What is a "digital-twin business model" any way? (20)

How a digital-twin business model matches, visually, all significant elements in the system, and how they change, to achieve great results.

Many people have asked “What the heck is this digital twin thing any way?” or even “How on earth can you make a claim like that?“

Now I get really annoyed when people make huge claims for feeble ideas or methods. So I have held off claiming that our dynamic business models [DBMs] are “digital twins” for a long time. But – the more examples I see, the more confident I am that I can make this claim. Why? Well, if done properly, a dynamic business model features:

items visible and measurable in the real world – not proxies or abstract items
actual time-series values on any of those items where data can be found or estimated
detailed, causal relationships that match the real world
calculated time-series values that match – with reasonable accuracy – those real-world values
… and all of this over time-scales and in time-units that are useful for operational and strategic planning and management

Here is a screen-capture showing the kind of thing a digital-twin model can do, for a new product launch.

This GIF shows about 10% of the whole model. In total, the model includes:

how marketing and word-of-mouth drive the capture of new customers and repeat sales
price and value-for-money impacting on the uptake and repeat-sales rate
changing affordability of the product as consumer incomes rise
‘experience-curve’ cost reductions as product output grows
profit contribution and NPV results
a competitive race against a similar rival with its own launch timing and strategy

… and the model can capture parallel time-series for real-world results for any or all of its elements, as time passes, allowing continuous planning and management of the strategy.

What more would you want a digital twin business model to do?

_____________

Digital-twin business models can be used for a wide range of business functions and issues. See our short courses on those opportunities here. There are some free preview lessons, and if you find one that's useful, use coupon blog20 at checkout for a 20% discount.

Categories: : business models, strategy