MoD goes online in £45m procurement manoeuvre

The Ministry of Defence (MoD) is to invest £45m in an online trading platform as part of a ten-year ecommerce strategy.

The Defence Electronic Commerce Service (DECS) project, which will allow the MoD to tender its procurement requirements on the internet, is a central part of a cost cutting measure that should save the department up to 20 per cent over the next five years.

At Friday's launch the minister for armed forces, John Spellar, welcomed the move, and told silicon.com how he hoped the department would benefit.

"We want to make sure we're getting our services cheaper and that we're getting value for money, but also we want to ensure we're getting the best possible relationship with our suppliers. That way we will be able to get our platforms working properly and use the extra money we've got in the defence budget to re-equip our forces and sustain the equipment," he said.

Spellar envisages the DECS platform will eventually be used to trade with sectors outside the military field, such as other government departments and commercial bodies in the aerospace industry.

Cap Gemini Ernst & Young is working closely with the MoD on the project, and according to David Galloway, its UK executive director, online procurement in the military sector is potentially worth £400m to £500m over the decade.

The project is a big departure for the MoD, as it currently operates a scattered network of over 800 internal websites and has failed to rationalise procurement orders into a single database.

Maurice Abell, UK CEO of Cap Gemini Ernst & Young, told silicon.com that one of the largest challenges facing the project was the bureaucratic nature and low technology awareness of the defence department.

"It will be really important to get some quick wins in this and to get the platform established. We need to get those in the MoD working with this comfortable adapting. There will be some potential problems with that because there is an inertia in the department at the moment," he said.

Major General Tony Raper, head of the DECS project, admitted that a dramatic change in the culture and practice of the workplace would be the biggest challenge facing the department, although he confirmed the MoD was committed to making the department an ebusiness-enabled organisation.