Conquering Inefficiencies with Digital Twin

The Digital Twin Technology (DTT) is considered as one of the over-the-horizon technologies, which is at the cusp of widespread adoption in India. However, companies want to do their due diligence before making any investments in going for any large-scale adoption of an emerging technology.

 

I got the opportunity from Ivey Business School to author a case study to examine whether the company, Megatherm Induction Limited (MIL), should adopt DTT or consider an alternative solution. The objective was to resolve lack of operational productivity. Manojit Chattopadhyay, Professor, Information Systems, IIM Raipur co-authored the study with me.

Challenge before Megatherm induction

In early 2024, MIL, a mid-sized manufacturing company was in a quagmire. It was besieged by a number of operational issues prevalent for a long time. As a result, there were issues of cost overruns, downtime, outdated machinery, safety risks, and training gaps. 

The CIO at the time was assigned the task of assessing the DTT's viability for the company, its financial impact, while at the same time also exploring alternative strategies like lean manufacturing, AI-driven predictive maintenance, and Augmented Reality-based workforce training. He was given three months to complete the assessment.

As the deadline approached, the CIO had to arrive upon a decision whether DTT was the right fit for MIL. Else, the company had to adopt a different strategy to better link with its long-term objectives.

Key insights from the assessment

During my research and analysis of this case, several critical questions emerged that are relevant for any CIO facing similar technology adoption decisions. Below are the key questions I explored with detailed responses based on my findings:

How should CIOs decide whether they should invest in Digital Twin technology or go for alternative solutions? The Technology–Organization–Environment (TOE) framework can set the basis on which the evaluation can potentially achieve the set objectives. CIOs should evaluate DTT adoption by systematically applying the TOE framework, ensuring decisions align with operational realities and strategic goals.

Technological context: Assess the perceived benefits (e.g., reduced downtime, predictive maintenance, enhanced safety, immersive training) against complexity and compatibility with existing systems. For example, at Megatherm, DTT promised a 20% reduction in downtime and enhanced training effectiveness, but the initial implementation complexity and infrastructure readiness required careful scrutiny.

Organisational context: Evaluate organisational readiness, including workforce capabilities, change management capacity, and digital maturity. Even if DTT provides significant operational advantages, CIOs must ensure employee training plans, cybersecurity safeguards, and cross-functional alignment are in place to enable seamless adoption.

Environmental context: Consider competitive pressures, regulatory requirements, and industry trends. In sectors like advanced manufacturing, competitive advantage often hinges on operational efficiency and predictive analytics, making DTT attractive. However, if the financial model projects a negative ROI in early years (as Megatherm's pilot showed), CIOs may explore hybrid models, incremental upgrades, or strategic partnerships as lower-risk alternatives.

Using TOE ensures the decision to adopt DTT is not driven solely by technological optimism but by a holistic view of capabilities, organisational alignment, and environmental fit. CIOs should also run a pilot project (as was done on the Ball Mill at Megatherm) to validate assumptions before scaling, ensuring financial viability and operational alignment before full-scale implementation.

Apart from the individual exercise, the CIOs should also engage in stakeholder engagement taking other stakeholders in confidence. On the collaboration side, engaging with other business functions, for e.g. plant manager, operations supervisor, finance manager, technology consultant, etc should be structured, inclusive, and iterative to align strategic priorities, operational needs, and employee readiness:

Cross-functional Task Force: Form a team with leaders from manufacturing, engineering services, HR, finance, and legal to ensure diverse perspectives. At Megatherm, such a team helped surface pain points like unplanned downtimes and safety concerns, ensuring the technology aligned with real operational challenges.

Employee Involvement and Feedback Loops: Engage employees at different levels through workshops and feedback sessions. This ensures insights from operators, engineers, and managers are incorporated, increasing buy-in and reducing resistance to change.

DEI Integration: Embed diversity, equity, and inclusion (DEI) principles in training and implementation. This includes customized training programs for diverse learning styles, equitable access to technology, and fair career advancement opportunities for employees impacted by DTT or alternative solutions.

Transparent Communication: Regularly communicate the rationale, progress, and challenges of the chosen path (DTT or alternative) to manage expectations and maintain alignment with business goals.

Continuous Review: Establish a feedback-based governance model to iteratively refine implementation strategies, leveraging early learnings to scale or pivot as needed.

Through structured, inclusive, and transparent stakeholder engagement, CIOs can ensure technology investments like DTT or alternatives are not isolated IT initiatives but enterprise-aligned transformations, enhancing competitiveness and operational resilience.