The aerospace and defense industry is grappling with disruptive forces—from market developments (aggressive production ramp-up rates) to technology innovations (autonomous aircraft) to geopolitical upheaval (Brexit). In response, companies are reshaping their portfolios through consolidation and new revenue streams, particularly in the aftermarket and sustainment segments. They also are embracing digital business models to improve revenue generation, drive efficiency, and improve supply chain performance. According to our research, 97% of aerospace and defense executives say they are willing to digitally reinvent their business and industry.

Five technology trends reshaping aerospace and defense

Trend 1 Citizen AI
As artificial intelligence grows in its capabilities—and its impact on people’s lives—businesses must move to “raise” their AIs to act as responsible, productive members of society.

Trend 2 Extended Reality
Virtual and augmented reality technologies are removing the distance to people, information, and experiences, and are transforming the way that people live and work.

Trend 3 Data Veracity
As organizations become increasingly data-driven across their operations, the importance of trusting the data that companies use is rising inexorably.

Trend 4 Frictionless Business
Ecosystem partnerships are becoming more important across the aerospace and defense industry.

Trend 5 Internet of Thinking
93 % of aerospace and defense executives believe that the next generation of intelligent solutions are moving into physical environments.

Conclusion

A new kind of living business
To create intelligent experiences and responsive innovation, companies need to become agile, shifting to a more fluid, nimble, and open relationship model that enables dynamism across the organization, partners, and customers. Ultimately, a company’s infrastructure will be primed to embrace new ideas and technologies and anticipate and respond to changing customer and market opportunities.

Recommendations

Pathways to a living business
To become living businesses, aerospace and defense companies should transform based on five key pathways:

  1. Target Core and Disruptive Growth Initiatives.
  2. Design Products and Services as Hyper-relevant Platforms.
  3. Build, Prototype, and Scale New and Innovative Experiences.
  4. Scale by Plugging into a Broader Set of Ecosystem Partners.
  5. Rewire the Culture by Infusing a Mindset that Keeps Customers at the Core.

Ultimately, the key is pushing past your comfort zone to develop a new stronghold. The process of becoming a Living Business not only offers a way to retain or regain traction now, but also ensures readiness to capture future growth.

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