Digital Engineering

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The Arrival of Digital Engineering: Megatrends Driving Engineering Services

As we look back over the past decade from what is now a networked, intelligent and connected economy, we see engineering as a transformed field. The way businesses design, deliver, consume and partner to source will never be the same. Given these trends, what should organizations do next?

Re-engineering the intersection of strategy, technology, and transformation

With the emergence of AR/VR, digital twin and internet of things (IoT) technologies, engineers are increasingly use these latest technologies and digital tools to capture data and craft design of new product and services. Engineering digitization and transformation have become inevitable. With the advent of digital engineering, your product and services become more intelligent and personalized, and the way your product is designed, manufactured, distributed, and serviced are more digitized and connected.

To unlock value from digital engineering, you need to answer:

  • How do you build the right operating model to support your digital transformation?
  • Which partners will enhance your digital engineering capabilities?
  • How do you drive enterprise change and transformation 
  • How can autonomous operations help you drive productivity?
  • Are you missing an opportunity and overlooking the areas for value generation?

For organizations more mature in the digital engineering journey, some key questions to include:

  • How are your service providers engineering value and bringing cost savings across your value chain? 
  • Is your ability to scale-up your pilots across the enterprise sustainable?
  • What metrics are you tracking, verifying, and validating to measure impact of your initiatives against the proposed business case?

Leveraging our industry expertise and technology skillsets, ISG Digital Engineering solution helps you create new revenue streams, advance your steps to meet ESG targets and improve your operational matrices towards cost, quality, and product release timelines. We help you create a diverse and harmonized highway of data and information flow plus the appropriate operating model, software expertise and security design to enable your business to become smarter, more intelligent and more connected. 

The Top Digital Engineering Agenda Items on a CxO’s Desk

IoT and Industry 4.0 driven Digital Factory

Top Priority
  • Cost Savings: Identify the opportunities to reduce cost throughout the value chain and implement the solutions at scale
  • ESG and Sustainability: Utilize Edge Analytics, IoT and Connected ecosystem to achieve ESG and Sustainability Targets
  • Customer Experience: Enhance CX with real-time insights
  • Time to Market: Bring in the agility to take faster decision, based on insights from connected devices, tracking and other capabilities
  • Asset Optimization: Smart shift from reactive to prescriptive maintenance and planning
  • Increase Revenue: Monetize knowledge, models and frameworks
  • Reduce Inventory: Significant impact on working capital by better planning, interchangeability and optimizing the inventory levels
Key Drivers
  • Continuously improve efficiency and reduce cost,  by optimizing the IoT investments
  • Modernize legacy Engineering & OT Landscape: Integrate IT-ET-OT-CT to accelerate transformation
Example Technologies
  • IoT
  • Big data
  • Edge intelligence
  • Human Machine Interface (HMI)
  • Digital Simulation
  • Product lifecycle management (PLM)
    Manufacturing operations management (MOM)
  • Industrial cybersecurity
  • 5G
  • Intelligent Automation / Robotics
  • Virtual reality and augmented reality (VR/AR)

Digital Thread driven by Data Insights Excellence (Engineering, Operations and Aftermarket)

Top Priority
  • Engineering & Manufacturing efficiency: Improve design decision-making, reduce time to market, increase assembly time 
  • Value-added services: Update deployments (through Digital Twin), Grow aftermarket sales, offer new services
  • Supply Chain Transparency: Manage engineering changes
  • Data decision-making: Single source of truth, standardize structure, and visualization enablement
Key Drivers
  • Vision & Strategy – Sets the leadership direction, future state vision, and roadmap for Digital Thread solutions and relevant architectures. Deploys the investments and resources to drive progress, including operating model, governance, and prioritized solution initiatives
  • Value Realization – Ensures prioritized investments are directly linked to realized business value and maximizes value across the value chain
  • Strategic Partnerships – Leverages service partnerships – for execution of digital solutions, and Industry partnerships – for informed industry-proven direction 
  • Adoption & Enablement – Fosters the culture and skillset required to support the adoption, use, and development of Digital Thread solutions. Ensures adoption through change management and communication
  • Delivery & Maintenance Model – Provides the standardized delivery processes, workflow management, and maintenance to ensure ongoing Digital Thread development and value realization
  • Solution Architectures – Defines the portfolio of logical and technical Digital Thread solutions and structure required to enable specific business outcomes. Incorporates key capabilities to support scalability and security
Example Technologies
  • Harmonized platforms including: Product lifecycle management (PLM)
  • Manufacturing operations management (MOM)
  • Cognitive analytics including Artificial Intelligence and Machine Learning
  • Augmented and Virtual Reality (AR/VR)
  • Digital Simulation
  • IoT, Robotics and Intelligent Automation
  • Industrial cybersecurity
  • 5G

Designing for Software defined-X (software as the new-core)

