The second largest public sector IT player in this year’s MIS 100 is the part of our national infrastructure devoted to protecting it. To achieve its goal of defending the people and interests of the United Kingdom and its overseas territories, the Ministry of Defence (MoD) employs over 300,000 people and deploys a budget of over £23 billion – the fifth largest spend of any defence ministry in the world and no less than 6.6 per cent of all public spending in the UK.

Thinking about the MoD means getting used to a different scale than other enterprises. The Defence Procurement Agency, just one part of the MoD’s ‘businesses’ – with its yearly budget of £6bn – is the single biggest purchaser of manufactured goods in the country, with its 4,300 staff managing more than 13,000 separate contracts, ranging from the purchase of submarines to small parts for a field radio. The MoD is also a huge landowner, with an estate equivalent to about one per cent of the total UK landmass. To meet costs in Iraq and Afghanistan it wants some £1.26bn this year alone.

Technology is a big focus for the MoD as a way to meet its targets of ‘making every pound spent on defence count so that the taxpayer gets the best possible value for money, using all the resources at our disposal to best effect and to encourage British defence technology, science and industry’.

To this aim the Ministry has a number of high-profile initiatives – Modernising Defence, the Defence Corporate Plan 2000 and the Command and Battlespace Management programme among others. But a core deliverable, the massive 10-year Defence Information Infrastructure (DII) project, which was first laid out in 2000 but which only appointed a partner for its first stage in March, has already run into some obstacles.

The overall DII goal is to provide a central common infrastructure that will underpin business change programmes, while improving command and battlespace management at strategic and operational levels. Other aims include taking control of disparate legacy systems and applications, linking some 100,000 civil servants to MoD systems as well as all 200,000 armed forces members, increasingly users of IT from logistics to battlefield.

Phase one of DII covers the provision of around 70,000 terminals and 200,000 user accounts, as well as delivery of a number of core systems for the MoD’s overall change programme. In the words of analyst group Ovum, DII intends to “change the way the armed forces operate”. Savings due to the project are estimated to be £170 million within the first three years, with £43m in the first year alone, as a common system replaces silos of information.

"The Ministry of Defence employs over 300,000 people and deploys a budget of over £23 billion – the fifth largest spend of any defence ministry in the world and no less than 6.6 per cent of all public spending in the UK"

But many eyebrows were raised last year when the EDS-led Atlas Consortium won the first phase of the £4bn contract, given EDS’ troubles managing certain other big government outsourcing arrangements. It seems that sceptics may have been proved partly right, in so far as things have not run smoothly. EDS is seeking adjustments in the contract to compensate for the ‘financial impact’ of the MoD having changed its mind about how it wanted DII built. The firm has warned the US financial community that the hiccup could materially impact its full year performance. The news came just a month before work was finally to begin on DII, this April.

Some observers see this as yet another public sector project derailed by change management issues. MoD spokespeople declined to comment to MIS 100, but the ministry has made representations elsewhere to the effect that Gershon efficiency requirements changed some of the scope of the project.

That is not to say the MoD is not getting huge benefits from rationalising its IT processes: in February this year it claimed it had already saved £10m by cutting the number of applications running to 150 with, for instance, the number of graphics software packages reduced from 25 to five.

Yet it is still uncertain what will happen next with DII. Design development and testing of phase one will take at least another year by the original schedule and rollout of the entire system five years. The MoD has always said that DII can only progress to stages two and three if the first 10 years prove that the concept is a success. It is probable things will get back on track, but there is plainly still much to be sorted out.