Defence will nearly double its planned investments in enterprise ICT compared to 2020, expecting to spend up to $1 billion annually after changes to its digital governance.
Total planned investments in enterprise data and ICT is expected to be between $8.5 billion and $11 billion in the next ten years, around twice as much as the $5 billion over a decade in the 2020 Force Structure Plan.
The new spending plan is outlined in the 2024 integrated investment program (IIP) released Wednesday, which also reveals an intention to spend $1.7 billion to $2.2 billion on science and technology infrastructure over the next decade.
The ramped up investment comes after Defence’s Chief Information Officer Group was replaced by the Defence Digital Group at the end of 2023. The new group is headed by chief information officer Chris Crozier, who was appointed at the beginning of August 2023.
This followed the release of the Defence Strategic Review in March 2023 which raised concerns about CIOG’s overreliance on contractors and called for the workforce to be rebalanced to a 60:40 APS/ADF to contractor ratio in addition to the decommissioning of legacy systems and platforms.
The 2024 IIP states that “investments in enterprise data and ICT will strengthen security and resilience and improve the ability to share data efficiently and at scale”.
It will “include an uplift in the network of ICT capabilities across Defence, and the people and systems that support it” as well as the integration of automated processes that use artificial intelligence and machine learning.
However, only $790 million worth of planned enterprise network investment and $660 million worth of planned enterprise system spend has been approved so far.
Among the funded programs that have already been announced are the Defence Enterprise Resourcing Program (ERP) to replace 90 per cent of Defence’s existing ERP applications and the OneDefence Data program to improve data management.
Both projects have been subject to unfavourable audits or external reviews.
The Defence ERP program has cost nearly $600 million in contracts so far, with sole system integrator IBM having secured more than $362 million since winning the work in 2019.
IBM delivered the first two tranches of the Defence ERP project. Tranche one focused on “logistics, land material maintenance and a finance capability, while tranche two is delivering an investigative case management capability, based on SAP S/4HANA”, a Defence spokesperson previously told InnovationAus.com.
Accenture, Deloitte and DXC Technology were brought in to help deliver the remainder of tranche three, due to be delivered by December 2030. The third tranche builds on capabilities delivered under the first two, with multiple releases to be rolled out over several years.
Defence ERP has previously been estimated to cost $1 billion between 2016 and 2025. An audit of the project found conflicts of interests, including IBM representatives being present and involved in decisions to amend its contract.
The $515 million One Defence Data program has been running since 2016, but was realigned with the first Defence Data Strategy in 2021.
Tranche one of the program, being delivered by KPMG, is focused on establishing and delivering the “governance, standards and change management to drive information management transformation” across Defence.
However an audit of the project, released at the end of 2023, found that the project was poorly justified and quickly went off track.
It also found that the program has been poorly governed, been impacted by conflicts of interest, and included a payment to KPMG for work that wasn’t undertaken. Defence and KPMG has rejected many of the criticisms.
