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MoD targets £174m savings from £4bn IT deal

But it's all in 'non-cashable' efficiency benefits, which should mean no job losses

The Ministry of Defence's (MoD) is targeting cost savings of £174m over the first three years of its £4bn IT outsourcing deal, which is due to be awarded early next year.

The 10-year Defence Information Infrastructure (DII) project is being contested by two consortiums – the EDS-led Atlas group with Fujitsu, Cogent, General Dynamics and LogicaCMG against the CSC-led RaDii consortium with BT, CGEY and Thales.

The MoD has previously refused to detail the cost savings targets but the figures were published in the MoD's efficiency review last week -- with savings of £43m in the first year, £66m in the second year and £65m in the third year.

But those savings -- totalling £174m -- are classed as "non-cashable", meaning they don't come from a reduction in staff or assets but from improved productivity and other efficiency benefits as a result of the single standardised IT platform that DII should provide.

DII will replace 300 diverse information systems across 2,000 locations worldwide, covering some 177,000 desktops.

Among the benefits of the DII listed in the Efficiency Review are reduced down-time, increased reliability of systems, "process-related" efficiencies and having a single, secure network instead of seven different ones.

The report says DII will also underscore vital cost savings in other areas of the MoD's operations. "DII is a key enabler for many of the other business improvement initiatives in the Efficiency Programme," the document said.