Top Priority
  • Business Model Transformation: Pivot from product economy to service economy
  • New Revenue Stream: Leverage Software & Technology to accrue revenue that is recurring and disconnected from the life cycle of the hardware / product
  • Customer Experience: Ensure finest CX
  • Value Realization: Improved value realization.
Key Drivers
  • PaaS: Shift from traditional model of manufacturing and selling Hardware with associated Software bundled together to offer the Product as a Service to meet business outcomes
  • Flexibility: Customers viewing hardware as a commodity and looking to pay only for services consumed to protect against hardware obsolescence while enjoying the flexibility to access to the latest technology advancements
  • Increase Revenue: Businesses are looking to increase the share of recurring revenue from subscription, software, services and marketplace ecosystem
  • Profitability: focus on Revenue that is subject to low customer churn while sustaining or expanding profit margins
Example Technologies
  • Low Code / No Code Platform as a Service
  • Instrumentation as a Service,
  • Cloud Native apps – SaaS – PLM, MES, SCADA,
  • Asset Performance Mgmt.  as a Service,
  • AI as a Service,
  • Digital Twin as a Service,
  • Event Driven Apps – AWS Lambda EDA,
  • IIoT Platform as a Service,
  • Robots/Drones as a Service etc.

Sustainable cost optimization across global footprint, process, product, tools and technology

Top Priority
  • Redesigning the Operating model in a sustainable and cost-efficient manner to reflect new business & revenue models
Key Drivers
  • Make vs Buy Optimization, 
  • Global Capability Centers, 
  • Managed services, 
  • Application Modernization, 
  • Enterprise Applications, 
  • Green IT and ESG Compliance
Example Solutions / Technologies
  • aPriori

Improve ESG adoption through digital engineering initiatives

Top Priority

How do I handle sustainability not as a one-off project but rather as a strategic agenda?

Key Drivers

How do I formulate and execute a net-zero strategy? How do I improve performance in the circular economy and also reduce product recalls? How do I improve IT’s contribution to sustainability via Agile, DevSecOps, Digital Twins and optimizing algorithms?

Engineering and Manufacturing Applications Transformation (PLM, MES, EAM,...)

Top Priorities
  • Value to the Business: Enable and capture Digital Threads outcomes across the extended value chain, 
  • Improve sales and product quality
  • Reduce time to market and Supply chain operational costs
  • Integrate new technologies like IoT, Edge, 5G and AI
Key Drivers
  • Top-line Increase: Increase revenues and look for alternative business models leveraging new ‘smartly connected’ technologies
  • Agility: Shift from a siloed functional approach to an integrated cross-functional collaboration model, to improve agility and reduce process waste
  • Smooth Operations: Mitigate supply chain constraints through tighter near real time integration between supply and demand
  • Time to market: Reduce time to market considering the fast changing political, economical and consumer behaviors landscape
  • Better UX: Optimize IT spending while improving user experience and capabilities
Example Technologies
  • Product lifecycle management (PLM)
  • Manufacturing Operations Management (MOM)
  • Digital Twin
  • IoT, Edge and 5G
  • Intelligent Automation
  • Virtual Reality and Augmented Reality (VR/AR)
  • VDI
  • Big Data
  • Cybersecurity (enterprise, product, process)

How can ISG Digital Engineering Advisory help you in your transformation journey?

ISG’s team of digital engineering practitioners possesses deep industry expertise and technical skillsets, giving you independent and objective advisory to help you design your end-to-end digital engineering transformation program.

Digital Engineering for Enterprises


We help you assess the current state of your digital engineering initiatives and how you measure against ISG‘s industry benchmarks and best practices. Based on your current state, ISG works with you to develop a digital engineering strategy that generates sustainable value.


ISG guides the development of your digital engineering transformation roadmap, with key element including data and platform, relevant technologies, organizational, and partnership aspects. The ISG Roadmap simplifies the complexity of implementing digital engineering initiatives.

Source and Transform

ISG advises you on your sourcing strategy, guides you in your make/buy/partner decisions and the potential sourcing scenarios so that you can effectively implement the roadmap. We support the onboarding of a best-in-class ecosystem which offers flexibility and enables agile contracting to scale and sustain the initiatives. ISG works with you to define the right key performance indicators (KPIs) and governance mechanisms to monitor and track value.

Contact Us to Get Started

Digital Engineering for Service and Technology Ecosystem Providers:

ISG helps providers create a differentiated positioning in the secured, intelligent, connected economy. We work with you to shape the market.


ISG assesses your existing portfolio and market relevance to identify gaps and opportunities for improvements.


We help you identify whitespaces and redefine your reference portfolio for chosen industry segments and work toward a targeted traction.

Go to Market

ISG's "market making" services help you reshape your go-to-market strategies. This includes:

  • Deal shaping and market shaping support, such as for responding to the market via RFPs
  • Ecosystem partnership recommendations
  • Sales strategy and sales enablement support.

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Discrete Manufacturing

Learn about ISG's expertise in the manufacturing space, including automotive, industrial and aviation. Embrace digital transformation at speed and scale for better resiliency, agility, adaptability and spend/value.


Consumer Packaged Goods

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Hi-Tech, Telco & Media

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Life Sciences, Med Tech & Pharma

Discover how digital engineering can solve your Life Sciences industry specific challenges. We'll help you navigate regulatory hurdles and cost pressures – plus digitize to focus on patient centricity and medical innovation.


Oil, Gas and Chemical

Optimize your strategic direction and digital projects for defensibility in a transparent industry. Find out how ISG Digital Engineering solutions can identify and bridge the gaps, enabling your digital transformation goals.


Digital Engineering for Your Industry

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