization
Supporting
organizations and
infrastructures Supply-side Demand-side
Skills, Assets, Fielded Assets, Mission
Force Operational Effects
Equipment & Equipment & synchronization
Elements capabilities
Platforms Platforms
1 2 3 4 5 6
Demand/
Acquisition Alignment Threat
Tempo Tempo Tempo
Copyright © BRL 2013 14

15. Structure Modeling:
Five aspects span the different levels of detail
Accountability
Hierarchies
Demand
Domain of interactions
Organization of Effects within
TEPIDOIL generating Mission Types across
Organization Force Elements Campaign Types
Circular 2,3 6
Dependencies Realization 1 4,5
Orchestration of
Skills, Assets,
Operational Capabilities
Equipment &
& Mission
Platforms
Synchronization
Supply-side Demand-side
Social & Data Synchronisation
Structure & Function
of physical and
digital systems
Copyright © BRL 2013 15

16. relationships
Modeling of basic
different layers
Alignment
Systems-of-systems architecture is layered
Analysis of patterns of
Copyright © BRL 2013
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Architectural Analysis of Layering:
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Interoperability Risks
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• Analyzing the Alignment Processes separately from the individual Force
Elements makes it possible to analyze the interoperability risks across the
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17. COHESION COSTING
Copyright © BRL 2013 17

18. Cohesion Costing:
Cohesion cost = Cost of using Force Elements + Cost of Alignment
• A different costing model is needed to identify the total operational costs
of responding to particular types of mission situation – cohesion costing.
– Cohesion costing combines the costs of use of particular Force Elements with
the costs of aligning their use in combination in relation to particular types of
mission situation.
Costs of Cohesion
Costs of use Costs of alignment
Composite Mission
Skills, Assets & Fielded assets Force Scenario
operational synchronization
Equipment & equipment Elements Effects
capabilities
1 2 3 4 5 6
Demand/
Acquisition Alignment Threat
Tempo Tempo Tempo
Copyright © BRL 2013 18

19. Analysis of Value for Defence:
Reducing both the average and the variation in total operational costs
• The value of an architectural change is the impact of both the reduced
average and the reduced variation*
• ‘Real Option’ pricing allows a value to be assigned to the change in
spread/variance * Agility = property of the force package
enabling it to do more things with the
same underlying force elements.
The total operational cost of approach ‘b’ across
the variety of mission situations
Value for Defence from:
1. Reduction in average level of
defence expenditure through
Value for Defence from: impact of trade.
2. Change in spread/variance
in levels of defence b
expenditure, based on the a’b’
a The total operational cost of
difference between the two approach ‘a’ across the variety of
curves ‘a’ and ‘b’ mission situations
Probability
Levels of total operational expenditure on
Concurrent Campaigns
Copyright © BRL 2013 19