Digital Twins Will Drive More Enterprise Innovation

Digital Twin that was conceptualized by NASA in the 1960s and later used during the Apollo 13 mission is an emerging innovation area that is slowly and steadily gaining momentum in the enterprise. The Digital Twin Consortium defines a digital twin as a virtual representation of an entity such as an asset, person, organization, or process and is developed to support business objectives.

While some of the large enterprises have already leveraged digital twins to innovate and create new models, the global pandemic that has made digital transformation an imperative, accelerated the concept in the business circle, more so because digital twins not only simulate real-time applications and make timely decisions, but also help mitigate the risks and costs involved in big projects.

Alfonso Velosa, VP Analyst, Gartner

In a recent interaction with CXOToday, Alfonso Velosa, VP Analyst, Gartner, explains how enterprises can implement digital twins in their business operations and products, as they seek to differentiate, innovate, and compose new business strategies. Excerpt.

What are digital twins and why does it matter to the enterprise?

A digital twin is a virtual representation of an entity such as an asset, person, organization or process that is developed to help people and enterprise teams make better decisions. Digital twin elements include the model, data, unique one-to-one association and monitorability. Digital twins are created in enabling technology platforms, such as analytics or simulation solutions, IoT platforms, or CRM applications

Enterprises are using digital twins to create virtual representations of previously opaque entities or activities for process, cost or other business improvements. For instance, improved patient outcomes due to visibility of the entire patient across the siloed systems, or reductions in unplanned outages by monitoring the equipment state are now possible. Technology providers see digital twins and associated information products and services driving new customer outcomes and revenue streams. Digital twins are designed to optimize the operation or use of such resources or any business decisions about them, such as improving maintenance or operational efficiency.

  • Digital twins enable business to enrich decisions — for example, to lower maintenance costs, increase asset uptime and improve
  • For OEMs, digital twins contribute to differentiation, new service models and obtaining customer data.
  • Digital twins of people contribute to improved health monitoring, employee safety and customer transactions.
  • Digital twins will help drive new business models, such as product as a service, as well as new data monetization

How do Digital Twins help in bridging the physical and the digital world?

We have built models of reality for the past few decades. What is different is modern digital twins take advantage of all the advances we have seen in SW systems, databases and historians, and sensors and connectivity to reflect a new view of reality.

The other advance is purposeful design and alignment of the models that form the foundation of digital twins – to business objectives. These may be models that are structured to help us predict failure modes in equipment so we can do predictive maintenance. Or models we populate with data on passengers arriving from abroad so we can identify high COVID risk passengers. Or complex models of an enterprises supply chain, manufacturing infrastructure and transportation infrastructure that enterprise leaders can use to optimize where they manufacture specific products and lower transportation and customs costs.

This design and alignment is how the digital twin bridges the physical and digital worlds – enterprises are building them to help them solve specific business challenges or to create new opportunities.

How technologies like IoT, AI, and cloud are driving the growth of digital twins?

A range of digital twin enabling technology platforms are used to build digital twins. While IoT platforms are best known for leveraging digital twins – many enterprises are using analytics or AI or supply chain management tools or PLM or physics solutions to develop digital twins.

How do digital twins benefit industries and which industries are upbeat on the technology?

Our customer engagement and survey data shows enterprises across all sectors are exploring the use of digital twins to:

  • Improve employee productivity
  • Drive process and cost savings
  • Customer engagement
  • New revenue opportunities

There is stronger concentration of activity in traditional industrial sectors such as oil and gas, manufacturing, and utilities.

Note that our survey shows differences in adoption. In IoT based environments, 88% of survey respondents highlight they are either using or plan to implement digital twins within the year. However in the current and broader research circle survey (Survey Analysis: Digital Twin Expansion Plans Signal New Software Skills Investments Are Required) 11% of respondents indicated they had large- and full- scale digital twin deployments to date in 2021, and they anticipated that 39% would have large and full scale digital twin deployments in three years.

What steps should CIOs take to realize the full promise of digital twins?

CIOs should balance a threefold approach and optimize it as appropriate for their enterprises:

  • Business: CIOs should support business projects that leverage digital twins. Thus, it is important to engage executives in the enterprise to develop ideas and proposals for where digital twins can be used. Since many enterprises have digital strategies – existing project roadmaps present opportunities to use digital twins while aligning to projects with clear business metrics. Do not invest significant IT resources if the project does not have clear business support or defined metrics.
  • Technology: Develop a tiger team to explore the technical competencies the IT team will need to support business initiatives that use digital twins. This will range from new approaches for model development, including traditionally OT or operational SW systems to integration, visualization and security for the digital twins at scale. In parallel, the CIO’s team will want to start developing a governance process for digital twins as these are long lived software assets and they have to be managed as
  • Culture: Engage with peers in operations and business leadership to ensure there is a culture change process in place as the outputs of digital twins will change processes in the enterprise, for example how we monitor and manage the maintenance of an asset or how we prioritize which senior citizen to

What to expect in the near future in terms of this technology?

Continued hype from the technology providers will lead to purposeful investments from enterprises across the spectrum to solve their business issues while managing the reality of their people, culture, and business opportunities. I also believe that OEM enterprises will have different drivers for the adoption of digital twins (with a particular focus on revenue and customer engagement) versus owner-operators of equipment or of supply chains, who initially focus on process and cost optimization before exploring revenue opportunities.

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Sohini Bagchi
Sohini Bagchi is Editor at CXOToday, a published author and a storyteller. She can be reached at [email protected]