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Activity title

Cost analysis of Information and Communication Technology

Activity Reference

SAS-ET-EB

Panel

System Analysis and Studies

Security Classification

PUBLIC RELEASE

Status

Planning

Activity type

ET

Start date

2018

End date

2019

Keywords

Cost analysis, Cost modelling, Information and Communication Technology

Background

Like most other sectors within our societies, information and communication technology (ICT) is of increasing importance within modern armed forces. ICT systems are key to operational advantages like fast and well-informed decision cycles and robust communication, as well as to effectiveness within supporting and administrative functions. Information and communication technology develops at an extraordinary fast pace, not least driven by enormous research and development by civilian actors. Armed forces can exploit this development, but also face unique challenges, e.g. in operating and connecting systems in potentially harsh environments. Also, compared to many other military capabilities, ICT-capabilities are not necessarily separate units because they are integrated as a part of other weapon systems. The growing importance, speed of change, and complexity in military ICT systems represent a significant challenge to modern armed forces. From the civilian side of our societies, we know that IT-projects often experience cost overruns, time delays and benefits shortfalls. These problems are just as relevant for military projects and could even be deeper due to the need for complex integration between heterogeneous systems in highly contested environments. Our knowledge on cost analysis of ICT systems is far more limited than on most other parts of military forces. Due to the speed of change and complexity of such systems, other analytical methods may apply than traditional methods used for estimation of both investment and operations and maintenance costs. More knowledge on cost analysis of ICT systems will strengthen defence planning, investment decisions and budgeting.

Objectives

The goal of the activity is to explore the methods used to estimate the future costs for ICT for military organizations as well as the methods used in the civilian sector, and to identify the best method or best practise for estimating costs for military ICT systems. As cost overruns and time delays are intimately linked, the activity will also explore methods for estimating and/or evaluating a realistic time schedule for acquisition and implementation of ICT systems. There is also a need to formulate common ground rules on the scope of the costs that should be included when estimating investments and operating costs for ICT.

Topics

Information and communications technology, Cost breakdown structure, Life cycle costs

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