RESEARCH REPORT

In brief

In brief

  • The Aerospace and Defense industry faces unprecedented disruption on multiple fronts.
  • Supply chains face increasing volatility, agile new competitors are targeting the market and technology is impacting across the value chain.
  • Seventy-six percent of industry executives agree digital transformation is imperative to overcome this turbulence.
  • Companies that have already embraced digital transformation are surging ahead—achieving up to four times improvement on their digital investments.


How digital transformation can unleash growth

Aerospace and defense companies are buffeted by disruption. Demand for passenger aircraft is forecast to double within two decades. Defense demand is surging. New competitors are entering the market. And new STEM (science, technology, engineering and mathematics) talent is in short supply.

Digital transformation is essential. The industry recognizes this. But to date, only a few companies have successfully harnessed digital to pivot decisively from today’s core operations to new approaches that drive growth.

Seventy-six percent of aerospace and defense executives believe that digital opens the door to new market opportunities.


More and more companies are embracing digital technologies like AI, analytics and automation. But only the top 19 percent are achieving significant returns on their digital investments.

These champions are successfully scaling more than 50 percent of their digital proofs of concept (figure 1). For the following pack, there’s real room for improvement.

Figure 1: RODI for aerospace and defense champions
(RODI is calculated as Return on Investments (Net Gain/Total Investments) from scaled digital POCs across all the key business function)

There are some big rewards on offer. Eighty-one percent of industry executives agree that the integration of customization and real-time delivery is the next big wave of competitive advantage.

Focus on three imperatives

So how can aerospace and defense companies accelerate their own digital transformations to drive new growth? Our three-point approach will help companies adapt to disruption and embrace a digitally driven future:

1. Digitize across the value chain

Embed digital across the value chain, from sales all the way through to manufacturing, aftersales, finance and human resources.

2. Collaborate to innovate

Drive innovation and boost future-readiness, by collaborating across the industry and technology ecosystem.

3. Embrace new business models

Manage the wise pivot between core ongoing business and new business models.

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John Schmidt

Senior Managing Director


Marc Gelle

Senior Managing Director – High Tech Industry, Europe


Marco Addino

Managing Director


Soumik Ghosh

Strategy Principal

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Destination digital: Get the essentials

Learn from leading industry experts why digitization, co-innovation and new business models are key to driving growth in the Aerospace and Defense industry.

Themes include how to go from delivering products to delivering services, how to innovate through collaboration across the ecosystem and why new business models are a game changer for the industry—and how digital technology can enable this ambition.

VIEW THE PLAYLIST

Digitize across the value chain

Collaborate to innovate

Embrace new business models

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