Digital Mastery in Defense – Successful Partnerships

Why do strategic partnerships in digital transformation fail so frequently? And how can organizations improve their approach to establish successful partnerships? One of the reasons of failure is the challenge to create sustained business value from digital transformations. Strategic partnerships are often burdened with solving a customer’s technical debt instead of creating value through business innovation.  A so-called “reach and range” approach as described in this article can help to intelligently slice and dice both the scope and the levels of transformation control to keep the focus on value creation.

Best-of-breed partnership ecosystem

Being successful in developing strategic digital partnerships starts with defining what type of partner is best for which part of the digital transformation scope and the desired outcomes. Additionally, the overall digital roadmap is to be defined: where and when you want to get results. Starting point is that in case of an external strategic partner the scope is not too broad to be digested by a single IT services & consultancy provider. It is therefore recommended to “slice” the digital transformation effort based on the “level of control” on the Y-axis. And select the best partner for each slice instead of selecting the best overall partner which might only be average in some areas of the transformation. In other words: select “best-of-breed” partnerships instead of a “best-of-suite” like partner. I refer to this as the “Reach & Range” partnership model which supports the vision that the future is defined by innovation through ecosystems. The slicing of the X-axis in the model can be done based on the organizational structure (E.g., groups of users, geographic locations, etcetera), the business model (E.g., Lines of Business) and/or the goals defined for the partnership. The following example shows a reach & range in which strategic, tactical, and operational level partnerships are mapped on the range axis, and military deployment type on the y axis. A further level of granularity is then added by including the operating domains: Land, Air, Sea, Space, and Cyberspace.

Striking the right balance

Striking the right balance between authorities, tasks, responsibilities, and accountabilities that matches the leadership role of the transformation is a complex and political matter. To be successful in digital transformations It is necessary to establish a Digital Transformation Office (DTO), an organizational entity with a leadership role across all operating domains. The DTO bundles the core elements of portfolio, program, change and rollout management of a company, whereby the combination of these sub-areas can counteract the difficulties of a digital transformation. [1] This can be either with an existing or a to be established organizational entity, and both with or without help of and external consulting partner. E.g., in Germany the Armed Forces’ digitalization agenda is owned by BWI, which is a public IT services provider owned by the German Federal Ministry of Defence and responsible for modernizing the Bundeswehr’s IT. BWI runs large digitalization programs like the Digitalization-Land-based Operations (D-LBO). In the UK MoD’s Defence Digital organization, residing within Strategic Command, was established specifically for this purpose. According to its mission statement it is responsible for making sure that effective digital and information technology (D&IT) is put into the hands of the military and business front line. DTO can also be implemented in a federated fashion. E.g., in the US there is, in addition to an enterprise-wide initiative, also a federated office implemented by the US Air Force.  

What is also important is to have the guidance of the Enterprise Architecture capability. With their broad spectrum of skills, cross-functional enterprise architecture teams are well positioned to drive defense-wide digital transformation. Once the DTO is implemented, it is essential that the structure, processes, resources, and systems that support the organization are up to the task. This is where one or more strategic partners should be selected and be involved in sketching the digital roadmap and accelerate the digital transformation. It can be decided whether to opt for a single strategic partner or strategic partners based on operational environment. Mostly the deployed and hypermobile domains are kept under one strategic partner umbrella. But one can argue that a single strategic partner for all domains is optimal considering the joint-nature of future operational concepts.

The Strategic Partner as Business Value Orchestrator

From our market survey on Digital Mastery, we see that Digital Masters are successful in implementing Business Value Management. This is achieved through five fundamental capabilities: effective business partnering, end-2-end demand management, cost transparency, business value transparency, and dynamic budgeting. [2] It is the strategic partner that must support the DTO and the business on all these parts and act as the “Business Value Orchestrator”. The Business Value Orchestrator is a capability, consisting of people, processes and technology which stretches across the entire ecosystem. It requires various roles to monitor value creation at all „slices“ of the reach-and-range model. Business partnering is preferably implemented through the EA function. Here the strategic partner must support and professionalize Enterprise Architecture Management to enable it to become a business consultancy. Regarding end-2-end demand management the strategic partner must take care of business requirements throughout the entire lifecycle. From the derivation of requirements from the business strategy to the development and operation of defense-specific solutions. This IT value chain is managed through the brokering “slice” in the partnership model. Also cost transparency and the distribution of cost is to be based on the consumption of digital services and to be provided by all ecosystem partners. We have developed a methodology and a framework, the Strategic Value Framework, to and align goals and objectives between projects and ensure their contribution to the digital strategy. Our methodology consists of a two-fold approach, where goals and objectives are at the center. The framework supports the orchestration of business value contributions across the partnership ecosystem. [3]

Co-innovation partnerships

As shown in the previous figure successful digital transformations need a new kind of service provider to be part of the digital partner ecosystem. The traditional service providers with their plan-build-run models and time-and-materials pricing need to be re-evaluated for their relevancy to the digitalization roadmap. To remain relevant for the customer the service providers need to become “co-innovators”. It is up to the ecosystem broker continuously assess digital services and partners based on their fit in the digital roadmap. The partnership between the US Army Enterprise Cloud Management Agency (ECMA) and Capgemini is a perfect example of such co-innovation. In the 2021 Army Digital Transformation Strategy it was stated the digital infrastructure of cloud must become more mature, with new capabilities and improved customer experience. Capgemini acts as a co-innovator by leveraging both commercial public cloud and extending into on-premises tactical locations to establish mission critical capabilities of the army. Hereby delivering a crucial piece of the digital transformation. [4] Another example is our involvement with UK’s Defence Digital program for which we will provision the MoD’s IT Service Center. We will provide the next generation of services, featuring our leading AI and Smart Analytics capabilities, to support the customer’s digital transformation. [5]

Conclusion

Successful partnerships don’t just happen, they require careful planning. Strategic partnerships can help early on in defining the digital roadmap, managing progress and above all managing the value creation from an evolutionary partner ecosystem. Establishing such strategic partnerships is not simply a question of setting up a legal structure or investment terms. In the previous Expert Perspective on “Digital Mastery in Defense” the importance and characteristics of a good digital strategy was the main topic. This article shows that the next step is then to execute this digital strategy through a partnership framework enabling a best-of-breed partner ecosystem which serves the defense services across all operational domains and leads to best-in-class digital solutions.