The presentation outlines the transformation journey of Defence Equipment & Support (DE&S), detailing its evolution into a bespoke trading entity managing significant defense projects for the UK armed forces. Key changes include organizational restructuring, improved people management practices, and enhanced process controls, all aimed at achieving a target of £3.44 billion in transformation benefits. Looking ahead, DE&S aims to adapt further by enhancing technology use, focusing on sustainability, and ensuring a well-managed workforce.

1. Transforming Delivery of Defence Equipment & Support
Lecture to APM South West England & Wales
Ian Butcher
4th Nov 2021

2. Presentation Outline
2
• What is DE&S, and What does it do?
• The origins/history of Transformation
• Our most recent Transformation Programme
– Organisational Change
– People Model
– Process & Control Framework (The DE&S Way to Delivery)
• Has Transformation delivered ?
• What’s left to do ?
• Personal reflections

3. 3
About Us
Defence Equipment & Support
(DE&S) is an Arm’s Length Body
and bespoke trading entity that is
part of the MOD.
We work with the Military
Commands (Navy, Army, Air and
Strategic), the world’s defence
industry and MOD Head Office,
managing complex programmes
that provide equipment and support
to the UK’s armed forces.
The Submarine Delivery Agency
sits separate from, but alongside,
DE&S, overseeing Submarine
Acquisition and Support…..it has
undertaken a very similar
transformation journey, but it is
strictly out of scope for this
presentation

4. DE&S Today
Delivering over
80%
of MOD’s largest projects
Workforce of over
12,000
both civilian and military
HQ in Bristol, but people working in over 100
Locations, UK and overseas, including in support of operations
Delivering a DE&S
programme of work of
c.£10bn
Operating budget ~ £1.1bn
600+
Major projects
4500
contracts (£47Bn)
over last 5 years

5. We are quite accustomed to change….
Key reforms & impacts 1960-2000 (Source Gray Acquisition Report, 2009)

6. Our Recent Journey
Today
May 2021
DE&S@25
Delivering the edge
through People,
Technology & Innovation
June 2011
Lord Levene
‘Defence Reform’
report
DE&S becomes a
Bespoke Trading
Entity and granted
management
freedoms
April 2014
Materiel Strategy
Programme Closure
May 2018
Launch of
Materiel Strategy
Programme
May 2011
June 2015
DE&S
Transformation
plan signed off
July 2018
DE&S@21
improvement plan
(Embedding
Change and
Continuous
Improvement)
October 2009
Gray Report on
Defence Acquisition

7. Link here

8. 8
The ‘Materiel Strategy’ Programme (2011-2018)
What we did
• Re-baselined Equipment Programme
• Explored GOCO vs In-house (DE&S+)
• Set up DE&S as a Bespoke Trading entity, with significant freedoms and flexibilities
• Reinforced the customer-supplier relationship
How we did it
• Supported by external Managed Service Providers (Bechtel, CH2M & PWC)
• Robust governance structure driving delivery of the plans
• In-year plans with incremental milestones en-route to our objectives
• Maturity measures allowing us to mark our progress
• Tracking benefits through our benefits realisation process
• Change Advocate Network helping to champion and embed change

9. Three KeyPillars of Transformation
People Organisation Process & Controls
Previously: Little targeted investment
in people to develop a motivated, skilled
and efficient workforce
Now: New approaches to people
management to improve skills,
motivation and performance
Previously: Difficult to move resource to
projects and areas of greatest priority to
DE&S
Now : Staff deployed flexibly to task
according to skills & availability
Previously: Inconsistent processes and
tools which resulted in inefficiency
Now: Standardised ways of working
so people can focus on adding value.
9

10. Who
(People)
Capacity
(Numbers)
&
Capability
(Skills)
and
How
Policy
Process
Tools
Finance and Accounting
Commercial
Human Resources
Information Management and IT
Project Management
Project Controls
Engineering
Integrated Logistics
Corporate services Group
Functions
Air Land Ships Strategic
Enablers
Domains – Director General (DG)
Corporate
(Enablers)
Director
General
Commercial
Director
Finance
Director
Human
Resources
Chief Digital
Information
Officer
Director
Programmes
and Change
Director
Engineering
and Safety
Director
Strategy and
Corporate
Operations
DE&S Board / Executive Committee / CEO / DCE
Delivery
What and When?
Organisational Change – The Balanced Matrix
Staff are now
• ‘Owned’ by
Functions not
Delivery areas
• Deployed to
Delivery teams
for specific
assignments
Functions
• Manage
recruitment
• Oversee staff
development
• Define and
assure the
Ways of
Working

11. People Changes
• Central resource constraints relaxed
• DE&S-specific grading structure, pay scales, and
reward model, introduced but….
• How Industry-like is it ‘right’ for DE&S to be ?
• How do you ‘value’ non-salary benefits ?
• New competence frameworks, role specific
‘success profiles’, and career pathways.
• Recruitment on an unprecedented scale
• A big focus on equality, diversity and inclusion.
• Commercial, Engineering & Project Delivery
Partners established.

