Cost by Capability: Funding the Right Mission Capabilities in a Cost Constrained Environment
In an environment of increasing demands on constrained resources, it has become imperative that Department of Defense (DoD) organizations be able to correctly identify the cost and proper allocation of resources across units to provide a sustained level of mission readiness. As operational units train and deploy across the globe, it is important to provide decision makers with the processes that will enable, implement, measure, and manage cost-wise readiness objectively. Connecting cost analysis to a readiness reporting model – such as the Defense Readiness Reporting System (DRRS) – represents a significant advance in ability and opportunity to inform enterprise leadership of the true cost to operational readiness in order to support more effective planning and decision making.
As a means of meeting our national security requirements yet reducing the cost of war, the DoD has placed an increased emphasis on understanding and reporting the readiness of mission capabilities. This shift in focus allows our nation’s military to be as agile and flexible as our enemy. Having a clear understanding of the cost of capabilities, and the applicability of these capabilities, is essential in planning for and justifying the budgets of these adaptive forces.
Cost by Capability provides sufficient granularity to enable improved resource tradeoff analysis with required costs to procure and support appropriate levels of resources based on mission requirements and current funding levels. By displaying resource costs by task or mission in a standardized form, the organization is able to support decision making and apply appropriate resources within and across operational units and at various levels within the organization to optimize and improve ability to meet changing mission and capability demands with a constrained budget. This level of granularity is essential as many times resources for a single combat unit are required for more than one capability and it is critical that costs are not double-counted.
Our presentation will talk about:
– The importance of providing decision makers with Cost by Capability
– How we develop our Cost by Capability figures across PESTO pillars (Personnel, Equipment, Supply, Training, and Ordnance)
– Potential improvements to our algorithm
– Expected benefits of Cost by Capability analysis and reports
– More advanced analyses available using Cost by Capability as an input
Booz Allen Hamilton
An employee of Booz Allen Hamilton, John Scardino is currently working as a member of the Norfolk Business Analytics team on the Readiness and Cost Reporting Program (RCRP) for the Navy Expeditionary Combat Command (NECC). His duties include the development of Earned Readiness and Cost Analysis support across Personnel, Equipment, Supply, Training and Ordinance (PESTO) pillars.
John graduated Penn State University in 2007 with a Bachelor’s of Science in Information Sciences and Technology and a focus on Integration and Application. While studying at Penn State John worked part time at the Office of the Bursar and also volunteered as a webmaster, team manager, and Assistant Coach for the school’s ACHA Division II hockey program. Prior to joining Booz Allen, John worked for EDS Corporation’s office in Chesapeake VA as a data and systems analyst as well as a small projects manager.