Digital twins are all the rage now. Valued at $17.73 billion in 2024 and having a CAGR of 40.1% from 2025 to 2032, this innovation is entering every business corner due to its immense potential. It answers the widespread need of businesses to cut costs, ensure better security of their operations, and achieve more informed decision-making.
About 70% of C-suite technology executives are exploring and investing in this technology. By 2028, at least 59% of executives globally intend to adopt digital twins in their operations.
The emergence of digital twins software is further facilitated by other factors: advancements in IoT and AI (which are now more accessible than ever), the growing interest in predictive simulations, and the search for sustainable solutions. Building such a technology calls for technical expertise and long-term planning to ensure that a digital twin accomplishes its purpose.
This article will answer the question, “What are digital twins?” It will also discuss their benefits, areas of use, and steps to implement one.
What are digital twins?
What is a digital twin, and how does it work? Essentially, it’s a replica of a real-life object, system, or process in the virtual environment. It’s highly detailed and usually provides an immense amount of data for the business. A digital twin is designed to help companies simulate or predict specific patterns or optimize operations while updating the information about the physical object.
According to an IoT Analytics report, almost 30% of global manufacturing companies have implemented digital twins. The demand for this technology is only growing in other industries as well.
How is it different from simulations?
The general idea can be somewhat similar, but simulations focus on specific pre-written conditions to analyze a potential scenario. Digital twins, in contrast, rely on real-time synchronization with their physical counterparts. This makes it more predictive and flexible, expanding the current environment to previously unforeseen opportunities.
How do digital twins work?
They rely on the Internet of Things (IoT), AI and Machine Learning (ML), and cloud and edge computing. Because companies need real-time updates about the physical objects to manage their digital twins, each of these technologies has its value.
However, IoT has the primary role in the process: installed on physical assets, sensors collect real-time data, such as temperature, pressure, and performance metrics. As implementing IoT becomes more accessible, the adoption of digital twins also grows more prevalent.
AI also actively contributes to the system’s functioning by processing the data and providing predictions about the existing patterns. ML makes this possible by developing algorithms to make these structures more independent.
Finally, all this information is transmitted and processed on cloud platforms or edge devices to boost the communication between physical and digital twins. Now that you know the answer to “What is digital twins software?” it’s time to move to the advantages it provides.
Business benefits of digital twins
This cutting-edge technology is one of the most revolutionary solutions for contemporary companies due to its contribution to business performance and procedural success. Let’s explore the key benefits of digital twins below.
Predictive maintenance
Equipment failure remains one of the most painful points in business disruptions. Usually, companies notice the need to fix or replace an outdated part too late. How does a digital twin work to minimize this? It continuously monitors assets by gathering data from IoT sensors and analyzing trends, allowing it to notice the early warning signs of potential problems.
One of the primary advantages of this shift is that it prioritizes issue prevention over reaction. For instance, in aviation, digital twins can track aircraft engine performance and notify the staff about any questionable “symptoms,” which allows companies to schedule maintenance and identify threats.
Improved decision-making
Usually, decision-making involves observation and intuition, plus historical data about the phenomenon. However, this approach isn’t always practical: it’s limited by the existing experience and the human factor. Digital twin creation, nonetheless, allows for nearly constant insights by simulating different scenarios and predicting potential outcomes.
By constantly updating information and ML capabilities, the process of analysis becomes not just informed but more contextually and situationally aware.
Faster innovation & prototyping
One of the reasons for delayed new product development has always been how resource-intensive it is. It’s tough to compare various instruments and tools only to throw them away if they don’t work. When creating a digital twin, companies can use virtual prototyping to address half of these concerns and cut down on resources.
Virtual prototyping decreases the number of extra steps necessary to refine a design or test the functionality of a new product. Plus, it identifies potential flaws before production, further streamlining the process.
Operational efficiency
When you create a digital twin, you can transform operational efficiency by allocating resources and boosting operations based on maximum efficiency and careful analysis. Companies that have adopted this innovation report a 15% improvement in sales, operational efficiency, and turnaround time.
Real-time assessments will notify a team about emerging bottlenecks and suggest solutions ahead of time. Such a preventive approach and high system flexibility make it a perfect solution for complex environments with many factors at play.
Sustainability & risk management
As more companies grow more concerned about sustainability and risk management, the potential for implementing digital twins only expands. They allow businesses to analyze waste and energy consumption, contributing to more sustainable outcomes.
According to Capgemini Research, digital twin usage led to an average 16% improvement in sustainability. Since this technology also allows for assessing environments like workplaces, it can pinpoint risks for the team and provide solutions for better staff protection.
Applications of digital twins across industries
How are digital twins used in various industries? Digital twins can be applied in a wide range of sectors. The ones actively using them are listed below.
Manufacturing
This market is one of the primary beneficiaries of digital twin software adoption — it’s the largest one for this technology. In 2025, the value of digital twins for manufacturing is forecast to reach $7 billion.
Enterprises create virtual models of production lines, equipment, or even factories. They can improve the current performance through analyzing and comparing the layouts and configurations or predicting overloads. Digital twins in manufacturing allow for accounting for future equipment failures or energy-intensive hours, which makes it easier for businesses to manage their schedules.
Healthcare
Healthcare is often one of the first adopters of new technology; in this case, digital twins revolutionize it for both patients and medical professionals. Digital twins in healthcare can improve surgical precision by testing procedures on virtual replicas before real-world operations.
On a less risky note, using the hospital’s digital twins can improve the existing schedule, staff allocation, and workload. With the amount of information processed in an average hospital daily, introducing it can help manage data and provide timely suggestions for allocating physicians to high-priority rooms or personalizing treatment plans based on patients’ data.
