Are you ready for tomorrow’s battle or yesterday’s war?

By

George Atalla

EY Global Government & Public Sector Leader

Working with governments to address complex issues and build a better working world.

6 minute read 3 Jul 2017

We’ve identified five areas where defense organizations can transform to meet the next generation of warfare.

Chaotic, mercurial and fought by state and non-state actors in the digital cloud as well as the physical battlespace: fifth-generation warfare is here. The changes it brings are disrupting defense organizations on an unprecedented scale. At the same time, a complex, interconnected risk environment is making a major geopolitical crisis in the near future significantly more likely.

To respond effectively today and control tomorrow’s battlespace, defense organizations must adapt to and master this new reality, which means they need to become smarter, simpler and stronger.

The disruptive power of digital

Rogue states, cyberattacks, terrorism and competition among nations for technological superiority are the major forces reshaping the operating environment.

Rapid technological change has been the driving force behind these shifts and will continue to define defense challenges in the future. Cybersecurity, big data, artificial intelligence, robotics and autonomous vehicles are already causing seismic shifts in global security. Directed energy weapons, hypersonic platforms and reusable swarm technologies are next. All of this challenges the way defense leaders manage their organizations traditionally and makes things such as logistics much more complex.

Then, there’s the issue of cost. Defense organizations require an immense amount of resources to innovate and be battle-ready in the current climate. To reflect this, and a healthier global economy, the NATO and Five Eyes countries have increased their investments in equipment and technology. Global defense spending is estimated to total US$1.7 trillion in 2017 — the highest ever in the post-Cold War era.

While budgets are growing, so are threats, instability and defense-specific inflation — which far outstrips regular inflation. Even technological advances that save money in the long run, such as artificial intelligence and directed energy weapons, bring high up-front costs.

With the pressure on to make the right decisions and prove they’re getting value for money, defense leaders need to adjust how they allocate budgets. In other words, they need to spend smarter.

While budgets are growing, so are threats, instability and inflation.

Simpler is stronger

Defense organizations must be ready to generate force elements that are ready for the fight. These must have the capabilities required to thrive in the digital operating environment and to excel in fifth-generation warfare. In response to the paradigm shift in warfare, defense leaders need to be dynamic, agile and flexible.

To become swifter and more responsive, defense organizations need to support their armed forces through digitally enabled processes and people. By questioning outdated processes, simplifying extraneous requirements and losing long-held conventions, they’ll be able to move to game-changing technologies that will make them stronger.

Five areas of focus

Here are ways for defense leaders to meet these combined challenges:

1. Be smart about spending

Maintaining a military that’s prepared to face uncertain future challenges is an expensive business. Despite the uptick in global defense spending, defense organizations still find themselves under financial pressure. Anything outside of preapproved budgets is also subject to intense scrutiny. With the “new normal” of slower economic growth set to continue, defense organizations need to make smarter investments while remaining poised for action.

Smarter spending isn’t just about balancing the books. It’s about planning and investing for the long term, and managing assets and costs effectively. That includes accounting for where the money is spent and budgets are allocated, and understanding the value and impact of those investments.

2. Take an enterprise-wide approach to digital

Technology helps defense organizations gain strategic advantage over enemies, make balanced strategic plans, control operational performance and manage resources. Digital transformation can also help them tune operational processes to output requirements and therefore respond to emerging threats faster. It’s why defense organizations are investing hundreds of billions of dollars in AI and machine learning, cyber weapons and threat detection programs, cybersecurity apparatus, robotics, and digital tools for their employees.

However, to get more bang for digital buck, defense organizations need to do more than investing in stand-alone projects that solve short-term problems. They need back-office tools and systems that are fit for purpose today, but can also flex in the future while fitting into existing systems and structures. Taking this integrated, systems-wide approach to digital will ultimately make them nimbler and more effective.

3. Transform the workforce

Defense organizations need flexible, dynamic and sustainable workforces to meet evolving military needs and society’s expectations. Recognizing this, leaders are already integrating military branches to create new capabilities and making changes to the way they employ civilian and reserve members of the defense team. This is helping to broaden the pool of talent. Developing a fifth branch of service — the so-called “cyber corps” — is also a focus. However, building a workforce that’s fit for the future requires changing the whole organization.

Defense leaders need to get better (and faster) at recruiting and keeping good people. They need to motivate both frontline and civilian employees through higher-quality career development. And they need more diversity in both leadership and combat roles. Most pressing of all, though, is the rising tide of digital. This is reinventing work by replacing labor with technology, creating new workforce models and preferences, and transforming operational demands. The impact on defense organizations will be huge. Defense leaders must adapt while they keep the engine running and uphold the institution’s shared vision and mission for service.

4. Optimize the supply chain

Tomorrow’s defense organizations will need to deploy the right forces in the right places even faster than they do today. And those forces will need the right equipment and supplies in the right amounts. This reality will require a new vision for acquisition. That’s why defense organizations are investing significantly in equipment, innovation and digital technologies. They’re also shifting the way they manage their procurement and supply chain activities.

This will lead to swift changes in the defense industrial base, such as front line to industry integration, autonomous supply chains and physical-digital operational capacities. Defense organizations will look increasingly to predictive field maintenance, the warehouse of the future and intelligent asset management to help them sustain the future forces. To realize the full benefits of these changes, they’ll need to replace outdated processes, manage costs effectively and up-skill their supply chain workforce. The outcome will be next-generation defense procurement that’s faster, resilient and more secure.

5. Modernize infrastructure

All armed forces need infrastructure that’s modern, resilient and fit for the evolving nature of conflict and technology. Yet of the estimated US$2 trillion-worth of defense estates in the world, many are aging, outdated and surplus to requirements. And each year, they cost tens of billions of dollars to maintain and modernize. Accommodation and facilities must also match the expectations of today’s service people and their families. Also, bases must provide infrastructure that’s aligned to the operational needs of the services and is environmentally sustainable.

What’s more, much of the world’s defense infrastructure dates back decades, even centuries, when warfare was completely different. Some of these assets are now obsolete, while others are unnecessarily large for today’s mobile, tech-enabled armed forces and their equipment. This gives defense organizations an opportunity to save significant amounts of money by reducing the size of their footprint. They should do this by developing a vision for infrastructure that reflects what tomorrow’s armed forces will need — one that rethinks concepts such as the need to own that infrastructure.

Summary

Defense organizations face a transformed landscape. While their budgets may be rising, the threats they face are growing more complex, geopolitical instability is increasing and defense-specific inflation is gathering pace. In response, they need to become smarter, simpler and stronger.

About this article

By

George Atalla

EY Global Government & Public Sector Leader

Working with governments to address complex issues and build a better working world.