Aerospace and Defense:

Navigating the shift to servicesRising to the challenge of availability contracting

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Defense: higher availability and performance at lower cost As a result, the A&D industry worldwide is facing a challenging transition away from traditional manufacturing supply contracts, and towards more innovative services-based contracting models — especially spares-inclusive, outcomes-based contracts measured and remunerated on the basis of availability and capability, also known in the US as performance-based logistics (PBL) contracts. To varying degrees, the industry has been on this journey towards services-based contracts for more than a decade.

Government agencies such as the US Department of Defense (DoD) and UK Ministry of Defence (MoD) are using these contracts as a way to drive better performance from their suppliers and platforms at reduced cost. So governments are looking to defense contractors to play a key role in supporting both the end-goals of their military programs, and also their drive to improve public finances.

Commercial aerospace: rising demand for through-life contractsIn common with defense contractors, commercial aerospace original equipment manufacturers (OEMs) are also facing a need to migrate towards a services business model, albeit for different reasons.

On the customer side, the larger established airlines have already built the means and capabilities — maintenance, upgrades, additional engineering — to manage and maintain the product through its lifecycle. However, the business model of the newer entrants to the airline market, both at the low-cost and premium ends of the market, is focused on transporting growing numbers of passengers rather than maintaining aircraft. As a result, these players are primarily interested in availability, and are seeking full-service contracts from the OEMs whose products they buy

— although the OEMs do not always possess the capabilities to meet this demand fully themselves.

Concerns over maturityAnother factor is that airlines are looking to reduce their risk and exposure to any lack of maturity in new aircraft platforms. Given the delays in a number of recent product development projects, airlines are concerned that they may be faced with a major maintenance effort after purchasing these new aircraft, including a need to hold a large and expensive inventory of spare parts. To mitigate this risk, they are asking OEMs of newly developed aircraft to agree to full-service contracts covering availability, spare parts inventory and maintenance.

Both of these drivers of the shift to service contracts in the commercial aircraft sector can also be seen in helicopters — where the larger operators are seeking to reduce the risks and costs of moving to new platforms, and the smaller players do not have the capital to invest in building maintenance capabilities.

When the US Department of Defense released its latest Quadrennial Defense Review in early 2010, the document confirmed what most executives in the Aerospace & Defense (A&D) industry already knew: that the pace of change facing A&D companies in their dealings with governments will continue to accelerate. This trend is also evident in other government reviews of defense policy and spending across the world, including the Strategic Defence Review currently under way in the UK, and parallel reviews in countries such as Australia and France.

All these reviews underline the fact that cost and operational pressure is creating far more complex decisions in which the role played by the A&D original equipment manufacturers (OEMs) is expected to be broader and deeper. True, government defense agencies still want robust, effective and innovative platforms. But they are also increasingly looking to their A&D contractors to help them maintain program readiness, achieve specific mission-based outcomes, and reduce costs.

New priorities for a new world

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New priorities for a new world

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The implications for A&D companiesA sweeping transformationAbout a decade ago, leading A&D companies worldwide identified the shift from products to services as a profound and far-reaching change for their businesses, striking to the heart of how the industry has been structured since the end of World War II. Rather than simply manufacturing and delivering products and spare parts, A&D companies must now provide a suite of services around those products to help their customers achieve program cost and performance goals.

To adjust to this change, many A&D companies have been actively shifting their business model from one centered on products and programs, to one where services are used to differentiate, lead and/or wrap the products — ultimately even seeking a position where the services are the products (see Figure 1). However, to date most companies — with a handful of notable exceptions — have not achieved the degree of transformation they have been seeking.

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Figure 1: Evolving positioning for A&D companies

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The prize on offerTo be high performers in the new services-led environment, A&D companies need to transform themselves on several fronts—including how they innovate around products and services, how they bring these products and services to market, and how they nurture the skills needed for success. Those who successfully embrace and execute these profound changes will reposition themselves for high performance in the future. However, any players who fail to achieve this transformation may find themselves struggling to catch up.

In our view, one A&D company that has achieved a measure of success in transforming itself into a services-led business is VT Group, which today describes itself as a “government and critical support services company”. Other industries provide many examples of companies that have achieved a similar change. IBM is an obvious case in point, having transformed itself from a computer hardware manufacturer into a leading global IT services provider — a journey also currently being undertaken by HP. Likewise, Nokia is migrating from handset manufacturer to mobile services.

