Continuous revolution: unlocking the future of drone operations

Drone operators are the pivotal players who will ultimately determine whether the huge economic and social potential of drones can be realised.

Innovative operators are already determining how the complex web of innovative technology, continuously emerging concepts of operation and winding regulatory regimes can be harnessed into viable, industrialised services fit for widespread use.

This next period will offer operators both fantastic opportunities, as well as daunting challenges, as the market matures and evolves. 
Those who prosper will do so because they anticipate continuous, far reaching transformation, and will equip their organisation with the right foundations for change. 

The increasing adoption of drones by a broad set of enterprises, public services and entrepreneurs promises a revolutionary leap forward in the productivity and performance of industries, from infrastructure to logistics to public protection. 

Drones have already radically improved reach, efficiency, repeatability and accuracy in areas like surveying, inspection and mapping – giving civil and commercial decision makers an easy, cost-effective way to gather all the information they need to underpin their critical decisions.

Vibrant and pioneering drone operations providers have already established themselves as a vital part of many industries’ ecosystems, using drones to deliver time and cost savings of 80% or more, compared to traditional approaches.

Everyone has an idea for how they can use drones to improve their professional or personal lives, and acceptance is building for exploitation of this ‘swiss army knife’ technology in many sectors.

A dizzying array of development, trialling and deployment is happening across the globe, demonstrating the value of drones in a wide variety of both extraordinary and mundane task such as parcel carrying, bridge painting, railway inspection, traffic monitoring, intercontinental freight, personal security, insulation assessment, pizza delivery, rock pile measurement, mountain and sea search and rescue, aircraft maintenance and even shark watching.

Innovators are pushing forward to make use of drones in new ways through new operational models and ways of working, which can deliver more than the way we use unmanned air systems today, whether through Beyond Line of Sight flights, automated data analysis, delivery of precious, sensitive supplies or operation in urban areas. 

Within the next decade, PricewaterhouseCoopers (PWC) projects there will be around £42bn of economic upside from drone exploitation in the UK alone, and sitting alongside this is the widespread public and social benefits, which will be made possible by democratised, cost effective airborne services delivered at scale.

Despite the continuously expanding range of specialisms, technologies, and services available to industry, some common challenges must be overcome in order for drones to deliver fully on their extraordinary potential.  Some – such as the provision of fit for purpose systems for airspace infrastructure, regulation, licensing and geo-fencing – are, rightly, preserved by Government and regulators, which in countries like the UK, are rolling out progressive policies to enforce safe and responsible drone use.

Beyond Government, the key players are the operators, also known as the organisations or commercial entities who deliver imagery, monitoring or transportation services using drones. Regardless of whether they are standalone commercial SMEs, or in-house units embedded in huge enterprises like infrastructure providers, drone operators are responsible for the complex end to end process needed to exploit the technology all the way from fielding customers’ requests, flight planning, combining the right platforms, pilots and data, through to the safe conduct of a flight, and ensuring the successful delivery of data or payload.

Drone operators are an unavoidable presence at the centre of the ecosystem – residing at the point where demand, supply, technologies, revenues, obligations and opportunities meet. Their role is to consider the art of the possible within commercial, technical and operational terms, and interweave theirs and others’ capabilities to deliver  the most effective and efficient service for each job.

Doing so, not once but dozens or hundreds of times a day means not only mastering their own skills and decision making but consistently meeting the demands of a variety of stakeholders:

• Customers need transformative, commercially dependable, high quality services.  
• Competitors force continuous improvement in offers, differentiation and pricing.
• Investors expect strong growth and a path to profitability.
• Suppliers and partners require a pipeline of jobs and efficient payment.
• Regulators oblige compliant, auditable and trusted operations.

Managing the needs and expectations of this complex ecosystem is challenging and absorbing, and operators must, above all, be able to see the wood for the trees – to focus on the right commercial and operational decisions for each job, even in the midst of competing demands. The drone sector is experiencing a high turnover and increasing growth, and each operator is being pushed to continuously improve its business performance, or risk quickly running out of competitive and financial room. 

