What digital infrastructure really means – and why it’s the key to the future of industrial SMEs

This article has been translated for your convenience using machine translation. Reasonable efforts have been made to provide an accurate translation. The official text is the German version of this content.

Digital infrastructure is the backbone of any company aiming to stay competitive and future-proof. In this article, we explore what we mean by digital infrastructure, the critical areas it covers – and the key questions mid-sized industrial companies should be asking themselves right now.

When we talk about “digital infrastructure,” we’re not just referring to servers, cloud solutions, or software. To us, digital infrastructure forms the strategic foundation on which the future viability of industrial SMEs is built.

It’s everything that runs behind the scenes, enabling processes and connecting information. In short, it’s the essential basis for smart applications, automation, artificial intelligence – and for modern customer interactions, from service to digital sales.

What does this mean for industrial SMEs?

Any company looking to embrace digitalization – or already on the journey – needs a clear understanding of its current situation. Only by knowing where you stand today can you purposefully evolve, scale, and meaningfully integrate innovations like AI into your operations.

Why a clear definition matters

In conversations with industrial SMEs, we often find that "digital infrastructure" means very different things to different people. For some, it’s basic IT systems, internet access, and laptops. For others, it’s about cloud solutions or data interfaces.

All of these are part of it – but the bigger picture is much broader.

Here, we share our perspective on digital infrastructure from the standpoint of industrial SMEs – and why data plays a central role.

What is digital infrastructure? Our perspective

We see digital infrastructure as an ecosystem made up of several interconnected areas. Each brings its own challenges and requirements – and together they lay the groundwork for digital value creation.

1. Data, information management & interfaces

One thing is clear: there’s nothing more crucial for a future-ready mid-sized company than a solid, reliable data foundation. That’s why we emphasize:

• Data strategies and data architectures
• Integration through APIs, middleware, and ELT pipelines
• Data visualization and dashboards
• Semantic models and digital twins
• Condition monitoring and predictive maintenance
• Data spaces like Catena-X and Manufacturing-X

How well do you know and use your data?

Every digital application relies on data – especially AI models, but also ERP analyses and BI dashboards.

Without clear standards for collecting, storing, and using data, enormous potential is lost. Consider these questions:

• Do we know where data is generated across our organization?
• Do we have a central data strategy and dedicated data owners?
• What’s the current state of our data quality, availability, and freshness?

A modern data infrastructure means centralized data architectures, clear accountability, reliable interfaces, and powerful visualization and analytics tools.

Getting structured and analytical about your data early on builds the transparency needed for automation and truly data-driven decision-making.

2. Legacy systems: What’s lurking in your existing landscape?

Many industrial SMEs still operate with systems that have been around for years – sometimes decades. While they may still function, legacy systems often make integration difficult, limit scalability, and hold back modern initiatives.

Take AI, for example: it needs access to large volumes of structured data, which isn’t possible if critical information is trapped in isolated legacy systems.

Key questions to ask:

• What legacy systems (ERP, production IT, machine control systems, etc.) are still in use?
• Are our IT and OT environments integrated or still operating in silos?
• How much time do we lose on manual, repetitive tasks?

Applications & software solutions

A thoughtful modernization strategy is critical for digitalizing operations without disrupting day-to-day business. Companies need software that simplifies processes – not makes them more complex.

It’s not just about choosing the right tools, but ensuring they work seamlessly together, for example:

• ERP, CRM, and industry-specific solutions
• Low-code platforms for custom workflows
• Communication and collaboration tools
• Development and integration of tailored software

Standard software can be a starting point, but true digital value creation demands integrated, scalable solutions that can grow alongside your business.

3. Cloud & platform solutions – including operations

Modern IT infrastructure must be scalable, flexible, and resilient – able to adapt as business needs evolve.

Cloud architectures – whether public, private, or hybrid – provide this flexibility. Combined with containerized microservices (e.g., Kubernetes), they create modular systems that can scale, evolve, and be maintained independently.

Infrastructure as Code (IaC), with tools like Terraform, also plays a key role, enabling the automated provisioning and management of infrastructure, reducing errors, and accelerating development.

DevSecOps approaches, continuous monitoring, and smart alerting are becoming increasingly important to ensure systems are proactively secured and optimized. From the very beginning, security and compliance must be baked in – "Security by Design" is replacing traditional security practices.

Our focus is on building reliable, extensible digital systems. To assess your infrastructure, consider:

• Are we using cloud services today? Which ones (IaaS, PaaS, SaaS)?
• Are our systems cloud-ready, or still fully on-premises?
• How quickly can we scale up or adapt when needed?

The cloud isn’t an end in itself – it’s a means to enable agility and modernization. What matters most is finding the architecture that fits your business needs.

4. Security and networks

Two often overlooked areas in digitalization strategies are security and network connectivity.

Security must be an integral part of every digital architecture. Interconnected systems that share and process data must not only perform well – they must also be consistently protected.

A strong security framework must cover all layers: access rights, encryption, authentication. Security should be integrated as early as possible in development – not treated as an afterthought.

Key questions to assess your status:

• Do we have a unified security concept across all systems?
• Are access rights, encryption, and authentication handled systematically?
• Are security considerations built into development processes (Security by Design)?

A modern infrastructure requires a DevSecOps mindset – development, security, and operations working hand in hand. Security is a shared responsibility, fully integrated into every IT process.

Adding technologies like mutual TLS (mTLS), multi-factor authentication (MFA), role-based access control, automated security tests, and compliance with standards like ISO 27001 or SOC 2, you create a level of security that matches the speed of today’s digital world.

Networks deserve just as much attention. Especially in industrial settings – with distributed machines, plants, and warehouses – network quality can make or break efficiency and scalability.

Questions worth asking:

• Are all our locations, machines, warehouses, and systems reliably connected?
• Are we facing issues with bandwidth, latency, or network security?
• How prepared are we for remote maintenance, VPNs, or edge computing?

Industrial-grade network infrastructures (LAN, WLAN, 5G, Edge), proper segmentation, strong firewalls, and continuous monitoring are all crucial. Stable, secure, high-performance networks are the foundation for making cloud solutions, data analytics, and automation work at scale.

Artificial intelligence as the end goal

Many digitalization initiatives ultimately aim to enable AI, as there is huge potential here for industrial SMEs. Whether forecasting, anomaly detection, or generative AI – it all hinges on having:

• Clean, accessible data
• Automated workflows (MLOps, CI/CD)
• Security and traceability
• Full lifecycle integration

Conclusion: What does this mean in specific terms for industrial SMEs?

Many SMEs already have a strong technical foundation, but often lack end-to-end networking between systems, data sources, cloud solutions, and applications.

For us, digital infrastructure means closing these gaps; not as a one-off project, but as a continuous development – technologically, organizationally, and strategically.

Our subsidiary Possehl Digital Services specializes in tapping into the diverse databases of its SME customers. They transform the information into individual, user-friendly software solutions. As part of the Possehl Group, Possehl Digital Services knows the technological requirements of industrial SMEs down to the last detail – especially those arising from existing IT landscapes.

If you want to learn more about possibilities to develop your digital infrastructure, please contact us any time, or get in touch with Possehl Digital Services.