At the Organization’s Driver’s Seat with a Digital Twin


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Table of Contents

Digital Twins of an Organization (DTOs) have garnered increasing attention among IT leaders across the world. Originally adopted from its ancestor, the Digital Twin, DTOs provide promising benefits for the management and steering of organizations, including the identification of bottlenecks, reduction of productions costs, improved quality of outcomes, and a suitable vehicle for breaking up silos and driving the transformation of a firm. In this article, we will introduce you to the cockpit of such a vehicle and provide guidance on how to realize your DTO.

What is a Digital Twin?

The concept of digital twins has been around for three decades. Initial ideas and implementations occurred in the early 1990s.1 Typical use cases are often found in engineering, namely in the form of CAD2 models and process simulations. The beauty of the concept, however, not only lies in having a digital representation of physical entities, but also in having a data flow between the real and digital world. This data flow enables users to better understand and learn about the current real-world entity, plan and simulate novel designs, and re-apply such designs to reality. This, of course, produces obvious benefits: the identification of bottlenecks, a reduction in production costs, and an improved quality of outcomes.

What is a Digital Twin of an Organization?

A Digital Twin of an Organization expands the existing concept of digital twins. The increasing interconnectedness of in-house IT, cloud systems, and IoT3 allows organizations to gather and integrate data from a wide variety of digital endpoints to create a digital representation of their organization and its interfacing ecosystem—from the first supplier to the last customer. Increasing interconnectedness, along with the benefits of digital twins, led to a surge in adoption of DTOs during the past five years towards its preliminary peak. It does not seem to have stopped here. DTOs help solve the challenge of opening organizational silos. Problems related to organizational silos are well-discussed in theory and practice. Resolving organizational silos, towards holistic end-to-end management and execution, is certainly a challenging task that is part of every transformation agenda. However, how do you overcome organizational silos? DTOs provide an understanding of how an organization functions. Moreover, the transparency of DTOs sheds light on organizational grey zones and black boxes. Thus, leaders can re-design the existing organization by integrating functions and streamlining delivery to reduce information- and production-flow bottlenecks. The results of implemented changes once again become visible by the DTO, effectively empowering management by providing a closed-loop, data-driven tuning tool. This enables leadership to reap the same benefits as realized by adopting the original concept of digital twins: a reduction in production costs and improved quality of outcomes. Furthermore, the identified potentials often pave the way for a new level of alignment via interdisciplinary collaboration to ultimately boost a company’s digital innovation capabilities.

DTO as a Vehicle Towards Success

Creating, maintaining, and driving a high-performance vehicle requires the interplay of various elements. Gartner4 boils these elements down to destination, map, performance, situation, and value.

The Building Blocks of a DTO

Destination

Destination:
Information about your desired destination and when you would like to arrive there.

Map

Map:
A guide showing how to reach that destination – your organization’s GPS will only be as good as its map database.

Performance

Performance:

An Indication of how far along you are on your journey.

Situation

Situation:

Situational Awareness (i.e., organizational awareness of roadblocks and challenges on the road ahead).

Value

Value:
Accurate Information on your organization’s progress and situation to enable informed decision making.

The Destination

The destination of an organization is described