14th Annual A&D Market Survey: Product Innovation, Cybersecurity & Technology Modernization Key to Combatting Commercial Pric...
June 08 2015 - 9:00AM
Business Wire
Continued investments in people, products and
technology needed to ensure long-term growth
The recovery of the global economy and increased demand for
commercial aircraft are lifting the aerospace and defense (A&D)
industry out of a challenging market. A&D companies are
continuing to invest in product innovation and technology
modernization for commercial operations, while government and
defense contracts are focused on cost control and more targeted
capital investments.
This is what top A&D executives reveal in the 2015 A&D
Market Survey, conducted jointly by CSC (NYSE: CSC), a global
leader in next-generation IT services and solutions, and the
Aerospace Industries Association. The 14th annual survey on
business, economic and technology trends polled senior executives
and senior managers at global A&D companies.
Key takeaways include:
- Designing and producing innovative
products and up-selling and cross-selling products continue to be
top goals in the commercial sector. However, pricing pressures are
forcing organizations to pursue continuous-improvement and
cost-containment measures, slowing the rate of innovation.
- Sequestration has taken a toll on
overall defense spending, with 65% of respondents citing budget
uncertainty for decreased investments in R&D. Only 50% of
respondents say they are investing in R&D, with cybersecurity,
UAVs and electronic warfare topping the list of R&D
investments.
- A majority of respondents (67.8%)
report increased spending to protect against cyberthreats, with
nearly half of those (29%) spending 25% to 50% more on
cybersecurity in the past year.
- Technology modernization continues to
be a major initiative, focusing on application replacement or
modernization, and IT infrastructure modernization. Cloud computing
is cited as a priority for implementing modernized applications by
41% of respondents.
- Finding skilled workers to replace the
industry’s graying workforce continues to be a key factor affecting
A&D companies. Critical areas include aerospace engineering,
mechanical engineering and cybersecurity.
- More than 71% of respondents in the
government sector report at least a 10% increase in product costs
related to complying with government acquisition regulations.
Thirty percent reported cost increases of at least 26%.
“In response to pricing pressures and lower government spending,
A&D companies are becoming more selective in their R&D
investments and are more focused on product innovation and
continuous improvement of manufacturing processes,” said Tim Ellis,
CSC industry general manager, Aerospace & Defense. “Technology
modernization is crucial for nearly every organization, and they’re
exploring many ways to modernize, including using commercially
available Software as a Service, migrating certain applications to
the cloud, and integrating systems for better data-sharing.”
Historically, the A&D industry has been slow to adopt cloud
computing, but the 2015 survey showed that cloud is a priority for
more than 40 percent of respondents. The move to cloud-based SaaS
applications was a top-3 priority for modernization in 2015, but
about one fourth of respondents cited “too many barriers to
adopting the cloud” and uncertainty about the cybersecurity and
data privacy of cloud-based applications as reasons hampering wider
cloud migration, suggesting more education is needed.
The survey also revealed the A&D industry’s frustrations
with the uncertainty over defense budgets and regulations required
for participating in government contracts. In addition to
discouraging bids on defense contracts, the current regulatory
climate is affecting R&D investments at a time when A&D
companies are facing a widening skills shortage.
For complete results of the CSC 2015 A&D Market survey,
conducted in the spring of 2015 with the Aerospace Industries
Association, visit www.csc.com/2015A&DSurvey.
About CSC
Computer Sciences Corporation (CSC) is a global leader of
next-generation information technology (IT) services and solutions.
The Company's mission is to enable superior returns on our clients’
technology investments through best-in-class industry solutions,
domain expertise and global scale. CSC has approximately 72,000
employees and reported revenue of $12.6 billion for the 12 months
ended January 2, 2015. For more information, visit the company's
website at www.csc.com.
About AIA
Founded in 1919 shortly after the birth of flight, the Aerospace
Industries Association is the most authoritative and influential
trade association representing the nation’s leading manufacturers
and suppliers of civil, military and business aircraft,
helicopters, unmanned aircraft systems, space systems, aircraft
engines, homeland and cybersecurity systems, materiel and related
components, equipment services and information technology.
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CSC Contacts:Anne Eisele, Media Relations,
703-641-2315aeisele@csc.comorGeorge Price, Investor Relations,
703-641-3842gprice4@csc.comorAIA Contact:Dan Stohr,
703-358-1078dan.stohr@aia-aerospace.org
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