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July 17, 2017

How to Become a Digital Frontrunner in Aerospace & Defense

A new study from the Boston Consulting Group (BCG) found that nearly all aerospace and defense firms are investing in the digitization of their businesses. But that’s not surprising. What is surprising are some of the report’s other findings, among them:

  1. How digital investment correlates to success
  2. The 8 technology drivers that are reshaping aerospace and defense as a whole
  3. The 4 technologies aerospace and defense companies are investing in most

Everyone is Investing in Digital

The study was centered around a survey of 110 senior executives and managers at aerospace and defense companies. As we mentioned, nearly 100% of them reported increased investment in digital technologies. Nearly 100% of respondents also reported that these investments were yielding positive results. Nearly half of respondents were willing to invest in digital technologies even without a short-term business case to support the investment. That tells us that digital investment is considered a relatively low-risk one. The report found that there are 8 technology drivers that are reshaping aerospace and defense:

  1. Advanced robots
  2. Additive manufacturing
  3. Horizontal and vertical integration
  4. Industrial internet
  5. Simulation
  6. Cloud and cybersecurity
  7. Big data and analytics
  8. Augmented reality

Frontrunners and Followers: Which are you?

The respondents were divided into two groups, followers and frontrunners, based on their self-reported success in using digital to:

  1. Improve operations – (81% of respondents)
  2. Increase revenues – (49% of respondents)
  3. Drive innovation – (52% of respondents)

Interestingly, the report found no correlation between the level of spending and the likelihood of a company being a frontrunner. Of the companies that were investing in digital for all three purposes, 58% were considered frontrunners, evidence that a balanced investment strategy is warranted.

4 Most Commonly Implemented Technologies

The report found that digital frontrunners not only invest in digital technologies to improve operations, to increase revenues and to drive innovation, they also apply digital technologies more broadly across their functions. Many frontrunners in aerospace and defense are investing in the same technologies, the report found. The four most common are:

  1. 3D printing for prototyping
  2. Simulation-based design
  3. Predictive analytics
  4. Real-time monitoring

A company is “four times more likely to be a frontrunner in operations if it applies digital across the life cycle of the product, from initial program management to aftermarket and sustainment activities.”

But the biggest differentiator that decided whether a company was considered a frontrunner or not was whether or not they had a chief digital officer (CDO). Few companies had this leadership position, but those that did were frequently among the frontrunners.

The report ended with a warning: although digital first-movers reap the greatest rewards, their advantage erodes over time as the digital tools they use become more prevalent. The lesson is an old one: innovation cannot stop. The goal must be to continuously evolve and stay ahead of the curve.

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