Experience shows that companies that transform themselves successfully from manufacturing to services tend to do so through four differentiating characteristics. The first is highly customer-focused account teams adept at building strong, trusting and durable customer relationships. The second is deep pools of expertise that can be re-used across multiple accounts and shared best practices. The third characteristic is the ability, processes and tools needed to create and manage virtual project teams specifically tailored to customer needs. And the fourth is having measures and incentives in place on a business and individual level, to reward and encourage delivery of high quality services, and bringing forth the right aspects of the firm for a particular customer anywhere in the world. Despite their efforts in recent years, most A&D companies are still some way from developing all four of these characteristics.

Rising to the challenge of services…Aside from these success factors, the underlying differences between product and services companies have been well documented. The most obvious example is that product companies emphasize features and functions — while services companies emphasize their intellectual capital. Moreover, the mindsets and cultures of product and service companies are quite distinct. Services involve a fundamentally different conversation between seller and buyer, and tend to allow greater ‘stickiness’ in the customer relationship. Trying to sell service models with a product mindset tends to prove ineffective or simply confuses the customer.

As well as having to foster and embed a new mindset, established A&D manufacturers also come up against a further challenge when trying to compete in services: the high embedded overheads imposed by their own corporate operations and activities, such as heavy ongoing investment in R&D. In moving into the services space, A&D manufacturers find themselves competing with ‘pure’ services businesses that do not need to invest in developing the next generation of fighter aircraft or armored personnel carriers, and are therefore able to operate at lower margins when pricing service contracts for customers.

…by moving from a ‘cost center’ to ‘profit-and-loss’ mindsetAll these operational, organizational and structural challenges mean a successful migration to services requires a fundamental change in how management views and runs the business. Under the traditional product-oriented approach, each program operates as a cost center drawing on the funds of a cost-plus award fee contract. In contrast, a services business demands an approach in which cost centers give way to aggressively managed profit-and-loss centers.

This change in cost model is already under way in the A&D industry, and can be seen in the ongoing transformation of original equipment manufacturers (OEMs) into original equipment providers (OEPs). The key strengths of OEMs traditionally lie in their integrated manufacturing capabilities and devotion to internal engineering excellence. OEPs, on the other hand, generate value by managing component suppliers, overseeing final assembly, leveraging information technology and delivering services that sustain products over their lifetimes.

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As A&D companies navigate their way through the transformation to a business model based on services, what are the most important issues they will need to tackle? In Accenture’s view, there are seven key factors that will determine the success or failure of the transition: strategy; service offering development; business case development and financial modeling; leadership; contract management; capability; and management of external relationships, including suppliers, partners, and post-merger integration.

These issues are summarized in Figure 2. In addressing each of them, A&D companies will draw on the four key characteristics we highlighted earlier of companies that transform successfully from manufacturing to services — namely highly customer-focused account teams, deep pools of re-usable expertise, the ability to create and manage virtual project

Key issues in the shift to servicesteams, and measures and incentives that reward and encourage delivery of high quality services. We will now examine each factor in turn.

1. StrategyEstablish clarity about the strategy, and verify that the services strategy is aligned with corporate strategy It is vital to identify clear strategic objectives at the start, since the strategy will determine the approach to the other five key success factors in the transition to services. Management should begin by defining the organization’s strategic purpose, and then creating a vision and mission around how it will be achieved. The next step is to create a robust business case around the contracting model for the services that will secure the business’s revenues and enable it to execute the strategy going forward. For example, if the business

will be unable to fulfill services-based contracts profitably, then the model under which services are provided will need to be rethought.

With the strategy and contracting model defined, management can then determine the shape of the organization that will execute both of them. This involves deciding what elements of the operating model are core and non-core, providing the basis for decisions on which activities should be kept in-house as critical capabilities, which should be outsourced, and — potentially — which capabilities might be retained in-house but offered externally as a new revenue stream. In cases where new critical capabilities are needed, management needs to decide whether to ‘buy’ or ‘make’ them, or alternatively whether to partner with a suitable third-party that can provide access to the required capabilities.

Figure 2: Key success factors in the transition from products to services

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Where the chosen option is to buy, then pre-merger due diligence will be conducted, acquisition deals negotiated, and post-merger integration conducted. A good example of capability acquisition in action in A&D was BAE Systems’ £531 million purchase of Detica in 2008. This allowed BAE Systems to secure a strong position in the fast-growing information intelligence and homeland security space more quickly than would have been possible by building such a capability in house.

