Efficient and effective delivery
Measuring and improving our cost-effectiveness3
It is difficult to estimate the dollar value of the effects of military capabilities and interventions. It is equally difficult to quantify, in dollar terms, either the contributions that the Ministry makes to the NZDF's military effectiveness, or the contributions that the NZDF's military activities make to high-level outcomes. For these reasons, we do not believe that it is feasible for us to construct a direct measure of our cost-effectiveness.
We can, however, describe where and how we add value. Further, if we can achieve more - or at least the same - for less cost, we will be improving the efficiency and effectiveness of our service delivery. We believe that we can provide two kinds of evidence to demonstrate such improvements:
- benchmarking the quality and cost of our work against similar work undertaken in other NZ departments, or overseas in comparable countries
- comparing the quality and cost of our current performance with our performance in previous years.
During the coming year, we will work to develop these benchmarks.
Strategic policy and purchase advice
When expenditure is well focused, unnecessary costs are avoided. We help ensure that large amounts of defence expenditure will be aligned with policy requirements and, through our careful analysis of options and business cases, will deliver value for money.
International Defence Relations
Security partnerships have the effect of increasing the overall security of each partner through their collective military capabilities. Joint understandings mean that the policy alignment and military capability that potentially is available to each partner is increased without needing to increase defence expenditure. By providing advice and participating actively in the conduct of international defence relations, we contribute to maintaining and improving New Zealand's security position.
The benefits of national security are realised through the military capabilities needed to establish and maintain it. Those capabilities generally consist of platforms and equipment and personnel who are trained to use them. Our work of purchasing and upgrading military equipment helps establish and maintain the military capabilities we need and therefore helps achieve the benefits of national security. We seek to administer procurement contracts so that platforms and equipment are delivered within budget, in accordance with specifications and in accordance with the contracted timelines.
Audit and Assessment
Value from defence spending is delivered when the NZDF and the Ministry are performing well in accordance with the Government's intentions. Audits and assessments provide the Government with assurances about the performance of the two organisations, help identify instances where performance may be straying from those intentions, and make recommendations about how to improve the situation.
- Cost-effectiveness is the relationship between the level of resources used (cost) and progress towards a predetermined outcome (effect). It is measured by comparing the dollar cost with the dollar value of the measurable benefits of the outcome. If a changed approach can achieve a greater value of benefits for the same cost, or the same benefits for less cost, then the changed approach is more cost effective.