By Pieter van Schalkwyk, CEO at XMPro
Digital Twins have emerged as a critical technology framework in today’s rapidly evolving digital landscape, unlocking substantial business value, and enabling digital transformation at scale. This cutting-edge technology approach provides a virtual representation of physical assets, systems, or processes per the definition of the Digital Twin Consortium [1]. It allows organizations to simulate, predict, and optimize their operations in a virtual environment before implementation. This innovative approach not only enhances decision-making and efficiency but also paves the way for new business models and strategies, demonstrating its critical role in driving the future of digital innovation.
A Digital Twin framework, while fundamentally technical, offers a powerful tool for businesses to transform both their business and technical intellectual property into tangible value.
At its core, a Digital Twin facilitates the conversion of implicit business knowledge into explicit, actionable insights, creating a more structured and repeatable approach to intellectual property management. This framework serves as a vital mechanism for capturing and showcasing institutional knowledge, significantly enhancing business processes. Additionally, it grants access to real-time intelligence within operational workflows, enriching technical data with crucial business context. This integration streamlines operations and bridges the gap between technical capabilities and strategic business objectives, marking a leap forward in how businesses leverage technology for growth and innovation.
Fig. 1 illustrates a digital transformation strategy using business and technical intellectual property to inform and enhance enterprise decision-making through digital twins.
Figure 1 – A Digital Twin make implicit intellectual property explicit at scale
Building upon this foundation, the Digital Twin approach amplifies the value of existing investments in technical intellectual property. This includes modern data architectures, ontologies, digital twin models, and the sophisticated integration and orchestration of IT services. A Digital Twin creates a synergistic relationship between business and technology by capitalizing on existing business intelligence, rules, and AI models enabled through IT. Furthermore, the approach introduces a unique Digital Twin user experience powered by IT-based platforms, merging Information Technology (IT), Operational Technology (OT), and Engineering Technology (ET) intellectual property with business processes. This fusion of technical and business capabilities cultivates a digital prowess that offers organizations a significant competitive edge. This strategic convergence optimizes existing resources and paves the way for innovative solutions and operational excellence.
Digital transformation transcends the mere digitization of existing paper-based and manual processes. While the digitalization aspect of a Digital Twin project enhances operational efficiency, its true transformative power lies in facilitating shifts in business models. A Digital Twin offers a distinctive mechanism that generates new enterprise intellectual property, positioning it as a vital and unique asset for forward-thinking organizations. This model-centric approach empowers companies to actualize their enterprise strategies effectively. It achieves this by synchronizing processes and activities across a broad spectrum of entities, each represented by their respective digital twin. This strategic alignment optimizes current operations and lays the groundwork for future innovation and growth.
The advent of enterprise IP, driven by Digital Twin technology, positions organizations at the forefront of their industries, transforming them into “best-in-class” leaders. This technological leap opens doors to an array of opportunities for creating innovative products and services, fostering new revenue streams while simultaneously delivering enhanced value to customers. A Digital Twin stands at the heart of this transformation, acting as a pivotal catalyst for “business model innovation.” It provides a scalable and repeatable framework for companies to refine existing offerings and explore and penetrate new market segments with digital products and services.
The market for these new digital offerings is expansive and continuously growing. As per a report by MarketsandMarkets, the Digital Twin market size is projected to grow from USD 6.8 billion in 2022 to USD 110.1 billion by 2028, indicating a surge in demand for digital twin solutions across various industries. [2]
Furthermore, as IDC predicts, spending on digital transformation technologies and services was projected to reach $3.9 trillion in 2027, accounting for more than half of all IT spending (“Worldwide Digital Transformation Spending Guide,” IDC, 2023).
“The fastest growing among the more than 300 DX use cases identified by IDC include Mining Operations Assistance, Robotic Process Automation-Based Claims Processing, and Digital Twins with five-year CAGRs of 32.6%, 30.6%, and 28.5%, respectively.” [3]
This substantial investment underlines the growing importance of digital initiatives like Digital Twins in driving business evolution. By harnessing these tools, organizations can not only stay ahead of the curve in their existing markets but also explore uncharted territories, creating novel offerings that resonate with evolving customer needs and technological advancements.
The real benefit is derived when this is done at scale, and a composable approach to Digital Twin solution development is the only way to do this at scale. The composable approach to Digital Twin solution development is based on packaging business capabilities that can then be composed and reused or recomposed to create new and additional digital twin solutions that can be rolled out in an agile manner with quick time to value. For more information on Composable Digital Twins see this resource on the Digital Twin Consortium website. [4]
There are significant benefits to using a Digital Twin to enable digital transformation across various industries:
- Better Decision Intelligence for Improved Decisions: In the context of digital transformation, better decision intelligence means organizations can leverage the insights gained from Digital Twins to steer their transformation initiatives more effectively. As companies transition from traditional practices to digital-first approaches, a Digital Twin acts as a compass, offering predictive analytics and deep learning to inform strategic decisions. For example, a Digital Twin can simulate the impact of digitizing a supply chain process before implementation, ensuring that decision-makers clearly understand potential outcomes, from efficiency gains to possible disruptions.
- Common Operating Picture Integrated Enterprise View: A Digital Twin’s ability to provide an integrated enterprise view is crucial for a successful digital transformation. By consolidating data across various digital platforms and systems into a single, accessible model, organizations can achieve a holistic view of their operations. This is essential for identifying digital gaps and opportunities, ensuring that transformation efforts are cohesive and align with overarching business objectives. An integrated view also enables real-time responsiveness, a key attribute of digitally mature companies, allowing for quicker adaptation to market changes and customer needs.
- Improved Business Processes with Recommendations: A Digital Twin significantly enhances the capability to improve business processes, a core aspect of digital transformation. With their ability to provide actionable recommendations based on real-time data and advanced analytics, a Digital Twin helps organizations to not only optimize existing workflows but also to innovate new digital processes. By continuously learning and updating, they can guide the development of new digital services or products, suggest areas for digital upskilling, and automate routine tasks, thereby driving transformation and helping businesses to maintain a competitive edge in a digital-centric marketplace.
CTA: Sign up to learn more about Transform! @InfoComm and on how Digital Twins can accelerate your business transformation initiatives.
References
[1] https://www.digitaltwinconsortium.org/initiatives/the-definition-of-a-digital-twin/
[2] https://www.marketsandmarkets.com/Market-Reports/digital-twin-market-225269522.html