Hexagon Digital Twin Industry Report
The “Digital Twin Industry Report 2024” explores the adoption and strategic value of digital twins across industries. Digital twins are defined as dynamic digital representations of the physical world, used to monitor, simulate and optimize the performance of systems or objects. This report, based on a survey of 660 C-level executives, reveals that 96% of leaders believe in the benefits of digital twins, with benefits including increased efficiency, improved troubleshooting and reduced operating costs.
Key areas of impact for digital twins include sustainability and carbon reduction, with 38% of respondents reporting a reduction in emissions with the technology, with an average reduction of 15%. The combination with artificial intelligence was crucial, as 80% of leaders said AI increases interest in digital twins by improving data access and analysis.
The report also dispels some myths about digital twins, highlighting that they are not just for large industrial players or complex physical systems. In fact, small and medium-sized businesses using this technology have seen significant improvements in efficiency, customer satisfaction and ROI, demonstrating the potential even for organizations with more limited resources.
Despite these benefits, some challenges remain, mainly related to data quality and integration. However, many companies are planning investments to improve data collection and analysis, with continued growth in the integration of digital twins into business systems.
AT4 Smart Services, a certified Hexagon partner, is able to support companies in their digitalization journey with 360-degree digital twin solutions, offering tools to improve operations, sustainability and decision-making through data integration and the strategic use of AI.
A detailed summary of the report now follows.
1) Digital Twins: A Value for Organizations
The report highlights how digital twins are bringing tangible benefits to organizations, improving efficiency, proactive problem solving and safety, as well as helping to reduce costs and emissions. 96% of executives surveyed believe digital twins are a highly beneficial technology for their industry. The key benefits are increased collaboration between teams and increased product or service quality, leading to reduced risk and increased customer satisfaction. Additionally, those tracking ROI report a return of more than 10%, with an average of 19% cost savings and revenue growth.
2) Reality Exceeds Expectations
The report highlights how the perceived benefits of digital twins are often underestimated by those who are not yet using them. For example, only 19% of respondents without a digital twin expect improved collaboration, while 44% of those who already use the technology confirm this benefit. Similarly, 47% of users report improved proactive problem solving, while only 28% of non-users would have expected this. This gap highlights how the technology exceeds initial expectations, with measurable impacts on efficiency and product quality.
3) The Influence of Artificial Intelligence (AI)
80% of leaders say that the integration of AI has made digital twin technology more attractive. AI contributes mainly in three key areas: creation, updating and access to digital twins. For example, AI reduces the time and cost of updating, allowing operations such as monitoring a site with drones, which takes only 20 minutes compared to hours in the past. Additionally, AI improves access to data, allowing users to visualize relevant information in real time. An advanced use is represented by the use of Large Language Models (LLM), which facilitate the interpretation of data in the field.
4) Five Myths Debunked
The report addresses and debunks five myths about digital twins:
- Myth 1: Digital twins replace human expertise – Digital twins support decision-making through real-time simulations and visualizations without replacing human intervention.
- Myth 2: They require a complete digital transformation – You can start small and gradually expand the use of digital twins.
- Myth 3: They require perfect data – Digital twins can be developed with existing data and improved over time.
- Myth 4: They are only for equipment – They are applicable to complex processes such as supply chain management and public safety.
- Myth 5: Implementation costs are high – Cost challenges are not a major barrier, thanks to scalable and controlled implementation methodologies.
5) The Digital Twin Value-Maturity Matrix
Hexagon has developed a matrix to assess the maturity and value of digital twins across industries. The matrix ranks industries based on the level of technical maturity and business value derived from digital twins. Industries showing the greatest maturity include public safety and automotive, while industries such as architecture, engineering and construction are at an early stage, limited by complexities such as uneven expectations among stakeholders. This matrix guides organizations to measure their positioning and identify potential areas for development.
6) Incremental Gains at Every Step
A phased approach is recommended for implementing digital twins, as even small projects can generate significant results. As new data is added and digital twins are further integrated, the benefits increase. The example of BASF and the digital project in Klagenfurt demonstrates that starting a project on a small scale can lead to progressive and continuous added value. Hexagon says that the incremental approach makes it easier to gain internal buy-in and demonstrate the value of the technology.
7) The Data Quality Challenge
Organizations cite data quality and data integration as the main obstacles to adopting digital twins. Access to accurate and consistent data is essential to maximizing the value of digital twins, but many industries are struggling with the scarcity of quality digital data. However, a growing number of companies are investing in improving data collection. Even digital twins with imperfect data offer significant value, which highlights the importance of working progressively to improve data quality.
8) Untapped Potential for SMBs
The report highlights that digital twins also offer great potential for small and medium-sized enterprises (SMBs). Although awareness of the technology is still low, SMBs that have adopted digital twins report improvements in efficiency, customer satisfaction and ROI. Over 65% of these companies have seen benefits in terms of efficiency and system durability. SMBs that monitor ROI expect an annual return between 11% and 30%, higher than that of large companies, demonstrating that the value of the technology is accessible even to companies with limited resources.
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