Operators’ ability to succeed will now be tested as the still-emerging nature of the market is likely to result in continuous change on multiple fronts:

• Regulatory environments are still developing, and likely to not only emerge sporadically, but change significantly across the world to reflect nations’ varying industrial, economic and public policies. Structural regulations such as airspace architecture and geo-fencing, permissive regulations such as pilot licensing and codes of behaviour, technical regulations such as equipment kitemarks, cyber security and communications standards, and civic policies such as privacy and many others must, be navigated successfully even as they evolve. 
• Ways of working are evolving quickly. In sectors like oil and gas, sector bodies are working with leading operators and Government to develop specific drone operations manuals for sensitive, complex sites such as offshore oil rigs. The approach needed often varies significantly from those in other sectors like agriculture or highway inspection, and requires operators to develop targeted services specifically tailored to the needs of its customers. For many operators, working across multiple environments, customers and sectors, this will most likely mean constant management of a proliferation of specialised, distinct, workflows, each with its own safety case, operating approach and ecosystem of suppliers. 
• Customers’ requirements are growing more demanding.  Demand for high volume, and complex operations are on the rise to deliver new intelligence and services, as well as to spread use and benefits across entire enterprises. High performing customers are pushing operators to deliver and/or support sophisticated and complex operations on a large scale. For example, monitoring multiple, wide-spread construction sites, or long linear asset surveillance or beyond visual line of sight (BVLOS) to remote locations over water or inhospitable terrain all while improving the performance and flexibility of their services ( For example, real time changes to tasks during a mission). Partially as a result, more basic or generic services are increasingly a commoditised, saturated segment likely to suffer downward pricing pressure. Through necessity many operators must effectively offer large scale, or alternatively more sophisticated operations, although these pose significantly more operational and commercial challenges than standard operations. The accelerating treadmill of customer expectations will likely require a continuing investment in development, and may also magnify weaknesses in business models or commercial approaches designed for simpler offers.
• End to end commercial confidence is as important as safety assurance when customers look to integrate drone technology into their core business operations, services or supply chain. Adopting new innovation is often met with risk, and many enterprises and organisations are sceptical of engaging with emerging technology in its early stages. Before committing to drones, customers will need to be convinced that their business interests or demands will be met. For example, the pizza will be delivered to the hungry customer, the thermal scan of the power line will be accurate, and the building site will be surveyed at the right time to accredit progress against key milestones. Gaining customer trust will require operators to reliably and consistently deliver customers’ business outcomes as promised, while seamlessly managing the ‘back office’ complexities within operations and technology.
• Acquisition and procurement approaches will wax and wane. The industry has already seen a number of waves in enterprise insourcing/outsourcing as major customers prioritise either the benefits of sub-contracting leading to cost-efficiency, access to market innovation, pay-as-you-go commercials, or in-house operations with specialist capabilities, risk and operational control, and margin removal. Both models most likely have a place in the sector, however, some enterprises already mix the two by outsourcing low risk, high volume operations but retaining scarce, specialist or mission critical capabilities in-house. As existing customers start to make up their minds, new customers will begin their own period of learning through trial and error. 
• Business and risk models need continuous improvement to drive commercial performance. Despite the innovative work of early adopters in operations and insurance, a detailed and dependable understanding of commercial and operational performance is hard to come by. Whether in real time or as part of business analysis, data on the performance and risk of different companies, products, services and individuals will be key to improving business outcomes and market differentiation. As the competitive environment intensifies, leading operators will use detailed business analysis around hardware acquisition, fleet management, pilot training, offer definition and pricing, operational performance and partnering, to develop lean operating models which can maintain strong margin performance, to invest in scaled capabilities for the next phase of growth. Key stakeholders such as investors, insurers and regulators will also use that analysis for their own assessment and scrutiny. 
• Scarcity of qualified, expert resources may constrain growth. As operators have emerged over recent years, many companies have to come to rely heavily on the rare, specialised competence of a small number of experts to deliver byzantine, nuanced operational and commercial activities. Determining the right flight, safety and operational plan for a given task, configuring the right capabilities, delivering safely and reliably all the way through to commercial completion demands expertise across a number of disciplines. Thus far, hands on, can-do approaches with a dose of ‘learn by doing’ has helped mask shortfalls in end-to-end expertise for straightforward operations.  However, there’s a daunting learning curve, especially in areas like safety, which is likely to steepen further in the coming years. To keep up with the market, operators who are dependent on high touch business models, bespoke operational / service development and ‘Brain Mk1’ processing power will likely see their future delivery and service improvement capacity constrained by the limited number of experts, a lengthening development cycle for new specialists, and rising wage and training costs for critical areas.
• Digital technologies will become the heart of the offer. The last decade has been focussed on the development of hardware such as platforms and payloads but now, dominant suppliers such as DJI, Parrot and DelairTech have brought accessible, practical offers to the market at scale. For operators, standardisation and commoditisation of hardware means that the choice of physical assets is now only a minor factor in their competitive edge as customers are focusing more and more on service efficiency, scale optimisation, intelligence and data analysis, as well as integration of drone operations into their wider enterprise software and systems. Operators’ ability to successfully exploit technologies like big data analytics and machine learning, machine-machine networks and autopilot will be critical to meeting customer expectations. 
   

