Digital strategies for competing in aerospace and defence

Digital strategies for competing in aerospace and defence

Accenture's John Schmidt looks at why aerospace and defence companies need a digital strategy more than ever and key areas for them to focus on.

Digital strategies for competing in aerospace and defence

A recently released Accenture report, Accelerating Through Digital Turbulence: Technology Vision for Aerospace and Defense 2017, identifies forces that are reshaping aerospace and defence, such as falling orders for airlines and the big data explosion.

These forces present challenges to the industry’s growth and profitability. To overcome them, aerospace and defence companies should tap into the power of a comprehensive and integrated digital strategy – spanning operations, supply chain, manufacturing, marketing, investments, and all other aspect of their businesses.

Falling orders for aircraft

The $736 billion airline industry is expected to see the number of airline travellers almost double, from 3.8 billion in 2016 to 7.2 billion in 2035. However, the number of orders for new aircraft has dropped sharply from its peak in 2013-2014. Orders received by the world’s top aerospace manufacturers are at half the level of 2014. This ‘softness’ in orders is expected to continue for the next two-to-three years.

To address these changes, aerospace and defence companies should consider investing more in digital strategies and technologies that will improve experiences for the growing number of air travellers. This could include:

  • Higher-quality and more reliable in-flight entertainment systems with choices tuned to current customer preferences;
  • Acceleration of the manufacturing process by using Internet-enabled eyeglasses that increase the speed of airline manufacture and assembly; and
  • Data mining for more efficient airline operation and customer service, which in an increasingly competitive market can lower costs, differentiate your brand and market new services, creating new revenue streams.

Big data explosion

Aircrafts are generating unprecedented amounts of data, which is generating more demand for big data insights. An aircraft can generate one terabyte of operational data per flight – approximately the equivalent of 200 DVDs.

To address the growth in data, aerospace and defence companies should consider using more predictive analytics technologies that can organize and generate insights about the data. For example, predictive data analytics can give an airplane pilot more precise insights about when an aircraft engine is running low on fuel.

Final thoughts

To address these forces and become digital businesses, companies should leverage the Internet of Things – a collection of digital devices such as sensors, smartphones, and Internet-connected eyeglasses, can help a company improve its products, better understand customers, and capture new business.

An Accenture survey of aerospace and defence executives finds that more than two-thirds (68 percent) of respondents are comprehensively investing in digital technologies as part of their overall business strategy. This is encouraging. But the rest of the industry needs to make digital the center-piece of their entirely connected businesses, all the way from the technologies they use, to the investments they make, the strategies they execute and the customers they serve.

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