PARIS, July 06, 2017 (GLOBE NEWSWIRE) -- For aerospace and defense (A&D) companies, broad adoption of digital pays off, according to a study by The Boston Consulting Group (BCG). Nearly all A&D companies say their digital investments have positive results. However, the most successful companies invest early in the development of products and broadly across functional areas. The study’s findings are detailed in the BCG report, titled Becoming a Digital Frontrunner in Aerospace and Defense.
The study focused on a global survey of senior A&D executives and managers. It assessed the extent and impact of digitization and identified the main challenges. The analysis found that companies fall into two categories—frontrunners and followers—on the basis of their self-reported success in using digital to improve operations, increase revenues, and drive innovation.
“How much a company invests in digital generally does not influence whether it is a digital frontrunner or a digital follower,” says Greg Mallory, a BCG senior partner and a coauthor of the report. “Rather, the frontrunners in the race to extract value from digital are those A&D companies that define an enterprise-wide digital vision to guide their investment decisions across functions and that establish the right supporting structures, roles, and culture.”
These are among the study’s key findings:
- Nearly 100% of respondents reported positive results from their digital investments, overall and with respect to each of three investment categories (improving operations, increasing revenue, and innovating). Respondents appear to regard digital investment as a low-risk move, as nearly half (45%) are willing to invest without a short-term business case.
- Frontrunners were closely divided with respect to investment levels: 49% were high investors and 43% were low investors.
- Most companies are deploying digital in their operations. Among all respondents, 81% invested in digital to improve operations, compared with 49% to increase revenue and 52% to innovate. Frontrunners tend to invest to achieve the widest variety of business goals. Among companies that invested in all three categories, 58% are frontrunners. Only about one-third of companies that invested in two categories or one category are frontrunners.
- Frontrunners also apply digital across a greater breadth of functions and activities. Many companies use digital tools for design activities (such as prototyping and testing). However, 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.
- The formal enablers of a digital organization—including structures, leadership positions, talent strategies, digital roles, and capabilities for agile development—are far more prevalent in frontrunners’ organizations.
- Frontrunners and followers cited similar challenges in adopting digital, with both groups ranking culture as the top challenge.
Whether an A&D company is a frontrunner trying to extend its lead or a follower seeking to catch up, a program for digital adoption should be guided by imperatives that include a clear top-down vision, mutually reinforcing digital initiatives across functions, and agile teams that lead initiatives and accelerate innovation. To help companies get started and move quickly, BCG has developed a comprehensive health check that uncovers key gaps and opportunities.
“Because the digital race has no finish line, even today's frontrunners may be tomorrow's followers,” says Mallory. “To stay ahead as competitors catch up, companies must ensure that their digital strategies continuously evolve.”
A copy of the report can be downloaded here.
To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.
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