Article published on LinkedIn, 21/12/2020
The implementation of a digital twin is currently one of the hottest topics in the IT industry.
The implementation of a digital twin is currently one of the hottest topics in the IT industry. Although the basic concept is not new, it has become increasingly popular in the recent two years, especially in the Healthcare, Automobile, and Manufacturing sectors.
The concept of the 10x rule, inspired by the book of Grant Cardona (or recently also with the new book '10x DNA' of Frank Thelen), is on every entrepreneurial agenda. Think big and go for THE moonshoot idea. Great motivational concept - but what about applying the 10x concept to the other side of the table - with the goal to improve your business 10x by removing the complexity barriers in your organization? Can this goal be achieved by applying a Digital Twin of the Organisation (DTO) to extensively increase transparency, visibility and decision making speed in the company?
What about applying the 10x concept to the other side of the table - with the goal to improve your business 10x by removing the complexity barriers in your organization?
Digital Twins are not really a new thing, but…
The hype about Digital Twins has been mainly initiated with the integration in Gartner’s Top 10 Strategic Technology Trends matrix for 2020.
Gartner defines a digital twin as “a digital representation of a real-world entity or system.”
The concept of a digital twin has long been used in industries from Aerospace to Manufacturing, primarily to create simulations of technical systems or envorinments.
Already end of the 90s, IBM and other IT Companies introduced system monitoring tools to oversee their complex IT networks. This was a few years before the growth of the internet exploded and new technologies like Machine Learning and IoT moved into the mainstream discussions of CTOs and and CIOs.
Also the systems management tasks of large infrastructure companies like the transmission- or distribution system operators who are running the power or gas grids - they are all using SCADA Systems (Supervisory Control and Data Acquisition) for ages. Basically these systems are a digital representation of multimillion dollar expensive real-world assets, e.g the grids or substations under their management.
But many new use cases initiated by the Industry 4.0 movement, the accelerated application of IoT devices, and the limitless availability of computing power and cloud storage for deep computing applications led to the rapidly increasing interest in Digital Twins in nearly all areas.
Can Digital Twins of an Organisation really help to reduce complexity by 10x?
As digital twins have become more mainstream, it became clear that anything can have a digital twin and that the concept of a digital twin of an organization (DTO) can also be turned into reality.
The idea of a DTO – the name was initially also created by Gartner Researchers – was driven by the goal of using a digital representation of a full enterprise to support the implementation of large transformation projects but also to improve day-to-day operational efficiency. There fore a DTO provides a virtual model of a business that leaders can analyze and and should essentially support the corporate decision making processes.
Due to the competitive advantage that digital twins can exploit, more and more large enterprises are utilizing DTOs to increase efficiency, optimize their processes, and reduce risks. Data and analytics are the main food of digital twins. Digital twins heavily utilize internal and open-source information, machine learning algorithms, and the connected IoT devices, leading to better outcomes and reduced costs. The key benefit of a digital twin is that it provides real-time data that can help with learning, reasoning, and understanding of how internal processes, supply chain collaboration and organisational structures work. The real-time pairing of the virtual and physical worlds provides the kind of insights that prevent downtime, highlight new business opportunities and can even support the painful yearly strategic and financial planning processes of the business.
Obviously, access to a professionally implemented DTO can give businesses a huge competitive advantage and therefore may lead to 10x upsides in running complex international organisations.
Before reaching 10x - there is some complexity to manage…
The obvious first step in creating a DTO is developing a virtual representation of the organization that is accurate and comprehensive. Due to the speed of change this is a very complex exercise since most organisations are not really aware about the real organisation behind their organisational charts - therefore it is wise to start with a small pilot project and then gradually scale up from there.
Due to the speed of change building a DTO is a very complex exercise since most organisations are not really aware about the real organisation behind their organisational charts
While creating a DTO requires a powerful platform, a consolidated enterprise architecture, and advanced process mining capabilities - it can fastly lead to visible results. A DTO reduces the risks that come with needed changes, allowing organizations to anticipate issues and make adjustments before implementing these changes in the real world.
It also allows all stakeholders to understand and align on organization-wide goals to commonly drive the business towards the 10x goal.