Speed to ROI

How quickly does a digital twin generate a return on investment?

You are an executive at a large industrial manufacturer.

You’ve done your research and you’re convinced that an enterprise digital twin of your plant machinery, processes, and resources will help you lift productivity, decrease maintenance spending, and increase profitability.

You know what data will be critical to feeding the digital twin model and you know how you’ll leverage your existing Industrial Internet of Things (IIoT) sensors to drive real-time efficiency improvements.

You can see a clear path to generating a return on the investment - you are considering in digital twins but there’s a question mark hanging over that ROI that has you concerned: how quickly will this solution pay for itself?

Even companies that go all-in on their digital transformation need to prioritize their adoption of new technologies, and the speed to ROI is a key factor in these decisions.

Luckily, when it comes to digital twins, achieving a ROI is rapid and recouping the entirety of a digital twin investment quickly is not only possible but expected by a clear majority of companies adopting the technology in 2019.

Recoup the Entire Spend in 12 Months

In 2018 LNS Research surveyed more than 300 manufacturing industry executives from around the world to determine how they were embracing digital twins, and what sort of results they were having after digital twins were deployed.

40% of those executives revealed that they had already deployed digital twin technologies. Significantly, nearly 60% of those executives expect to fully recoup their investment in digital twins in just 12 months - that is not only do they expect to begin generating a return on their investment but they expect the digital twin solution to fully pay for itself in just a year.

Start Small with Quick Wins, Then Scale

One of the core features of digital twin technologies is the capacity to start by developing digital twins of small, discrete parts of a business and then expand the deployment across the business.

For example, a company might invest in digital twins of individual machines on the factory floor so as to better anticipate maintenance needs and optimize the machine’s efficiency.

These discrete digital twins of individual machines can later be linked with each other and with digital twins of processes and policies in a factory so as to provide a composite digital twin of an entire plant.

Then, later again, digital twins of different plants, the logistical links between them, and the interconnections and interdependencies can all be combined into a single enterprise digital twin to optimize operations and investments across an entire company.

At Cosmo Tech this is the process by which clients tend to build their digital twin programs. Indeed, the common platform that underlies all of Cosmo Tech’s digital twins make it simple to scale vertically and horizontally towards a true enterprise digital twin. This scale up approach has demonstrated the ability to pay for itself within the next quarter.

Now Scale Faster

LNS reports that this is exactly the way in which manufacturers are adopting digital twins across the world. They report that while the average number of plants and factories that their surveyed manufacturers have is 25, companies typically deploy or pilot digital twins at first in only one or two sites.

The scale-up arrives quickly, though.

LNS reports that in 2018 less than 15% of digital twin deployments involved annual budgets of more than $5 million. By 2023, however, LNS expects that those budgets will grow and that more than 40% of those same manufacturers will be investing more than $5 million each year in digital twins, with nearly 5% investing more than $20 million annually.

Great Bang for Your Buck

Let’s turn back to our large industrial manufacturer and our executive with a question.

By marrying a quick recoup of the initial investment with a capacity to scale a digital twin program from a single machine to an entire company quickly and easily, you can quickly take advantage of your digital twin and generate a real ROI. It’s not really a question of the cost of investing in a digital twin but rather what it might cost the executive not to invest in digital twins.

Whether it’s optimizing a manufacturing process, managing investments and maintenance on a utility network, or lifting efficiency on a transport or mobility network, a digital twin is the smart choice to realize a fast and sure return on an investment in transformation.