the value of agility

.

The Value of Agility

Philip Boxer BSc MBA PhD

September 21st 2013

Copyright © BRL 2013 1

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Contents

• The Study

– Objective

– Design

– Conclusions

• The End-to-End Process

– Demand Analysis

– Structure Modeling

– Analyzing Value for Defence

• Next Steps


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THE STUDY


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Study Objective

Scope

– Surface fleet with a variety of vignettes spanning the full range of concurrent mission types and capability space

Objective

– Pilot an approach that can answer what reconfiguration of the existing surface capability would maximize the effectiveness of the existing surface capability within budgetary constraints

Assumption

– That the effectiveness of given configurations of Force Element in particular Mission Situations can be provided as input to the study

Limitation

– Very limited availability of data on architecture of Information Superiority Capabilities and their costs


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Study Design

• Preparation – Define and document the scope of the pilot

project

• Study – Collect and capture relevant data using a

matrix that represents the multi-sided demands being made on operational capabilities

– Develop the appropriate modeling approach (planning the appropriate use of PAN tools best suited for the selected capability subset) for both the baseline data and proposed variations

– Develop models and analyze their architectural properties, including costs

– Identify options and provide associated economic analysis using the projective analysis method and PAN tools

• Closure – Write a report that articulates the use of the

projective analysis method and application of PAN tools, and summarizes the results of the modeling and analysis

• Preparation – We chose a large-scale scope for the end-to-

end process.

• Study – Dominated by need to develop additional

non-warfighting vignettes and to collate data into data templates. Availability of data very limited.

– Insufficient time gap between workshop developing vignettes and the modeling workshop, compounding the data problem. We might have added a C4ISTAR SME*, but chose to go for 1st approximation.

– The models had limited detail on the Alignment Processes and their costs, which limited analysis of stratification. A workaround was used on alignment costs.

– The savings identified were too large, having understated alignment costs and overstated the variation in costs of use.

• Closure – The end-to-end process was completed, gaps

in data were identified, and a 1st approximation result obtained.


* SME – Subject-matter Expert

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Study Conclusions

• Surface Fleet capabilities are confronted with an increasing proportion of mission situations in which Force Elements need to collaborate in changing or unpredictable ways.

• Maximising effectiveness within budgetary constraints requires changes to the architectures of both Force Elements and Alignment Processes.

• A modular approach using corvettes and fleet auxiliaries with corresponding changes to C4ISTAR capabilities shows an average saving of 35-45% on the force’s total operational costs of cohesion, which increases to 40-50% when taking into account the value of the reduced variation in these costs


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END-TO-END PROCESS


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Process Steps

1: Demand Analysis

– Describe the variety of demands, defined in terms of the differing nature of the Alignment Processes needed to produce cohesive responses to this variety

2: Structure Modeling

– Identify the architecture of the Force Elements and Alignment Processes

3: Analysing Value for Defence

– Identify the costs of these architectures and any proposed changes, and value their impact on the cohesion costs across the variety of demands identified


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1: DEMAND ANALYSIS


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Through-Life Capability Management (TLCM)

• The UK MoD is engaged in a major change programme to evolve its acquisition processes

– Since 2005 publication of the Defence Industrial Strategy (DIS), the UK MOD has been evolving its acquisition process to implement the processes, infrastructure and culture to deliver Through Life Capability Management (TLCM)

• TLCM is defined as: “…an approach to the acquisition and in-service management of military capability in which every aspect of new and existing military capability is planned and managed coherently across all Defence Lines of Development (DLoDs) from cradle to grave.”

• TLCM faces a challenge in the way it delivers a double agility:

– Agility in the acquisition of new equipment capabilities and fielding them across the DLoDs, and

– Agility in the operational responsiveness of fielded forces to rapidly changing and asymmetric forms of threat.


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Agility

• The operational agility of a Joint Capability Package is the variety of capabilities that it can generate at campaign tempo.

• The acquisition agility of a supplier is the variety of Force Elements that it can provide at acquisition tempo.

Threat

CapabilityCoalition

ContributionPhysical

Environment

Joint Capability Packages

Force Elements

Organisation

Infrastructure

Logistics

DoctrineInformation

Personnel

Equipment

Training

Audit Process

http://www.aof.mod.uk/aofcontent/operational/business/capabilitymanagement/capabilitymanagement_whatis.htm

Demand for operational capabilities at demand/threat tempo

Demand for Force Elements at acquisition tempo

Alignment Processes orchestrating and synchronizing the use of Force Elements at alignment tempo


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The demand for multi-sidedness

• The demand for operational agility creates a demand for multi-sidedness in the way a Force Element can be used.

