A novel data architecture ushers in the industrial revolution 4.0

BY SANDY STRASSER

(Published in The Produktkulturmagazin issue 2 2016)

Never before has the world been as networked as it now is. But how should we design a digital future in which data are the lifeblood of companies? Industrial Data Space forms the basis for safely and autonomously exchanging data. It supports enterprises when using these innovation potentials and provides fundamental data services; i.e. the anonymisation of data, integration services and the setting of “expiry dates” for their use. As a result, it makes an important contribution towards the digital transformation of companies. 

The significance of data for business success has been continually growing since the introduction of electronic data processing and the automation of production processes in companies. Industrial Data Space is a virtual data space that enables the secure exchange and simple linking of data between enterprises. It maintains the digital sovereignty of the data owners and simultaneously forms the basis for smart services and innovative business processes. The initiative was established as an association by sections of enterprise, politics and research in Germany at the end of 2014, since then pursuing the objective of the development as well as the utilisation of data exchange at both the European and the international level. 

 “A major element of Industry 4.0 is the data exchange between industrial enterprises,” explained Dr Reinhold Achatz, talking at the beginning of the CeBIT exhibition in Hanover last March. The head of technology at Thyssenkrupp AG is the Chairman of the Industrial Data Space e.V. association, which was unveiled to the public for the first time at the stand of the Fraunhofer Society. The association, founded in January, comprises 18 founding member companies and organisations. We talked to some of these about the project. 

With the new Industrial Data Space e.V. association, enterprise is actively co-developing the architecture of Industrial Data Space. Why was it important for your company to become part of this association? 

DR. JOACHIM MAASZ, Business Intelligence, Analy-tics & Controlling at Bayer Business Services: Exchanging data with customers, suppliers and the authorities will further intensify in the future. Within the context of the progressing digitalisation of business processes, it is already apparent that data are becoming part of the product offerings of our customers. Against this backdrop, it is important to Bayer that it has secure, generally accessible platforms for data exchange. We have been committed to the Industrial Data Space association from the outset, with the aim of bringing the specific requirements of a life science company to the table and jointly developing solutions with the partners. 

DR. RALF-PETER SIMON, Managing Director of the KOMSA parent company: With Industrial Data Space, we have the possibility of actively co-developing a new, cross-sector and secure data eco-system. As one of the smaller companies among the global players and DAX luminaries, we regard ourselves as the advocate of the association, particularly for the small and medium-sized enterprises for whom we want to clarify the benefits of Industrial Data Space and make access to it and its concrete utilisation simple. And all this not just for our sector, but also for companies not focusing on information and communication technology (ICT). 

GERHARD BAUM, Chief Digital Officer, Schaeffler AG: In the future, data will be a core component of creating value. These data will be exchanged beyond company boundaries, becoming commodities and enabling additional value added. For this reason, we are extremely interested in standards, architectures and methods and are therefore committed to the association. 

ULF THEIKE, Managing Director of TÜV NORD: Whether household appliances, heating thermostats, baby monitors or toys – ever more products operate using an app or come with Internet access. Hence, IT security is becoming increasingly important for TÜV texts as well. We want to ensure security when exchanging data. It is for this reason that we have signed up to the Industrial Data Space association. 

MARKUS VEHLOW, Partner at PwC and cloud-computing expert: In this, we see a solution for the long-standing challenge of efficiently and intelligently combining data together to create so-called smart services – hence, ultimately to develop new business models and business processes while maintaining data sovereignty. This means that all members themselves decide what data are used for what purpose. Here, data transmission takes place in accordance with a standardised “timetable” which in turn takes the individual governance and security concerns of each enterprise into consideration. 

DR. RALF SCHNEIDER, Group CIO of Allianz SE: Modern insurance products are increasingly necessitating data exchange with partners in various sectors. At the same time, the secure handling of confidential customer data has top priority at Allianz. For this reason, it was a logical step for us to become part of this initiative.

How close is the cooperation between you and the other members? How should we concretely imagine this collaboration? 

DR J. M.: Currently, we are still in the early phases of our cooperation, in which the members are initially focusing on their specific “use cases”. Within the context of further development, there will be additional projects, hence intensifying the collaboration between the individual members. 

