Unlocking Digital Life Cycle Management across Industries
We are witnessing an enormous upheaval in the traditional hardware manufacturing industry. It is not just the pandemic-induced wave of digital transformation that swept through the industry, making software and digital solutions key in all the operations and general enterprise workflows. The transition unfolding today is much more disruptive than this. And it goes beyond the basic need of manufacturers to convert the analogue to the digital in order to gain transparency, efficiency and real-time insights.
Today, software-centric innovations have trickled through all echelons of the manufacturing business, finally making their way to the end products. Once composed only of mechanical and electrical parts, these assets are now morphing into smart and complex systems that combine hardware, embedded sensors, processors, software, and connectivity features. Expanding beyond the traditional hardware product boundaries, these digitally-enabled assets offer new opportunities via their improved functionality and capabilities.
The changing nature of digitally-connected products inevitably opens the door to new ways of sourcing, conceiving, designing, manufacturing and operating them. New business models, cross-industry synergies and previously untapped ecosystems suddenly become accessible. Thus, in these incredibly exciting times, it is important for industry players to be at the front line where transition and change happens. And to embrace innovation.
As software gets embedded in the product itself but also in the design, the engineering and in after-sale services, it is poised to revolutionise a myriad of industries: from automotive to aerospace, from industrial products and services to critical infrastructure. Most notably, software is transforming the automotive industry.
How software is transforming the automotive world
Next to the electrification and autonomous driving revolution, the automotive industry is undergoing a digital product transformation: software has taken over the entire orchestra of vehicle design, testing, performance, connectivity, and ownership. While vehicles were traditionally hardware and mechanical-engineering driven, today’s innovation comes via software as cars turn into always-connected, dynamic platforms with a myriad of applications and features which can be updated over-the-air (OTA).
As this vision of software-defined vehicles takes shape, one important shift occurs: mobility players now have the power to make continuous innovation possible. From tech and data-driven vehicle engineering to holistic product development models, from new software and hardware updates to expanding customer experience ecosystems, — having software at the heart of the auto industry opens the door to an endless digital life cycle management.
Adopting a data-focused architecture and virtual engineering capabilities
In this new environment, a centralised software architecture and data-enabled engineering will allow digital prototypes, product simulations, and reliable digital twins of physical systems to be designed and managed throughout the development and life cycle of the vehicle.
To better illustrate this, let us consider the example of NEWTWEN, an Italian startup founded in 2020 to provide software that generates high-fidelity digital replicas of physical systems which can be integrated directly into the real-time firmware of the systems themselves. Considering an electric vehicle powertrain, for instance, such Digital Twin on Chip solutions accurately predict temperatures and other critical system states in physically inaccessible locations, providing valuable insight for real-time control systems to enhance performance and reliability. Furthermore, each embedded digital twin is a model which evolves over time with the physical device itself. When a fleet of such devices is connected to the cloud, this “Internet of Twins” offers a rich new source of on-edge data to inform condition monitoring and predictive maintenance of the entire fleet.
Another example comes from German startup Veecle, whose mission is to empower vehicle manufacturers to program their vehicles and keep them up-to-date via a modular software architecture. By separating software from hardware and using a modern programming language called Rust, Veecle enables automakers to program their vehicles at any time — during development, prototyping, or even after the vehicle’s original sale. Their software solution is applicable to any hardware, allowing automakers to program functionally in their vehicles without the intervention of suppliers. NoS is the Operating System developed by Veecle and Nteract is the designed car interaction system based on Android Auto.
Vehicles as living entities: creating a holistic customer experience
Traditionally, OEMs have relied heavily on dealerships to manage the vehicle’s sale and have had limited direct touchpoints with their customers. With the emergence of next-generation software-defined vehicles these dynamics are about to change and OEMs will be able to significantly increase their customer centricity efforts. Being built on a modern software architecture, vehicles promise to establish a direct interaction between the OEM and the customers and to cultivate a lasting customer relationship. Acting as living entities that can be regularly upgraded with new functionalities and novel features, vehicles will be able to deliver a holistic and highly personalised customer experience throughout their entire lifetime.
Be it innovative driving experiences such as autonomous driving or sophisticated customisation features to the infotainment system or to the car interior, OEMs have expanding opportunities to reinvent their vehicles through digital life cycle management. Given the complexity of this task, keeping track of the changes introduced via feature updates will be critical. Thus, traceability solutions, such as the one developed by Munich-based startup Twinu will be in high demand.
Twinu enables companies to maintain a link to their products along the entire product life cycle by introducing unique Digital Product Twins. Using web3 technology the digital twins enable and digitize many use cases such as proof of authenticity & ownership, Digital Product Passports or voice, IoT and Metaverse integration. Twinu accumulates reliable product information throughout the lifetime of the product, enabling a truly digital product experience and closing the loop on circularity. Needless to say, shared-economy and as-a-service models can be based on the foundation of these digitally-represented products.
Enabling value creation opportunities within a wider ecosystem
With the advent of software-defined vehicles, the automotive core-product ecosystem will be significantly widened to include services that improve the customer value beyond the vehicle. OEMs will need to initiate partnerships in transport-adjacent markets such as connected and autonomous vehicle insurance, urban infrastructure, energy storage, and powergrid, remote maintenance, health, and even entertainment.
Reaping the benefits of a connected, multi-party ecosystem will also require gaining control over enormous amounts of shared data and using advanced data analytics to interpret it and drive insights. IOTICS, a deep tech company founded in the UK, has a patented technology for the creation of such safe and trusted cooperative data ecosystems. Its overlay architecture enables companies to keep existing systems without re-architecting and its decentralised interoperability enable data modelling via digital twins of assets, data or algorithms. Digital twins act as a single gateway to truth, securely brokering access and blending signals in real time from internal and external data sources. In a nutshell, IOTICS offers a novel approach to data sharing based on virtualisation, symmetry and secure interactions that foster the creation of ecosystems across enterprise boundaries.
While there is no doubt that the next generation of opportunities will be built on top of vastly expanding ecosystems, monetising the data streams emerging from these ecosystems will also be key. Coupled with the success of software-defined vehicles and digital industrial assets in general, these transformations will open up a spectrum of new business models for capturing value. The long-standing asset ownership business model is expected to shift to a product-as-a-service model in which the manufacturer retains ownership and customers pay as they go. Thus, life cycle revenue streams can be unlocked via subscription-based models or pay-per-use.
This is the exact opportunity that the Cologne-based deep-tech startup CashOnLedger wants to explore. The startup bridges the worlds of industry and finance through new data-driven business models such as Asset-as-a-Service. Since industrial subscriptions extend the asset lifecycle and incentivise a prolonged operation of the asset, they also empower the circular economy. CashOnLedger provides the technical infrastructure needed to transform Industry 4.0 data into recurring financial streams while at the same time enabling the tracking of the asset lifecycle.
This new software-defined age will push mobility and industry players to reinvent themselves. They will need to implement superior technologies and acquire novel differentiation points. Partnering with cutting-edge tech startups is one of the winning strategies in this race to outpace the competition. Our 30+ STARTUP AUTOBAHN corporate partners have recognised the importance of startup partnerships and have initiated over 465 pilot projects since 2016.
To learn more about software-designed vehicles, read Five Automotive Trends that will Reshape our Relationship with Cars in the Next Five Years outlined by STARTUP AUTOBAHN’s partner DXC Technology.