The Stories to Track at the Paris Air Show
As the Paris Air Show gets under way, Accenture has already noticed that change is in the air for the week ahead in Le Bourget.
Four stories in particular clearly underscore the significant changes taking place within the aviation industry.
One: 50th Anniversary and beyond
This year's Paris Air Show will differ from previous ones in three ways.
First, the Asian aerospace and defence industry is growing faster than the more established United States and United Kingdom markets. During the next several years, commercial air traffic growth in Asia will be the key driver of overall market growth. As such, more exhibitors and attendees will be from Asian countries, particularly China, India and Korea, than previous Paris Air Shows.
Second, this year's event will focus more on collaboration as opposed to previous years. The trend at this event previously has been for companies to often make new product announcements as standalone entities. This year will be much more about interdependence and companies coming together as teams. The number of companies that attempt to succeed as islands unto themselves is shrinking, and this will be noticeable at the event.
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Third, at previous Paris Shows the emphasis has primarily been on hardware and manufacturing. This year's event will be more about services and software. This event will focus more on providing engaging customer experiences with better software and services.
Two: Fluctuating dynamics in emerging and developed countries
The Paris Air Show 2013 will shine a spotlight on the momentum, or lack thereof, among companies in emerging versus development countries. The latest competitive threats and business opportunities in Asia and the Middle East will be important stories to track. Commercial air traffic growth in these two regions has outpaced other global regions and will continue to drive global demand. Governments of China, Japan and India have continued their commitments to build aerospace and defense capabilities and skills. China, for example, is developing and certifying regional and wide-body commercial aircraft.
Elsewhere, companies from Dubai, Malaysia and Indonesia are also gaining market momentum and this will be more apparent at the show. Market growth among industry players from Brazil and Russia has continued in recent years. They will likely have a more prominent presence than previous years. By contrast, during the past year the U.S. and U.K. aerospace and defense markets have been relatively slow. Expect fewer news announcements than in previous Paris Air Shows from companies from these developed nations.
Three: Converging on the "extended enterprise"
Look for an intensifying emphasis on the extended enterprise for all parts of the aerospace and defense value chain. The extended enterprise embodies a converging network of firms ranging from customers to suppliers to third parties who directly or indirectly collaborate in design, development, production, delivery and support of a product. This network encompasses all facets of collaboration including processes, people and technologies needed to manage efficiently the interdependencies among that network.
The extended enterprise will be a more prominent story because of major problems the industry has had in recent years with production delays, cost overruns and ground halts, particularly with major aircraft programs. A growing number of companies realize they must embrace extended enterprise business models. In fact, several have sharpened their focus and investments in this arena particularly in the past two years.
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Momentum towards the extended enterprise model illustrates widespread convergence throughout many high-tech and electronics industries including aerospace and defense. Convergence encompasses a broad global marketplace dynamic in which different companies and sectors are brought together, as competitors and collaborators, across traditional industrial and technological boundaries. In a world dominated by convergence, many traditional products, services and types of companies will become less relevant. Yet a stunning array of news ones will be possible and this is something to look for at this year's show.
Four: Accelerating momentum towards software and services
Watch for important software-related stories. Commercial and military aircraft are becoming more software-enabled compared with previous generations. The exponential conversion of hardware functions to networked, upgradeable software will drive industry momentum at the event and over the next several years. Aerospace and defense companies need to understand the implications of a software-driven, "connected everything" world. At this year's Paris Air Show they are likely to learn more about this.
Controlling the flow of information in today's digital business, where applications, systems, networks and communications channels are constantly changing, ranks among the most challenging aspects of enterprise IT. Software-defined networking (SDN), where the network gets managed through software instead of hardware, provides a giant leap forward in enterprise flexibility. Using SDN, aerospace companies can reconfigure systems connectivity without changing their physical characteristics, making it easier for them to manage, change and integrate cloud computing services and generate more returns from their network investments.
Damien Lasou is the global managing director of Accenture's aerospace and defense practice. He can be reached at Damien.firstname.lastname@example.org.