DR R. S.: The cooperation is very close; after all, we ultimately want to create a data eco-system that can be used in all sectors. Coordinated by the Fraunhofer Society, “use cases” are being drafted in collaboration with the respective companies. The objective is to define commonalities with regards to the system requirements and create prerequisites for solving concrete issues. This also focuses on drafting the resulting requirements in terms of the data architecture and the technical, organisational and commercial-contract structures. To this end, crucial components of the new data eco-system will be jointly developed, reaching far beyond mere technical questions. 

G. B.: There is a whole range of relationships. We exchange information directly with the other members. And we are already working on concrete projects with some of them. The objective here is the further development of the contents. 

U. T.: What is particularly appealing is the fact that the members come from very different sectors. Food, automotive, logistics, energy, chemicals – the enterprises involved have to engage with the requirements of the other members. They are all united by the common interest in maintaining control of their data and handling this information in a sovereign and responsible manner. At the same time, the member companies question the status quo and develop new, digital business models. We make contacts among each other and share our experiences. 

M. V.: The Industrial Data Space association is split into various committees. On the one hand, there is a Board, but also various work groups focusing on certification or architecture, for instance. For these, and many further topics besides, there are meanwhile around 70 so-called “use cases”. These are concrete application cases allowing members to use Industrial Data Space themselves. The formulation and the development are then carried out jointly by all members of the association. 

DR R. S.: Of particular significance is the open exchange between all parties involved across the various sectors. In addition to the communication and cooperation via a joint platform, quarterly personal meetings are planned. Defined work packages are processed in small work groups between these meetings.

Why do you believe is the creation of such innovative business processes of essential importance for the entire industrial sector in the future? 

DR J. M.: Digitalisation offers huge potential to simplify business processes and to align them better to the requirements of customers and suppliers. Industry as a whole has to engage with the possibilities of progressing digitalisation and develop new business processes and models if it wants to remain competitive in the medium term. 

DR R. S.: Digitalisation is by no means a new phenomenon, but a process that has been running at increasing speed for many years and that affects all sectors and companies of all sizes. However, the overwhelming majority of small and medium-sized companies that make up the foundation of economic power and employment in Germany have barely touched on the subject of digitalisation to date. In part, they are unaware – or insufficiently aware – of the possibilities, opportunities and risks. For this reason, it is important to join forces to sustainably promote innovation, employment and value added, and hence secure long-term competitiveness in Germany. 

G. B.: Digitalisation permits new value added through new, data-based business models. With the example of Silicon Valley and within the context of the traditional Internet, we have seen how software-oriented enterprises are redefining entire sectors. We have to position ourselves correspondingly within the Internet of Things in order to be flexible and competitive in terms of future value added. 

M. V.: Data have meanwhile become their own production factor. Their intelligent combination and analysis – smart services – are part of future digitalisation. An important reason for why this is particularly significant is showcased by the value chain within a company. Those who are successful at transforming or supplementing their value chains will be at the cutting edge and will be sustainably positioned for the future. But those simply standing still will have an extremely tough time keeping up with the competition over the next years. 

DR R. S.: Customers expect insurance services from a coherent range. Here, secure and also cross-company data exchange is becoming increasingly important. Both our customers and we – as an insurance services provider – have to retain an overview of the relevant data – and in real-time.

The changing role of data comes with a simultaneous change in its value for companies. What benefits do your customers in turn draw from this? 

DR J. M.: Users have access to a superior offering of products and additional services that will be customised, less expensive and more comprehensive than it has been the case to date. 

DR R. S.: Developments such as 5G mobile networks, 3D printing and smart services are changing the way companies operate and how people work and structure their lives. Today, customers expect customised products and services tailored to their specific requirements and at mass-product prices – or even completely free. They expect service provision at any time and at any location. 

G. B.: With us, the primary focus is on the customer. Today, customers value our mechanical and electromechanical components and systems and pay for them because they receive value added in return. And our new digital business models will also be oriented on customer benefit; customers have to be given significant, tangible value added. This value added is dependent on the customer and the sector. 

