Why Digital Twins are Central to Digital Transformation? Enterprises no longer have a choice, but innovate for the best customer experience

Digital is all pervasive. The shift to digital is the need of the hour. From simple digitisation to complex transformation, billions of dollars are being poured into transformation projects. While the term "digital transformation" will mean different things to each organisation, the enterprises, indisputably, are morphing into digital companies.

Commonly, digital transformation means integrating the latest and emerging technologies into all aspects of a business. While it can be easily misconstrued as a technology project, digital transformation has a larger purpose. Internally, organisations are transforming to do even better. Externally, they want to be a force to reckon with, by placing customers at the center of the universe.

Author Greg Verdino summarises digital transformation as this: Digital transformation closes the gap between what digital customers already expect and what analog businesses actually deliver.

So, where does digital twins fit into the analog and digital gap? Could digital twins become the central pivot to successfully meet the objectives of a digital transformation program? Let's find out.

The Digital Customers

The oft repeated "customer experience" buzzword is for a good reason – survival. Enterprises are faced with the sternest competition, increasing customer expectations and dropping profit margins. Customers of today have a plethora of choices and one tweet is sometimes sufficient to cause irreparable damage to a business. The digital customers have raised the stakes for anytime, anywhere, any-channel experience. Enterprises no longer have a choice but to innovate, and provide the best customer experience.

The Analog Business

Fundamentally, for the enterprises, digital transformation is as much of a culture and people's transformation, as much as it is a technology transformation. With an existential issue at stake, enterprises are taking a hard look at how they've been operating. By encouraging pathfinding innovation, changing a risk-averse culture and enabling a workforce skills' upgrade, many enterprises are seriously changing their analog outlook. No leadership agenda is complete today, without a digitally-infused action.

The Digital Twins' Pivot

Digital transformation is a continuous journey. As new technologies and business models emerge, the digital journey will be enriched. Technologies like artificial intelligence, blockchain and IOT are making inroads to enable enterprises to offer better value to their customers.

The fast-emerging concept of digital twins – a convergence of multiple existing and evolving technologies – has much to offer for the digital transformation ideologies. Digital twins are built on the core concept of a digital equivalent for a physical entity. From automotive to agriculture, every enterprise interaction with their customers involve physical entities. Digital twins are paving the path for enterprises to bring the benefits of software world onto the physical assets – thereby providing an opportunity to better serve the needs of the digital customers.

Improve User Experience

Data is critical to understand the past, know the present and predict the future. Effective data management forms the bedrock of any successful user experience programme. Digital twins deploy IOT to gather real-time information from the physical world. The information gathered is constantly processed, analysed and learnt to provide meaningful insights. Armed with the real-time insights, enterprises can drive successful user-centric programs.

Innovative High Quality Offerings

Innovation is a competitive edge, setting the leader apart from the followers. Innovation in the physical assets demand high R&D budgets. The high cost of failures commanded specific and expert knowledge to design, test and operate. Digital twins offer the ability to overcome these innovation barriers. A simulated environment combining real-time information, enables enterprises to collaborate with the user community for developing high-quality offerings.

Streamline Business Process

Broken process and bureaucracy would top-the-chart of customer frustration. Given the complexity of todays' business processes, the technology framework, orchestration and knowledge management are broken and silo-ed. Digital twins serve as a meta-layer bringing together the various systems and processes under one umbrella. From knowledge management, training and optimising the business processes, digital twins have a key role to play in the complex future. Simulations and visualisations, furthermore, aids human learning and better process management.

Operational Agility

In a highly competitive world, operational agility will impact the top-line and the bottom-line for the enterprises. The massive volumes of information gathered, black-box algorithms and the pressure to make quicker decisions are severely disadvantaging the human operators. By leveraging vast amounts of information, technologies and scenario, digital twins enable a variety of diagnostics and prognostics' capabilities. The human operators can get back into the loop and identify ways to be competitive and agile.

Information Security

With all the data comes the challenge of information security. The case for open-source, cross-learning and information-sharing has never been stronger. Trust will be the under-pinning factor to drive the need. The increasing incidence of data breaches only sets us back from progress. Digital twins have the potential to offer a collaborative platform for trusted stakeholders to exchange information and benefit from it. Besides, digital twins can also serve as an obfuscation layer to preserve the sanctity of the information.

The way Forward

IDC forecasts the worldwide spending on technologies and services that enable digital transformation will reach US$1.97 trillion in 2022, at a CAGR of 16.7 per cent. Enterprises are changing the fabric of their workplace to place the customer at the center. From product design to marketing and sales, and even post-sales, enterprises are taking bigger risks than ever before. Digital twins offer enterprises an approach to achieve the objectives of their digital transformation programs. It's about time, digital twins become part of the agenda.