PwC with the Ministry of Defence

Commercial Excellence

UK Defence has well-publicised affordability challenges. Not only must it keep existing Equipment Programmes running within affordability limits, it must also find headroom to invest in new capabilities, such as space and cyber. When the public finances are in a difficult state, as they are now, these challenges are even more acute.

Defence Equipment & Support (DE&S) sits within the UK MoD and buys and supports military equipment and services. It spends £11 billion annually and has already made major gains in driving efficiencies. But it needed to do even more to help address the overall affordability challenges of UK Defence.

DE&S needed an Efficiency Partner to do two things: help them meet very challenging short-term efficiency targets, whilst also helping them codify efficiency insights, approaches and tools, and transfer them into business as usual.

DE&S appointed PwC in July 2019, with two objectives:

  • Deliver £1 billion of efficiencies across the MoD’s 10-year Equipment Plan;
  • Build their internal capability, equipping DE&S to continue realising efficiency as part of its core mission with much less reliance on external help.

PwC recognised that these two objectives were inextricably connected and mutually supporting. Building the client’s own long-term capability relied on delivering efficiency in a way that was built around the client from the outset.  Operational and Corporate Leaders in the business needed to own efficiency delivery, and to set their relative goals and priorities accordingly.

At the heart of PwC’s solution was the Efficiency Delivery Framework – a way of looking at DE&S’s business processes through an efficiency lens. The framework closely aligned with the acquisition lifecycle, and had five categories: right product, right support, right commercial construct, right price and right execution.

Working across all four DE&S delivery Domains (Ships, Land, Air and Strategic Enablers), PwC prioritised and agreed the list of projects to target. Over the course of the year, they embedded consultants within 19 separate client Delivery Teams, adding capability, capacity and confidence to what DE&S was already doing. This injected efficiency expertise and energy into established practices at the point it could be most effective, and offered external perspectives and challenge.

The capability-building element was designed to systemise and transfer efficiency insights, experience and tools from the PwC team’s ways of working into the business. PwC focused not only on the ‘upskilling’ of individuals, but also on creating the environment for those skills to sustain and grow, and be used effectively to deliver efficiencies in the long term.

The programme presented four main challenges: scale, complexity, fast pace and large targets. PwC met all objectives and surpassed client expectations — efficiency savings exceeded the contracted requirement, and internal capability goals were met in full. As a result, PwC was engaged for a second year.

View the PwC profile in the MCA Members Directory.