The MoD must find a way to maintain its growing e-commerce agenda while making savings, argue Andy Brown and Ian Kelly, Defence Experts at PA Consulting Group
The Defence Electronic Commerce Service (DECS) provides a range of hosted services that standardise the way trading partners interface with the MoD in a secure environment, and more quickly than traditional paper-based processes.
DECS was established in 2000 as a Public Private Partnership (PPP) between the MoD and Capgemini, and has recently been extended to 2012. It is used by over 15,000 MoD and industry personnel, with over 750 trading partners – annual transactions in 2008 were estimated at over £2.6bn1.Current live services include:
Purchase to Payment (P2P) – an Oracle-based system that enables automation of order, delivery, invoice and payment processes, as well as a level of integration with the MoD supply chain;
Bulk Fuels Inventory Services (BFIS) – a SAP system for the management of fuel, lubricants and gas inventories across all three services;
Catalogues – electronic catalogue hosting for MoD purchasing – a framework for suppliers’ catalogues such as ICT and medical supplies and linked with P2P for direct ordering from hosted catalogues;
Internet Access to Shared Services (IASS) – providing access to some of the MoD’s key corporate applications (such as HRMS and JPA) via the internet. IASS is often used by MoD personnel who have no direct access to the MoD network.
The development of the service has been evolutionary, with additional services such as IASS added to the core P2P service to meet specific customer needs. These additions have delivered benefits to the MoD and have taken some steps towards supply chain integration, with BFIS, for example, but there remains scope for further integration.
DECS has undoubtedly advanced the e-Business agenda within the MoD, but as the scope of the service evolves, there is an increased risk of overlap with other services, both within the MoD and across government – for example, services similar to IASS are offered by a number of the major defence industry players.
This overlap is a luxury that is no longer affordable, particularly in the current environment of public sector cost-cutting and the Strategic Defence and Security Review (SDSR), and presents both an opportunity and a threat to DECS.
Looking forward, the MoD faces the challenge of how best to realise the maximum benefits of electronic commerce whilst ensuring that services such as DECS are aligned with the emerging vision from the Cabinet Office and the MoD’s own Defence Core Network Service (DCNS) programme.
DCNS, in particular, is looking to remove duplication of services and create a more flexible approach to delivering the information services required to support operations. It will also need to address the tension between the desire for end-to-end management of services, and the need to avoid expensive duplication that can come about when multiple end-to-end services exist in adjacent areas.
While careful management of the boundaries between services will help avoid duplication of costs in theory, in practice this can be very difficult, particularly the management of the migration to a new service for long-running contracts such as DECS.
Given the current economic and strategic climate, future decisions about services such as DECS will not be made in isolation. Careful planning is needed to ensure the MoD and government only pays for the services actually required and that those services are paid for only once. Compounding this challenge is the fact that any consolidation of services, whilst providing a positive investment case, might nonetheless fail to gain approval if the imperative is for short-term savings.
Over the course of its development, DECS has delivered clear, tangible benefits to the MoD and by extension, the supply chain. Looking ahead, its future evolution must be managed carefully to maximise value for money.
1 MOD renews public private partnership with Capgemini’, Capgemini press release, 9th March 2009.
Ian Kelly, Senior Defence Expert, PA Consulting Group.
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