by Peter Thorne
@Cambashi_Peter
LinkedIn

The Digital Twin concept is creating an opportunity for PLM providers. Top management of PLM user companies already believe PLM is the owner of Digital Twin technology. The opportunity is for PLM providers to take the lead in defining road maps which will guide their customers’ visions for Digital Transformation. This paper considers road maps in other sectors and Cambashi market data to suggest how PLM providers can elbow their way to the front of the queue.

Evolution and Revolution

“My customers would have asked for faster horses”

“No amount of development and optimization of candles will deliver electric lighting”

Most cases are less dramatic, but whatever the situation, there are limitations to both customer driven strategies, and incremental technology development. Sometimes providers must make a big leap in the technology they offer. But their customers want and sometimes need future development road maps to have a step-by-step feel. Giant leaps are disconcerting.

To bridge this gap, it helps firstly to have a good idea of all the implications of the big leap, and secondly to articulate the road map so that the big leap can be seen in context. One well known example is in the automotive sector: the road maps for ADAS (advanced driver assistance systems including autonomous driving) are presented in six levels, from level 0 (a human driver controlling everything) to level 5 (an automatic system which at least matches the performance of a human driver). The big leap comes at level 4 – no human interaction required. The wireless communications sector has built the idea of continuous progress with occasional big technology steps into its way-of-life. The framework from 2G via 3G and 4G to 5G has provided the foundation for individual road maps for providers across the entire industry ecosystem. By signalling the steps along the way, everyone involved – the users, the OEMs, the suppliers and the legislators – knows what’s coming and can plan accordingly.

Digital Twin

“Digital Twin” is a concept which PLM providers use both as a strategic anchor, and also to communicate the pathway to the future. Their efforts are commendable but have left plenty of space for management consultants to sell “Digital Transformation” strategies to the top table of management in all the sectors which buy PLM technology. “Digital Twin” is perceived as a technology – the capability to replicate the characteristics of a physical item in the computer. “Digital Transformation” is something for which management teams must have a vision – a vision for doing more online, a vision which develops and innovates the business model, outflanks fast-moving born-digital start-ups, identifies new revenue streams, and defines new competitive advantage.

So how does this fit into a road map? In enterprise software – including PLM – there is no accepted whole-sector framework comparable to 2G-5G in wireless communications, or level 0 to 5 in automotive ADAS. Perhaps the closest contender is Industrie 4.0 (I4), which describes the concept of connected digitalised industry value chains. Some published material gives maturity-model type guidance on how to judge the “as-is” and “should-be” I4 status of an organization, for example, see[1][2][3] , and these concepts help frame the characteristics a road map should address. However, enterprise software is just one part of an I4 vision, so each enterprise software provider must identify how its offer addresses I4 objectives.

Leading providers, and providers which dominate a particular niche, are comfortable to define the agenda, priorities and road-map themselves. There is a successful precedent in semiconductors – the tick-tock model served Intel well. Tick-tock helped coordinate development of two co-dependent technologies – chip architectures (tick) and chip manufacturing processes (tock). It also helped to communicate development schedules and sequencing to suppliers and customers, and in this way drove the whole semiconductor-centric ecosystem. Indeed, as limits to Moore’s Law came into view, Intel introduced a new Process-Architecture-Optimization model to replace tick-tock. Part of its objective was to provide reassurance that the road map was not heading for a road block.

PLM providers hold an important card: management teams in their target markets believe “PLM” is the owner and source of “Digital Twin” capabilities. In addition, all industry sectors have an almost unblemished historic record of allocating a higher proportion of their budgets each year for expenditure on engineering software – and Cambashi’s forecasts indicate this trend will continue (see figure 1).

Figure 1: Cambashi forecasts indicate continuation of the historic trend of industries to spend more each year on engineering software as a proportion of their value-added. (source: Cambashi Market Observatories)

This trend is the result of the complex interplay of various aspects of market dynamics. New technologies get the headlines, and these are taken up by early adopters. A combination of new technologies and experience enables users to make better use of software, and grow both the scope and intensity of use of applications. Also, as time passes, the market lifecycle leads new buyers into the market – the early majority and the late majority of the bell-shaped take up curve – and overall penetration increases. The result of these factors is the ‘propensity to spend’ curves in figure 1. So market growth within an industry is possible even if the industry itself is not growing.

