With sequestration having an impact on these industries from both a budget and merger & acquisition (M&A) perspective, the economics of cloud computing are becoming even more attractive. Teri Takai, CIO of the Department of Defense (DoD) published the DoD Cloud Computing Strategy in July of last year and many of its findings are reflected in the current state of cloud adoption in A&D. She recently published the presentation DoD CIO’s 10-Point Plan for IT Modernization, which is available for download from the department’s website. The following is a summary of key DoD IT Modernization initiatives.
It’s ironic that two industries who are highly reliant on collaboration often have the most siloed legacy systems, processes and IT infrastructures. As one aerospace executive told me recently, the industry sees cloud computing as solution to what many call “silos of excellence” that slow down progress. Aerospace executives also speak of security concerns, especially in the area of globally-based defense support and logistics platforms.
Greater Collaboration, Lower Costs
Defense Information Systems Agency (DISA) Director Lt. Gen. Ronnie Hawkins Jr. was recently interviewed by Defense News, and his comments reflect what is often heard from aerospace and defense companies as well. He says a more enterprise-wide approach to managing information systems is needed to break down functional and service-unique barriers of the past to increase collaboration. He’s also leading the DISA in partnership with the Defense Logistics Agency (DLA) to attain a 20% cost reduction in his agency, relying in part on cloud computing to reduce costs. Consolidating down to one e-mail system, virtualizing applications in a hosted environment, and moving capabilities to the cloud are integral to achieving the 20% cost reduction. Ultimately he sees the DISA becoming a cloud service broker.
How A&D Requirements Are Turning Into A Catalyst for Greater Cloud Security
Lt. General Ronnie Hawkins’ comments reflect the concerns defense agencies and their supply chains have regarding cloud security. He highlights the need for close coordination with the commercial, private sector cloud computing vendors to ensure the cloud security architecture requirements of the DISA are reflected in future product designs. DISA requirements apparently outpace those available from commercial, private sector vendors. This is encouraging, because it means A&D’s requirements are a catalyst of continued improvement in cloud computing security.
The American Institute of Aeronautics and Astronautics (AIAA) held Aviation 2013 in Los Angeles this week where their AAIA Framework for Aviation Cybersecurity was presented. The framework shows why security is so critical to commercial and defense-related aviation in financial terms. For the A&D industry to get the full value of cloud computing, commercial cloud computing vendors have got to invest heavily in security research & development (R&D) to keep pace with this industry’s requirements.
How Cloud Computing Is Revolutionizing Aerospace And Defense
In speaking with aerospace executives and following defense-related adoption of cloud technologies, these are the top ten ways cloud computing is revolutionizing the A&D landscape:
- De-Siloing Quality and Compliance Management across production is leading to greater supplier audit consistency and reduced compliance reporting costs. While visiting one defense contractor, the CIO mentioned how on-premise compliance and quality management systems had become siloed over time and of limited use except for one area of production. He explained it would cost over $700K to get the on-premise system integrated to their enterprise-wide ERP system. Clearly having a cloud-based quality management and compliance system would avert the $700K integration cost and reduce reporting workloads. Today this contractor manages International Traffic in Arms Regulation (ITAR) compliance with manual workflows despite having a quality management system in place.
- Mobile Device Management (MDM) has moved beyond dashboard support for smartphones and tablets to being integral for product design and managing production. The two facets of mobility most affecting A&D include designed-in support for situational and battlefield awareness systems including Enhanced Position Location Reporting System (EPLRS) support and increasing reliance on mobility platforms for streamlining production data management including Computer Aided Design (CAD) design files used as part of Bill of Materials (BOM) and work instructions on the shop floor.
- Reducing tooling costs using cloud-based platforms is accelerating. It is common to find up to 67% of total development cost for a given commercial aerospace contract being attributable to tooling costs alone. Cloud-based systems have been able to significantly reduce tooling time and costs by saving prior configurations and by being integral to calibrating machine tools on the production floor.
- Higher priority being placed on virtualized applications across the DoD including data centers with cloud-ready infrastructure supporting secured applications. The DoD is planning for a transition state that includes consolidation and virtualization of legacy applications, many of which are very costly to maintain. The following graphic shows the planned progression the DoD anticipates in migrating their data centers to an enterprise cloud infrastructure.
- Chief Information Officers (CIOs) realize they must become strategists and move beyond being the caretakers of legacy systems if their careers are going to survive and thrive. Resistance to change is very strong in many A&D companies, and often the systems running production can be decades old. CIOs and their staffs fall into a rut of being caretakers of legacy systems when what’s best for their careers is to push themselves past that role and into being strategists. CIOs confided in me that keeping legacy systems running can get pretty boring; several want a new challenge and a chance to contribute more.
- The silent majority of cloud implementations in A&D are in highly secured vault areas and hidden from view in denied environments. These systems are contained in secured clouds and are most often used in project management of advanced aerospace and defense engineer-to-order projects. They also often have project-based management systems running entirely secured within a given work area. Consortium and global-based product and program development projects are entirely managed on cloud-based systems behind multiple layers of security as well. These are the silent majority of cloud adopters in A&D.
- The A&D industry is losing patience with its “cylinders of excellence” as sequestration brings urgency to make collaboration pay. Breaking down the silos that slow down collaboration, cross-project reporting and limit supply chain visibility are a high priority for many aerospace executives especially. As one jokingly called the “cylinders of excellence” the greatest impediment to growth, others have mentioned how cloud computing applications and platforms break these down by making data locked in legacy systems available project, division and company-wide.
- Department of Defense (DoD) requirements for cloud security are outpacing what commercial providers offer today, forcing a faster pace of innovation that benefits everyone. Based on the comments from Lt. General Ronnie Hawkins and from the many discussions held with CIOs and CEOs of aerospace suppliers, it’s clear that many of their requirements surpass off-the-shelf cloud security platforms today. In many cases they surpass Service Level Agreement (SLA) levels as well, requiring custom development. This is good news for cloud computing overall as the DoD will continue to push for higher levels of security over time. SLAs, ITAR compliance, and AS 9100 REV C. compliance are just the beginning.
- Cloud-based consolidation of collaboration applications is the “low hanging fruit” of cost reduction in defense agencies. As Lt. General Ronnie Hawkins said, he looks to e-mail consolidation and reliance on the cloud computing to assist with a 20% reduction in costs for DISA. The DoD Cloud Computing strategy also mentions this as one of the key strategic objectives for the department over the long-term.
- Automating Maintenance, Repair and Overhaul (MRO) workflows using cloud-based systems that include mobility support are leading to reduction in inventory levels while service levels increase. MRO is where the majority of A&D manufacturer make their highest gross contribution margins yet also have the greatest exposure to customer churn and attrition. Cloud-based MRO systems are being used today to enable MRO process performance gains by reducing inventories, increasing service levels, improving the design of service strategies all leading to more integrated MRO strategies corporate-wide.