The Digital Strategy for Defence: A review of early implementation by the National Audit Office

Government has developed a strong strategy for adapting to the rapid digitisation of warfare but does not have a complete plan or a clear way to determine if it is on track to deliver the necessary data, technology and skills, according to the National Audit Office (NAO).

To meet the needs of modern warfare, and enhance its effectiveness and efficiency, the Ministry of Defence (the MoD) must transform a large and complex organisation with an extensive legacy IT estate, using scarce specialist skills. In 2021, the MoD launched the Digital Strategy for Defence (the strategy) to transform its use of technology, people, processes and cyber so it can seamlessly share and exploit data.¹ Defence Digital is the organisation within the MoD responsible for leading the implementation of the strategy.

Implementation of the strategy will let the MoD operate more effectively in an era of disruptive technology and evolving security threats. The MoD aims to join up military operations across land, air, sea, space and cyber and work closely with the rest of government, academia, industry, and international partners. To do this, it recognises that it needs to transform its digital capabilities to share information seamlessly and make decisions based on data. The MoD has strengthened its digital function and is starting to develop common approaches to data and technology.

The strategy is consistent with good practice the NAO has identified across government.² Government hasn't always understood the quality of its data, has not prioritised its use, and has tolerated data that is not fit for purpose. The strategy recognises that data are a strategic asset, and that people and processes are as vital as technology to successful digital change. There is strong support for the strategy from the most senior leaders of the MoD.

The MoD's diagnosis is that its data are hard to access and share, it has gaps in critical skills, its core technology needs updating, and its processes are out of date. Defence Digital estimated it will spend £11.7 billion over 10 years updating or replacing legacy systems, and upgrading to modern replacements will be complex.

The nature of the MoD's business adds additional challenges to implementing the strategy. The MoD has three security classifications - Official, Secret, and Above Secret - which sometimes require separate digital systems. Its technology is used in hostile environments with limited connectivity, such as at sea. The MoD also shares data with international partners and must be able to work with their technology and security policies. This adds to the challenge of modernising and integrating technology.

There is no complete plan to implement the strategy, or a clear way of measuring whether it's on track. Although the MoD has individual plans for individual workstreams and programmes, it has not brought these together to provide a complete picture of progress. A comprehensive plan would also allow the MoD to prioritise its activity effectively when challenges emerge.

Defence Digital's project delivery has historically suffered from a lack of skilled and experienced personnel, insufficient reporting and assurance, and a culture focused on approvals rather than outcomes. This has undermined trust in its delivery of the strategy. In 2019-20, Defence Digital completed 76% of its most important delivery milestones - this fell to 57% in 2020-21 during the COVID-19 pandemic, before recovering to 78% in 2021-22. The MoD's goal is for this to reach 90%. Defence Digital has recognised the weaknesses in its project delivery and is making improvements.

Defence Digital is on track to exceed its efficiency targets in this spending review period (until 2024-25), but it aims to identify up to £790 million more by 2032-33. Its formal target is to achieve £1,370 million of efficiencies by 2032-33, but its ambition is to achieve £2 billion. Defence Digital's performance in making these efficiencies will affect the funding available for the MoD to invest in its priorities, including the strategy.

The MoD does not have enough people with the right digital skills, which is affecting delivery of the strategy. It finds it hard to recruit and retain talent because it cannot match private sector pay, and because the pay scales available to digital specialists in government vary. Technologists see the MoD as bureaucratic and the hiring process - including getting security clearance - as too lengthy. The shortfall of technical skills is affecting the delivery of both individual programmes and the strategy. Defence Digital is trying several approaches to fix its skills gap, but its progress has taken longer than planned, and it requires a different approach to getting what it needs.

To implement the strategy by the target date of 2025, the NAO recommends that the MoD should immediately create a clear delivery plan for the strategy which:

• makes clear how the strategy integrates with its wider objectives;
• identifies and prioritises all the activities needed to achieve the strategy's outcomes;
• identifies what people, skills and funding will be needed; and
• sets clear performance indicators for the strategy's progress.

Gareth Davies, the head of the NAO, said:

"The Digital Strategy for Defence aims to transform capabilities through people, technology and data. If implemented successfully, it should support the seamless sharing of data and coordinated decision making needed for modern warfare.

"However, the MoD faces ongoing challenges with its implementation of major technology programmes and acquiring scarce digital skills. The MoD needs a clear plan for prioritising resources to where they are needed most urgently if it is to deliver its ambitions for digital transformation."

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Notes for Editors

1. Through the Defence Digital Strategy the MoD wants to achieve three strategic outcomes by 2025, which are:

• a digital ‘backbone' - the technology, people, and organisational processes that will allow the MoD to share data easily and securely with decision-makers across defence;
• a digital ‘foundry' - a software and data analytics development centre; and
• an empowered digital function - a skilled and agile community of digital specialists.

2. The NAO's work on implementing digital change across government stresses the need for an overall plan for how an organisation can transform itself, which clearly sets out the associated ambition and risk. See The challenges in implementing digital change (July 2021).