The digital revolution in aerospace and defense (A&D) has reached an inflection point, according to a recent study by The Boston Consulting Group (BCG). As A&D companies accelerate their investments in digital technologies, their leaders are questioning whether their investments are paying off. In many cases, they are not getting satisfactory answers.
The study drew on BCG’s second annual global survey of digital adoption in A&D. Participants included more than 200 senior A&D executives and managers. “The survey results point to a looming digital crisis,” says Greg Mallory, a BCG senior partner and a coauthor of the report. “Executives have invested a lot in digital and now want to see returns for that money. Yet, in terms of digital adoption, the industry is still immature compared with automotive and industrial manufacturers.”
The uncertainty surrounding returns may lead some A&D companies to pull back on their technology investments, while others may double down. “The results of our study indicate that a third approach is a more effective way to unlock value,” says Lacy Ketzner, a BCG principal and another coauthor of the report. “Companies should complement their direct investments in digital applications with simultaneous supporting investments in digital enablers.” These enablers include talent, leadership and culture, agile at scale, data strategy, data infrastructure, and digital ecosystems.
The imperative to avert a digital crisis is supported by several key findings:
A&D companies continue to prioritize investments in digital technologies. For many, digital is at the top of the CEO’s agenda. Investment levels are increasing to support both core operations and new growth areas.
Rising investments are accompanied by heightened concern about returns. Respondents cited demonstrating value as their most important digital challenge, a finding that was validated in our discussions with company leaders.
In comparisons with automotive and industrial manufacturers, A&D companies stand out for defining a digital vision but lag behind in terms of investments in digital enablers.
“Taken together, the survey results suggest that being really smart about early proof points and targeted investments is the best way to capture more value sooner from digital investments,” says Mallory.
Sourced from Globenewswire