Cost of readiness

Client: A large organisation with a complex resource structure

Problem: The organisation has an obligation to prepare capabilities to meet a wide range of exceptional circumstances and events, whilst maintaining the capability and capacity to perform routine tasks. The problem was to understand the cost of maintaining capabilities that are ready for use (the “cost of readiness”) and to identify a better balance between being ready for everything all of the time and being sufficiently ready so that final preparations can be made within an acceptable timeframe. A key aspect of the problem was the training and retention of staff with key skills that are both lengthy and costly to acquire and require expensive on-going training to maintain.

Approach: Conceptual models of the cost-incurring mechanisms were developed in order to articulate the understanding of the cost-readiness relationship including the maintenance of readiness over long periods and to meet a wide range of contingencies.  Quantitative models were then developed to examine the cost of readiness across the extremes of potential variation in the capability generation and preparation cycles. The work has recommended changes to capability generation and preparation processes, especially staff training regimes, and quantified the resulting monetary and readiness benefits.

Benefits: This work identified cost relationships that were previously unknown and capability preparation cycles which could provide higher readiness at lower cost than at present. The work has also contributed to a major restructuring of the organisation and its work force.

Contact: David Wrigley