Change and Transformation in the Private Sector
As the UK’s largest Defence contractor, BAE Systems underpins national sovereignty and security, as well as making a significant contribution to the economy. Research from Oxford Economics found that in 2022, the company contributed £11bn to GDP – equivalent to 0.4% of the domestic economy.
One area of significant focus is the Air domain. The company’s Air Sector designs, manufactures, supports and provides training for Typhoon and F-35 military fast jets and the Hawk trainer aircraft, while developing the next generation combat air system, Tempest, which will secure the UK’s sovereign combat air defence capabilities for the long term.
The company identified the need to drive efficiency, affordability and agility for customers in helping them respond to the evolving threat context today, while also taking key steps to transform to deliver the products and services of tomorrow faster than ever before.
KPMG was appointed as the partner to help deliver this. Through an extremely close working relationship, where commitment has been a watchword, a multi-skilled KPMG team has worked with BAE Systems to deliver the transformation at scale.
This has included moving over 5,000 people into new teams digital and data-led performance improvement across supply chain, procurement, engineering, project management and manufacturing; enterprise performance management; embedding Enterprise leadership through redesigned senior executive forums; and a full programme of cultural and change management.
Examples of specific workstream projects and outcomes include designing and implementing a new end-to-end digital solution for engineering using an integrated workflow tool; the design and implementation of a modernised digital procurement solution that will help drive significant efficiencies, cost savings and performance improvements; and the launch of a whole new line of business within the Air Sector – FalconWorks® – which is its innovation hub for new products and services, employing 1,200 staff and working with a range of external partners in a dynamic ecosystem.
The programme has played a key part in energising the organisation, and strengthening its confidence and resilience for the future, with key outcomes including:
- New operating model designed and implemented
- Newly created Falcon Works® innovation hub fully operational, staffed with 1,200 FTEs
- Nearly 100 individuals in Air trained and developed to deliver transformational change activity
The project has resonated widely, to other divisions of BAE Systems and beyond into the wider Defence ecosystem. There have been over 1,000 visitors to the Ignition 35 space that the BAE Systems and KPMG team has created – including senior customer figures who have been keen to find out more about transformation approaches and understand how the successes of the programme may be replicated elsewhere.
View the KPMG profile in the MCA Members Directory.