Global defence budgets are climbing at their fastest rate in decades, with European markets alone expected to expand by more than 20% a year. Yet according to a new analysis by Bain & Company, much of that money may not be used effectively.
The consultancy argues that aerospace and defence manufacturers are still relying on outdated programme management methods that prioritise process over performance.
“We’re seeing a huge, in some cases unprecedented, surge in demand across both commercial and defence aerospace,” Massimo Sabella, Bain’s EMEA Aerospace & Defence Lead, told AGN during MRO Europe. “But this is happening at the very moment the industry is constrained by talent scarcity, technological disruption, and lingering supply-chain bottlenecks. That combination risks making an extraordinary growth opportunity far less efficient than it should be.”
Bain’s June 2025 brief, Beyond Program Management: A Bold Fix for Aerospace and Defence Programs, highlights that major defence acquisition projects worldwide have accumulated almost $46 billion in cost overruns, with average delivery timelines stretching from eight to eleven years.
The firm’s consultants argue that traditional “waterfall” management approaches, geared around sequential engineering milestones and compliance paperwork, are no longer fit for the scale and complexity of today’s programmes.
Why outdated defence programme management is wasting billions
Katherine Kajzer-Hughes, one of the report’s authors, said Bain’s research identified three systemic flaws that repeatedly derail large aerospace and defence projects.
“Too many programmes are over-scoped and over-engineered,” she said. “Requirements exceed what’s actually needed to deliver the mission, design isn’t linked early enough with production or procurement, and you end up with beautiful engineering that isn’t designed for deliverability.”
Second, she warned of a chronic lack of transparency. Programme budgets and schedules are often built on assumptions rather than data, leading to the so-called ‘watermelon-green’ phenomenon: “green until the day they’re due, then suddenly red.”
The third flaw, she added, is cultural. “Programme management becomes process-focused rather than outcome-focused. Functions chase their own metrics for engineering or supply chain excellence instead of asking how their work drives overall programme performance.”
Bain’s bold fix: zero-based strategy and outcome-driven defence programmes
Bain’s prescription is what it calls a zero-based, outcome-back strategy. That means stripping programmes to their essential purpose, linking every activity to measurable outcomes, and using data analytics to understand root causes of delay and cost inflation.
“Zero-base your strategy and lead with the outcome, not the function,” Kajzer-Hughes advised. “Every process has to directly contribute to programme performance. If it doesn’t, take it out.”
Sabella believes that this mindset shift is crucial as European governments and primes ramp up production of everything from munitions and drones to sixth-generation fighters.
“This wave of rearmament is unlike anything we’ve seen in decades,” he said. “But unless programme structures evolve to match it, nations will end up paying far more for far less capability.”
Data and front-line engagement can rescue defence programmes
Beyond process reform, Bain emphasises front-line engagement and data discipline. The report urges leaders to “build an indisputable baseline” of real-time performance data and involve those closest to delivery in decision-making.
“If you don’t have the data to understand what drives performance, build it,” said Kajzer-Hughes. “And if you’re doing work that doesn’t clearly contribute to the outcome you’re trying to deliver, stop doing it.”
With defence spending accelerating on both sides of the Atlantic, Bain’s warning carries a clear message: the challenge is no longer how much governments invest, but how intelligently that investment is managed.
As Sabella concluded, “This is a once-in-a-generation scale-up. The winners will be those who modernise how programmes are run, not just how technology is designed.”
