Reimagine your businessDigital business transformation in the aerospace industry

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The aerospace industry—including commercial aviation, defense, and space companies—is undergoing a digital business transformation aimed at energizing growth. Digitally based business models improve revenue generation and operating efficiencies using new ways of working. Aerospace leaders have already begun to fundamentally change how they innovate, work, and engage customers and employees—with impressive results:

• Driving innovation with powerful new collaboration, simulation, and design tools: Geographically dispersed aerospace design teams now work virtually side-by-side, contributing equally on design ideas in real-time using digitally interactive whiteboards.

• Accelerating productivity and responsiveness: 3D printing is an emerging technology that speeds design development by facilitating on-the-spot prototyping. It also decreases repair times by allowing parts to be fabricated where and as needed.

• Breakthrough intelligence via the Internet of Things (IoT): Embedded smart sensors not only automate real-time data gathering from aerospace products and processes, they capture data from places that until now were operational blind spots—opening the door to invaluable new insights.

• Working smarter with machine learning: Applying the latest developments in predictive analytics gives companies actionable insights into a wide range of aerospace tasks, such as aircraft maintenance scheduling and systems performance optimization.

• Delighting customers with richer experiences: Modern digital tools that collect and analyze customer insights help aerospace companies focus design resources on products and services with the highest potential returns.

This paper examines how Microsoft enables aerospace companies to apply these digitally enabled capabilities. You’ll see proven ways to accelerate your ability to meet the industry’s most pressing demands, such as finding new revenue streams, better collaboration with global supply chains, confidently complying with regulatory requirements, inspiring a younger workforce, and creating innovative, market-leading products and services.

Digitally based business models propel revenue and efficiencies.

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THINKING DIGITALLY

The aerospace industry has an edge when adopting new technologies because of its repeatedly demonstrated eagerness to do so. For example, many aerospace com-panies are using digital technologies to create unmanned vehicle, situational awareness, and biometric security systems.

However, becoming a digital business is different because of its scope. It’s an ongoing company-wide, multi- dimensional transition to a digital-first point of view. Digital business transformation is a journey that can start any-where within an organization. What’s important is to begin immediately, learn quickly, and continuously iterate.

Your digital innovation partner

Microsoft inspires and enables digital business strategies. Successfully employing powerful new digital technologies to accelerate revenue generation and improve produc-tivity requires the right set of expertise and experience. During a digital transformation, we help you focus on three core areas:

Reimagining your partnerships with your customers (and your customers’ customers): “Know your customer” has earned its status as a timeless business truism. Today’s digital tools let you learn things about your customers that they don’t even know about themselves. The result is the accelerated creation of modernized aerospace products, services, and processes that meet or exceed—and some-times anticipate—customer requirements.

Redesigning your operational and business processes: “Streamlining” is far too weak of a word to describe what today’s digital technologies do for aerospace manufac-turing, collaboration, and security processes. The goal is more than incremental operational improvements—it’s breakthrough, step-function gains.

Evolve your business models: New digital technologies are upending the status quo. More products are being sold on a per-use basis; new services are being created using previously unavailable data and insights; simulations are complementing and enhancing real-world environ-ments; more internal resources are being allocated based on actual rather than worst-case consumption.

BAE’s innovative application of 3D printing to its manufacturing processIn support of its ongoing goal to reduce both aircraft weight and overall manufacturing costs, BAE began exploring the use of 3D printing to fabricate parts. As BAE experimented with its 3D printing solution, it deployed design optimization software (Altair OptiStruct) to identify which materials best satisfy weight/cost tradeoffs for each part. This insight, combined with the flexibility of 3D printing, satisfied both goals.

BAE asked its long-time and trusted partner, Microsoft, to help build on this initial success. Working together, we turned this powerful new manufacturing technique into a repeatable, supportable, and more efficient best practice that could be share internally and with other aerospace manufacturers.

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Better-focused, more-profitable innovation

Today’s new digital and social tools provide a better under- standing of aerospace customer needs than ever before. They provide visibility into which products and services customers are using, how they’re currently using them, how they anticipate using them in the future, how they’re redefining their own business models and offerings, and what kind of help they need.

