Original Post Date: Wednesday, October 1, 2008

 As I prepare my remarks for the first PRICE Systems International Symposium and User Group Meeting in Asia hosted by the PRIGENT corporation, I am astounded by the recent globalization of the Defense Industry.  Worldwide weapon systems acquisition has been permanently changed by: 

  1. the merger of US defense contractors in the 1990's,
  2. the entry of European contractors into the US Defense Industry (EADS, BAE) in the 2000's, and
  3. the entry of Korea into the global market happening now.

Today, BAE Systems is the sixth largest U.S. defense contractor, U.S. defense contractors dominate European Defense top-ten lists and S. Korea is building its global customer portfolio, including Turkey. Among of the greatest challenges to this newly globalized industry are communication and understanding between customers and contractors, and among the internal organizations within a multi-national corporation. Defense procurement agencies and contractors wishing to succeed in this new world must adopt new communication strategies. 

One of those strategies will be evident at our event.  Negotiations to set the right price and to determine the ensuing operation and support costs are difficult in this environment.  Cost models, which work in the precise global language of mathematics, are the Rosetta Stone in the procurement Tower of Babel.  At our Symposium TruePlanning and the PRICE models will be the common language among Defense procurement professionals from around the world. And they will have little trouble communicating and understanding because the models distill their differences down to a universal set of cost drivers, activities, and resources common to all projects. We will discuss estimating software costs, IT project cost estimating, the effect of software development tools, the challenges of project planning and budgeting - and there will be understanding. When we used acronyms to name our model parameters, an arcane term like ECMPLX (engineering complexity) became the global term for describing the technology maturity and engineering experience of a development task.  Today, our clients from around the world have a universal understanding of our model parameters and can communicate and negotiate effectively using our cost estimating software.  Everyday, I see evidence of vast productivity improvements when multi-national companies and international procurements standardize on our models and cost management software, establishing a common language in the midst of diversity. 

Is it like a Tower of Babel where you work? Consolidation is occurring in nearly every industry today, so think about the efficiencies that can be gained through standardization?  ...communication?  ...immediate understanding?  As you improve communication and understanding, you will become more productive and estimate more accurately.