A lesson in Vendor Management from NATO using SEER by Galorath to assist in the decision making

1. CASE STUDY
NATO’S NEED:
As defence funding becomes more tightly controlled
and monitored, it is paramount for NATO to achieve
value for money with all of the projects that it initiates.
The NATO Communications & Information Agency
(NCIA) was formed in 2012 as part of a broader agency
reform and was given responsibility for the acquisition
of major programmes within the NATO portfolio. The
NCIA’s founding principles are focused on understand-
ing the full life cost of a project, implementing best
practice and working more closely with NATO’s pro-
gram offices. As part of its work NCIA introduced a
centralised single-point-of-truth for all cost estimation
activities, with a desire to implement a commercial es-
timation solution.
The initial focus of NCIA is to generate a framework to
identify specific process improvements for better pro-
ject management in projects that are heavily software
dependent, known as Software Intensive Projects (SIPs)
OUR SOLUTION:
NCIA has entered into a long term relationship with
Galorath and has introduced the SEER for Software,
SEER for IT and SEER for Hardware solutions into its
centralised cost estimation team. The SEER solutions
act as the single-point-of-truth for NCIA and allows the
organisation to develop data-driven estimates to be
used in conjunction with vendor responses to NATO
released RFI.
In partnership with a standardised sizing approach (in
this case Function Points) and risk assessments, SEER,
and in particular SEER for Software, are a fundamental
component when estimating SIPs.
The cost estimation team has been trained and certi-
fied in the all aspects of the use of SEER. This level of
professional training provides NCIA with the confidence
to use SEER to evaluate vendor responses to RFI and
allows the Agency to provide a more balanced estimate
to be used during budget negotiations both internally
(for approval purposes) and externally with vendors.
ABOUT NATO:
NATO is a military and political alliance headquarter in
Brussels, Belgium. With an annual budget in excess of
€4Billion. Its core business is peace and security and is
funded by the member nations.
NATO comprises a number of agencies, one of which,
the Communications & Information Agency acts as
NATO’s acquisition organisation.
In today’s business context NATO is a ‘user’ or
‘customer’ organisation
THE BENEFITS:
Now that the process for SIPs is established it has been
used to assess vendor responses to a current NATO
program. The SEER estimates were used as part of the
budget negotiation with the vendor with remarkable
results.
With its initial proposal the vendor requested a project
budget of €7.2Million. Using the risk based estimates
generated from SEER, NATO were able to negotiate a
project cost of €4.1Million, a saving of 43%. Instead of
the usual 5%-10% expected through traditional negoti-
ations.
Because on these results the NATO Investment Com-
mittee has more confidence in the estimates provided
by NCIA and finds it easier to release funding for pro-
jects backed up with SEER estimates.
Data-driven estimation is seen as a fundamental part to
the success of project delivery within NATO. Based on
the results delivered to date the SEER suite of solutions
is seen as the cornerstone to that process.
www.galorath.com
Steve Robinson
srobinson@galorath.com
+44 (0) 207 788 9042