IT initiatives within the Swiss Army are encountering significant challenges, leading to procurement delays and rising costs. Recently, the rollout of a crisis-resistant logistics software was halted, and the military faces delays in several IT projects totaling 19 billion francs. Key issues include ineffective project management, complex systems lacking expertise, risky dependencies, vague tender requirements, lengthy procurement processes, and an excessive focus on cost over innovation. The army aims to shift towards standardized products to address these ongoing issues.
When IT initiatives falter within the Swiss Army, the financial implications can be significant. Procurement delays become a frequent issue, costs escalate, and ultimately, the military is left without effective solutions.
Recently, the military suspended the rollout of a new logistics software designed to withstand crises. This tool was intended to manage ammunition inventories, summon soldiers, and streamline various logistical tasks. Unfortunately, the software module never saw implementation.
It could take a decade before a replacement solution is rolled out. “Honestly, I’ve stopped being overly optimistic,” expressed outgoing army chief Thomas Süssli in a late January interview. This setback is not an isolated incident.
Currently, around seven IT projects within the army, totaling 19 billion francs, are raising serious concerns. They all share a common thread: delays and millions in unexpected costs.
As early as 2017, the federal government faced a loss of 125 million francs related to the “FIS Heer” IT project. In 2021, the VBS announced that establishing three new data centers for the army and the federal administration would incur an additional 250 million francs in costs. Furthermore, the completion date for this project has now been pushed back to 2030, seven years later than initially scheduled.
Conversations with various experts and industry insiders familiar with the military’s IT reveal six recurring issues that plague nearly all procurements, offering valuable lessons for the private sector.
1. Ineffective Project Management
Managing IT projects and procurements is often seen as unappealing. While infrastructure must function seamlessly, it lacks the prestige that attracts attention from senior officials. This often leads to a lack of commitment at the federal council level, resulting in costly mistakes. There’s a widespread understanding that digitizing the army is vital for its future.
IT projects require top-level management involvement. Without defined responsibilities and a strong advocate in leadership, the likelihood of project failure increases significantly.
2. Overly Complex Systems with Insufficient Expertise
The military’s current IT infrastructure has evolved over the years, resulting in a complex and heterogeneous setup. It comprises highly specialized systems that are challenging to replace. Often, modern alternatives are lacking as existing solutions are entirely custom-built.
Replacing these tailor-made solutions can be even more problematic when the complexity of tenders is underestimated. Decision-makers frequently lack adequate market knowledge and technical insight, leading to unrealistic requirements that are difficult to achieve.
Standardized solutions generally outperform custom software. Organizations that depend on bespoke development should be mindful of the long-term implications.
3. Risky Dependencies
Many army tenders are crafted so narrowly that the winning provider is often predetermined. Additionally, the tendering process is perceived as opaque.
Industry insiders suggest that IT service providers with established connections to the VBS have an edge. Moreover, some military personnel maintain militia roles, blurring the lines between business relationships and military bonds. “Prolonged collaborations foster a trust that can be perilous,” noted Andreas Löwinger, a co-founder of the IT service firm Xplain.
Maintaining a healthy distance from suppliers is crucial. Open communication with potential vendors leads to better outcomes. Competitive tenders and a transparent selection process help prevent dangerous dependencies.
4. Vague Tenders and Unattainable Promises
Many tenders, including those from the army, suffer from imprecision and incompleteness. Key requirements, such as cybersecurity, are often defined only after contracts are awarded, leaving providers unable to accurately price essential functions. If requirements arise post-award, they may need to be fulfilled at prohibitively high costs, assuming providers can even meet them.
Providers tend to focus on securing contracts, sometimes promising unrealistic capabilities that their products do not yet possess. Any resulting issues typically get funneled to the legal department.
To avoid complications, it’s essential to establish comprehensive requirements upfront. Delayed adjustments almost invariably lead to increased costs and time overruns.
5. Lengthy Procurement Processes
IT projects at the federal level typically progress through several phases: needs assessment, planning, tendering, evaluation, awarding, development, testing, migration, and implementation. The higher the expense and complexity of a project, the longer the process tends to take.
Prolonged intervals between needs assessment and implementation can result in outdated technology standards, shifts in internal processes, and changes in workforce methodologies. This may lead to the acquisition of systems that are not only obsolete but also misaligned with the needs of the personnel who must ultimately use and maintain them. Therefore, agility should take precedence over bureaucratic procedures.
6. Focus on Cost Over Innovation
Observers note that tenders from the army often place excessive emphasis on price, as it is one of the few objective criteria available. This transforms tenders into price competitions rather than fostering a contest of innovative ideas.
Rafael Perez Süess, chair of the board at Zurich IT firm Bitforge and a board member of the Digitalization Association Swico, recommends that procurement offices transparently communicate project budgets from the outset. This allows providers to tailor their solutions accordingly, enabling authorities to prioritize quality over merely selecting the lowest bidder.
Perez also advocates for breaking projects down into smaller components. This approach enhances flexibility and allows for improved project control, enabling the involvement of multiple specialists rather than relying solely on one provider for everything.
Army’s Shift Towards Standardized Products
The critique surrounding the army’s IT procurement processes is not new; however, the IT landscape and procurement practices have largely remained stagnant over the years. In a comprehensive statement, the army identifies five primary reasons for delays: inflated expectations, underestimated complexities, delivery setbacks exacerbated by inflation, organizational obstacles, and “Helvetizations”—the adaptation of international systems to meet Swiss-specific needs.
The VBS intends to address these challenges by increasingly prioritizing the use of “existing products and solutions.”