2. Offering developmentDefine and articulate the service offerings to customers.Under the traditional cost-center mindset, the relationship between A&D companies and their customers was defined by the RFP and contracting processes, ultimately leading to delivery of the required products. The shift to a service-oriented profit-and-loss model raises a new set of considerations, meaning it is vital to establish a clear definition and articulation of what elements actually make up the service offering to customers.

The company will also need to develop new sales strategies and revamp its sales forces based on a focused and disciplined methodology for selling services. This change reflects the need for the transition to services to be supported by highly customer-focused account teams adept at building strong, trusting and durable customer relationships. Sales representatives and account managers will need to learn how to differentiate their company from its competitors, and clearly articulate a services value proposition to potential customers. Processes must be established for keeping track of changes in the services marketplace and amending the sales strategies accordingly.

3. Business case development and financial modelingConduct financial analyses to prove that the shift to services makes good business sense To verify that the move into services will be beneficial in terms of value creation and profitability, the business will need a new approach

for developing business cases and modeling financial scenarios and outcomes. For example, some services contracts involve heavy initial expenditure that is then earned back at a profit over ten years or more. The need to finance such deal shapes demands a very different approach from selling equipment, and impacts the mix of internal and—possibly—external financing used to fund the early stages of the contract.

Getting this approach right is all the more important given the structural challenge that we mentioned earlier, with A&D companies potentially finding that their ability to compete with ‘pure’ services suppliers is hampered by their own high embedded corporate costs, such as R&D investment. Furthermore, lower margins in some service provision contracts mean that profitability is very sensitive to changes in variables such as contract length, delays in delivery, or raw material cost changes such as fluctuations in the oil price. This sensitivity is a risk that has to be understood and managed.

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4. LeadershipHave credible and committed leadership in place to drive the services agenda and to enthuse and energize the workforce about the shift to servicesRobust and visible commitment from senior management is important to the success of any major change initiative in any industry. However, few change initiatives in major corporations are as pervasive or all-encompassing as the task of piloting a long-established world-class manufacturer into the services space. This means energetic and inspirational leadership is all the more important.

In many cases, this leadership is provided by a single individual who combines a compelling vision with the drive to see it through. There are examples of these dynamics at play, both within and outside the A&D industry. When IBM made its concerted move into services, IBM’s CEO at the time, Lou Gerstner, appointed Sam Palmisano to lead the change. Announcing the appointment in January 2002, Gerstner commented in a statement: "Over the last decade, Sam Palmisano has taken on a number of IBM's most significant challenges, from building the services business to transforming our server line…He has made it both his personal mission and that of IBM to

become the No. 1 competitor in each of these markets." The subsequent success of IBM’s services group has been well documented.

Within A&D, Miles Cowdry has led the concerted drive into services by the UK-based power engineering manufacturer Rolls Royce plc, whose Services division now accounts for 50% of Rolls Royce’s overall business. Before taking over as Director - Global Corporate Development at Rolls Royce in December 2008, Miles Cowdry was President - Services, where he was responsible for developing the company-wide services strategy. His prior experience included being President and CEO of Data Systems & Solutions DS&S, which provides asset management and plant optimization solutions to aerospace, defense, marine and energy companies. It is widely thought that Miles Cowdry’s previous experience running DS&S has been a key driver behind the growth of Rolls Royce’s services business.

5. Contract managementEstablish a clear, robust and profitable approach to contracting, contract management and improving operational performance.Moving to a services model requires a fundamentally different approach to the creation of value propositions for customers. Rather than selling hardware, the focus in on effectively and consistently providing services that increase availability, heighten combat readiness, and regenerate combat power to generate new profitable revenue streams. Also, with a limited number of new platforms currently under development by military agencies and A&D suppliers, the emphasis has shifted to supporting and maintaining the existing equipment base.

These shifts have a major impact on the way contracts are constructed, managed and fulfilled. Contracts now need to allow for active monitoring and measurement not only the performance of systems and platforms, but also the performance of programs, verifying that customer-

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up and operate intelligent service contracts with defense agencies that can deliver a win-win for both sides. Mechanisms should also be applied to reduce contracting costs, including establishing a clear up-front definition of customer needs, and using existing and/or repeatable processes, systems, and other assets within new contracts.

