The Smart Systems group at the Institute for Technical Informatics deals with new challenges in technology induced by the paradigm change from product orientation to service orientation and towards smart systems. At the same time the expectations of customers imply increasing complexity and reduced development cycles, typically in agile environments. Both in Europe and in the US initiatives towards Smart Manufactoring promote the computerization of the manufactoring industry, typically referred to as Industry 4.0 - the fourth industrial revolution. This requires to include all stakeholders - customers and business partners - in the development process. It also requires that producers and customers become more and more connected with intelligent networks guaranteeing security, privacy, and functional safety. The research of the working group focuses on the transformation of concepts into realistic prototypes with different levels of detail and different levels of connectivity to assess the properties and performance of the concepts.