These deep behavioral insights profoundly improve your ability to systematically meet customer needs and improve profitability by developing modern products and services. Industry analyst Forrester Research says, “Companies that successfully harness digital technology to advantageously serve customers will create clear competitive separation from those that do not.” i

Modern products are designed using a volume and quality of customer insights that simply was not available until recently. That means they more consistently meet customer needs, build market value, and drive profitability.

Designing good stand-alone “point” products is no longer enough. Digitally savvy aerospace companies are building innovative lifecycle solutions. These modern products often have built-in usage-data-gathering features that automatically monitor their own performance and health. This caliber of data lets you improve product serviceability, customer experiences, and customer loyalty over time.

From digital concepts to aerospace results

Microsoft applies a standardized approach when helping aerospace companies use digital technologies to establish data-rich interactions with customers and within design teams. By strengthening design collaboration and adhering to powerful innovation-focused standards—such as the JT Open and 3D Manufacturing Formats—we revitalize development processes, inspire breakthrough ideation, speed design, and reduce costs.

Recent advances in information technology and computing paradigms elevate design and engineering’s ability to drive aerospace innovation and value:

1. Big Compute for engineering analysis and simulation: Analyze massive amounts of design data using today’s cloud-based hyperscalable, on-demand computing power.

2. Mobility for design engineering: Arm designers and engineers with the high-performance, 3D-capable tools they need to innovate from wherever they are, including a customer site or the factory floor.

3. Secure document collaboration: Confidently share sensitive documents both internally and externally with recent advances in encryption, identity, and authorization policies.

4. Innovation communities: Bring teams together using technology that allows ideas to develop organically, without being intrusive. Let your designers simultane-ously share ideas and content across a digital canvas that can be viewed from anywhere in the world.

5. Product analytics and insights: Make better roadmap decisions, strengthen product usability, and improve design elements using insights based on telemetry data gathered from in-use products.

REIMAGINE YOUR PARTNERSHIPS WITH YOUR CUSTOMERS

Microsoft inspires and propels innovation

Apply powerful new technologies across each of your key aerospace processes:

Creating and collaborating: Let your global innovation community simultaneously see, share, and engage with ideas. Technologies elevate idea sharing beyond what was possi-ble even a couple of years ago.

Analyzing and optimizing: Lay the founda-tion for next-level innovation by synthesizing data from a multitude of sources and supporting native connectivity for machine-to-machine and machine-to-cloud scenarios. Microsoft Power BI, Microsoft Azure Machine Learning, and Microsoft Azure for IoT make advanced analytical capabilities a reality.

Simulating outcomes: Drive better, faster design decisions using powerful simulations. Extend your on-premises high-performance computing capabilities to the cloud to scale computer-aided engineering on-demand and generate the insights you need, when you need them. Microsoft Azure Big Compute and Batch provides the flexibility needed to satisfy your compute-hungry apps.

Working on the move: Let your designers innovate from anywhere using exciting new mobility capabilities. Our feature-rich Microsoft Surface Pro 4 and Microsoft Surface Book devices free your designers, and their creativity, from their desktops.

Securing the work: Protect sensitive design information across multiple device types and geographies using industry-leading encryp-tion, identity, and authorization policies that travel with your information. Microsoft Azure Rights Management and Microsoft Enterprise Mobility Suite deliver the very latest in security capabilities.

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Boeing’s new collaboration tools drive effectiveness and reduce costsBoeing is using our global communications and produc-tivity tools—Microsoft Lync Server, Microsoft Windows (across multiple mobile devices), and Microsoft-partner Wirestone’s sales and marketing app—to better commu-nicate and solve complex issues across vast distances. By establishing a consistent collaboration platform, Boeing is also avoiding many of the costs associated with its previous technologies.

The realized benefits include:

• Improved employee productivity, responsiveness, and knowledge sharing

• An enhanced, secured mobile productivity platform

• Reduced IT costs through simplified management

• Lower Web and audio conferencing costs

Learn more by reading these two case studies: Mobile Productivity at Boeing Takes Flight and Boeing Promotes Knowledge Sharing for Global Workforce.

