New Deloitte Aerospace & Defense Study Finds Root Causes for Cost Overruns

  • (Source: Deloitte)
  • 12:00 AM, November 20, 2008
  • 1802
WASHINGTON --- New analysis from Deloitte on Major Defense Acquisition Programs indicates an imminent need for the Aerospace and Defense (A&D) industry to reexamine their acquisition process or risk facing cost overruns that may exceed 46 percent in 10 years, up from 26 percent today.>> To help the A&D industry keep their programs on schedule and within budget, Deloitte today announced some key best practices. According to Deloitte, these practices can help the industry address each of the five root causes that lead to cost overruns and schedule delays, which include technical complexity, talent shortage, supply chain challenges, politics and program management challenges.>> "Program management and execution problems have become too big to ignore," said Tom Captain, vice chairman, Global and U.S. Aerospace & Defense leader Deloitte LLP. "Countless reports and studies prove that the problem has worsened over time, and that significant, transformational changes need to be made so the A&D industry can afford its own future. This study identifies the root causes and outlines what changes need to be made in order to resolve the systemic challenges.">> While technical advances make it possible to develop incredibly powerful and sophisticated weapons, this increased functionality also makes it extraordinarily difficult to manage the product development process. According to Deloitte, both industry and government can tackle the issue of technical complexity by doing a better job of specifying requirements, using mature technologies, dividing programs into simplified work packages with shorter durations and by creating budgets that reflect technical complexity, risk and realistic assumptions.