How Digital Twins are saving asset managers millions in operation costs
We have seen the sudden onset of this global pandemic cause significant challenges for organisations who own, manage or finance physical assets. Lockdowns, travel restrictions and a rapidly slowing economy have forced companies to re-think “business as usual”.
It comes as no surprise that this economic uncertainty has forced organisations to focus on reducing costs. The aim is to not only to minimise the impact of immediate pressures but to future-proof businesses, enabling them to prosper in the economic climate awaiting us, post-pandemic.
Increasingly, cost reductions in an organisation are achieved by adopting technology. “Digital Twins,” or “Digital Reality Models,” is one high-impact technology that is currently in high demand. When accessed via a functional presentation platform, multi-industry case studies clearly prove significant reductions in operating expenses.
For example, a national telco operator can bank savings of over $1.5m on inspection costs, eliminate 10,000 hours of high-risk work and demonstrate better governance to their board and insurers across their 2000 towers.
While managing operational expenditure is a business imperative, Digital Twin technology provides many additional benefits. They play a prominent role in delivering organisational efficiencies by streamlining business processes, reducing inspection timelines, and drastically reducing OH&S risks.
When organisations adopt digital workflows and 3D models, they will not only be operationally leaner but will amass abundant asset data that is readily accessible through a common ecosystem.
On the other side of the equation, organisations that delay digital transformation may become uncompetitive in the market, hampered by a higher cost-base, and lower fidelity data.
RESTRUCTURING TO TAKE ADVANTAGE OF DIGITAL TWINS
The global business community is devising strategies to withstand the current situation and to ensure economic survival. To that end, right now is the perfect time to implement or expand your Digital Asset Management strategy.
Launching a robust digital solution allows businesses to benefit from immediate cost reductions.
These savings are compounded by establishing repeatable future processes, which will be executed and managed by fewer human resources, and in a substantially shorter time-frame than the current state.
So where does digital transformation sit financially in the present day? In terms of managing operational expenditure, the initial investment of moving to a Digital Asset solution can be attributed to restructuring costs, leaving the organisation with lean operating expenses.
REDUCING OPERATIONAL EXPENSES WITH DIGITAL TWIN
First, let’s highlight the operational inefficiencies in the physical asset management space. Manual inspections are expensive, time-consuming and labour-intensive. The current, non-digital process includes sending personnel to and from the site, toting substantial amounts of expensive equipment and stock they may or may not use.
Often completed at heights, manual inspection methods leave an organisation exposed to human-risk and the substantial, often unquantifiable costs associated with workplace injuries. Perhaps most frustratingly, the outcome of this process is often underwhelming. Despite the considerable costs incurred in time, resources and risk, the resulting data is often subjective, inconsistent or incomplete.
By leveraging a Digital 3D modelling solution, organisations benefit from immediate and long-term returns on the investment.
DATA COLLECTION SAVINGS
The immediate benefits:
- A reduction in the personnel required to capture data by up to 66%
- A 50% reduction in the time to complete inspections, effectively doubling capacity.
- A significant reduction in all costs associated with travel
- Elimination of productivity downtime associated with travel
- Reduction in equipment expenses involved in data capture
- Reduction or removal of human-risk related to data capture
Examples like these are only a fraction of the cost-savings an organisation can expect. By multiplying these cost reductions across an entire asset portfolio, savings can very quickly add up to millions of dollars.
TREND MONITORING AND PROACTIVE MANAGEMENT
The long term benefits:
Over time you continue to realise additional benefits with repeat data. By layering one inspection model onto the previous, you have the ability to monitor trends over time by comparing differences.
Once you start collecting this valuable data you will then be able to take advantage of technology like artificial intelligence (AI). As defect-identification and change detection matures you can start leveraging, even more, cost savings.
Trend data ultimately enhances decision making, which in turn assists an organisation to develop better preventative maintenance strategies while benchmarking assets to comparable ones within a portfolio.
A global facilities management organisation identified a failing roof structure early, which prevented a $30M insurance claim, while also providing the data as evidence in the tenancy dispute.
SAFETY, GOVERNANCE & INSURANCE; LONG TERM ORGANISATIONAL EXCELLENCE
Now that the organisations operating expenses have been significantly reduced, what other departments and stakeholders can realise a financial benefit?
To start, once an organisation has its asset portfolio digitally recreated, it holds data that is complete, non-subjective and indisputable. The data becomes the organisation’s biggest asset.
Digital Twins can be used as the most comprehensive presentation layer to:
- To satisfy insurers so an organisation can access reduced premiums, or as a dispute resolution tool.
- Assess and benchmark asset valuations
- Use as a tool to identify investment risks and recapitalisation requirements
- Leverage equity/debt financiers and investors for additional investment funding or more favourable investment terms.
When it comes to the sale or acquisition of assets, having comprehensive records of asset condition provides an invaluable tool as part of due diligence for asset valuations, determining capital expenditure requirements and benchmarking against comparable assets.
For capital projects, it can be used as a reporting tool to monitor progress, prove milestone completion, access additional finance and keep detailed governance records.
Lastly, but most importantly is the reduction of potential workplace injury or death. The cost to an organisation can easily and quickly reach millions of dollars. There are costs associated with settlements, legal fees, brand reputation damage, increased insurance premiums, loss of staff morale, and potential site shutdowns. There is a duty of care to avoid having to send someone into a dangerous situation if possible, and if there is technology available today that can mitigate the need, that alone makes Digital Twins priceless.
2020- IT’S TIME TO IMPLEMENT
Digital Twins allow an organisation to continue their inspection obligations without disruption, plan maintenance schedules and develop informed strategies. They also facilitate teams and stakeholders to collaborate effectively and efficiently from anywhere.
Operating cost savings are compounded by establishing repeatable future processes, which will be executed and managed by fewer human resources, and in a substantially shorter time-frame than the current state.
Regardless of industry or asset type, whether it be small business, multinationals or government departments, everyone can achieve significant savings with Digital Twins. Organisations are already leveraging their data, and with data comes knowledge, and with knowledge comes power.
Chief Executive Officer
Get Your ROI Calculator
Trendspek’s ROI calculator can be used also as your checklist to determine your cost savings. We also offer the opportunity to help you with your calculations by our experienced team. Get your copy today, and appreciate how much you will save tomorrow.