1. DEPARTMENT OF DEFENCE Strategic Business Plan FY 2004/05 to FY 2006/07
31 May 2004

2. Scope Background Layout of the Plan
Discussion per Chapter (Financial Aspects are covered in the Budget Presentation)
Concluding Remarks

3. AIM
To brief members of the Portfolio / Joint Standing Committee on Defence on the Strategic Business Plan of the Department of Defence for FY2004/05 to FY2006/07.

4. BACKGROUND
Required by law to be tabled in Parliament after the Budget speech within specific timescales.
Contents of plan generally prescribed by the Regulations from the DPSA and National Treasury
Commitment by the DOD to Parliament and public as to how the DOD intends to utilise resources allocated to it.
The Plan shows, among other things, DOD outputs and risks that are transferred to higher authority.
DOD Plan for FY 2004/05 is a product of serious departmental reprioritisation in order to stay within budgetary allocation (Special PDSC – November 2003).
Main challenges: Human resources; Information Technology; Deteriorating Facilities; Servicing of Memoranda of Understanding (MoUs) and funding for deployments.

5. LAYOUT OF PLAN Chapter One: Strategic Profile and Objectives
Chapter Two: Corporate Strategy
Chapter Three: Organisational Management
Chapter Four: Defence Administration
Chapter Five: Command and Control (Joint Operations)
Chapter Six: Landward Defence
Chapter Seven: Air Defence
Chapter Eight: Maritime Defence
Chapter Nine: Military Health Service
Chapter Ten: Defence Intelligence
Chapter Eleven: Joint Support
Chapter Twelve: Conclusion

6. CHAPTER ONE Strategic Profile and Defence Objectives
Confirms the following:
DOD Mandate, Vision, Mission
# Note: DOD Vision was changed in March 2004 to:
“Effective defence for a democratic South Africa”

7. CHAPTER ONE … Mission Success Factors:
National Consensus on Defence
Excellent Strategic Direction
Excellent Resource Management
Effective combat Forces and Support
Professionalism in the Conduct of Operations
Successful Implementation of the Transformation Process.
Defence Outcome: “Effective defence for a democratic South Africa”.

8. CHAPTER ONE … Minister of Defence’s Outcomes
Defence Against Aggression
Promoting Peace and Security
Collateral Utility of the SANDF (Support to the People)
Minister of Defence’s Priorities and their alignment with Cabinet Priorities
Functions of the Secretary for Defence and the Chief of the SANDF
Affordability and Sustainability
DOD to balance the requirement to defend the country and its people, but also provide support to peace efforts in Africa.
Budget constraints are adversely affecting the ability of the SANDF to maintain and sustain certain capabilities.

9. CHAPTER TWO Corporate Strategy
Corporate Strategy comprises Business Strategy & Military Strategy
Business Strategy: It gives guidance to the DOD with regard to good governance practices based on Govt policies. This includes ensuring efficient, effective and economic use of resources. It guides and aligns all resource and functional strategies in support of the Military Strategy. One such functional strategy is the Human Resource Strategy 2010 which seeks to rejuvenate the SANDF, ensure affordability and improve representivity.

10. CHAPTER TWO … Military Strategy
Sub-Strategies: Provide Forces; Employ Forces and Force Support
Military Strategic Objectives
Defence Against Aggression
Promoting Security
Collateral Utility of the SANDF (Support to the People)
Missions per Objective

11. CHAPTER THREE Organisational Management
    Macro design principles as envisaged during Transformation
In 1999 – Minister of Defence approved permanent and Review posts.
In 2001, DOD structure was revised to provide for the CFO as prescribed by the PFMA.

12. CHAPTER THREE … POST STRUCTURE
Planned macro personnel strength:
FY 2004/05 
FY 2005/06 
FY 2006/07  (which is in line with the Defence Review recommendation of
Force Design options identified by the Defence Review are not affordable!

13. CHAPTER FOUR Defence Administration
Elements (Sub-programmes):
Political direction (Min of Defence); Departmental Direction (Secretary for Defence); SANDF Command and Control (Chief of SANDF); Policy and Planning; Corporate Staff Office; Financial Services; Acquisition and Procurement Services; Defence Inspectorate; Equal Opportunities and Affirmative Action; Human Resources; Legal Services; Religious Services; Corporate Communication; Reserve Component; and Defence Foreign Relations.

