On the Industry Forward Podcast, hosts Dale Tutt, VP of Industry Strategy, and Conor Peick have been diving into the shift-left and the transformative journey companies are taking towards software-defined products. In the second part of a conversation with Scot Morrison and Doug Burcicki, the discussion moved beyond technology to explore the cultural and organizational shifts required to support this evolution.

While much of the conversation around software-defined products focuses on Digital Twin technology, hardware-software co-design, and system complexity, Dale raised a critical question: How do companies reconcile cultural and technical differences to ensure both efficiency and a positive working environment?

Acknowledging the challenge especially for large and traditionally siloed organizations, Scot explored how different departments—chassis, powertrain, software, hardware in an automotive example—often operate independently. Add to that the complexity of working with multiple tiers of suppliers across geographies, and the need for seamless collaboration becomes clear.

To address this, Scot emphasized the importance of traceability and integration. Siemens is working with leading customers to embed traceability directly into development tools, enabling seamless transitions between design phases. Rather than relying on static documents or spreadsheets, teams can maintain a continuous thread of requirements, specifications, and test results throughout the development lifecycle. This approach not only improves efficiency but also reduces the risk of miscommunication and rework.

Collaboration as a Competitive Advantage

Doug continued by reinforcing the importance of collaboration, noting that many engineering domains that previously worked in isolation must now engage in deep, cross-functional cooperation. A striking example is the reversal of the traditional development flow: where software developers once adapted to predefined hardware, today, software is driving hardware decisions.

This shift Doug has noted in the automotive industry is emblematic of the broader transformation in industry. Software is no longer a supporting feature—it’s a primary differentiator. From user interfaces to over-the-air updates, software defines the customer experience and influences purchasing decisions. As Doug points out, leading automotive companies have demonstrated the power of software to deliver new features and value long after a vehicle leaves the showroom.

This new reality is pushing OEMs into unfamiliar territory. Many are now specifying chip requirements and engaging directly with semiconductor foundries—activities that were once far removed from their core competencies. The result is a need for organizational recalibration, including new skill sets, new workflows, and a new mindset.

Speaking the Same Language

One of the most significant barriers to collaboration is communication. As Doug noted, even the word “architecture” can mean different things to different engineering teams. Software, electrical, and platform teams may each have their own interpretations that can lead to confusion and inefficiencies, especially in high-stakes development environments.

To overcome this, companies must invest in shared frameworks and common data models. The comprehensive Digital Twin plays a crucial role here, serving as a unified source of truth that aligns teams around a consistent understanding of the product. By integrating requirements, design data, and validation results into a single digital thread, organizations can make better-informed decisions and accelerate development.

The journey toward software-defined vehicles is as much about people and processes as it is about technology. As Dale, Scot, and Doug make clear, success depends on breaking down silos, fostering collaboration, and embracing new ways of working. It’s a complex, ongoing transformation—but one that holds immense promise for innovation, customer value, and competitive advantage.

Shifting Left: From Chip Selection to System Verification

As the conversation progresses, Dale Tutt reflected on personal experience with the challenges of hardware selection in long development cycles. In industries like aerospace, it was common for chips to be nearly a decade old by the time a product reached its first customer—raising concerns about obsolescence and performance. Today, however, the integration of Digital Twin technology and virtual platforms is helping companies mitigate that risk by enabling concurrent development of software and hardware.

Scot expanded on this point, emphasizing how companies are now using virtual platforms not just for development, but for decision-making. Before even selecting a chip—let alone designing a custom system-on-chip (SoC)—organizations are now running realistic software workloads on virtual models to evaluate performance, compatibility, and cost. This early-stage simulation allows teams to make informed architectural decisions and even pivot mid-development if purchasing constraints or new requirements arise.

Virtual Hardware-in-the-Loop: A New Era of Testing

The emergence of virtual hardware-in-the-loop (vHIL) testing promises to be among the most transformative aspects of the shift-left. Traditionally, hardware-in-the-loop (HIL) testing occurred late in the development cycle, requiring physical prototypes and complex integration setups. But with Digital Twins, companies can now simulate entire subsystems—or even full vehicles—long before hardware is available.

Scot described how this approach enables realistic and repeatable testing using captured data or 3D virtual environments. This is especially valuable for validating autonomous driving systems, where edge cases and rare scenarios are difficult (or dangerous) to replicate in the real world. By shifting these tests into the virtual domain, teams can explore a broader range of conditions, identify issues earlier, and reduce reliance on costly physical prototypes.

Moreover, this virtual testing environment supports continuous verification, where test results are traced back to requirements and design decisions. This not only improves quality but also supports compliance and documentation efforts—critical in regulated industries like automotive and aerospace.

A New Development Paradigm

Conversations with Siemens experts on the Industry Forward Podcast continue demonstrate how the development of modern vehicles—and all complex products—is undergoing a fundamental transformation. Software is no longer an afterthought; it’s a strategic driver of innovation, differentiation, and customer value. And with that shift comes a need for new tools, new processes, and new ways of thinking.

From early chip selection to full-system validation, the comprehensive Digital Twin is enabling companies to move faster, collaborate more effectively, and deliver smarter, safer, and more capable products. It’s a challenging journey, but one that offers immense rewards for those who embrace the challenge.

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Siemens Digital Industries Software helps organizations of all sizes digitally transform using software, hardware and services from the Siemens Xcelerator business platform. Siemens’ software and the comprehensive digital twin enable companies to optimize their design, engineering and manufacturing processes to turn today’s ideas into the sustainable products of the future. From chips to entire systems, from product to process, across all industries. Siemens Digital Industries Software – Accelerating transformation.