• The multi-sidedness of the demands on a Force Element is the variety of different forms of collaboration* demanded of it.

Variety of Mission Situations

Force Elements

X X X

XXX

X X

X

X

Inter-State Conflict

Non-inter-state Conflict

X

X

X

Threat met by use of single Force Element: a few very

capable vessels

Force Elements purpose built to

meet most demanding threats

1 2 3 4 5 6 7 8 9 10

Force Elements built to meet a variety of threats through

working together collaboratively

X

X

Threat met by composition of

many Force Elements: different types of vessel and capability able to

work collaboratively

Current focus

Defence trend

* Geometries-of-use


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Variety of demands across Campaign Types

• The larger proportion of operational time was spent in the top-right quadrant.

• The trend across the whole range of Campaign Types is towards the pursuit of greater asymmetry and therefore increasing variety.

Concurrent Campaign Types (aka Defence Operations)

5-8. Non-combatant evacuation

9-10. Counter-Drug Operation

1. Littoral Land Attack

2. Anti-Air Warfare

3. Anti-Surface Warfare

4. Anti-submarine

Warfare

11. Mine & obstacle counter-measures

12. Ship to objective manoeuvre

Enduring medium scale Military Assistance to

Stabilisation & Development

Enduring Medium Scale peacekeeping

OROR

Enduring small scale PK

Enduring small scale PP

OR

Limited duration SS (MS) Power Projection

Limited duration SS (MS) Peace

enforcement Limited duration SS (MS) focused

intervention

AND

One-off large scale

deliberate intervention

OR

AND

Standing Overseas

Commitments

13. Humanitarian assistance &

distaster relief

14. Counter

Piracy

A vignette

A scenario/effects ladder relates each vignette to its larger Campaign context

1

1 1

1

1

.05.95

11.8.2.05.95.25

.25.5

low high

few

many

Variety of different types of Mission Situation*

Number of managerially and

operationally independent Actors

5-8. Non-

combatant

evacuation

9-10

Counter-

Drug

Operation

1. Littoral Land

Attack3. Anti-Surface

Warfare

4. Anti-

submarine

Warfare

11. Mine &

obstacle

counter-

measures

12. Ship to

objective

manoeuvre


disaster relief

14.

Counter

Piracy

Insertion, reconnaissance,

ISTAR

10%

70%

20%

2. Anti-Air

Warfare

* Variety of geometries-of-use


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2: STRUCTURE MODELING


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Current Approach

• The MoD’s acquisition focus has been on the Force Elements capable of countering the most demanding threats, encountered primarily in inter-state conflicts.

– The acquisition and deployment of a Force Element includes its systems-of-systems that can be assumed to reside under a single operational1 and managerial2 authority.

– The costs of operational use are established through activity-based costing, focusing on the costs across the DLoDs that directly contribute to the operational use of the Force Element.

• The costs of aligning the use of multiple Force Elements to the demands of particular mission situations either remains implicit in the use of particular Force Elements, or belongs to another type of enabling Force Element providing the capability for Information Superiority (viz CCII and ISTAR).

– Capability acquisition is silo’d

1 Authority over the way the Force Element is used as a part of an operationally deployed Force Package. 2 Authority over the way the Force Element is made available for use by operational authority.


.

High-level capability

Surface combatant

Alignment dependent on exo-systems

Alignment dependent on endo-systems

1 endo-system – systems-of-systems that are endogenous to the Force Element 2 exo-system – systems-of-systems that are exogenous to the Force Element

Directed SoS: CCII architecture Star-

connected

Collaborative SoS: CCII architecture fully networked

Capabilities that a Force Element is built to create

acting alone

Capabilities that a Force Element is built to create by acting together with others

Cost of operational use of the capability

Interoperability Risks

Aircraft carrier

The Force Element is designed to operate within a Task Force with its

own CCII, such that the Task Force can act like a single Force Element

1

Corvette

A subset of capabilities can be deployed that are more dependent on exo-systems

2

‘Containers on Fleet

Auxiliaries’

Capabilities are created that are independent of the platforms on which they are deployed

3


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Changing Architecture in response to increasing multi-sidedness

• Proposed changes in architecture introduce:

