Digital Transformation and Internet of Things

Mit dem Internet der Dinge werden in der Produktion mechanische und informationstechnische Elemente kombiniert.
© University Stuttgart IFF, Fraunhofer IPA; Photo: Rainer Bez

Digital transformation poses enormous challenges for companies – artificial intelligence, smart services and the platform economy are just some of the topics that are currently demanding innovation and transformation capabilities from organizations. At the same time, however, the change also offers great opportunities, for example to make processes more efficient or to develop new business models. One part of the digital transformation is to deal with the shift to an Internet of Things (IoT). For industrial companies, the Industrial Internet of Things is of particular interest as a subsection of IoT.

Digital transformation – smart handling of challenges and changing market conditions

Digital transformation means, first of all, digitizing processes that were previously carried out non-digitally. This enables companies to solve existing problems of manual processes, offer new customer experiences and adapt to changing market conditions. In addition, digital transformation opens up new business models and possible further developments for existing ones. In a 2019 study by Techconsult and Telekom, companies were asked, among other things, about the positive effects of digitization measures. The respondents named simplified processes (52%) and customer satisfaction (50%) as well as service and product quality (47%) as the most important points.

According to a study published in 2020 by the Fraunhofer Business Innovation Engineering Center, the greatest challenges for SMEs in particular include recruiting specialists and managers as well as trainees, increasing employer attractiveness and employee retention – in short, finding and also retaining the right personnel. An important factor here is offering flexible and attractive forms of work that enable a good work-life balance. Digital transformation also plays a major role here, because IT equipment and appropriate software form the basis for location-flexible and time-flexible collaboration.

In connection with digital transformation, the keyword artificial intelligence (AI) often comes up. AI applications are capable of autonomous and self-optimizing execution of defined tasks, which companies can use to optimize processes, for example. Like digitization in general, AI also opens up opportunities for offering new types of products and services.

»Industrial Internet of Things« for an intelligent production

One part of the digital transformation can consist of introducing IoT technology at suitable points in the company. The term »Internet of Things« refers to the networking of physical and virtual elements in a common system with the aid of information and communication technology. In the consumer goods sector, IoT technology is used, for example, in the form of smart home applications. Of particular interest in the industrial sector is the Industrial Internet of Things (IIoT).

As part of the IIoT, machines and sensors are to be networked with each other by industrial software in order to collect data and thus optimize processes. By definition, Cyber-Physical Systems (CPS) play a key role in the implementation of IIoT. This is because CPS are characterized by the linking of information technology components with physical or mechanical components within a system – in other words, exactly what IIoT ecosystems are all about. Cyber-Physical Systems are already being used in many ways in production today. The range of possible use cases extends from smart sensor systems to the digital embedding of workstations. As the development of IIoT progresses, it is expected that CPS will become even more established in industrial production.

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