The coming period is full of opportunity and excitement for operators, but it will also see lots of potential change and increasing pressure – test of operators’ ability to scale up while maintaining a high quality of service, delivery performance and profitability. 

Significant market churn is, therefore, to be expected. Some existing players will leap through the hurdles with ease, parlaying their pioneering spirit, established market position and road-tested expertise into a next generation of services and business success.

Others will find their legacy models wanting, be too slow to adapt, or will be weighed down by unwise investments in redundant skills or technology, becoming fodder for an active period of consolidation, deconstruction and ‘fast failure’ cautionary tales.

Some will struggle to reconcile to the necessary cultural change, which will require bridging the divide currently evident in the sector.

Operators with heritage in aviation naturally gravitate to safety focused, and process orientated culture, but can also bring commercially stultifying assumptions from other sectors or eras. Newer, digital sector orientated start-ups prioritise speed and disruption, user experience, and commercial flexibility  but can find jumping in before testing the water to be inadvisable from a safety, trust or regulatory perspective. A dogmatic adherence to one or the other will undermine some operators, as successful competitors engender a culture which is mindful of both commercial and operational imperatives.

The credibility and increasing awareness of the market will also entice new entrants; new start-ups within profitable niches, and major players from adjacent sectors like services or aerospace who can bring large scale synergies and load-bearing balance sheets as key assets in the race for scale and market share.
 

Across different markets, business models and geographies, the wanted profile of drone operators who are meant to exploit this period of change, is clear. Whether they are in-house outsourced, new entrants or established leaders, strategically minded operators are focused on establishing four foundations within their business and operational architecture:  

1. Delivering More For Less
Leaning and sharpening commercial and service delivery models – even while margins and pricing remain healthy. Improving competitive position and bottom line performance in the short term while releasing investment for new services, skills and business development is critical to build future growth on a sustainable basis, rather than continual rounds of dilutive financing.

2. Trusted Operator
Putting in place rigorous and high quality operations processes, models and tools to ensure that customers, regulators, insurers and suppliers can have confidence in delivery – both from a commercial and safety perspective. The confluence of information age risks (like cyber security risks) and inviolable aviation challenges (like airspace management will obligate operators to demonstrate they take their assurance responsibilities very seriously. Public trust will also be central to the image and credibility of the industry, and with it the ability to gain the support from stakeholders and wider society which the industry, and operators need to thrive.  

3. Digitised Operations
Establishing a fit for purpose digital ‘backbone’ which brings together the disparate, diverse data operators enabling them to  make critical commercial and operational decisions is vital to deliver effective, safe, repeatable services. Operating and business models will not scale if they are built on with intervention from expensive, scarce specialists, with fragmented data and functionality fragmented across bargain basement tools and information silos. To support the services and innovations of the future, well positioned operators are putting in place digital enablers required for a high performing enterprise.

