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Why digital transformation is extremely vital in the Aerospace & Defence industry?

Updated: Sep 19, 2023

The aerospace and defence industry is a fast-growing sector that has been affected by both technological innovation and changes in consumer demand. It is now more important than ever for companies operating in this field to embrace digital transformation as part of their business strategy.

The aerospace and defence industry is one of the most capital-intensive industries in the world. With an average value of over $1 million per aircraft, it's no surprise that these organisations have been slow to adopt new technologies such as cloud computing and big data analytics.

However, aerospace and defence companies are now realizing that they need to embrace digital transformation if they want to remain competitive in today's hyper-competitive marketplace. The reason? Digital transformation enables them to:

  • Reduce costs by eliminating waste and optimising processes

  • Increase revenue by improving customer experience

  • Realise new growth opportunities through innovation

But what does this mean for businesses in this sector? How can they use digital transformation to help them succeed? And what will success look like?

What is digital transformation? Digital transformation refers to the use of digital technology to change an organisation's operating models, business models, customer relationships, products and services offered, and more. The goal of digital transformation is to increase efficiency and solve problems in order to improve customer experiences.

Why is digital transformation so important for aerospace and defence companies?

In order to survive in a competitive environment, businesses must be able to adapt quickly and easily change how they operate so that they can meet shifting consumer demands. This requires an ability to react quickly without sacrificing quality or efficiency — something that can be difficult for many organisations with rigid processes in place or outdated technology systems that don't allow them to monitor performance or make necessary adjustments quickly enough when necessary changes occur in their environment (such as new technologies being introduced into the marketplace).

Here are the other key benefits digital transformation brings to the aerospace and defence industry:

Improved customer experience  

The customer experience is paramount for any business but especially so for an airline or defence contractor where customers' safety is at risk if something goes wrong. As a result, these organisations have implemented new technologies such as automated check-in systems that improve efficiency as well as provide a better experience for passengers.

Improved operational efficiency

Digital technologies can help improve operational efficiency by reducing costs and increasing productivity. For example, automation systems can be programmed to perform repetitive tasks automatically with little or no human intervention required; this frees up employees' time so they can focus on more complex tasks or on customer service instead of taking care of manual tasks.

Improved productivity

Digital transformation can also help increase productivity by reducing costs, simplifying processes, and enabling faster decision-making. In addition, digitalisation allows for better resource planning, which enables organisations to optimise their workforce at all levels of the business.

Increased quality control

The ability of businesses to track every step of a process digitally also means they can monitor its progress much more closely than ever before. This means they can make sure every step is being done correctly and ensure quality standards are maintained throughout production processes – something that’s particularly important for complex engineering projects like aircraft parts manufacturing.

Better collaboration

Digital transformation is helping to bring together different teams across the aerospace and defence sector, allowing them to work more effectively together. This helps to share knowledge more easily and do more with fewer people.

Aerospace and defence companies have been slow to adopt digital transformation. This is because they are a fast-paced, highly regulated industry with complex processes and large amounts of data.

The aerospace and defence industry has always been a difficult one for new technology and innovation to penetrate. The sector is highly regulated, with a strong focus on quality control and making sure that products meet the highest standards in the world.

Moreover, the aerospace and defence industry also has some of the most complex supply chains in the world, making it difficult to implement new technologies across multiple locations.

Fortunately, there are signs that change is coming very soon. For example, Airbus has recently announced its plans to invest $1bn in artificial intelligence (AI) over the next five years.

This investment will help Airbus develop autonomous systems like drones, which could be used for everything from maintenance inspections to traffic management in airports or airfields.

The aerospace and defence industry can implement digital transformation effectively by following some examples below which are:

1. Adopting an agile approach to software development. The agile approach is based on short iterative cycles, where you build, test, and release functionality in small chunks. Using this method allows you to quickly test ideas and get feedback from users before moving ahead with costly development projects.

2. Building a continuous integration pipeline. Continuous integration (CI) is a software development practice that requires developers to integrate code into a shared repository several times per day. This helps teams identify problems early and often because code changes are reviewed as soon as they're checked in the repository, rather than when all the changes are complete and ready for release – which could be months later.

3. Building an effective data analytics strategy. The aerospace and defence industry has access to a huge amount of data, but this doesn’t mean that they can use it effectively. Since there are so many different applications being used by various departments at any given time, it becomes difficult to get a 360-degree view of the situation. This is where data analytics comes into play. By using data analytics tools, you can make sense of your company’s data and identify valuable insights which will help you make better decisions in the future.

The aerospace and defence industry is under constant pressure to innovate and create new products and services faster than ever before. It is also facing increasingly demanding customer requirements and rapidly changing markets.

Digital transformation can help A&D companies better understand their customers’ needs and wants, improve product development processes, optimise supply chains and build more effective sales channels. However, there are several challenges facing the industry as it embarks on this journey.

The challenge is to implement digital transformation in the face of multiple factors such as funding constraints, lack of skilled workers, new production methods, and shifting customer preferences.

Furthermore, the aerospace and defence industry has been under pressure to reduce costs while maintaining quality standards. This has led to increased automation in production processes, which was initially limited to standardised parts. However, automation has now moved beyond standardised parts to include customised ones as well. This shift towards customisation has resulted in a need for more sophisticated software applications that can handle complex design requirements.

The complexity of the application development process for the aerospace and defence industry stems from its wide range of products including avionics systems, sensors, and actuators that are used across industries such as transport, energy generation, and healthcare. These products are often highly customised based on customer requirements, which means that there is no standard design process for creating them. This requires a high degree of flexibility from developers who must be able to adapt their software solutions according to each client’s specific needs and requirements.

And another challenge is concerning the lack of talent. Many organisations within the A&D industry struggle to recruit and retain the right people for their digital transformation efforts, with the number of job vacancies for engineers outstripping supply by more than two to one. This imbalance could mean companies are unable to implement new technology and processes quickly enough to keep pace with competitors, who may be better equipped to take advantage of the benefits offered by the latest innovations.


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