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REDESIGNING OPERATIONAL AND BUSINESS PROCESSES

Move beyond incremental process improvements to a new way of working

Digital aerospace businesses embrace the new way of working by continuously scrutinizing and streamlining operations at every level. Recent digital technology break- throughs significantly improve the speed and quality of collaboration across a myriad of global business functions.

For example, employing intelligent production and service machinery throughout manufacturing and MRO operations helps aerospace companies better anticipate, react to, and adapt to internal and external challenges. It also directly contributes to profitability. According to industry analyst Gartner, “By 2018, the total cost of own-ership for business operations will be reduced by 30% through smart machines and industrialized services.” i i

Workplace collaboration and productivity

Aerospace design and supply chain teams—including partners and suppliers—continue to trend toward greater geographic dispersion. And, as aging employees retire, they’re being replaced by younger talent with a much different set of expectations regarding workday norms, mobility, and social connection.

Digital aerospace companies are using technology to transition from the old at-your-desk work styles to the new anywhere, anytime, any-device styles. Microsoft’s modern workplace solutions include productivity tools that markedly elevate the ease and security of collaboration activities across geographies and demographic groups:

• Share confidently: Modern online conferencing and collaboration capabilities allow your aerospace teams to have more efficient virtual meetings, crowdsource new ideas, and share files more securely. Keep your on-the-go employees productive while protecting against data and identity theft with industry-leading security capabilities. Microsoft Office 365 and Microsoft Enterprise Mobility Suite combine next-generation, world-class collaboration and security.

• Participate and innovate: Let your workers easily start conversations, collaborate on files, and organize team projects. An enterprise-grade collaboration technology like Microsoft Yammer is much more than just instant messaging.

• Anytime, anywhere communication: Energize global, interactive project discussions using tools that allow designers to work from wherever they’re needed. Devices like Microsoft Surface Hub, Microsoft Surface Pro 4, and Microsoft Surface Book bring people together, no matter where they happen to be located.

“I believe the Surface Hub is one of those, ‘why didn’tsomeone think of that first’ products. It makes so muchsense and fixes many problems workers and businesseshave with collaboration today, and even more senseinto the future, given worker disaggregation.”

- CIO.com, “Microsoft Surface Hub Could Solve Enterprise Collaboration Problems,” 2/14/15

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Manufacturing and service processes

Aerospace manufacturing continues to grow in com-plexity. Products today have thousands and sometimes millions of parts and face increasingly stringent quality- control and performance standards. However, traditional manufacturing processes and controls are not keeping pace. They’re too labor and time intensive; too prone to human error.

Increasingly, modern factory floors are benefiting from new digital capabilities. For example, the IoT and pre-dictive analytics are adding game-changing intelligence to production and MRO facilities. Continuous machine learning provides the real-time visibility needed to quickly identify (and often anticipate and rectify) production and service problems.

Microsoft helps aerospace manufacturers expertly apply these kinds of innovative, digital technologies. The following capabilities simplify and improve the processes related to production, quality and inspection, and maintenance and repair:

• Embrace the world of smart sensors: Powerful new predictive analytics capabilities let you learn about production line and component behavior, predict future outcomes, and even fix problems before they occur. Data provided by sensors is only insightful if it’s handed off to powerful technologies like Microsoft Azure for IoT and Microsoft Azure Machine Learning.

• Bring data to the factory floor: Reach new levels of productivity and innovation by better navigating the assembly structures found in engineering models and printing prototype parts for testing or use in mainte-nance and repair activities. Siemens JT2Go for Windows and Microsoft Windows 10 enable the new era of 3D printing to make real contributions to factory floor and MRO productivity.

• Create repeatable workflows: Improve workflow, mo-bility, and social collaboration across design teams and within supply chain groups. Supporting technologies like Aras Flow for Windows bring proven intelligence to aerospace workflow processes.

