1. Unlocking Potential 1 Understanding the Open Business Model The value proposition for the government – Learning from industry DISTRIBUTION STATEMENT A. Approved for public release. CAPT Paul VanBenthem, Deputy, Navy Open Architecture Implementation, DASN (RDT&E) The views presented are those of the presenter and do not necessarily represent the views of DoD or its Components.

2. Unlocking Potential 2 DoD and OA DoD has long strived to gain benefits from Open Systems Architecture (OSA) approaches by acquiring data rights and; contracting with industry to define an open system Typically resulted in a vendor-specific product line or platform-unique architecture

3. Unlocking Potential 3 DoD Impediments to Transformation Political contributions help shape policy Secure defense contracts/earmarks and influence defense budget to make contracts more likely Over $27 million during 2012 campaign cycle Biggest contributors: L-M, Boeing, GD, NG, UT, Raytheon $132 million lobbying dollars spent in 2012 Biggest spenders: Boeing, UT, L-M Acquisition legislative and policy constraints Stovepipes Funding Program Source: Center for Responsive Politics, www.opensecrets.org

4. Unlocking Potential 4 Learning from Industry DoD can learn from commercial industry's playbook leverage their “lessons learned” based on product-line success Industry has proven that investment in initial product-line architecture reaps system life cycle cost reductions due to: integration Planning for obsolescence technical refresh common components and software across platforms

5. Unlocking Potential 5 Typical Industry Standard Practices Multi-use – multiple levels Architecture Hardware modules and structures Software Common core components Design Standardized interfaces Require use of standard interfaces between modules Multiple vendors able to produce modules meeting form/fit/function requirements

6. Unlocking Potential 6 Auto Industry Examples Renault Volkswagen General Motors

7. Unlocking Potential 7 Renault “Automakers rapidly are moving toward a new era in vehicle architectures that promises lower costs, turn- on-a-dime manufacturing and shorter product- development lead times” (WardsAuto, Oct 28, 2013) Renault CMF architecture concept Source: http://wardsauto.com/vehicles-amp-technology/big-rewards-hurdles-seen-next-gen-flexible-vehicle-architectures

8. Unlocking Potential 8 Volkswagen MQB architecture to underpin 39+/- models covering eight size and market segments Allows for quicker product development as future vehicles are derived from the existing platform Photo courtesy WardsAuto, Oct 28, 2013 Source: http://wardsauto.com/vehicles-amp-technology/big-rewards-hurdles-seen-next-gen-flexible-vehicle-architectures

9. Unlocking Potential 9 GM Transformation GM’s bankruptcy inspired radical change GM CEO Fritz Henderson: four core values customer/product focus Speed risk-taking accountability Operating model team overhauled the company’s bureaucracy dismantled GM’s bureaucratic “matrix” structure Culture transformation team implemented the new cultural values in the workforce Layers of bureaucracy removed Source: http://www.crainsdetroit.com/article/20091109/EMAIL01/911099979/can-a-new-corporate-culture-save-gener

10. Unlocking Potential 10 General Motors Adopting a more flexible approach mixes and matches modules across product portfolio Modular architectures enable: quick reaction to changes in consumer preferences shorten vehicle development times Reduce architectures from 30 in 2010 to 17 in 2018, core platforms from 39% to 96% to 99% on core architectures by 2020 to 4 basic vehicle sets in 2025 Consolidate lead engineering to one center drive inefficiency out of product-development process Sources: http://wardsauto.com/management-amp-strategy/gm-vehicle-platform-consolidation-accelerating-product-chief-says http://wardsauto.com/auto-makers/gm-taking-new-approach-global-engineering-vehicle-architectures http://wardsauto.com/auto-makers/new-management-team-lifts-veil-gm-strategy

11. Unlocking Potential 11 Efficient and frequent capability insertion and technology refresh to overcome obsolescence at the lowest possible cost Greater mission adaptability and warfighting dominance via re-configuration Increased efficiencies in ship design, construction, testing, sustainment, and disposal achieve affordable relevance over the lifecycle Modular and Open Warship Vision Top-level Objective: Affordable Relevance over the Life Cycle Flexible Ship = Platform + Payload + Growth Margin