Automotive industry
What are the main benefits of using digital twins in automotive manufacturing? Instead of risking money and time to analyze new vehicle behavior, the automotive industry can simply recreate a digital twin technology for a new product and test its capabilities. This allows for design and product testing without spending time on creating a real-sized car model just to redesign it at a higher cost.
Moreover, digital twins in the automotive industry can simulate crash tests to check safety and aerodynamics.
Construction
Construction is an expensive industry, and old-fashioned virtual models no longer suffice to ensure the same level of data accuracy as digital twins allow. With digital twins in construction, companies can recreate entire cities or large structures without risks or significant costs — it facilitates innovation by enabling them to experiment and try different solutions before settling on the final one.
Digital twins also make it possible to simulate structural integrity considering the climate and weather conditions. This provides insights into how well the buildings, bridges, or other structures will withstand a potential earthquake, heavy wind, or any other environmental threat.
Logistics
Digital twins in logistics enhance supply chain visibility and efficiency by providing real-time data on shipments, warehouses, and transportation networks. Logistics already heavily relies on IoT to make informed decisions about route optimization to avoid busy roads or dangerous weather conditions.
However, the industry also uses this tech to enhance warehouse and supply chain efficiencies by creating statistical models evaluating the maximum capacity of the available space and distributors.
Energy and utilities
This market often operates in volatile economic, technological, and environmental conditions that can damage the power grids or energy sources. Using digital twins in energy enables providers and utility companies to optimize energy distribution by examining energy consumption and prior infrastructure performance.
Businesses may focus on preventative maintenance to ensure long-term equipment performance, reducing costs associated with unnecessary replacements. The same goes for improved renewable energy efficiency: digital twins can suggest concurrent updates based on weather conditions, such as wind direction or wave strength.
Some use cases of digital twins in the energy industry include optimizing solar plant effectiveness or fostering oil and gas production (either sustainability-wise or for security purposes).
Use cases of digital twins in different industries
Exploring the experiences of other companies in various markets can provide you with insights for your product. These examples of digital twins show how multifaceted this technology can be.
Rolls-Royce’s IntelligentEngine
Rolls-Royce has integrated digital twins into its IntelligentEngine program, which creates virtual models of jet engines to monitor their performance in real time. The on-board sensors and satellite connectivity provide information about the engines immediately to signal a malfunction or a need for a physical assessment.
Neurotwin
When it comes to the question “What are the main benefits of using digital twins in healthcare?” Neurotwin’s answer can easily take one of the first places. Neurotwin’s ambitious goal is to create a virtual twin of the human brain to improve the treatment of neurological diseases like Alzheimer’s.
The company intends to utilize personalized hybrid brain models to provide flexible treatment using non-invasive brain stimulation.
BMW iFACTORY & Toyota
BMW and Toyota are adopters of the newest technology in the automotive industry. These use cases of digital twins in the automotive industry show how to implement them for their smart factories to improve vehicle assembly, prototyping, and energy usage.
DHL
One of the leaders in logistics, DHL, with its new perspective, answers the question, “How can the use of digital twins help to improve performance in supply chains?” It has developed digital twins to improve its decision-making in the rapidly changing environment in Latin America and beyond.
One of the key reasons for switching to this technology lies in the limited ability of manual systems to forecast the necessary picking labor. This ensures the company knows the approximate number of staff for every shift.
Singapore’s virtual twin
In a revolutionary decision driven by the city-state’s interest in becoming a “Smart Nation,” the Singapore Land Authority (SLA) captured detailed terrain and surface information to create Singapore’s digital twin. It enables the city to enhance its disaster preparedness and urban management.
Steps to implement digital twins in your business
How to create digital twins and launch them? Below are the basic steps of digital twin development, from idea to maintenance.
- Identify potential use cases. Because building a digital twin is quite a difficult process that will take up your resources, you need to have a clear vision for the use of digital twins. Where will this technology add any value? How to build digital twins for the assets and systems that might need digital replication? Businesses should identify the area open for this — something that can’t be satisfied with the prior manual solutions.
- Collaborate with the development company. Developing a digital twins technology is a task that requires expertise in IoT, AI, data analytics, and cloud computing. If you don’t intend to build an in-house team for the constant management of your digital twin or don’t know how to hire the right people, consider partnering with a development company. Find a company with an extensive portfolio to assess its experience.
- Integrate the digital twin with existing systems. Building digital twins also requires a seamless connection with the existing company’s systems, like IoT or cloud infrastructure — usually, this is discussed with the development team. The digital twin works as intended only with the proper integration, so this stage requires careful consideration.
- Monitor and optimize performance. Once deployed, it requires continuous monitoring and refinement. Creating digital twins is only the first step — their value lies in exemplary performance and regular updates. Initially, the entire system may need additional tweaking for ideal performance. However, maintenance is vital at all stages, and the model should be regularly refined and audited.
Anticipating virtual innovations ahead
Implementing a digital twin is a long-term investment contributing to security, performance efficiency, and resource reduction. Although it requires a challenging first step — and a reliable development company — it’ll eventually pay off for all staff members and provide significant leverage against your competitors.
Are you looking for a professional team that knows how to build digital twins and bring your physical object, phenomenon, or work environment into virtual reality? Contact us, and we’ll develop custom software for digital twins for your business needs.
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About the author:
Oleg Roberman, Chief of Delivery at Eastern Peak
With strong technical background and outstanding project leadership skills, Oleg helps Eastern Peak customers introduce competitive advantages and instill productive changes in every process by resolving complex business issues and managing multicultural teams through innovation and creative thinking.
