GenAI Triggers Digital Engineering Technology Shift in U.S.

The digital engineering services sector in the U.S. changed significantly in 2023 as several major enabling technologies converged, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2024 ISG Provider Lens Digital Engineering Services report for the U.S. finds that the growing power and importance of generative AI (GenAI) sparked this transformation, with service providers integrating GenAI capabilities into their software platforms and services. This was only the latest development to change the way enterprises think about digital engineering, as they were already evaluating innovations around agile development, composable architecture, microservices, AI deep learning, predictive machine learning and other technologies.

“GenAI has led U.S. enterprises to revisit their technology roadmaps,” said Gaurav Gupta, partner and global leader, Digital Engineering, at ISG. “Companies are eager to adopt new tools that can deliver solid benefits, so the digital engineering technology sector is heading for strong growth.”

While several leading global system integrators have added GenAI capabilities into their portfolios, enterprise adoption of GenAI for digital engineering so far has been cautious and selective, the report says. Integrators are beginning to offer GenAI for automating the creation of design alternatives, optimizing solutions to complex engineering problems and enabling rapid prototyping. GenAI algorithms promise to help engineering teams quickly assess many design possibilities and optimize them based on parameters such as performance, cost, security and sustainability.

Modular, agile business processes and workflows are also reshaping digital engineering practices, allowing companies to rapidly respond to customer demands and bring new products and experiences to market, ISG says. Enterprises are embracing composable design, an approach based on selecting and assembling components in various combinations to fulfill specific user requirements. Many are also adopting microservices architectures to break down monolithic applications into more manageable units for faster development and deployment.