12. • Creation of a central Business Management System (BMS)
• Covers ‘Business Management’ and ‘Project’ and ‘Service’ Delivery
• Targeting ISO9001 accreditation by end 2021
• A ‘back to basics’ approach to project planning and control
• Resourced schedules reflect internal work, supplier work, and the interactions
• Earned Value Management (EVM) applied to internal and supplier activity
• Improvements to contract planning & management
• A big investment in tools
• P3M: An Oracle-based toolset for Project, Programme, and Portfolio Management
• Capability rolled out incrementally since 2017 via a series of “releases” & still improving
Process & Control Changes (The DE&S Way to Delivery)
Not part of P3M –
Microsoft Application
Team
Member

13. P3M– A Step Change in Capability
Scheduling
Resource
Management
Approval
Management
In Year KPIs
Scope
WBS Dictionary
Basis of Estimate
Future Phase
Project Funding- Pipeline
Actual Cost Management
Capex
Forecasting
Opex
Forecasting
HR System In/Out
Unifier R4
EVM
Portfolio/
Project Shell
Structure
Contracts
MR and
MR forecast
PM Estimate at Complete
(EAC)
P6
Team Member
Time Recording
Project Sub
Ledger-
Actuals
out/forecast
in
PB&F –
forecast in
Project KPI
Enterprise
WBS
Enterprise
OBS
R3
Single system contains
project performance,
forecasting and
Approval management
Automated
flows
between
systems to
ensure data
integrity
Scope and
assumptions
under config
control in single
system
Improved
forecasting–
inconsistencies
evident
Retirement of
separate
spreadsheet-based
cost management
tools
Improved
governance
and project
history
management
OBIEE
Reporting
Commitments
Change Management
R3 = Today’s functionality
With numerous standalone
artefacts alongside R4 =Commences roll out Spring 2022

14. The Benefits Transformation delivered
Equipment Acquisition/Support and Operating Cost benefits over 10 years (14/15 to
23/24) delivered via six key drivers:
Organisational Change
People Change
Process & Control Change
Better management of projects
Improved process and control framework
Reduced Private Sector Support contract spend
Improved workforce productivity
Reduced non-labour costs
Better contracting
Transformation
Plan
Total Transformation benefits: Target: £3.44bn (£4.5bn achieved*)
*As at 31 Mar 19, FY14/15 to 23/24 including SDA
Official Link to NAO Equipment
Programme Report

15. Looking ahead : DE&S 2025 – Strategic Overview
• Responds to Integrated Review, Defence Command Plan, and Defence and Security Industrial Strategy
• Builds on the last ~5 years of Transformation and Improvement activity
Our Vision: To be recognised leaders in the delivery of military equipment solutions for the Information Age
Value to the taxpayer
and society
• Progress towards ‘Net
Zero’ across our sites.
• Reducing equipment
emissions en-route to
Net Zero 2050
• Increased focus on
‘social value’ when
awarding contracts
• Optimising how the
business/workforce
operates internally
• Further efficiency
savings (£3Bn target)
Pace and agility for
our clients
• Streamlined approvals
• Space Delivery Team
• Greater alignment with
Customer priorities
• Further improving
equipment delivery
performance
• Support improvement
programme
Delivery through
people
• Improving Leadership
capability
• Smarter working using
enhanced technology
& infrastructure
• New HR Management
System.
• New ‘reward’
arrangements
• New platform for staff
learning (training)
• Continued focus on
Equality, Diversity,
Inclusion & Wellbeing
Accelerated digital
solutions
• Pilot digital T&E
methods to reduce live
trial needs
• Use of Communities
of Interest and ‘AI’ to
spread knowledge and
experience
• A technology enabled
‘innovation Bridge’
• Digital automation of
repetitive processes.
• AI centre established
Delivery through
partners
• ‘Cloud based’
solutions for low
complexity contracting
• Pilot digital supply
chain mapping on 5
critical capabilities
• Taking forward the
Industrial Strategy,
piloting more flexible
approaches
• Enhanced relationship
management with
strategic & critical
suppliers
• Establish International
Collaboration Centre
of Expertise
Link to DE&S@25 Strategy

16. 16
Personal reflections
• It has been a roller coaster ride – transforming whilst still delivering to our customers.
• The core principles were right, but execution could have been better…however, hindsight is wonderful .
• Simultaneously changing Organisation & People Models and establishing a DE&S Way to Delivery was bold
• …but our problems were interconnected; a narrow focus wouldn’t have delivered the desired benefits.
• We started transformation short of staff, and despite unprecedented recruitment we remain hard pressed
• Our demographic means we have lost & continue to lose lots of experienced staff.
• Transformation was very dependent on contractor support.
• Those contractors had good skills/experience but struggled to understand the business.
• Some of the ‘medicine’ handed out probably wasn’t really what the patient needed
• …and they were expensive .
• The initial one-size fits all (DE&S Way to Delivery) approach was widely challenged even during rollout
• We should have agreed acceptable ‘tailoring’ earlier; we’d have saved hassle & progressed further/faster.
• The final killer questions:
• Am I proud of what DE&S does and the transformation we have achieved?
• … would I recommend DE&S as a place to work ?

17. 17