Digital Twins in Business: Weighing Benefits, Costs, and Long-Term Impact
To me, almost every aspect of Digital Twins is fascinating! What makes them so captivating? Is it the technology? The data? The potential actions they can perform? Or is it turning my business into something like a game?
Digital Twins are undeniably intriguing. However, once the initial excitement wanes and you embark on the journey to create one, you need to address some fundamental questions.
Let’s delve into these questions:
- What is the cost of developing a digital twin?
Time translates to money, and the more time invested in development, the higher the associated costs. If you choose to outsource the development, you’ll incur expenses for labor and expertise. The cost of building a Digital Twin hinges on various factors.
2. What returns can building a digital twin offer?
While crafting a digital replica with real-like capabilities is undoubtedly appealing, it must translate to value if it involves expenses. What forms of value can be derived from a Digital Twin?
3. How can a Digital Twin deliver value?
Value manifests in diverse ways. Utilizing a Digital Twin to share real-time insights with stakeholders can be immensely valuable. Imagine visualizing intricate details like assembly lines or business workflows. Would these visualizations provide value, especially when shared with others?
Operational Twins: Sharing Information:
Consider this as one variant of a Digital Twin. It facilitates sharing critical information that might be difficult to perceive directly. For instance, creating a Digital Twin of your office building to monitor conference room occupancy or tracking shipping operations in real time.
Simulation Twins: Planning Ahead:
Another breed of Digital Twin involves modeling existing processes, visualizing them, and then employing a Digital Twin to simulate alternate scenarios. Yet, extracting value from simulations presents challenges. How can you ascertain if an alternate path is better or worse than the current setup? What metrics can gauge efficiency?
Historical Twins: Understanding the Past:
By recording data that fuels your Digital Twin, you gain the ability to rewind time and analyze how various data points influence each other. Historical Twins act as time machines, enabling you to study past occurrences and draw valuable insights.
Digital Twins: A Form of Software Development:
Analogous to developing custom software, Digital Twins entail hardware, software, and hosting/maintenance components. Like any software endeavor, the investment should align with anticipated value. Thus, it’s essential to pose the right questions and assess prospective gains before diving in.
Critical Pre-Development Questions:
Before embarking on a Digital Twin project, consider these queries:
- What type of Twin are you aiming to create? Historical, Operational, or Simulation?
- What value do you aim to derive from a Digital Twin?
- How does the concept of a Digital Twin align with your company’s overarching objectives and long-term strategy?
- Can a Digital Twin enhance operational efficiency, customer experience, innovation, or other key business goals?
Measurable Gains and Feasibility:
- What gains would be considered significant? Is a 5–10% productivity increase meaningful? How will you measure it?
- Can a more efficient process model be quantified? How can success be determined?
- Is validation of the current process’s efficacy desired? Sometimes, the current process might already be optimal.
Feasibility Considerations:
- Is the data collectible and precise enough to yield a valuable Digital Twin?
- Does the anticipated value outweigh the expenses of development and maintenance?
- What are the costs of data instrumentation, recording, and Digital Twin maintenance?
- Do you have access to reliable and accurate data sources for the Digital Twin?
- Do you possess the technical expertise for development and maintenance, or would partnering with a third-party provider like Digital Bot Lab be necessary?
Measuring Success and ROI:
- Which individuals or departments within your organization would benefit from this technology?
- Can you define key performance indicators (KPIs) to gauge the Digital Twin’s impact?
- What ROI are you expecting from this initiative?
Beyond Being Cool:
While the allure of Digital Twins is undeniable, they must be evaluated within the context of your business strategy and their tangible benefits. Making an informed decision demands a clear comprehension of your goals, coupled with a thorough analysis of potential costs and gains. Collaborating with experienced partners like Digital Bot Lab could offer invaluable guidance and support throughout the process.
Digital Twins undoubtedly captivate with their potential for insights and advantages. Nevertheless, their development must be grounded in strategic alignment and the promise of substantial value. A meticulous evaluation, informed by your organizational objectives, remains paramount in making an educated decision regarding Digital Twin creation & implementation.
Remember, the ultimate measure of success for a Digital Twin lies in its ability to contribute to your organization’s growth, efficiency, and overall success. By following these steps and maintaining a clear focus on delivering tangible value, you can create a Digital Twin that goes far beyond being “cool” and becomes an integral part of your business strategy.
