The engine, reactor, shields, and armor on the Command Craft can be upgraded. The upgrade path will vary depending on the ship. For example, upgrades for a carrier may not be available for a transport.
An upgraded system results in better performance and in the case of shields and armor, higher protection.
Most upgrades can be performed on-board by your own on-board engineers or engineers at starstations or starbases.
If your upgraded system is damaged or destroyed, depending on its damaged components, you may only be able to replace it by first downgrading to a lesser component and then trying to upgrade it.
Note: Artifacts cannot be repaired.