Editorial: Two out of three ain't bad | ADM Dec 2010/Jan 2011

Katherine Ziesing | Canberra

As ADM was going to press, the 2009-2010 Major Projects Report was released.

The level of detailed information on cost, schedule and other performance measures provided in this valuable document from the Australian National Audit Office (ANAO) expands year by year.

The Defence Materiel Organisation (DMO) has much to be proud of in the document (see our From the Source interview on P90 for more) in terms of cost and scope but once again schedule is where the triangle fails.

Most project managers will tell you to pick two of the three elements and be happy with that.

But when spending taxpayer dollars, we have the right to expect all three in the pursuit of quality for our warfighter.

In its examination of the 2009-10 Major Projects Report the ANAO examined the performance of 22 programs up from 15 it scrutinised last year.

It found that while budgetary compliance had improved, delays remained the major issue.

In total, the approved budgets for the 22 major projects amount to $40.8 billion, as at 30 June 2010.

This represents just over half of the budget for the DMO’s approved major capital investments.

The analysis of the lead or main capability for the 22 major projects covered in the 2009-10 MPR shows that 13 projects have experienced schedule slippage.

The ANAO report also states that:

• Predicted delays on getting planes into the air, new weapons to ships and improved communications system out to men and women in the field now total an aggregate of 688 months – or 57 years.

•  The average delay for a project has risen from just over two years in 2008-09 to just under three years in 2009-10.

• The main reason for the delays is failure to accurately estimate the scope and complexity of work by the DMO.

But to place the blame solely on the shoulders of the DMO is disingenuous.

An argument can be made that Capability Development Group in their initial phases can be just as responsible.

Projects failing to make it through sporadic Cabinet meetings also play a role in the blockages delaying work through to Defence industry.

There are many points at which a project can go off the rails and rarely is there a single point of failure but rather a compounding of factors.

2011 looks to be a bumper year in terms of the number of projects across all domains reaching important milestones.

Let’s try and keep it on track so the next ANAO report looks a little rosier on all three sides of the triangle.

Imagine...

Gregor Ferguson | Sydney

Try to imagine a combat aircraft of unprecedented performance and embodying new technologies: a new propulsion system, new armament, improved communications and networking capabilities and a new and very different construction technique which in turn demands new production processes and skills.

Aircraft like this have often been sold straight off the drawing board.

But now try to imagine the difficulties involved in ramping up production of this complex new aircraft.

Imagine the disappointed customer’s reaction to lengthy production delays.

Imagine the temptation to cancel the project altogether.

Imagine the difference cancelling such a project would make to our nation’s history.

And no, we’re not talking here about the Joint Strike Fighter nor the F-111.

We’re talking about the Vickers-Supermarine Spitfire which made its maiden flight 75 years ago on 5 March 1936.

The Royal Air Force ordered 310 aircraft in June 1936 on the flimsy basis of a single test flight by a service pilot following initial flight testing by the manufacturer.

The Spitfire’s innovative, all-metal stressed-skin monococque airframe was a production nightmare and deliveries were painfully slow.

So bad was the situation that, in 1938, the RAF seriously considered cancelling the Spitfire program after that first batch of 310 aircraft.

The Spitfire survived – that early, risky order ensured sufficient numbers had been delivered to help ensure success in the Battle of Britain.

The Spitfire is now a legend.

Nothing changes.

Any new complex project, which aims to deliver a significant increase in operational capability, is inherently risky.

Pretending otherwise is foolhardy.

But the Spitfire and F-111 show us that complex, challenging projects can deliver splendidly on their promise.

But it’s important for all parties are, first, to create a process which recognises and manages the inherent and changing uncertainties in a complex developmental project and, secondly, to calibrate and manage customer and stakeholder expectations – politicians and the media – throughout that process.

History has important lessons for the ADF’s Joint Strike Fighter, Air Warfare Destroyer and Future Submarine projects.

This is a good year to be revising and applying those history lessons, along with modern project management practices.