iGouge

05:31 GMT, August 25, 2009 WASHINGTON | As Defense Department officials overhaul the Pentagon’s acquisition system, they’re asking warfighters to define exactly what they need, then holding industry to more fixed-price contracts to develop those capabilities, a senior defense official told American Forces Press Service.

Shay Assad, acting deputy undersecretary of defense for acquisition and technology, cited two problems that have long plagued the defense acquisition system. Expectations were set so high — and contracts written accordingly — that systems took longer than expected to develop. Meanwhile, costs escalated, with the Defense Department left to pick up the bulk of the additional charges.

Both practices are coming to a halt as the Pentagon changes the way it does business. The goal, Assad said, is to be more responsive to warfighters’ needs and better stewards of taxpayer dollars.

Warfighter requirements always will trump in the acquisition effort, Assad said. “We want our warfighters to have the overwhelming technological superiority. We want them to have every advantage they can possible have,” he said. “We do not want this to be a fair fight.”

But too often in the Pentagon’s drive to provide that superior capability, “we push the technical envelope too far,” he acknowledged.

“We are expecting too much, instead of being realistic about what we can achieve in the near term and getting that to the field,” he said.

Defense Secretary Robert M. Gates told Congress earlier this year the Pentagon too often makes the perfect the enemy of the good. Gates said the department needs to be more willing to settle for the “75-percent solution” that gets capability into warfighters’ hands faster, than always waiting for a near-perfect system.

Therefore, officials are looking to the experts — the warfighters themselves — to define exactly what they need.

“Bringing warfighters into the decision-making process that drives acquisition is “a big change,” Assad said. “We’re very focused on working with the warfighters, and there’s a significant amount of interchange,” he added.

The dialog promotes a better understanding of what capabilities are available now and can be delivered in the short-term, and which requirements have no present-day solutions and will take longer to meet, Assad said.

Warfighters get to identify, for example, when the 75-percent solution that’s deliverable within two years will work until the 100-percent solution will be ready in about seven years.

“Our warfighters sometimes get frustrated because of the length of time it takes to design, develop and field a system,” Assad said. “And when we look back on it, the reason that happens is because we did not do as good a job as we should have up front, defining what we need, or making sure that the technologies exist to meet that requirement. So this is a big step forward in being more responsive to warfighters’ needs.”

Meanwhile, the department is keeping no-bid contracts to a minimum to increase competition. And in awarding contracts, it’s helping to prevent cost overruns through better up-front cost estimates and more fixed-price development programs.

Assad conceded that fixed-price contracts aren’t suitable for every program, and that it is nearly impossible to estimate precisely how much every development program will cost. But getting a better handle of costs at the beginning of the development process will reduce expensive surprises later in the process, he explained.

“So when we say something is going to cost $50 million, we will be comfortable that it is going to be in that range somewhere — not $300 million,” he said.

Fixed-price contracts, with payouts tied to performance, will make contractors closer partners in ensuring programs proceed on schedule and on budget, Assad said.

President Barack Obama emphasized the importance of these and other acquisition reforms under way during an address last week at the Veterans of Foreign Wars convention in Phoenix.

“Every dollar wasted in our defense budget is a dollar we can’t spend to care for our troops or protect America or prepare for the future,” the president said. “We cannot build the 21st-century military we need and maintain the fiscal responsibility that America demands unless we fundamentally reform the way our Defense Department does business. It’s a simple fact.”

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Donna Miles
American Forces Press Service

So some quick thoughts:

- use of social networking technologies (Fancy term for collaboration), will allow end users in the military to provide real time feedback to the politic of systems/application development. This will be a radical impact.

- Top Leadership can get direct feedback from end users (but must be careful they don’t over react).

- TOP DOWN leadership must consolidate systems/applications, requirements (JOTS model).

- Technology (Disruptive Technology will aide in this). Virtualization, remote access, video, better bandwidth, more “big brother” security technology (application layer firewalls).

SAN DIEGO — Why did Amylin Pharmaceuticals Inc. become an early adopter of cloud computing services, and how did it lay the groundwork for the move?

For almost two decades Amylin had no drugs to sell, but in 2004 that all changed with two FDA-approved drugs for diabetes and obesity. Company executives predicted that the company would become a $3 to $5 billion entity in five years and would need huge IT infrastructure scalability to support that growth.

The company already needed to refresh its 5-year-old hardware and had reached capacity and power limitations in its two data centers. It was running out of space and execs had to decide if it was time to build a new data center.

CIO Steve Phillpott addressed all these challenges by deciding to go with cloud computing services. But it took a lot of preparation before the business as a whole warmed to the idea.

Amylin ultimately adopted Amazon Elastic Compute Cloud (Amazon EC2) for targeted applications in the cloud like sales targeting and human resources (HR)/benefits; Salesforce.com Inc.’s Force.com for application development work; and storage in the cloud through network-attached storage cloud provider Nirvanix Inc.

During a session at Burton Group Inc.’s Catalyst Conference, Phillpott explained how he laid the groundwork for cloud computing services, both in IT and beyond. We present it here in a to-do list format along with his experience.

Steps to adopting cloud computing services

Assess IT software assets, then consider putting commodity and standalone applications in the cloud.

The IT team built a chart that showed business users which applications they thought were differentiators and which ones they thought were commoditized and explained why applications they viewed as commodities were better suited for cloud services like email for LiveOffice. Standalone applications like HR/benefits and sales analytics were also better suited for the cloud.

“We explained that these were applications and systems that did not have a lot of interaction with other ones and were more suitable to the cloud,” he said.

Reorganize IT teams according to application functionality rather than brand.

To prepare for a virtualized/cloud environment, Phillpott eliminated application silos such as those for Oracle or Siebel applications. “IT thinks their value is associated with an application rather than a skill, so we changed the mind-set to skills that we wanted in this new paradigm, like data management, business intelligence and analytics and the ability to do end-to-end business processing rather than skills tied to a particular application,” Phillpott said.

Get a handle on your internal IT costs. What does email, ERP and clustered storage cost you internally? You need to know this before you can validate what it costs you in the cloud. Phillpott engaged the finance department from the get-go to validate these costs internally compared with a services model.

To socialize the cloud computing concept around the business, figure out the terminology that business executives and users are familiar with.

When Phillpott heard that business users were reading The New Age of Innovation and using terms such as R=G for Resources are Global, he started to adopt the same terminology to explain the benefits of the cloud. “You need to sync up the vocabulary around the cloud and virtualization with what the business users are hearing about it.”

Engage IT staff members by giving them a role in the process.

Phillpott made testing cloud services a game for IT. He picked several cloud applications for IT to test like sales analytics and HR/employee performance management and had no ground rules. Test whatever service on whatever provider you like.

However, at Amylin, it wasn’t until he himself built an Amylin Web image on Amazon EC2 and played with it that IT started to pay attention. “I can tell you that there is no better motivation for IT than to see the CIO doing it himself, after that IT scrambled to test things out,” said Todd Stewart, IT director at Amylin.

Engage stakeholders throughout the organization. Information security, legal and finance are just a few of the groups that need to be involved. It took Amylin two months to figure out security issues in the cloud — with a lot of trial an error. The consensus in general is that security is ultimately up to you — most cloud providers leave security parameters up to the customer, whether they be a need for encryption or beyond.

Footnote: Steve is a US Naval Academy graduate and worked at Gateway and Life Technologies. He has several years experience in IT management.