Given this market opportunity, and the “Digital Twin” advantage for PLM in customer perception, this is fertile ground for PLM providers. However, it is important for software providers to recognize that decision makers in their target customer organisations don’t always appreciate nuances in the way the label “PLM” is used:

  • Sometimes, “PLM” implies product definition authoring tools (such as CAD and simulation) as well as ‘pure’ PLM capabilities (such as workflow, access control, change and version management)
  • However, away from the engineering team, a full-range “engineering software” PLM provider can be perceived as being in the same category as “PLM-only” providers.

It is the full-range PLM providers who are best placed to use Digital Twin roadmaps to gain senior management attention, and strengthen the opportunity for PLM software in Digital Transformation projects.

Digital Transformation

Let’s start with table-stakes; the entry level is that a Digital Twin road map must make a positive contribution to an overall value proposition. Each PLM provider must show how its road map for Digital Twin can support and help shape Digital Transformation in general.

Executive management at PLM user companies have probably heard this before, from their management consultants, and probably from other categories of enterprise software provider. So, from the point of view of this senior team, the general version of the road map leaves a lot of work for them to do – they will feel they have to convert the generalities into specifics which relate to their business.

To get closer to the customer, some providers may choose industry-specific explanations, using the language of a specific sector, quoting support for industry standards, and presenting use-case examples. Others may prefer a more horizontal and technology-oriented view and aim to differentiate as a platform to support all required solutions – their Digital Twins will be more inter-operable with existing systems and Digital Twins from other providers. Both approaches have the same goal – customer acceptance of the road map as a contributor to their Digital Transformation vision.

Providers’ teams in the field which have gained ‘trusted advisor’ status with their contacts will be very effective in this environment. They will bridge the gap and in some cases be able to open up new lines of communication to their customers’ top management. They may even find ways for their contacts to use their roadmap as the framework for Digital Transformation planning.

But this is business-as-usual for PLM providers. This is just a start. The wave of awareness of IOT, digitalization, Digital Twins and Digital Transformation which is sweeping production, distribution and service industries deserves much more.

Re-aligning the tectonic plates

It’s probably too early to say the days of unfettered globalisation are over. But anyone writing the PEST (Political, Economic, Social, Technology) sections for a business plan with global scope will be asking questions about globalisation assumptions and forecasts.

This is fertile ground for discussion with the top management of any organization involved in design, engineering, production, distribution and service. In the manufacturing context, the flow of conversation is broadly:

  • Advances in manufacturing technology shift the balance between low cost labour and highly skilled labour as a source of competitive advantage.
  • At some point, new versions of the old spreadsheets which said “build factories in low cost regions” are going to reach a tipping point and will say “build factories in locations where it is easiest to install, run and maintain advanced production systems”.
  • These are complex waters to navigate. Those spreadsheets are just one of many factors which guide manufacturing businesses towards growth and profit. But fluency in the use of connected digital systems is widely seen as vital for survival. This fluency will be key to the ability to ‘sweat the assets’ of an advanced production system; and also enable an organization to define and defend its role in the most profitable industry networks.
  • A step change in thinking is needed to enable an organization to achieve the required level of digital fluency. In these days of cloud computing and smart connected products, it is not effective to think in terms of computers, application software and databases. The siloes are changing and the old technology-centric acronyms no longer provide a good guide to the way software should be used. The best way to plan digital transformation is in terms of Digital Twins.
    • This is because Digital Twins will be the nodes which enable communication, automation and optimization for cooperating teams of people and systems. And, crucially, the concept of Digital Twins empowers non-technical people to see, and help define, the information flow to support their organization’s core value-adding processes.
  • Digital Twins add all the physical assets of an organization and its partners into the scope of online information and operational systems. Business process and business model development can consider the entire business online. This is a big change, in the past only the parts of the business defined by forms, documents and transactions could be handled this way.
  • Digital Twins allow every status, every action, every command travelling to and from smart connected objects to be handled online and also to be simulated in advance. Whereas Amazon had to invest at a spectacular scale to move retailing online and change market expectations, Digital Twins offer a step-by-step approach, using the smart connected assets which are first choice for investment anyway; and integrating the smart connected capabilities which so many companies are adding into their own products.

