Procurement management of the armed forces

Agile process management was the focus of a panel discussion at the Technet Europe Conference 2023, which was recently organised by the Armed Forces Communications and Electronics Association (AFCEA) in London. The panel topic: "Agile procurement and continuous partnership: Contribution and initial assessment from industry". AFCEA (Armed Forces Communications and Electronics Association) has been creating a forum that brings together and networks industry, politics, science and the military since 1946.

Stefan Hefter, Partner, Defence & Space, played a key role in the debate. Hefter can look back on 20 years of experience in digitalisation projects and agile process management.

The aim of the discussion was to exchange views and opinions on how the procurement process of armed forces can discover and promote innovations and the need for innovation in good time so that necessary innovations reach the troops quickly. During the discussion, Stefan Hefter pointed out the advantages of integrating agile methods into the existing process. Contrary to popular opinion on the panel, however, he emphasised that a complete transformation of the procurement process towards agile also harbours risks.

An agile procurement process does create advantages in terms of flexibility, allowing new innovations to be recognised, tested and implemented in the organisation. At the same time, however, the following risks arise: Long-term projects, as defence projects usually are, cannot be adequately managed using agile methods and they threaten to become more and more extensive and therefore more expensive due to scope creep - the piecemeal expansion of requirements.

Military procurement processes are formal acts that are intended to procure products that must be both scalable and interoperable. Short-term agile processes often do not lead to success. What is needed is a combination of long-term contractual relationships between the armed forces and industry with clearly defined performance specifications and components that can be called up at short notice for the rapid implementation of innovations.

Similar to a scrum sprint - a fixed period of time in which a certain amount of work is completed - new innovations can be developed, trialled and implemented quickly. Specialists are already using this system effectively to test and procure new solutions. This transformation requires constant dialogue between the armed forces and industry in order to strike a balance between long-term stable partnerships and agile procurement opportunities. The risk of "fail fast", of losing money by developing and testing solutions that cannot be implemented, exists here and is borne by the armed forces as product owners with responsibility for the end product.

However, the risk would not arise anew, but would merely shift away from the troops, who wait too long for new innovations, towards the procurement organisations.

KPMG can act as a long-term partner for the implementation of agile methods in the procurement process, e.g. as a proxy product owner and scrum master. Our experts have many years of experience in agile process management and the implementation of agile methods in existing processes. In addition, our consultants have extensive specialist knowledge in the defence sector as well as in the areas of digitalization and product development. This expertise already enables us to make a valuable contribution to the holistic transformation of procurement processes. With our know-how and our methodology for defense procurement processes, we can master the complex tasks of a necessary transformation in order to continue to provide armed forces with the innovations they need on the battlefield of the future.