From Data to Decisions: A Method for Evaluating the Strategic Value of Digital Twins

Digital Twins are gaining increasing attention in research and practice as one of the most exciting technologies within Industry 4.0. They enable new business models, increase efficiency, and provide a basis for differentiation strategies. This paper develops a method to evaluate the strategic benefits of Digital Twins based on the phases of the product lifecycle and a Balanced Scorecard approach. The strategic benefits cover the entire product life cycle, with the highest potential presumed in the production and service phases. The method proposed in this paper serves as an orientation aid and a tool to support a holistic investment decision for companies. It allows for a more comprehensive understanding of the strategic benefits of Digital Twins and their potential impact on the product lifecycle. The research is based on a literature review regarding Digital Twins and approaches to evaluating their strategic benefits. The paper contributes to the existing body of knowledge on Digital Twins by proposing a novel approach to evaluating their strategic benefits, specifically in the context of the product lifecycle. The findings provide valuable insights for companies seeking to implement Digital Twins and develop new business models.