What Is the Return on Investment of Digital Engineering for Complex Systems Development Schedules? Findings From a Mixed‐Methods Case Study on the Post‐Production Design Change Processes of Navy Assets

Abstract

Complex engineered systems routinely face schedule and cost overruns, along with poor post‐deployment performance. Both INCOSE and the U.S. Department of Defense (DoD) have championed Digital Engineering (DE) as a potential remedy, yet most of DE's purported benefits remain anecdotal, and its return on investment (ROI) remains poorly understood. Addressing this gap, this research presents findings from a case study of a Systems Engineering (SE) team conducting the preliminary design process for post‐production design changes to legacy Navy assets. Through a mixed‐methods study, we document why complex system sustainment projects are routinely late, where and to what extent schedule slips arise, and how the DE transformation could improve schedule adherence. This study makes three major contributions. First, it documents four archetypical inefficiency modes driving schedule overruns and explains how these mechanisms unfold in their organizational context. Second, it quantifies the magnitude and deviation of schedule slips. Third, it creates a hypothetical DE‐transformed version of the current process that is aligned with DoD's DE Policy, and compares it against the current state to estimate potential schedule gains. Our findings suggest that DE transformation could reduce the median project duration by 50.1% and the standard deviation by 41.5%, leading to faster and more predictable timelines. However, the observed gains are unevenly distributed across different task categories. To the best of our knowledge, this study presents the first quantitative evidence of DE's potential ROI, offering practitioners and policy‐makers a basis for DE investment decisions for system lifecycle management. Post‐production design change projects in complex engineered systems frequently exceed projected schedules, underscoring the need for new approaches that improve efficiency and traceability across the system lifecycle. To that end, Digital Engineering (DE) presents an opportunity as the SE community continues to shift toward more digital, model‐based practices. Yet, the practical benefits of DE remain insufficiently understood. This study makes three major contributions that address this gap at its core. First, we identify the origins of delays within a Navy SE team conducting preliminary design phases of post‐production design changes. Through a mixed‐methods approach, we characterize four archetypical inefficiency modes causing schedule overruns and explain how they influence the process. Second, we quantify the location and extent of delays, highlighting how significant delays that are typical for complex system sustainment projects could be materializing. Finally, we provide the first quantitative evidence of DE's return on investment for complex system development, addressing a critical gap in the literature where most DE benefits have remained anecdotal. Results suggest a significant reduction in time and variability in the project timeline. However, schedule gains are not uniform across all task categories, with the most important improvements observed in System Level Modeling and Analysis, Information Exchange, and Review Meetings. For practitioners, these findings provide evidence‐based guidance on how to align DE transformation efforts with organizational processes and behaviors. This means identifying the activities where DE offers the greatest leverage in the organizational context and prioritizing transformation efforts accordingly. This insight helps not only instill confidence in the substantial upfront investments required for DE adoption but also build support for the broader cultural and organizational changes necessary to sustain long‐term transformation.