U. T.: Above all, digitalisation will offer our customers efficiency benefits. Just one example from TÜV: To test an offshore wind turbine, our engineers today have to complete comprehensive and time-consuming safety training, travel out to sea and usually climb up the installation in storms and rain. It takes hours until the motors and rotor blades have been checked. And the wind power system has to be shut down for this period. Soon, sensors will be transmitting daily data with information on the condition of the wind power system – during running operation. This saves customers money and resources. 

M. V.: If you are thinking about changing or expanding your own value chain, Industrial Data Space is the ideal platform to take on, and successfully master, this challenge. In principle, it is a tool for driving digitalisation forward and hence we are – at the end of the day – pushing the concept of smart services across all sectors with our customers in mind. 

DR R. S.: On the basis of the available data, we – as an insurance company – can proactively protect our customers and offer recommendations for preventing losses before they even occur. Furthermore, our customers no longer have to plough through mountains of files and folders at home and insurance policy holders are spared having to re-enter the same data time and time again – while the customer simultaneously retains complete data sovereignty.

What protective measures are there to prevent abuse of this highly-sensitive data pool? 

DR J. M.: Security and data protection are the top priorities. Here, the main focus is on protecting personal information. For companies, it is important to retain the sovereignty of their own data and data that has been entrusted to them. This means that companies can control the data flows and decide who receives what information and for what purpose. To this end, the suitable protective measures have to be drafted and implemented within the development of Industrial Data Space. 

DR R. S.: The basis will comprise data and system architecture standards along with joint governance models that in particular also include strict certification and utilisation conditions. With this, Industrial Data Space maintains the digital sovereignty of the data owners and simultaneously forms the basis for “secure” smart services and innovative business processes. 

G. B.: Data security and privacy are essential. Here, there are already outstanding technologies for protecting data and separating data from people. Human and organisational abuse has also to be taken into consideration within this context. 

U. T.: The security architecture is the centrepiece of Industrial Data Space. The connections between the participants are, of course, encoded – preventing access by means of false identity. In addition to the software, chips with comprehensive security functions are also required. 

M. V.: Industrial Data Space is based on various security fundamentals and is open to new security concepts, such as blockchains, for example. Furthermore, there is for instance a work group that exclusively focuses on this topic and – by means of “security by design” – already implements comprehensive security measures as early as in the design phase. In addition to this, all parties involved are certified in terms of IT security. Many of our members have also supplied the work groups with competent members of their own staff. PwC is represented by those members of staff who have already developed the “Requirements Catalogue for Secure Cloud computing” (Anforderungskatalog für sicheres Cloud Computing) on behalf of the Federal Office for IT Security (BSI/Bundesamt für Sicherheit in der Informationstechnik). 

DR R. S.: There is a broad range of measures for preventing data abuse: encoded storage of data, transparency for customers in terms of the stored data and their utilisation or the certification of data-processing software and technical measures.

What is the most important success factor for Industrial Data Space? 

DR J. M.: In addition to data security, there will be open, uncomplicated access for the broadest user community possible. 

DR R. S.: There will not be a single central success factor, it is more of a bundle of factors that is decisive – such as creating real solutions for the most diverse real challenges – to ensure that among other things systematic, fast scaling can be achieved within Europe and in global business relationships, in order to de facto create a new standard. 

G. B.: Collaboration and the definition of standards are important and represent competitive edges for the European eco-system. Here, we are focusing on fast implementation and expanding swiftly. 

U. T.: It is very clear: the commitment to handling data responsibly has to be followed by action. Within a global context, German and European companies have a knowledge edge with regards to industrial production digitalisation. This edge must be retained. What opportunities does digitalisation offer my company? And what business ideas can be generated from the data volume? If Industrial Data Space provides motivation here, then we have already achieved a lot. 

M. V.: For us, the most important success factors are expansion – in other words, acquiring new members – and the topic of internationalisation. We want it to become a de-facto standard that is open and accessible to all and will one day be used by all. 

DR R. S.: Open dialogue, know-how and the corresponding input from the enterprises involved are just as decisive for the success of the initiative as the dissemination of the models developed and the standardisation of cross-company solutions.

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