Digital continuity takes center stage in aerospace and defense strategy

Amid inflation, supply chain instability, and geopolitical shifts, Capgemini predicts aerospace and defense firms will boost digital continuity investments to 3.4% of annual revenue by 2028, highlighting its strategic role in future-proofing operations

The Capgemini Research Institute has released a new report titled "The Strategic Edge: How Digital Continuity Drives Business Outcomes in Aerospace and Defense," highlighting the growing importance of digital continuity in the aerospace and defense (A&D) sector. The study reveals that the seamless integration of data across the entire product lifecycle—extending into the broader partner ecosystem—is becoming a critical factor in driving business transformation.

According to the report, over 80% of A&D leaders recognize digital continuity as a catalyst for transformation and a strategic means to gain competitive advantage. In 2024, A&D organizations allocated an average of 2.1% of their annual revenue toward digital continuity initiatives. These investments aim to enhance production capacity, accelerate development timelines, reduce operational costs, and maintain agility amid global disruptions.

With the industry grappling with inflationary pressures, supply chain instability, and ongoing geopolitical shifts, Capgemini forecasts a continued surge in digital continuity spending. By 2028, A&D organizations are expected to increase their investment to an average of 3.4% of annual revenue, underscoring the strategic value of integrated digital ecosystems in future-proofing operations.

“Digital continuity is a critical imperative for aerospace and defense organizations to thrive in today’s challenging and uncertain geopolitical environment. If it is embraced as a way of working, it will help organizations increase productivity and free up key resources from the waste created by disconnected systems and data. Ultimately, it enables operational excellence, reduces product development cycle times and fosters a collaborative culture, setting A&D players up for long-term success. Business leaders clearly recognize this and as a result have been ramping up their investments in these initiatives,” said Lee Annecchino, Global Industry Lead, Aerospace and Defense at Capgemini. “In order to leverage the full potential, A&D organizations must focus on building interoperability across systems, enabling robust data management and adopting a comprehensive change management strategy.”

Digital continuity helps A&D organizations to ramp up quickly, driving many business benefits

Nearly nine in 10 (86%) A&D executives agree that digital continuity is important to their organizations’ ramping-up strategies, and 77% believe that improving digital continuity will accelerate the process.

Around a third (34%) of A&D organizations have already reduced costs with 13% cost reduction on average because of digital continuity. Thirty percent of A&D organizations have already realized shortened time to market and 18% have accelerated product development cycle times because of digital continuity, making it a top priority for investment.

Defense organizations are better prepared to ramp up production

According to the survey, 44% of defense organizations are prepared to ramp up production compared to just over a third of civil aerospace organizations. The readiness of defense organizations to ramp up production can be driven by geopolitical uncertainty and technological and infrastructure investment, including a more flexible manufacturing execution system (MES), and a more resilient supply chain. For example, 65% of defense organizations agree that their supply chain is adaptable to quickly changing customer demands, while only 45% of civil aerospace organizations believe the same.

The report also finds that more than 8 out of 10 (86%) defense organizations recognize the need to integrate AI and generative AI in engineering and product development and over half (56%) to develop autonomous systems. However, less than half of the defense organizations are prepared to integrate AI (44%) and only 35% are prepared to develop autonomous systems.