Governments are now more interested in purchasing capabilities than equipment. For contractors, this means an emphasis on through-life support rather than on delivering equipment and returning only when it requires spares or repairs. The driving force behind this shift in emphasis is a continuing effort to transfer risk — technical, financial and operational — from the public to the private sector. This in turn stems from the continuing pressure on governments to reduce spending. The interface between contractor and buyer is becoming less clearly defined, with contractors encroaching into areas previously considered the province of the user — financing, training, monitoring usage and performance, maintenance and so on, through to decommissioning and, potentially, replacement.
However, while the contractor value chain is being extended, and as weapons and associated subsystems and systems become increasingly complex, the cost of maintaining a broad range of technical and industrial capabilities is beyond the means of almost all contractors. This means that contractors are compelled to focus on specific, selected areas of expertise — outsourcing certain areas of manufacture, buying in certain equipment, services and components, and investing only in activities where they can excel.
How PricewaterhouseCoopers can help you
At PricewaterhouseCoopers, we can help you decide how and where to prioritise investment, how to maximise value in acquiring new capabilities — or disposing of those likely to undermine value — and how to assess and manage risk throughout the product life cycle.