– Increased modularity of Force Elements

– Increased reliance on exogenous systems-of-systems

• 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

Architecture 2

Force Element

Alignment Process

Equipment capability

Architecture 1

Systems of Systems endogenous to Force

Element

Systems of Systems exogenous to Force

Element

Current focus

Defence trend

Variety of Mission Situations

Force Elements

X X X

XXX

X X

X

X

Inter-State Conflict

Non-inter-state Conflict

X

X

X

Threat met by use of single Force Element: a few very

capable vessels

Force Elements purpose built to

meet most demanding threats

1 2 3 4 5 6 7 8 9 10

Force Elements built to meet a variety of threats through

working together collaboratively

X

X

Threat met by composition of

many Force Elements: different types of vessel and capability able to

work collaboratively


Reduced cost of Force Elements Reduced cost of Force Elements

Reduced costs of Alignment

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Operational agility, aligning composite operational capabilities to mission demands

Acquisition agility, generating operationally available capabilities across the DLoDs

Balancing acquisition and operational agility • Balancing these two forms of agility and their corresponding costs involves

spanning a number of different layers of organization.

Suppliers

Institutional Forces

Operational Forces

Theatre Command

Mission Command

Skills, Assets & Equipment

1

Fielded assets & equipment

Force Elements

2 3

Composite operational capabilities

Mission synchronization

4 5

Scenario Effects

6

Demand/ Threat Tempo

Alignment Tempo

Acquisition Tempo


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Modeling Approach

• Projective analysis is an approach to modeling and analyzing the relationships across all six layers

Skills, Assets, Equipment &

Platforms

1

Fielded Assets, Equipment &

Platforms

Force Elements

2 3

Operational capabilities


4 5

Effects

6


Alignment Tempo

Acquisition Tempo

1

2,3

4,5

6

Domain of interactions: using surface assets

Organization

Realization

Supply-side Demand-side


Platforms

Organization of TEPIDOIL generating

Force Elements

Orchestration of Operational Capabilities

& Mission Synchronization

Effects within Mission Types across

Campaign Types

Effects Ladders

Analyzing multi-sidedness

Supporting organizations and

infrastructures

Supporting organizations and

infrastructures


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Structure Modeling

Social & Data Synchronisation

Demand

Accountability Hierarchies

Structure & Function of physical and digital systems

Circular Dependencies 1

2,3

4,5

6

Domain of interactions: using surface assets

Organization

Realization

Supply-side Demand-side


Platforms

Organization of TEPIDOIL generating

Force Elements

Orchestration of Operational Capabilities

& Mission Synchronization

Effects within Mission Types across

Campaign Types


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Architectural Analysis of Stratification

• Analyzing the Alignment Processes separately from the individual capabilities showed the relative complexity of these processes in the vignettes placed in the top-right quadrant of the capability space.

• The delta architecture introduced modularity into both the Force Elements generated and the Alignment Processes.

Modeling of basic relationships

Analysis of patterns of Alignment

Layers 1-3: Complexity of

Force Generation

Hi

Lo

Layers 4-6: Complexity of Alignment Processes

HiLo

V1 - Littoral land attack

V2 - Anti-air warfare

V3 - anti-surface warfare

V4 - Anti-submarinewarfare

V5-8 Non-combatant evacuation*

V9 - Ship stop and search*

V10 - Interdiction of go-fasts*

V11 - Clearance of landing beach

V12 - Ship to objective manoeuver

V13 - Disaster Relief*

V14 - Counter-piracy interdiction*

* top-right quadrant in the capability space


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3: ANALYSING VALUE FOR DEFENCE


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Cohesion Costing

• 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.


1


Force Elements

2 3



4 5

Scenario Effects

6

Costs of use Costs of alignment

Costs of Cohesion


Alignment Tempo

Acquisition Tempo


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Analysis of Value for Defence

• 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

a’b’

2. Change in spread/variance in levels of defence expenditure, based on the difference between the two curves ‘a’ and ‘b’

Probability

Levels of total operational expenditure on Concurrent Campaigns

The total operational cost of approach ‘b’ across the variety of scenarios

b

a The total operational cost of approach ‘a’ across the

variety of scenarios

Value for Defence from: 1. Reduction in average level of

defence expenditure through impact of trade.

* Agility = property of the force package enabling it to do more things with the same underlying capability set.


.

Value to be captured by Terms-of-Business Agreement (ToBA)


1


Force Elements

2 3



4 5

Effects

6

Smart: Acquisition of equipment or platform spanning its life-cycle

provider purchaser

provider purchaser

TLAM/TLCM: Through life management of (equipment-based) capability

provider purchaser

TLCM+: Through life management of (collaborative system-of-system-based) capability

Purchaser-provider boundary defining value for defence

ToBA


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END-TO-END PROCESS CONT’D


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End-to-end Process

Vignettes: existing mission

threads Data Templates:

FE architecture, threads & internal/

external events

Effects Ladders:

Campaign context to vignettes

Capability Space:

What variety of vignettes?