Fast, tangible manufacturing gains with highly mobile, 3D solutionsOrbital ATK is using the Siemens JT2Go and Microsoft Surface Pro solution to boost productivity, reduce costs, and increase shop floor quality and accuracy. The utility of the solution has won strong acceptance among workers, suppliers, and customers.

“We see the Siemens JT2Go and Microsoft Surface Pro combination as more than a tool to work faster. It’s a tool to drive higher levels of manufacturability and quality.” — Matt Johnston, Digital Design and

Engineering Manager, Orbital ATK

Learn more by reading this case study: Aerospace Firm Boosts Productivity with Move of 3D Product Data to Shop Floor

The Internet of Things is adding game-changing intelligence to the factory floor.

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Security and compliance operations

Data security and regulatory compliance are top aerospace priorities. Protecting intellectual property across an increasingly complex value chain is essential to long-term survival and prosperity. Statutory compliance is also a challenge; few industries are as heavily regulated.

Microsoft stands apart in its ability to help large, geo-graphically dispersed aerospace enterprises manage security risks and comply with regulations.

Security: Protect sensitive IP across multiple device types and geographies using advanced encryption, identity, and authorization policies that travel with your information. Providing enterprise-grade security for everything from “things” to the cloud requires capabilities like:

• Multifactor authentication for PC access via either a biometric device, facial recognition, or a PIN sent to a mobile device

• Data loss prevention protocols that include the ability to recognize and automatically encrypt data, wipe devices remotely, and generate detailed audit reports

• Enabling administrators to automatically prevent users from installing untrusted applications

These and other capabilities are built into technologies like Microsoft Windows 10, Microsoft Enterprise Mobility Suite (EMS), and Microsoft Advanced Threat Analytics (ATA), which leverage machine learning to let you quickly detect and adapt to changing cyber-security threats.

Compliance: Meet an increasingly demanding set of international, country-specific, and aerospace-specif-ic compliance standards with the capabilities provided by Microsoft Azure Rights Management Service (RMS) and Microsoft Office 365. Regarding ITAR compliance, as just one example, Azure lets you control who may or may not access specific information, while simultaneously enabling rich collaboration. And Office 365’s ITAR-support plans meet the security, privacy, and regulatory compliance requirements for U.S. Federal Government agencies (including FISMA/FedRAMP and ITAR) and companies operating under ITAR.

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Digitizing the possibilities

New technologies create across-the-board aerospace opportunity. Today, large aerospace enterprises more easily penetrate adjacent businesses, and smaller compa-nies more effectively compete with entrenched players. The winners are the ones that pick the right technology and partners. According to Gartner, “Digital business will redefine traditional industry and market boundaries and will lead to industry-blurring disruption and reinvention on a scale never seen before.” ii i

Aerospace organizations are evolving business models in three fundamental ways:

1) Shifting from just building products to also monetizing data-centric assets

The goal here is to creatively examine aerospace systems for (a) new product-as-a-service opportunities and (b) ways to monetize existing data and digital assets.

The new digital era is creating exciting new product-as-a-service opportunities. The classic aviation example is charging for engines by the hour instead of as a one-time purchase. Demand for these kinds of services is strong because they allow customers to more accurately forecast costs and shift traditionally CAPEX expenditures to OPEX.

In terms of profitable execution, both of these monetized assets require manufacturers to collect operational and performance data from their products, services, and processes. Here again, new technology is the answer. For example, the combination of IoT and learning machines accurately gathers data and creates revenue-generating information.

Turn machine learning into new revenue

Machine learning techniques transform information gathered from your modern, intelligent products into revenue-generating opportunities. Translating usage data into maintenance and repair analytics, or feeding data from defense-system sensors into a geomapping system, are just two examples. This kind of information can quickly be packaged as a digital service that either improves margins or creates new revenue streams.

Model your way: Microsoft Azure Machine Learning offers a simplified approach to automating the produc-tion of salable information services. It lets you easily create information-mining models with a web browser and drag-and-drop gestures or simple data-flow graphs. Azure Machine Learning Studio features a library of timesaving templates and best-in-class algorithms from Microsoft businesses like Xbox and Bing. Code and models are easily shared across global design teams, so everyone can leverage modeling techniques to create revenue-generating ideas.

