What is Digital Twin Technology? Exploring a £150bn potential market opportunity

As part of Bdaily’s latest feature, Innovation Week, we hear from John Hill, founder and CEO of London headquartered business process simulation platform Silico, who explains why digital twin technology is set for rapid adoption in 2023.

Digital Twin Technology has evolved from highly specific applications in manufacturing and aerospace into becoming a widespread management best practice.

By implementing operational resilience through Digital Twin technology, organisations can ‘play out’ how certain decisions may impact their business to avoid being impacted by the next market disruption. But what are Digital Twins, and how do they work? Read on to find out more…

The emergence of Digital Twin technology

A Digital Twin is a virtual model designed to accurately reflect a physical system or process. In addition to providing information on effectiveness, performance, and potential future bottlenecks, they replicate decisions in real-time, providing real-time feedback.

Businesses can then use these simulations to transfer learnings gained in a digital setting to the real world and determine the best course of action.

As global markets continue to grapple with uncertain economic conditions, it’s little wonder that Digital Twin technology has become an appealing choice for senior leaders across industries. According to Gartner, the global market for Digital Twin technology is expected to reach $183bn (approx. £150bn) in revenue by 2031.

Digital Twin technology has been around for some time and has been used to monitor product performance and quality for high-value projects involving mechanically complex systems. NASA used basic twinning technology in the 1960s to support and maintain satellites without the need to be physically there.

Now, the technology has been adopted to support wider industries and business applications, with the purpose of solving specific challenges and industry-agnostic use cases that aid in broader strategy and decision-making.

The opportunity for Digital Twin technology in enterprises

Digital Twin technology is set to continue its rapid adoption across various industries in 2023. It’s now possible to incorporate Digital Twins into any given non-physical system, through Business Process Simulation (BPS) enabling organisations to build twins of their whole business, otherwise known as a Digital Twin of the Organisation.

This provides several key advantages, such as increased frequency and speed of scenario planning and better alignment of business and financial objectives.

Enterprises can generate forward-looking analytics by creating a large-scale Digital Twin, based on real-time data and forecast process outcomes in different scenarios and circumstances: think of it as predictive maintenance for your business processes.

For example, BPS can identify if the capacity of your order-to-cash process is sufficient to cope with the increasing order volumes your sales team is forecasting. A forecast of rising backlogs and lead times may then define the business problem of this iteration of the improvement cycle.

Looking forward, rather than backward

Using ‘what if’ scenarios in BPS helps evaluate the ‘as-is’ processes of a business and identify potential future problems. For example, using what-if scenarios, BPS can determine where backlogs will accumulate in different scenarios to indicate which tasks and activities should be addressed.

BPS can determine how changes throughout a business may affect processes and business objectives by connecting various processes across teams and departments and connecting them to business outcomes.

Users are not restricted to statistical distributions when creating such scenarios. Instead, Digital Twins can serve as a reflection of future expectations and policies to help determine how prospective changes will impact each step in the process.

A Digital Twin analyses the effects of a system-wide change. The twin is then able to outline which immediate disturbances need to resolve. By creating a Digital Twin, enterprises can trial variations they wish to make, record the possible impacts, and make a strategic decision on whether to commit to making the change to their real-world systems.

By identifying variations between intended and achieved outcomes over time, BPS can assess if additional process adjustments are necessary to accomplish goals. Process experts can then take proactive action throughout the deployment to enhance outcomes, improve client and customer experiences and increase satisfaction levels.

Rather than just looking backwards at historical data, BPS can forecast process KPIs in forward-looking scenarios and establish a baseline of as-is performance. Future conditions – such as case volumes or FTE resources – are likely to be different and will alter KPIs.

Rather than comparing against historical performance under past circumstances, BPS enables enterprises to establish a baseline of future performance against which a transformation initiative can be measured.

How Digital Twins will drive the future of business

Legacy systems lack the ability to account for deviations and disruptions. In an increasingly unpredictable economic climate, businesses must be prepared to adapt swiftly to unforeseen circumstances and external forces such as competitors or natural and economic disasters.

To navigate this, it’s essential for businesses to trial variations, record the possible impacts, and make a strategic decision on whether to commit to making changes to their real-world systems. Enterprises can transform their processes using BPS to ensure they continually achieve their strategic objectives.

By Matthew Neville – Senior Correspondent, Bdaily

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