Delta surface architecture:

alternative architecture(s)

external events

campaign effects

base case

strategic context

larger impact of changes

Modeling effects generation:

structure, orchestration & synchronization

SMEs

Modeling delta: delta structure, orchestration & synchronization

SMEs

base model

Stratification analysis:

layers of alignment

Cohesion costing templates:

5-layer analysis

.kbs

stratification

Costings: L/M/H confidence

costs

Base & Delta Costings:

Cohesion costing for each vignette

.xls

SMEs

Mission type occurrence:

Relative frequency & duration of vignettes

SMEs

Vignette occurrence: Monte Carlo distributions

Costs delta & Variations:

variation in total annual costs

Present Value of savings:

long term impact of delta architecture

Real option valuation:

Additional value of reducing variation

SME* Workshops

SME* sourcing of data

Analysis


* Subject-matter Experts (SME’s) used to overcome limitations in data currently available

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Results from End-to-End Process

• What is the level of multi-sidedness created by the current variety of demands?

– Significant multi-sidedness met by separate complex star-connected orchestrations of Force Element

• What are the consequences of this multi-sidedness for engineering architecture of Force Elements and Alignment Processes?

– There needs to be less redundancy in the provision of capabilities by Force Elements combined with a greater focus on the Alignment Processes per se.

• What are the expected savings when implications are successfully met?

– A modular approach shows an average saving of 35-45% on the force’s total operational costs of cohesion, which is increased to 40-50% through reduced variation

Y-axis: Number of Force Elements

needing to

interoperate for this Orchestration

X-axis: Orchestrations of Force Elements

Z-axis: ‘Number of overlapping Orchestrations

A Peak

Jagged complex star-connected orchestrations

low high

few

many

Variety of different types of Mission Situation

Number of managerially and

operationally independent Actors

5-8. Non-

combatant

evacuation

9-10

Counter-

Drug

Operation

1. Littoral Land

Attack3. Anti-Surface

Warfare

4. Anti-

submarine

Warfare

11. Mine &

obstacle

counter-

measures

12. Ship to

objective

manoeuvre


disaster relief

14.

Counter

Piracy

Insertion, reconnaissance,

ISTAR

10%

70%

20%

2. Anti-Air

Warfare

2. Complexity of supporting multi-sidedness

1. Variety of demands

-0.20

0.00

0.20

0.40

0.60

0.80

1.00

0 2 4 6 8 10 12 14

probability

months/year

Normalized probabilities of duration by vignette

V1 littoral land attack

V11-12 Ship to objective

V13 Humanitarian assistance & disaster relief

V14 Counter Piracy

V2 anti-air warfare

V3 anti-surface warfare

V4 anti-submarine warfare

V5-8 Non-combatant evacuation

V9-10 Counter-Drug Operation

-0.05

0

0.05

0.1

0.15

0.2

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probability

ACU ,000

Normalized costs

base

delta

-0.05

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0.10

0.15

0.20

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0.30

0.35

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-100 -50 0 50 100 150 200

probability

ACU ,000

Normalized savings

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Average Annual Savings by Mission Type

6. Savings per vignette

7. Changes in cost variation

5. Variation in vignette duration

0.0

1.0

2.0

3.0

4.0

5.0

6.0

V1

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ACU ,000/month

Variation in monthly costs per vignette

base cohesion costing

delta cohesion costing

hybrid delta cohesion costing

4. Costs per vignette

3. Complexity of 2 agilities

Layers 1-3: Complexity of

Force Generation

Hi

Lo

Layers 4-6: Complexity of Alignment Processes

HiLo

V1 - Littoral land attack

V2 - Anti-air warfare

V3 - anti-surface warfare

V4 - Anti-submarinewarfare

V5-8 Non-combatant evacuation*

V9 - Ship stop and search*

V10 - Interdiction of go-fasts*

V11 - Clearance of landing beach

V12 - Ship to objective manoeuver

V13 - Disaster Relief*

V14 - Counter-piracy interdiction*

* top-right quadrant in the capability space


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NEXT STEPS


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Next Steps

• Given the potential impact of the approach for the MoD, a first step must be creating more awareness within that organization of this level of analysis

• Therefore, it is strongly recommended organizing a 1-day workshop for key people involved in strategy

– What is multi-sidedness and how does it impact the MoD’s approach to generating capability?

– What is necessary to increased effectiveness in an environment of increasingly multi-sided demands?

– What were the results of this pilot study?

• After this, next steps can be defined, for instance

– To repeat the study with a refined scope and more solid data

– To identify the consequences and next steps for the MoD

– To identify the consequences and next steps for ToBA


.

END
