Digital Twins Will Aid Digital Transformation In 2020

IBA Group
Mark Hillary

I wrote recently on this blog about the use of SAP to create Digital Twins, a digital representation of a real system so it can be more easily monitored and controlled. As I mentioned earlier, this has been a common practice in aviation for several years. Engine manufacturers will always maintain a digital version of every engine they sell and ensure that the digital version is updated in real-time using sensors on the real engine.

In aviation the advantage of doing this is obvious – it allows for more efficient maintenance and safety procedures when the digital engine allows engineers to monitor real engines remotely. But I believe that the launch of SAP’s Leonardo system last year will really start accelerating the use of Digital Twins as a common business strategy.

It is a combination of technologies and strategies that are creating this possibility, but the three important ones are:

1. The Internet of Things (IoT); as the real world fills with sensors and connectivity as standard for almost every electronic device we will reach a point where systems such as a Digital Twin are essential just to stay on top of what is connected and what information it is reporting. In the home, this may only be devices such as a Kindle, iPad, Echo, phone, lightbulbs, or heating thermostat, but in the industrial environment it can easily be more complex and difficult to control.

2. Artificial Intelligence (AI); with so much data being created constantly by sensors we will need to apply AI principles to the data just to make sense of it all. For example, if your home thermostat detects patterns in the way that you prefer your home to be heated then it should be able to anticipate what you want before you change the settings.

3. Machine Learning (ML); the ability to look at every action and outcome by every sensor inside a network will allow the system to learn about the ideal outcomes and then to suggest recommendations in future based on earlier learning.

It is really the IoT that is at the heart of this development. Imagine the complexity of a modern industrial facility – a large brewery or car factory for example. Across the entire property will be doors, windows, pumps, and various robots that all need to be coordinated. Most companies with these facilities will already have some sort of control mechanism, but the Digital Twin makes an assumption that every component (pump, door, assembly-line robot) has in-built sensors. By taking a feed from all of these sensors we can build a complete virtual mirror of the plant.

The IoT facilitates this by ensuring that the real-time sensor data is available, then the AI system goes to work on spotting potential problems or just process flows that are unusual and alerting workers to places they need to check.

I have seen this type of system deployed for an office management system where every light, heater, door, and window is modelled in the system. I believe that we will see the Digital Twin concept growing much faster as companies find that they can create enormous efficiencies by improving what they do and spotting problems before they happen.

As Forbes magazine recently suggested, it will soon be impossible to plan any kind of digital transformation for your business without creating a digital twin first. The processes will be simply too complex for any one manager to understand from start to end. Not only do you need to map out all the existing components, you need to apply AI to oversee how the entire system is working.

Without these deep insights into the way your business functions at present any transformation plans will be impossible. Digital Twins are not just for those obsessed with being able to manage their existing IoT infrastructure, they are becoming an essential tool for managers who want to see how the future of their business might look.

Digital twins will aid digital transformation in 2020

Digital Transformation Is Redefining Business Models

IBA Group
Mark Hillary

The technology industry is in an interesting place right now. Industries across the world are facing a wave of digital transformation that is often redefining their entire business model and value proposition. In addition, the increased strategic focus on customer experience (CX) as a boardroom priority is creating a wave of investment in emerging technologies. There has never been a better time to be closely connected to the IT industry because IT is redefining so many industries at a scale that nobody has ever seen before.

Customer expectations have changed dramatically in recent years meaning that companies need to deploy every tool possible to increase both sales and loyalty. The Business to Business (B2B) environment research by Salesforce shows that 80% of customers are influenced by the way that a company is able to understand their individual needs. There is a clear need for organisations to explore how digital transformation and the use of more innovative technologies can create a better experience for their customers.

There are many examples of the changing digital environment and how emerging technologies are changing the interface between companies and their customers, for example:

1. Bots; intelligent chat bots are able to handle simple customer questions automatically deflecting calls that would need to be answered in a contact centre.
2. Automation; the use of Robotic Process Automation (RPA) to automate manual processes makes life easier for employees and increases productivity.
3. Data Analytics; the ability to personalise service for customers because the system knows exactly what they like, when they like to buy, and which channels they prefer. Companies can use data insights to show their customers that they understand exactly what the customer wants.
4. Immersion; Both augmented and virtual reality systems are being used for solutions such as allowing customers to experience a luxury hotel before booking and how to find products inside a store.
5. Self Service; customers are increasingly searching for help online before ever asking a company for help with their products so there is an increasing need to create intelligent content that answers customer questions in locations such as Google.

It’s clear that the combination of increasing customer expectations and the emergence of these new technologies is driving a wave of digital transformation. More than ever, companies are turning to their technology partners for answers. Technology is no longer just a service that supports the business, technology is rapidly transforming how organisations function and redefining business models. Technology is rapidly becoming the most important driver shaping how organisations function and define a business model today.

The Six Key Factors For Success In Digital Transformation

IBA Group
Mark Hillary

Digital transformation is a business strategy that has been increasing in importance in the past few years. The ubiquitous use of smartphones, access to fast mobile Internet, and the app store concept have all combined to create a platform where established companies can offer online services and new companies can go to market with innovative ideas extremely quickly.

In some industries, such as financial services, there is an arms race taking place. New companies are launching services that are free of the technical legacy a large company, such as an international bank, needs to manage. Freed from many of the traditional requirements – such as a chain of retail branches – these new services can offer better prices to customers and be entirely designed around the needs of the customer, not the legacy systems of an established company.

It’s clear that companies across all industries need to be exploring how digital tools can improve their service to customers, but digital transformation projects can be risky. If a company bets on the wrong type of service then they can quickly become irrelevant in their own marketplace. Alternatively, if a company fears the complexity of a major digital transformation and delays investment then they may find that entirely new market entrants steal their customers by offering a more customer-centric product.

There are some key areas of focus that should be analysed before commencing on a digital transformation project, both to mitigate against failure and also to increase the chance of success. New research published in Information Age highlights six key factors for success in digital transformation projects:

1. Leadership; is the company leadership really supporting change?
2. People; does your team have the skills you need?
3. Agility; are you able to change plan during the transformation?
4. Business Integration; how will the transformed business connect to the existing processes?
5. Ecosystem; what support do you have from suppliers and others in the value chain?
6. Value From Data; are you capturing the right data and analysing it at the right time?

These may appear to be obvious points that any executive team would consider before a major change, but it’s worth studying each factor in more detail because digital transformation projects do fail. Often the reasons for failure are clear – a lack of agility is a classic example. If your project is so large that it may take several years to implement then it is almost certain that the requirements in a couple of years will be different to now. Therefore agility is essential.

The increasing use of Artificial Intelligence is a good example why these six key factors are important. In the Information Age research 68% of respondents said that they had already had a positive experience of AI systems and 61% expected AI to be creating new jobs in the near future.

That 68% figure is quite high for a technology that is often talked about as a trend for the future. Technologies such as AI are becoming very important in the present-day business environment and many of these emerging technologies will lead to a fundamental change in business models and the competitive landscape. But digital transformation is not just about the integration of emerging technologies into your existing business processes, it is the enabling of new business models or services through the use of technology.

These six factors identified by Information Age really do speak to the way that a digital transformation project should be approached. Kodak was researching digital photography and yet they never saw Instagram on the horizon – digital transformation can completely change entire industries in a short period of time so this is an area of strategy that is essential to get right.