6. CapabilityBuild or acquire the capabilities needed to execute the services strategy, through effective change management encompassing people, processes, locations, data, information system (IS) enablement and technology.Change management and workforce transformation — The journey towards becoming a service organization needs people to lead, support and execute that change at all levels. This places new demands on how A&D companies acquire, align, evaluate and develop their workforces. To make the transition successfully, the entire organization needs to be engaged in a new mindset and model around the new vision. The strategy must be clearly branded

and articulated internally, and a communications and engagement program conducted to verify the workforce understands and supports the change rather than misconstruing and resisting it. Employees also need to be clear on the role they will play and how they can succeed in the new environment. New and additional skill requirements be needed to support new value propositions, meaning re-training/re-purposing of the workforce is key.

Attracting top services talent and skills may be a challenge, given that the company will still be perceived in the external recruitment market primarily as a product manufacturer. And while hiring new talent may help drive the change, it is only part of the answer. To achieve effective alignment between the organization and the services vision, A&D companies will need to look beyond traditional HR activities, to fundamentally change their corporate culture to one that is driven to identify and serve customer needs. As well as fostering a profit-center mindset, this means ensuring that people have access to the knowledge and tools needed to provide the right levels of service to their customers.

mandated levels of system/platform uptime are met. There should also be provision to develop, measure, and report upon program metrics while the program is “in flight”, along with flexibility to innovate and incorporate new elements. This can enable ongoing operational improvements and possible expansions in scope during the term.

Effective profiling and management of program risk in services-based contracts is a further key capability, especially given the fact that these contracts often involve multiple vendors working together. When something goes wrong, such as an accident or failure involving the equipment being maintained and serviced, then the underlying complexity of the contractual relationships and responsibilities becomes clear. So, to bid profitably on availability and performance-based contracts, an A&D company needs to reach an accurate view of the short and long-term risks — both financial and non-financial — that come with assuming responsibility for maintaining asset availability.

By following leading practices such as these, A&D companies can set

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To verify the change to services is fully reflected in customer engagements on the ground, the company will need to define new ways of working and operating model that supports the new business. These are likely to include implementing virtual information processing and technology (IPT); ‘enabling’ technologies such as instant messaging and collaborative tools; and personal and business incentives and measures based around collaboration. To maximize the benefits from these changes, the company should create virtual and connected ‘pools’ of expertise that generate and foster team-based innovation.

Process development — As the portfolio of services develops, it will require new processes, supported by new responsibilities and approaches to risk. Maintenance, repair and overhaul (MRO) — for example — is a critical capability that can be retained and carried out either in-house or via an external partnering arrangement, or a mix of the two. Managing a blend of internal capabilities and partnerships will require refined supply chain and repair loop processing, and different ways of working with the extended supply chain, probably including

the adoption of industry standards for repetitive activities such as maintenance. Standardization will also help the company to reduce inventory and manage arising rates downwards.

Locations — A&D companies are already well versed in moving assets from one location to another. In the new environment, they will need to augment these core logistical skills with a flexible support organization — effectively a mobile field force, similar to the technical crews found in the telecoms and cable industries. To a large extent, this mobile field force will be the company's primary face to the customer. Much of the field force’s work will take place with defense agencies on their premises, representing a major change in working environment for many employees. This reinforces the need for virtual collaboration and communication tools to maintain a sense of teamwork, and to encourage and sustain sharing of experiences and ideas.

Data quality and management — Timely, accurate and complete data is mission-critical to the cost-effective delivery of A&D companies’ service

offerings, and will become ever more important in the future. In the move to service provision, particularly around MRO and supply chain services, the quality of the provider’s data management and analytical capabilities will determine its ability both to meet customers’ service requirements and drive out further costs over time.

Robust data quality and management are essential for tracking the as-maintained bill of material, accurately forecasting demand and inventory needs, and monitoring suppliers. Perhaps most importantly, sound data allows A&D companies to monitor the performance of assets in the field and the overall financial performance of the service program. Companies also need to be aware that poor quality data from defense agencies may impact their ability to deliver against those agencies’ own service requirements.

When paired with advanced prognostic software, sensors embedded in assets can provide advance warning of problems, in turn enabling A&D companies to perform preventative maintenance, thereby sustaining

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higher levels of asset availability. These capabilities can help the A&D company minimize repair costs while complying with service level agreements. Information fed back to engineers can help ensure defect reduction and improved reliability going forward.

Information systems and technology — The vital importance of data makes it essential that an A&D company creates an infrastructure for gathering, recording, managing, and communicating data in near real-time. Furthermore, the shift to services involves closer and continuous engagement with customers, and therefore demands integration with defense agency system. Both the service provider and customer need to share a single source of the truth so that they can jointly view the progress of contracts and assess business intelligence and key performance indicators (KPIs) around contract performance. The vital importance and sensitivity of this information means the quality and security of the data are paramount, as are the resilience, performance and network latency of the underlying integrated infrastructure.

