Defense and security trends 2025: Building strength with data and AI
In 2025, defense and security organizations will focus on using intelligent solutions to maintain mission readiness across air, sea, land, and cyberspace.
Advanced air mobility. Autonomous drones. Hyperspectral sensor systems. On-orbit servicing. Position, navigation, and timing systems. Augmented reality for maintenance, repair, and overhaul. Artificial intelligence-powered mission-planning capabilities.
The list could go on—and on and on—about the sorts of opportunities that aerospace and defense startups are pursuing right now. Space-focused startups are active in about 20 business sectors. Add aviation and the broad brush of “defense,” and the diversity of activity is simply staggering.
There’s a common denominator in all this. A&D startups all do business, in one way or another, with some of the world’s most risk-averse organizations: national security establishments, civil space agencies, and the prime contractors with whom they prefer to do business.
Aerospace and defense startups’ business challenges
Working with these sorts of organizations takes structure and traceability in all dimensions, from the people aerospace and defense startups hire to the products they deliver to the money they spend. It also begs for scalability, because if something works well, small firms need to show they can deliver a lot of it, reliably and quickly.
That can be a challenge for young organizations like A&D startups who focus on delivering innovation at speed. As a result, there’s been less attention paid to the business side, making it harder to break in and, later, manage relationships with government agencies and primes who expect extreme operational regimentation.
Add to that the need to manage contracts, estimate pricing, manage supply chains, onboard and grow employees, and deal with compliance, and things can get overwhelming quickly.
That’s why many emerging A&D firms are turning to software-as-a-service (SaaS)-based cloud ERP.
Cloud ERP benefits for aerospace and defense startups
These systems embed ready-to-run industry best practices and collaboration features that relieve A&D startups from having to plow time and money into reinventing the business-process wheel now and as they scale.
They encompass a continually updated body of knowledge and process amassed over a half century’s support of A&D industry leaders. With cloud ERP, startups can exploit it all for pennies on the dollar and speak the business language of the major players governments are most comfortable with.
Cloud ERP is basically a shortcut to Fortune 50-grade management and administration. It lets an A&D startup focus on innovating and delivering the products and services attracted its customers and partners in the first place.
Cloud ERP functionality is wide-ranging, particularly when taking into account an ever-expanding selection of specialized partner applications that integrate with it:
- Tracks inventory and materials and keeps tabs on intricate manufacturing throughout the product lifecycle.
- Manages the supply chain and improves visibility and information exchange, boosting resilience of increasingly complex aerospace and defense supply chains in which small disturbances can trigger massive consequences.
- Aids product-quality and regulatory compliance management.
- Estimates costs based on a massive database of historical comps (vital for small companies lacking managers steeped in contract experience), then calculates and allocates actual costs precisely, enabling real-time visibility into budgets versus actuals across individual projects and organization-wide. This is especially important given extended A&D sales cycles and lengthy product-development timelines.
- Assures business compatibility with established primes and growing players, many who use full-stack ERPs, making for more efficient interaction.
- Integrates with product lifecycle management (PLM) tools as well as specialized product-pricing and quoting tools. The PLM piece is critical in getting data out of CAD systems and into manufacturing systems, enabling iteration between design and tooling and moving to production quickly and then scaling it as needed—often a hurdle for manufacturing-oriented A&D startups.
- Leverages advanced data capabilities, increasingly bolstered with AI, to provide a real-time view of analytics around manufacturing, supply chain, and finances that benefits management and investors.
- Does it all reliably and securely.
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Focus on innovation while keeping risk in check
Regardless of how amazing an aerospace and defense startup’s technological capabilities, it must deal with the workaday challenges of running and growing a small company: predict demand, satisfy customer needs, and achieve profitability, manage employees, collaborate with suppliers, oversee finances, ensure quality and compliance, and address all the other complexities of running a business.
Complicating matters is that the A&D business demands structure and rigor like no other. Every bolt, every line of code, every proposal line item must be justifiable and traceable.
Cloud ERP makes sense for small companies in lots of industries, but none more so than in aerospace and defense, where the end-customer desire for risk mitigation is nearly as powerful as the interest in innovation.
In addition, where these startups also must comply with national regulatory requirements and ensure data, operational, legal and technical sovereignty, sovereign cloud solutions and service providers make cloud ERP a viable option.
Cloud ERP helps A&D startups show they’re serious about the structure and industry-standard business processes that keeps risk in check. Most importantly, it helps today’s aerospace and defense startups operate more effectively today while building a platform for future growth and diversification as they become the primes in their own right.