14. CHAPTER FOUR …
Risks and Mitigating Actions: Budget constraints which have adverse effect on the following:
Servicing of Memoranda of Understanding (MoUs)
Renewal and sustainment of IT-based internal control systems for finances, structure and human resources
Mitigating Action: Reprioritisation
Services to be scaled down, suspended or abolished: None

15. CHAPTER FIVE Command and Control (Joint Operations)
Outputs: Operations and Joint and Multinational Exercises as per table
Risks and Mitigating Actions:
Gap between level of funding for force-providing forces and the force levels required for ordered commitments (Operational Risk).
Cost of internal deployments
Mitigating Action: Reprioritisation
Services to be scaled down, suspended or abolished: Deployments will be aligned with budget as approved by Parliament.

16. CHAPTER SIX – Landward Defence
Outputs: As per table in the Plan.
Risks and Mitigating Actions:
Combat readiness is affected by health status (aging HR profile, tuberculosis, etc). Thus, deployment of troops for internal and external purposes and also joint and multinational exercises may be affected negatively.
Budget constraints may result in losing strategic industry support.
Deterioration of facilities.
Mitigating Action: Reprioritisation
Services to be scaled down, suspended or abolished: None but all capabilities will be maintained at minimum levels due to under-funding.
Performance and Service Delivery Improvement as per Table.

17. CHAPTER SEVEN – Air Defence
Outputs: As per table in the Plan.
Risks and Mitigating Actions:
Deterioration of main equipment, weapons systems and ground support infrastructure.
Declining numbers of suitably qualified and experienced personnel.
Limited funding may affect completion of the ROOIVALK project.
Mitigating Action: Reprioritisation
Services to be scaled down, suspended or abolished:
Flying hours for force preparation and force employment will be reduced.
Reduction in the number of qualified apprentices and learners.
Performance and Service Delivery Improvement as per Table.

18. CHAPTER EIGHT Maritime Defence
Outputs: As per table in the Plan.
Risks and Mitigating Actions:
Lack of logistical support, ordnance and facilities, mainly for new corvettes and submarines.
Deterioration of facilities and equipment due to under-funding.
Limited availability of qualified and experienced personnel due to requirements for the new corvettes and submarines.
Mitigating Action: Reprioritisation
Services to be scaled down, suspended or abolished:
Certain stores depots, maintenance units and the naval reserve units will be closed down. These functions will be incorporated in existing units.
Performance and Service Delivery Improvement as per Table.

19. CHAPTER NINE Military Health Service
Outputs: As per table in the Plan.
Risks and Mitigating Actions:
Deterioration of hospitals, facilities and equipment.
The high rate of medical inflation.
High workload of professionals.
Inability to recruit sufficient members into uniform.
Mitigating Action: Incentives introduced.
Services to be scaled down, suspended or abolished: Reduction in output of the defensive chemical and biological warfare programme.
Performance and Service Delivery Improvement as per Table.

20. CHAPTER TEN – Defence Intelligence
Outputs: As per table in the Plan.
Risks and Mitigating Actions:
Outdated Information Technology.
Deteriorating conditions of Defence Intelligence HQ.
Outflow of experienced personnel.
Mitigating Action: Reprioritisation.
Services to be scaled down, suspended or abolished: None.
Performance and Service Delivery Improvement as per Table.

21. CHAPTER ELEVEN – Joint Support
Outputs: As per table in the Plan.
Risks and Mitigating Actions:
Maintenance and repair of facilities, vehicles and equipment.
Insufficient skills and experience levels.
Lack of suitable Enterprise Application System for the DOD.
Mitigating Action: Reprioritisation.
Services to be scaled down, suspended or abolished: None.
Performance and Service Delivery Improvement as per Table.

22. CHAPTER TWELVE – Conclusion
Despite budgetary constraints, the DOD is committed to excellence in service delivery as per mandate.
SANDF consistently succeeded to deploy troops (internally and externally) through reprioritisation.
However, there is serious misalignment between ordered commitments and budgetary allocation.
Way forward includes:
Phased withdrawal from routine SAPS support.
Migration of the Service Corps.
Increased implementation of Military Skills Development, supported by a viable exit mechanism.
Successful integration of the Strategic Defence Packages.
Progress in health issues through Project MASIBAMBISANE and Project PHIDISA to address the HIV/AIDS pandemic.

23. Output reductions are:
CONCLUDING REMARKS
General mitigating action for budgetary constraints is reprioritisation.
Output reductions are:
SA Army: No reductions but all capabilities will be maintained at minimum levels.
SAAF: Flying hours and reduction in numbers of apprentices and learners
SAMHS: Defensive chemical and biological warfare programme

24. Questions and Discussion