The Economics of Assurance: How HIL Testing Minimizes Risk and Maximizes ROI for Complex Products

Modern products demand rigorous testing amid growing system complexity, rising safety standards, and the increasing demand for efficient products across industries like automotive, power, and robotics. Hardware-in-the-loop (HIL) testing simulates real-world conditions, enhancing embedded system reliability and reducing development costs. This blog highlights how HIL empowers businesses to achieve faster time-to-market, lower recall risks, and improved product quality.

Modern products, from consumer electronics to industrial machinery, integrate a wide array of technologies to meet rising consumer expectations for safety, reliability, and customization. However, this push for innovation comes with its own set of challenges, particularly in ensuring the seamlessness and safety of such complex systems.

In a market where time-to-market pressures and competition are fierce, businesses are under constant pressure to rethink their product development strategies. This includes adopting advanced testing methodologies to mitigate risks, streamline development processes, and optimize resources. The need for a comprehensive development toolchain, complemented by automated testing and agile practices, has become imperative. Case in point: companies leveraging these methodologies have witnessed 30-40% of productivity gains.

Enter Hardware-in-the-Loop (HIL) testing—a game-changing approach that enhances the reliability of embedded systems by simulating real-world conditions. HIL testing not only facilitates more efficient development but also reduces costs associated with product failures and post-launch issues.

HIL: Delving Deeper into Trends, Use Cases, and Test System Expansion

The hardware-in-the-loop (HIL) testing market is poised for significant growth, projected to reach $2,230.7 million by 2032.

The projected growth of the HIL testing market to $1291 million by 2027 highlights its critical role in managing increasingly complex embedded systems. This growth reflects increased demands across industries for reliable and effective testing of embedded systems, driven by several key market factors:

• Increasing complexity of embedded systems: Embedded systems are now expected to handle more functions and integrate with various other devices and platforms. HIL testing helps ensure these complex systems perform correctly before full deployment.
• Rise of autonomous and connected systems: As autonomous vehicles and interconnected devices become more common, rigorous testing for safety, responsiveness, and interoperability is essential. HIL testing plays a critical role in validating these capabilities in real-world scenarios.
• Growing focus on safety and reliability: Safety standards continue to tighten, especially in sectors like automotive and industrial machinery, driving the demand for robust, reliable testing methods such as HIL.
• Advances in simulation technology: Improved simulation tools allow HIL systems to recreate complex, realistic conditions, making them ideal for testing high-stakes applications without the risk of failure in the real world.
• HIL testing expansion into non-traditional industries: Beyond aerospace, defense, and automotive, industries such as energy and marine technology are adopting HIL to enhance system performance and reliability.

Industrial use cases of HIL

HIL testing has proven its value in a variety of use cases, showcasing its adaptability across diverse industries:

• Power grid reliability: Enterprises in the power industry leverage HIL to test system reliability, ensuring stability across the grid and minimizing disruptions. For example, HIL testing supports real-world scenario modeling to evaluate and optimize power grid operations, helping power plant personnel ensure project success and resilience.
• Automotive ADAS/AD validation: Bosch SDS uses HIL systems to validate advanced driver assistance systems (ADAS) and automated driving (AD) systems. By simulating various driving conditions, HIL allows for thorough testing of safety-critical systems under diverse scenarios, from standard maneuvers to complex, unpredictable situations.

These use cases highlight how HIL testing continues to evolve and extend its reach into new, non-conventional industries, becoming an indispensable tool for ensuring system reliability, safety, and performance.

A Closer Look at the Cost-to-Benefit Analysis of HIL

When considering hardware-in-the-loop (HIL) testing, organizations must weigh financial and operational factors to assess the overall return on investment (ROI). While HIL testing can be a substantial upfront investment, its long-term benefits often justify the initial costs. Here are key considerations:

Financial and operational challenges of HIL testing

• Gaps in tech maturity: Many organizations still rely on legacy infrastructure and processes that struggle to keep up with modern system complexities. Developing a real-time simulation environment requires advanced capabilities that outdated systems cannot support, leading to potential delays or inaccuracies in testing.
• Data challenges: HIL testing demands robust data management from collection to storage and analysis. Outdated methods can hinder data accuracy and reliability, creating challenges for effective decision-making.
• Higher upfront costs: Implementing HIL involves significant initial investment in specialized hardware, software, and skilled personnel. This often requires budgeting not only for equipment but for training and ongoing support as well, which can stretch resources.
• Integration issues: HIL requires integration across disparate systems, technologies, and sometimes a broad network of vendors. Misalignment between systems or incompatible technologies can lead to costly delays or require additional resources to bridge compatibility gaps.
• Compliance challenges: HIL testing environments must adhere to evolving global regulations, which vary by region and industry. Failure to meet these requirements can result in regulatory penalties, product recalls, and reputational damage.

