How digital twin technology can transform your enterprise
Digital Twin technology is on the cusp of dominating global digital transformation. According to a recent report, the global market for digital twins was valued at $6.30 billion in 2021 and is estimated to reach $131.09 billion by 2030. Put simply, a Digital Twin is a virtual representation of a real-world entity or process. Digital Twins enable an accurate simulation of a process or entity which can run different scenarios to understand the impact of different decisions. By doing so, the twin replicates its environment in real-time and offers insights into performance, efficacy, and possible future challenges. Simulations enable businesses to apply the insights obtained in digital environments to the real world, helping them identify the optimum path forward.
A brief history of Digital Twin technology
To date, Digital Twins have predominantly been used for high-value projects involving physically large structures or mechanically complex systems. The creation of digital twins for assets is commonly used in manufacturing to experiment with new production techniques. It has even been used in space, with NASA using this technology since the earliest days of interstellar exploration to operate, maintain, and repair systems without the need for a person to be physically present. While these are valuable use cases, the applications of Digital Twins can go far beyond these examples to have a much greater impact on society.
How Digital Twins propel enterprises forward
Incorporating Digital Twins into organisations’ non-physical systems is now possible thanks to innovations in this space. By utilising Business Process Simulation (BPS), organisations can create Digital Twins of the entire enterprise. Several commercial benefits result from this, including speed and frequency of advanced scenario planning, and improved alignment of commercial and financial objectives.
Businesses can generate forward-looking analytics through scenario planning using 'what if’ scenarios by creating a large-scale Digital Twin based on real-time metrics generated by all departments. Monitoring processes and predicting upcoming challenges enables businesses to make strategic decisions and take proactive measures. Having seen their simulated outcomes within a Digital Twin, a business can then execute these changes – or not - in the real world, all from a single workspace.
It is possible to create Digital Twins of individual processes or financials in as little as a few weeks if materials about the structure of the Twin exist already and data can be integrated from standardised sources. Over time, these Digital Twins of individual elements like processes or financials may grow to full Digital Twins of the enterprise, with the time required depending on the size and complexity of the company.
As so many companies operate in an increasingly unpredictable economic environment, there is a great deal of ambiguity surrounding strategic plans - especially when market conditions deviate from historical data. To navigate an optimal path, it is critical to use advanced forecast models to understand how cost and pricing changes today should impact decision-making.
In response to recent shortages in the labour market, many companies want to optimise their spending and plan for the future. A Digital Twin of the enterprise can be created to demonstrate how, in practice, businesses such as edgeTI and Hybrid Theory can make the most optimal decisions to strategically prepare for the potential challenges they will face.
Another benefit of BPS is the ability to accurately forecast margins and identify how they could be increased. Forecasting margin is vital to ensure that correct funding is always available without leaving unnecessarily large buffers in place. Businesses can make dynamic margin forecasts by building an end-to-end digital twin that gives a single view of margin on a product-by-product basis. By automating the margin calculation process, thousands of scenarios can be run across the business in seconds, resulting in margin improvement.
The evolution of Digital Twin technology
While Digital Twins will undoubtedly continue to transform aerospace and manufacturing, in the future, digital twins will further unlock our ability to plan and manage the complex organisations that are crucial for our continued economic progress, including those in insurance and financial services. The next generation of decision-makers will routinely use forward-looking simulations and scenario analytics to plan and optimise their business outcomes. I predict that the future of Intelligent Enterprise Automation will see a Digital Twin created of every complex enterprise.
Maintaining a Digital Twin requires regular data updates and testing that can be automated, as well as adapting the Digital Twin to changing business practices such as process changes. However, this adaptation in the Digital Twin is value-generating by itself, and the Digital Twin can be adapted to evaluate if changing the process is beneficial before implementing changes. Particularly for Process Twins, this maintenance is done as part of transformation initiatives by internal specialists that reengineer processes with Silico translating their ideas for process changes into an updated Digital Twin.
In an increasingly competitive world, businesses must make data-driven decisions to survive. With simulations, what is discovered within the digital environment can be applied to the physical world. This enables businesses to be more agile to respond to rapidly changing conditions.