7. Management of external relationships The success or failure of A&D companies’ shift to service contracting depends critically on how well they select and manage their capability collaborations, suppliers, and in-fill acquisitions While A&D companies have historically used external suppliers on a contract basis for a range of specialist engineering activities, the shift to services elevates the need for external capability collaboration, supplier collaboration and targeted acquisitions to a new level. One reason is that service offerings frequently bundle seemingly quite different components together, such as aircraft maintenance, training, and facilities management. Currently, no single company is likely to have all of these available in-house.

Tackling such challenges effectively is key to A&D companies’ long-term success in the new environment. For example, a major commercial aerospace OEM may currently employ up to 95 percent of its workforce in its own engineering and manufacturing plants. The move to a services focus and availability contracting will require OEMs to support customers at their own locations and implement a large and complex logistics flow for inventory. As a result, the new model may result in up to 70 percent of the resources used by the company being outside its own business.

In many areas, teaming with third parties will be the only option. In a highly capital-intensive industry, the core focus of OEMs’ capital expenditure has traditionally been product development, generally with a long pay-back period of six or seven years. A services-based model requires logistics and maintenance capabilities and facilities across the world. If A&D manufacturers seek to develop these themselves, it will involve major expenditure and simultaneously bring them into competition with many of their existing customers, suppliers and capability colleagues — including large specialist maintenance service providers.

Against this background, OEMs will need to apply skilled management and integration of the various components in the services value chain, both in-house and third party. This will demand clear and smart decision-making on who the right partners are, and on the basis on which they work and collaborate with them — including sharing of risks and rewards. Targeted acquisitions may also play a role in building the right value chain to meet customers’ needs.

At the same time, the multi-tier nature of the new services value chain means A&D companies will need to collaborate more actively with second- and third-tier suppliers, verify that all colleagues and customers can work from an integrated workplan, and regularly monitor the status and quality of products and services across the entire value chain.

Other forms of collaboration will also become more important, including outsourcing of non-core processes to achieve lower (and more variable) costs and increased agility. Similarly, trusted offset partnerships on the ground may be vital for contractors serving overseas markets, who find themselves facing offset requirements to invest in the local economies. These relationships may also help to improve overall program profitability by allowing some activities to be shifted to offset colleagues in lower-cost locations.

As we have highlighted above, the ability to identify and execute acquisitions to fill service capability gaps — and then successfully integrate those acquisitions post-merger — is a further key attribute in the services era. For example, General Dynamics 2008 purchase of Switzerland-based Jet Aviation saw GD acquire one of the world's leading business aviation services companies, providing services including MRO, refurbishments, engineering and global executive-jet charter services to the aircraft manufacturing industry and its global customer base. Such complementary in-fill acquisitions in the services apace have been a feature of the industry in recent years.

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environment, while facilitating the right cultural and behavioral changes to support the strategy.

Supply chain development, financial and process change & improvement — supporting rigorous planning, monitoring and management of supply chain performance, together with finance & project management.

Data and Information — helping clients generate the real value from information assets, including application of sophisticated analytics and relevant, actionable business intelligence.

Technology consulting and Systems Integration — implementing, supporting, integrating, and/or providing the technology operations needed to facilitate the service offering and support effective collaboration, both internally and externally with suppliers, partners and customers.

Post-Merger Integration — supporting speedy and effective operational, technology and cultural integration of acquisitions.

Service providers — assisting clients in managing and collaborating effectively with service providers, such as engineering service providers.

Strategic sourcing — Proactive strategic procurement, which takes a category management usage-based approach to overseeing the buying of products and services. It also involves utilizing suppliers’ high performing capabilities to help deliver a reduction in the total cost of ownership of a product or service.

Service Management — This has seven key components:

• Product lifecycle management – Managing the process of product creation from the inception stage,

Through our unique portfolio of solutions and assets, Accenture has the established capability to help A&D companies tackle the entire spectrum of issues arising in the shift to services.

As Figure 3 shows, we can help with issues including:

Strategy development — drawing on our industry knowledge and experience to assist in the development of a clear, robust and deliverable strategy at the corporate and services levels.

Offering development — helping clients define and articulate the service offering to customers, supported by new sales strategies and a refocused sales force.