Inadequate alignment of people, processes, and technology can lead to significant repercussions, including product recalls (affecting up to 73% of cases), budget overruns, and potential safety issues. Avoiding these outcomes requires a multidimensional approach that integrates organizational alignment, standardized processes, and the right tools to handle increasing system complexities.

Benefits of implementing HIL testing

Despite these challenges, the benefits of HIL testing often outweigh its initial costs, enhancing both short-term and long-term outcomes:

• Improved sales and revenue: HIL testing enables businesses to deploy highly reliable systems, which can directly impact sales. For example, AI-based embedded guided sales systems show a 52% improvement in conversion rates and a 15% increase in average order value.
• Long-term savings: Detecting faults early in the design and testing phases helps reduce the need for rework, post-launch failure resolutions, and other costly issues, ultimately leading to significant savings over time.
• Accelerated time-to-market: With optimized frameworks for HIL testing, companies can execute testing more efficiently, enabling faster go-to-market (GTM) rates. This early time-to-market translates into faster revenue generation and competitive advantages.
• Lower risk of recalls: Thorough HIL testing reduces the risk of product failures and recalls, which can have far-reaching financial and reputational consequences.
• Enhanced product quality: Testing complex systems in a controlled environment results in products that meet higher standards of quality and reliability, translating to increased customer satisfaction and loyalty.
• Compliance and risk mitigation: HIL testing environments are designed to help organizations meet stringent regulatory requirements and mitigate risks associated with non-compliance, safeguarding both the brand and the bottom line.

Through this cost-benefit analysis, it becomes evident that the long-term advantages of HIL far outweigh the initial investment, offering companies a powerful tool for maximizing ROI, enhancing product quality, and minimizing risks.

The Future of HIL Testing

The future of HIL testing is shaped by emerging technologies and evolving industry needs. Digital twin technology, which creates a virtual replica of physical systems, is increasingly integrated with HIL to enhance testing accuracy and efficiency. This combination enables real-time feedback and continuous improvement, making testing processes more dynamic and reliable.

HIL testing is spreading its roots beyond automotive to power electronics, industrial robotics, and medical devices. It is touted to become a cornerstone in ensuring critical components across these sectors meet evolving performance and safety standards. While its growing prevalence can be seen in smart grid technologies, renewable energy systems, and power conversion devices in the power industry; integrated control systems, software regression, testing, and simulated drug/ device delivery scenarios are key areas where it is applied in the health industry. With robots becoming more advanced and autonomous, HIL is also being used to gauge risk control software, safety systems, and version control in industrial robotics.

In the coming years, HIL platforms are expected to be more scalable and flexible, accommodating the growing complexities of modern systems without requiring extensive infrastructure overhauls. The move towards open architecture and modular systems will further enhance HIL’s adaptability, allowing organizations to customize their testing environments according to specific project requirements. Additionally, virtual HIL testing is set to gain prominence, particularly as remote work becomes more prevalent. This will enable decentralized teams to collaborate effectively, testing systems regardless of their physical locations.

Transform Testing with Bosch SDS

Bosch SDS is at the forefront of V&V transformation, offering state-of-the-art HIL testing solutions that empower businesses to navigate the complexities of new-generation product development. For instance, Test Farm Management System (TFMS) is a web-based application for monitoring and managing test PCs, development PCs, Hardware-in-the-Loop (HIL) systems, and lab cars. Developed by Bosch SDS with the motive to maximize resource utilization by enabling a “work from anywhere” approach, it empowered businesses to elevate testing efficiency through real-time status updates, and features such as Wake-on-LAN (WOL) and over-the-air (OTA) updates while maintaining optimal security through access control. Besides improved productivity, security, and resource utilization enterprises can also conduct more secure and globally compliant testing.

Another solution, Remoted, is a lab digitalization initiative by Bosch SDS, that enables remote testing and debugging of software, hardware, and test equipment. Product engineers can have 24*7 access to lab resources as if they were physically present, regardless of their location. In addition to a central database for labs and a common platform for status monitoring, it also enables product development staff with improved test automation and end-product quality before market release.

Our Virtual Remote-Control System (VRCS) is designed and developed for remote access and control of test setup anytime, anywhere. VRCS makes location-independent testing possible, enables better resource utilization, and speeds up the development and testing cycle. In addition to providing 24/7 access to lab resources, VRCS enables product engineers to remotely monitor and control test setups, execute tests, and analyze results. This empowers engineers to collaborate seamlessly with colleagues and experts, regardless of their physical location, leading to accelerated innovation and improved product quality.

With Bosch SDS’s expertise, organizations can harness an advanced HIL ecosystem to develop safer, more reliable, and profitable products. This partnership helps businesses mitigate risks while also ensuring a competitive edge, maximized ROI, and top-notch innovation.