PARTITIONING NATIONAL DEFENCE INTO PORTFOLIOS Les Vencel 1 , Terry Moon 2 and Stephen Cook 1 1 Systems Engineering and Evaluation Centre, University of South Australia Mawson Lakes SA 5095, Australia 2 Defence Science and Technology Organisation PO Box 1500, Edinburgh, SA 5108, Australia Abstract. Partitioning national Defence into portfolios, where key capabilities and activities are appropriately aggregated together, has been suggested as an effective way to manage national Defence. This paper examines in detail the application of a heuristic approach to achieve this, assessing the efficacy of various ways of partitioning national Defence using the established heuristics of systems architecting. The insights gained may then be applied to configure or refine the structure and to establish linking of the portfolios. INTRODUCTION In a previous paper Moon & Cook (2001) examined the challenges facing defence organisations and concluded that a significant change will be required to address these challenges in a world with ever-increasing expectations on organisational performance. They identified the major drivers for the management of national Defence and proposed a whole-of-life (WOL) approach with activities and capabilities aggregated into portfolios 1 for the duration of their lifecycle: from concept through to disposal. The general principles for partitioning and aggregating defence activities and capabilities into portfolios were also discussed along with the advantages of configuring portfolios into an overall ‘linked-portfolio’ structure. That paper concluded by discussing the evaluation of portfolios. This paper explores in more detail the principles that may be applied to effectively arrange the elements of national Defence into portfolios and then link the resulting portfolios into an appropriate enterprise 1 In the previous paper ‘portfolio’ was defined as: an assemblage of military capabilities: a level of complexity at the “combined capabilities” level of SoS described in Allison and Cook (1998) or Level 3 Business systems described by Hitchins (2000). framework. To do this, an assessment approach is taken which uses the systems architecting heuristics given by Rechtin (1991). By assessing several ways of partitioning national Defence that have already been used, what works and what doesn’t work may be explored. A HEURISTIC APPROACH Rechtin (1991) discusses various approaches to architecting complex systems including heuristic reasoning. 2 The central idea of the heuristic approach is applying ‘contextual’ sense. Knowledge of what is reasonable in a given situation or context is established by drawing upon the expertise and experience of the community of practicing systems architects and is expressed as a series of heuristics. Rechtin defines heuristics in several ways. They can be decision rules, analogies, models or metaphors but all are widely accepted qualitative statements resulting from the experience gained by practising systems architects. Properly used, such ‘rules of thumb’ can add structure to ill-defined situations and provide insight into complex activities. More than 100 heuristics are presented and discussed in Rechtin’s book. For the reader’s convenience he lists all of them in an Appendix. From this extensive list, the following groupings of heuristics, considered relevant to the task of partitioning national Defence into portfolios, were constructed: 1. Simplicity. Rechtin gives the following versions of this: • Keep it simple stupid (KISS). • Simplify, simplify, simplify. 2 He views the heuristic approach as having some of its origins in the pronouncement and rational approaches. 1 99