Deploy in minutes: With Azure Machine Learning, your model is live in minutes as a fully managed web service. These services connect to any data from any source, including IoT-enabled products, production equipment, or MRO operations. That’s when the full power of machine learning is unleashed. As needs change, you can easily update your model and put it back to work —without losing access to previous results.

EVOLVING BUSINESS MODELS

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2) Complementing physical experiences with digital ones

Aerospace organizations will make enormous productivity and effectiveness gains by finding creative ways to converge physical and digital experiences. Holographic computing is a great example. It’s revolutionizing how designers work, how repairs are made, how we train, how we learn, and much more.

Microsoft HoloLens takes holograms out of the realm of science fiction and into the workplace. HoloLens is the first fully untethered, see-through holographic computer. It makes 3D, high-definition holograms come to life, seam- lessly integrating with physical places, spaces, and things. We call this experience “mixed reality.” With HoloLens, there isn’t a screen to touch or a mouse to click. It under- stands your movements, vision, and voice, so you can interact with content and information in the most natural way possible.

Now your aerospace designers, maintenance techs, and trainees interact with new product ideas in environments where products will ultimately be used:

3D, high-definition holograms are redefining aerospace design, maintenance, and training.

• Designers assess how part prototypes will integrate with existing subassemblies right in their lab, before finalizing design schematics.

• Maintenance techs visualize replacement parts and design modifications before machining a part.

• Trainees no longer have to travel to production facilities, MRO sites, or airports to get hands-on experience. They practice on “real” assemblies from a classroom.

3) Redefining internal business models

The technologies that enable aerospace companies to build data-driven services for customers also support the creation of pay-as-you-go internal services. Converting fixed costs into variable costs creates substantial savings and efficiencies by enabling managers to consume only the resources they need, rather than being charged for a fixed estimate of peak usage. As examined earlier, cloud-based systems let designers use high-performance com-puting resources only as needed, versus the traditional approach of buying big computers that often sit unused.

Microsoft Azure is a growing family of integrated cloud services that delivers powerful analytics, computing, database, mobile, networking, storage, and web capa-bilities where and as needed. Azure provides access to the internal cloud and resource pools, or hybrid (internal and external) cloud and resource pools, needed to create reliable pay-as-you-go internal services.

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As we’ve seen, adopting a digital-first mindset reveals an astonishing array of possibilities for an aerospace enter-prise. Digital technology combined with new and better data sources creates abilities that were unimaginable only a few years ago:

• Reliably predicting manufacturing and business out-comes

• Anticipating customer needs with far greater certainty

• Improved productivity by enriching physical experiences with digital ones

• Better operational responsiveness to market dynamics

• Accelerated cycles of product innovation made possible by including customers and partners throughout the value chain

FROM KNOWLEDGE TO ACTION — REIMAGINE YOUR BUSINESS

And these are just some of the possibilities. Finding an innovation partner to inspire and enable your digital business transformation is essential. At Microsoft, we have the technology, skills, and experience to help you:

• Reimagine your partnerships with your customers and their customers

• Redesign operational and business processes

• Evolve business models

Building digital business momentum starts with collabo-ration. Share this document with your colleagues and get the conversation started. Stay in touch with our digital manufacturing developments by following Simon Floyd on Twitter and LinkedIn, and by reading our manufacturing industry and technology-related blog rolls:

• Microsoft in Discrete Manufacturing

• Azure Machine Learning

• Azure RMS

• Big Compute

• Hololens

• Internet of Things

• Surface

i Forrester Research, “Predictions 2015: CIOs accelerate the business technology agenda,” November 10, 2014

ii Gartner, Inc., “Top 10 Strategic Predictions for 2015 and Beyond: Digital Business Is Driving ‘Big Change‘,” October 4, 2014

iii Gartner, Inc., “Top Industry Predictions for 2015: Digital Business Transfor mation Gets Underway,” December 11, 2014

Microsoft inspires and enables digital business.