Organizational change enablement and workforce performance — helping to reorganize, reshape and re-skill the workforce for the services

Accenture’s approach

Figure 3: How Accenture’s portfolio of solutions and services meets A&D companies’ issues in shifting to services

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through product design, and all the way to the end of life product retirement stage. Verifying that in-life enhancements / design changes are managed appropriately through the lifecycle of the product or service.

• Spares management – Managing the provision of spares parts to support the in-life maintenance of any product or service. Verifying that the correct level of stock is held in the right place at the right time and at the correct volume.

• Availability contracting – Contracting the availability of a product or service, whereby the buying organization is paying for the product or service based on its availability on an ‘in-life’ basis. The supplier is responsible for providing a comprehensive service based on forecast usage and required service levels, making it accountable for managing the in-life cost elements during the fulfillment of that service.

• Reverse logistics – Managing the flow of products back from their point of use to the point of original dispatch or alternatively the location for holding, storage or repair of used stock.

• Asset management – Tagging and tracking the identity of a product to verify that information is readily available on that product on a distributed basis to support decisions that need to be made for maintenance purposes. This includes equipment performance monitoring, and planned, unplanned, and predictive maintenance planning and scheduling.

• Repair, return & warranty management – Tracking of the warranty life period of products to verify the correct warranty claim procedure is invoked at a point of failure with either in-warranty or out-of-warranty products, and verifying the original equipment manufacturer is held accountable for providing the appropriate cover at that point of failure, under the correct commercial terms.

• Field force enablement – The scheduling, routing and dispatch of field engineers and the management of work orders to keep field force utilization operating at a high level.

Why you should talk to AccentureAs world-class A&D company with deep and long-standing relationships with defense agencies, you can draw on Accenture’s industry experience and knowledge to support your successful transition from a product focus to a services orientation.

Why should you trust us to deliver on this? Because we are already helping many leading A&D companies across the world to navigate this journey. And because we also work with defense agencies, so we understand their needs and expectations.

We could quote many examples of our work, but here are just two. Together with Accenture, BAE Systems is helping the United Kingdom Ministry of Defense (MoD) introduce availability contracting to the Royal Air Force's fleet of Tornado aircraft. Under the ATTAC (Availability Transformation: Tornado Aircraft Contract) program, BAE Systems has contracted with the MoD to improve the availability of the Tornado fleet for frontline operations, while considerably reducing the cost

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of fleet maintenance. By bringing to bear Accenture's experience in IT integration, performance management and supply chain management along with our Program Profitability and Capabilities Based Lifecycle Management assets, BAE Systems is in a position to help realize key aspects of the UK Defense Industrial Strategy and to secure work on future availability contracts for other complex MoD programs..

On the defense agency side, our clients include the United States Air Force. Together, Accenture and partners are working with the U.S. Air Force to develop net-centric operations that yield more informed decision-making capabilities and foster high performance in command and control functions. Accenture helped transform individual disparate C2 systems at 19 Air Operations Centers around the world into a standardized, smooth, integrated enterprise. Interoperability across the multiple centers will enable faster access to intelligence, surveillance, reconnaissance and targeting, and will also assist Air Force commanders with real-time, common operational views of all air and space weapon system operations throughout the global battlefield.

Navigating a changing industryAs we have described, A&D companies are moving into a new era — one that brings new challenges and opportunities. To achieve high performance, they will need to shift their businesses from pure manufacturing to a blend of manufacturing and services. This means moving away from a cost-center model to a profit-and-loss model. It also means realigning their people, their products and services, and the processes involved in bringing those products and services to their customers.

Defense agencies have made it clear that they expect A&D companies to help them achieve their program and mission goals at a lower cost. Those companies that transform themselves into agile, services-oriented partners will be positioned to drive sustainable results and achieve higher levels of performance in a rapidly changing world.

To find out how Accenture can help your A&D business reshape and reposition itself for the services-led future, please contact: Mark R Newall Tel: +44 207 844 3140

All rights reserved © Accenture 2010. Accenture, its logo, and Accenture High Performance Delivered are trademarks of Accenture. This document is produced by consultants at Accenture as general guidance. It is not intended to provide specific advice on your circumstances. If you require advice or further details on any matters referred to, please contact your Accenture representative.

Copyright © 2010 Accenture All rights reserved.

Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

About Accenture Accenture is a global management consulting, technology services and outsourcing company, with approximately 204,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$21.6 billion for the fiscal year ended Aug. 31, 2010. Its home page is www.accenture.com.