4. Fit For the Future
Planning and equipping for the next wave of innovation – whether improved autonomy on drones themselves via the development of autopilot, the introduction of machine-machine air traffic control via unmanned traffic management (UTM), or the automation and optimisation of decision making through analytics and machine learning. Through a variety of technologies and new services, the operator of the future is expecting far higher levels of repeatability, automation, personalisation and analysis, than what is available today. The resulting disruption to business models and service offers will be significant and widespread, and astute operators are already thinking through both the impact of change, and how they can harness it.

Developing and delivering the blueprint for sustained success will, for many, require business transformation. New approaches will be needed to synthesise a perpetually changing and complicated set of operational ingredients, and to satisfy an increasingly sophisticated customer base setting a high bar for commercial and safety performance. 
Culturally, operators must embrace the best of the aviation and digital sectors. Customer orientated, commercially viable and experience-focused approaches must be reinforced by a quality and delivery assurance mind-set that values structured, repeatable, and risk-managed behaviours. Developing a culture that supports both rigour and innovation – and ensuring staff, processes, training and leadership behaviours can reconcile the two – will be at the heart of a successful and sustainable operator.

Reengineering organisational models away from boutique projects towards industrial scale service delivery will need significant attention. Internally, the business tools available in larger enterprises such as people, process, commercial, risk and resource management, need to be considered if they are to underpin their growth. Externally, offers may have to be redesigned to work at high volume, minimising cost of sale and marginal delivery cost, maximising repeatability, and maintaining differentiators even as customer bases diversify.

The specialised Intellectual Property, operational approaches and customer insight which fuelled operators’ initial, dizzying growth phase need to be captured and systemized so key competitive advantages and delivery assets are sustained even as headcount grows and churns. While early stage companies are built on close, intimate cadres of like-minded collaborators, growing companies must be able to equip new, diverse groups to take the proprietary Crown Jewels to the next level. Transforming strategy, business development and innovation activity into a community effort requires relentless focus on identifying, testing and sharpening the ‘golden nuggets’ in anticipation of changes ahead.

Partnership, supply chain and collaboration transformation must be targeted on priority drivers of scale and relieving bottlenecks in delivery capacity.

On the demand side, maximising the visibility of differentiated, niche or high performing services through go to market partnerships, digital marketing and the cultivation of volume sales channels will be vital to identify and capture new customers finding their way through the sector.

On the supply side, operators’ ability to access the right quality and quantity of pilots, platforms, supporting services, such as insurance, and critical data, such as approvals, will determine how responsive they can be to customer requests. It will decide how to run multiple operations simultaneously and enable them to work across disparate geographies and win ad hoc / fast turnaround business. How effectively sub-contractors and service providers can be integrated into proprietary operations will then determine the success, quality, safety and commercial performance levels delivered – and thus Operators’ effective reach, capacity and growth potential.

Whether to enable high levels of service tailoring and flexibility, leverage the efficiencies of automation and execution, or to assure and quantify performance, digital transformation will be imperative. Putting in place the technical skills to harness disruptive technologies, the business development skills to exploit network effects and digital marketing, and the leadership skills to exploit expanding datasets and increasingly powerful tools will build the foundation operators will need to transform for success.
 

Thales believes in the huge potential of the drone sector – it will be, without doubt, a critical industry of the future, and a force for good in improving productivity, performance and quality of life over the coming years, everywhere.

In the United Kingdom, Europe, the United States and around the world, Thales is working with policymakers, regulators and partners to ensure that the drone market is understood, trusted and equipped in a way that supports both safe operation, and the widespread adoption of drone technology.

Thales is keen to work with innovative, ambitious drone companies, to bring together world leading capabilities in autonomy, mission systems and critical decision making, digital, air traffic management, avionics, analytics and cyber security, to bear through innovative new offers like Soarizon and Ecosystem.