Technological change is driving our business like in no other industry. If we stand for the security of technology, then we must be at the forefront of technological change ourselves. At the same time, we also want to use innovation in our own company in order to work more efficiently and to offer our customers a high level of service. We have been encouraging active innovation management for many years and invested € 9.4 million in fiscal year 2016 (prior year: € 6.9 million) in research and development.
The process for the promotion of innovation, which was introduced in the prior year, has proven to be successful and enables the rapid and targeted promotion of substantial and clearly market-focused innovation projects. A central role is played by the newly established Corporate Innovation Fund for highly promising innovation projects, which covers part of the project costs incurred by the TÜV SÜD entity. This funding aims to strengthen the role of the divisions and regions in the innovation process. The individual projects are initiated and implemented locally by divisions or regions and supported by central innovation management. The focus is on a flexible implementation of pilot projects with customers and partners. This enables us to respond rapidly and efficiently to new customer needs and to create innovative offers.
Technological progress is currently characterized by advancing digitization in almost every industry. The creation of the new Digital Service function during the fiscal year also means that this trend is now reflected in the organization of the company. Thus, within our matrix organization the possibilities of digitization have been implemented in our existing portfolio and extended to include new services and solutions.
We reached an important milestone in the internationalization of our Digital Service activities in April 2016, when we opened a first Digital Service Center of Excellence (CoE) in Singapore. TÜV SÜD will invest a double-digit million sum over the next three years in order to build up comprehensive competency for data analysis, cyber security and functional security. Together with industry experts, innovative services will be developed and tested in various pilot projects. The aim is to transfer the expertise gained to other markets in the Asia-Pacific region. A first example of this is cooperation with government agencies of the Republic of Singapore in the definition of simulation and test environments for autonomous driving.
Both our group-wide digitization strategy and the specific digital agendas at division level are aimed at the following three fields of action:
Through continuous monitoring, a large amount of data is now available, often in real-time. In order to generate added value from this flood of information, technical know-how and industry knowledge are to be integrated into the evaluation process. TÜV SÜD has decisive potential for differentiation in this respect since no other competitor has similar expertise in technology, machinery, processes or industrial workflows. In addition to ongoing projects – for example, in the area of predictive maintenance of power plants, the focus in 2016 was on lift systems. The goal is to obtain information about their operating state from real-time sensor data, to predict damage by means of appropriate tools, thus avoiding the failure of the system or expensive repairs. In this way, we not only achieve the highest level of security, but at the same time also increase customer satisfaction.
The increasing cross-company networking of systems also places higher demands on IT security. Integrated protection requires not only sound IT expertise, but also a comprehensive understanding of the respective industry and sector. TÜV SÜD has been active in this area for several years and helps customers to counter threats with suitable protective measures. We inspect industrial plants and processes, analyze weak spots, evaluate the risks and test the system security. With the advance in digitization, there is more and more data with personal or security-related characteristics, whether in the area of mobility, in manufacturing processes or in the health care sector. In light of this, the necessity to create a neutral platform for the storage, exchange and processing of sensitive data has become increasingly relevant. Like no other company, TÜV SÜD’s brand is synonymous with trust and safety. On the basis of this strong positioning, we also want to play a decisive role in the area of the Trusted Data Exchange.
Functional safety of digital systems
Mutual trust in the competence and reliability of process partners is the key success factor for the Industry 4.0 concept. The more comprehensive the networking, the more likely a failure or a mistake by a process partner could jeopardize the entire supply chain. The risk of one party becomes a threat to all parties involved. Cyber security, i.e., protection against attacks, and the safe operation of plants and systems are mutually dependent. Standards and certifications as well as unbiased advice on issues such as interoperability, reliability or functional security can help to create this trust. With our comprehensive sector and industry experience, we provide our customers with the most important know-how to make digitization successful in their industry.
Last but not least, we want to use digital transformation to further increase the efficiency of our own processes and offer new and improved services to our customers. For example, we are working on using augmented reality to optimize our processes and are optimizing the deployment of drones in inspections wherever the regulatory framework permits.