Title: Agility and Value for Defence
Authors: Dr Nicholas Whittall & Philip Boxer
Where published: RUSI Defence Systems
Cohesion-based costing (CBC), in contrast to activity-based costing, offers a means of uncovering the real costs of meeting ranges of operational demand by tracing from a range of decisive points in the context of use throughout the Enterprise to locate the entities contributing to the military effect. This extends through, inter alia, procurement networks, development, force elements, lines of command, to uncover where value is created and thus locate opportunities for flexibility in the contributing entities to deliver agility in the contexts of use. From the perspective of a variety of scenarios, the cohesion costs of a particular type of decisive point will vary over some range with some varying probability, creating a probability distribution of cohesion costs.
This offers a means to attach a value to the cost of introducing flexibility. The value will be related to the impact the flexibility has on the agility of force structures, measured by its impact on the probability distribution of cohesion costs. The cost of the flexibility and the value of the ensuing agility provide the grounds for a commercial transaction and, ultimately, a means by which value-for-defence may be assessed.