Intermedium: No more easy money in Defence

Sweeping changes announced in the Government’s Defence ICT Strategy report last week spell an end to easy money for providers but should still open plenty of opportunities, an analyst claims.

Five key objectives were identified in the future ICT environment blueprint: Greater ICT scalability; flexibility and adaptability; continued technological capability edge; enhanced interoperability; and improved business support. To achieve these, the Department of Defence will need to make strategic reforms, which include optimising the value of its ICT investment, driving closer alignment with stakeholders, providing agreed, priority solutions and strengthening ICT capabilities.

The Department’s reform will require an investment of around $940 million over the next four years, according to the 2009 Defence ICT Strategy paper, but is expected to deliver savings of $1.9 billion over the first 10 years, and an additional $250m each year thereafter.

According to Intermedium head of consulting, Kevin Noonan, the changes will mean “easy money” that came to vendors from Defence would dry up. But those that positioned themselves appropriately could take advantage of the initial $940m outlay. Defence accounts for around one-third of total Government ICT spending, Noonan said.

He claimed there would be additional opportunities in the recommencement of spending, which had essentially been put on hold while the report was developed.

“It’s now clearly stated where the Department of Defence wants to go with this,” Noonan said. “The key thing here is the role of the CIO has now been clearly identified – the point of central control within Defence has finally been established. It was something they had been struggling with for quite some time.”

Longer-term consolidation will mean less money in Defence for vendors and partners, Noonan said, but for the most part savings will be made by clearing up inefficiencies and overlap. This should leave plenty of room for organisations to position themselves to drive innovation for the Department.

Defence has already handed over regional ICT support to major government integrator, Unisys, in what seems to be an early sign of things to come. Going forward, Unisys will manage over 100,000 desktop computers at 460 Defence bases and sites.

The contact, valued at around $240m over five years, will see Unisys provide support services including network security and infrastructure support, as well as server and desktop support to all areas within defence utilising the Restricted and Secret networks.

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