Business value from Digital Twins

Everyone needs a proof-point for these claims; technology must deliver business value. One of the easiest examples to explain is predictive maintenance – smart connected assets backed by analytics systems to offer a step change improvement in up-time for the assets, with lower servicing costs. But wait – where did this concept come from? It needed a Eureka! moment from the individual or team who first imagined it. Somehow, these people juggled concepts of continuous monitoring, the ability to identify and recognize pre-failure profiles from sensor readings, and insight and belief that this could change the business process of periodic maintenance and fault fixing.

This leads to a question for the management team: where do they (or their management consultants) expect this type of thinking to originate? Digital Transformation benefits for their organization will come partly from implementing widely known concepts like predictive maintenance, and partly from seeing unique and proprietary opportunities to innovate, differentiate, and improve business processes which impact customers, suppliers and in-house plans and decisions.

The opportunity could be up-time in a production facility; or operational processes to reduce material and energy consumption; or virtual commissioning to reduce the time needed for physical commissioning and start-up of new assets. Who in the organization will see these new capabilities, new efficiencies in working practices, new automation opportunities, and new cost reductions? Making Digital Twins a core unit of thinking for Digital Transformation will increase the chance that leaders at all levels can contribute, and make the connections to business value. The IT team is important, but a Digital Twin discussion is not an IT discussion, it’s a business discussion in which insight into the way assets and products are used will be the catalyst, so the top team themselves will be vital contributors. Engineering software PLM providers will want to emphasize how, compared to a no-simulation Digital Twin, the capability to simulate its physical counterpart enables their Digital Twins to support a much wider range of possibilities for automation, remote asset management, problem solving and process innovation.

A Digital Twin road map

Imagine a PLM user company accepts the vision as above and starts to use Digital Twins as the central entities in their Digital Transformation vision. They will still have some very real problems to overcome before endorsing and investing in more than proof-of-concept projects, for example, an overloaded IT department with a 6 or 12 month queue of projects; difficulties coordinating projects which span many functions; and a skills gap when it comes to development of connected, or web-based, or real-time, or mobile information systems.

The road map for Digital Twins can learn from Intel’s tick-tock. Parallel streams of ‘Extend and simplify Deployment’ and ‘Extend and simplify connectivity, simulation and interoperability’ span the spectrum from immediate deployment problem solving, to development of big-picture vision for Digital Transformation. The connectivity and interoperability themes point at the opportunity to create a maturity model analogous to the six levels of ADAS, or perhaps 2G, 3G, 4G, 5G. Is it conceivable that a future definition of Digital Twin categories could be accepted as a framework by users and competing providers? The first step is the hardest – elevate the Digital Twin concept. It can become the lingua franca that enables the top table of PLM user company management to inject their business insight and articulate the business process and perhaps business model innovations which will deliver value from real Digital Transformation projects. These projects will implement connected applications which maintain and integrate Digital Twins. At Cambashi, we are investing to measure this connected applications opportunity across nine market areas. Our goal is to provide the hard-to-get quantitative market data to enable technology providers to judge the opportunity and see how to allocate resources. This is a great opportunity for PLM providers. Come on, PLM!


[1] Schumacker, Erol and Sihn’s 2016 paper available via https://www.sciencedirect.com/science/article/pii/S2212827116307909 identifies a number of earlier I4 readiness and maturity models.

[2] Some management consultants have published overviews of frameworks for projects in this area, for example, BDO (see https://www.bdo.com/industries/industry-4-0/maturity-model ), Capgemini (see https://www.capgemini.com/fi-en/2018/09/industry-4-0-maturity-model-mirroring-today-to-sprint-into-the-future/ ), PWC (see  pp 28-29 in https://www.pwc.com/gx/en/industries/industries-4.0/landing-page/industry-4.0-building-your-digital-enterprise-april-2016.pdf ).

[3] Some software providers support studies which address I4 strategies and implementation, for example a Siemens author worked with academics on I4 modeling ( see https://www.researchgate.net/publication/310628749_Industrie_40_Components_-_Modeling_Examples ); and acatech’s authoritative study (see https://www.acatech.de/wp-content/uploads/2018/03/acatech_STUDIE_Maturity_Index_eng_WEB.pdf ) is distributed by PTC (see https://www.ptc.com/en/resources/iot/report/maturity-index ).

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