What is a Digital Twin? The Complete Guide to Digital Twin Technology

What is a Digital Twin?

A digital twin is a digital model that replicates a physical object, system, or process in a virtual environment. It goes beyond a simple diagram or snapshot: it is a data-driven replica that evolves alongside the real thing. By connecting real-world data to a virtual model, organizations can monitor performance, run simulations, and predict outcomes before making changes in the real world.

The concept started in aerospace but has expanded well beyond it. Today, digital twin technology is used across manufacturing, healthcare, urban planning, energy, and business process management. Whether you are modeling a jet engine or an order-to-cash workflow, the idea is the same: create a digital replica, feed it real data, and use it to make better decisions.

Digital twin solutions are now widely adopted: a 2023 Strategic Market Research study found that roughly 75% of businesses use digital twins in some capacity. The digital twin market is expected to grow from USD 24.5 billion in 2025 to over USD 259 billion by 2032.

A Brief History of Digital Twin Technology

Digital twin technology traces back to the 1960s, when NASA built physical replicas of spacecraft to simulate conditions before missions. During the Apollo 13 crisis in 1970, NASA used ground-based simulators to model the damaged spacecraft and evaluate rescue scenarios.

In 2002, Dr. Michael Grieves of the University of Michigan formalized the concept by linking a physical product with its virtual counterpart through continuous data exchange, calling it a “product lifecycle management” framework. The term “digital twin” itself was coined by NASA engineer John Vickers in 2010.

Since then, digital twin modeling has moved from mirroring physical hardware to replicating entire systems and processes, supported by IoT sensors, cloud computing, AI, and simulation engines.

How Does a Digital Twin Work?

A digital twin works by establishing a continuous loop between a physical entity and its virtual replica:

1. Data Collection: Gather data from the real-world object or process. This might come from IoT sensors on physical equipment, event logs from IT systems, or operational data from ERP, CRM, and workflow platforms.
2. Virtual Modeling: Build a virtual model using this data. The model captures the structure, behavior, and rules of the physical counterpart. For a manufacturing line, this means modeling machine sequences and throughput. For a business process, it means mapping out activities, decision points, resources, and timing.
3. Synchronization: The digital twin stays connected to its real-world source through continuous or periodic data updates, ensuring the virtual model reflects current conditions rather than a static snapshot.
4. Simulation and Analysis: With an up-to-date virtual model, teams can run simulations: what happens if we add a resource? Remove a step? Change a supplier? These “what-if” scenarios run in the virtual environment without affecting real operations.
5. Feedback and Action: Insights from the digital twin feed back into the real world. Teams use simulation results to decide what to change, implement improvements, and repeat the cycle.

Types of Digital Twins

Digital twins come in different levels of scope and granularity:

• Component twins (also called part twins) replicate individual parts. For example, a digital twin of a single valve in a pipeline or a specific step in a workflow.
• Asset twins model complete functional units made up of multiple components: a pump system (valves, pipes, motor) or a department’s workflow (steps, handoffs, decision points). They show how components interact.
• System twins capture how multiple assets fit into a larger system. A production line, a logistics network, or a business process spanning multiple departments are all examples.
• Process twins provide the broadest view. They model how entire systems work together across a production facility, supply chain, or enterprise operation. A process twin of your order-to-cash cycle captures every step from order receipt to payment collection, across all systems and teams involved.

For business process improvement, the process twin is the most relevant type. It is where process mining , process modeling , and process simulation  converge to create a powerful digital twin of your operations.

Digital Twin Technology in Business Processes

Digital twins are often associated with physical assets like turbines, buildings, or vehicles, but some of the most useful applications are in business processes. Every organization runs on processes: order management, procurement, customer support, invoicing, hiring, and more. These processes generate large amounts of digital data, which is exactly what a digital twin needs.

A business process digital twin is a virtual model of how work actually flows through your organization. It captures the real sequence of activities, the time each step takes, the resources involved, and the variations that occur. Unlike a static process diagram drawn in a workshop, a process digital twin is built from actual data and can be continuously updated.

Why Business Process Digital Twins Matter

• Transparency: See how your processes really run, not how you think they run. Digital twinning surfaces inefficiencies, workarounds, and bottlenecks.
• Prediction: Simulate changes before implementing them. What if you automate a step? Add a team member? Change a rule? The twin lets you test these scenarios safely.
• Continuous improvement: As real-world data flows into the twin, you can track the impact of changes over time.
• Risk reduction: Test process changes in a virtual environment before rolling them out.

How to Build a Digital Twin of Your Business Process

Creating a digital twin of a business process does not require sensors or IoT devices. It requires data, a model, and a simulation engine.

1. Capture the current process with process mining. The foundation of any process digital twin is understanding how work actually happens today. Process mining  extracts event log data from your IT systems (ERP, CRM, helpdesk, workflow tools) and reconstructs the real process flows. Rather than relying on interviews or assumptions, it discovers the actual paths, variations, and timing directly from data. This is your “as-is” digital twin. With ProcessMind , you can upload your event data and instantly see a visual map of your process, complete with bottlenecks, rework loops, and performance metrics.
2. Model the process with BPMN. Once you understand your current process, refine and formalize it using process modeling . BPMN (Business Process Model and Notation) is the standard for creating clear, structured process diagrams. Define the intended flow, including activities, gateways, decision points, and resource assignments. Combined with mined data, you get a complete digital twin: the actual process enriched with business rules and structure. ProcessMind combines mining and modeling in one interface. Read more in our guide on the combined power of process modeling and process mining .
3. Simulate and run what-if scenarios. A process digital twin becomes much more useful when you connect it to a process simulation  engine. Want to know what happens if you add staff to a bottleneck, automate a manual approval, change the routing logic, or increase order volume by 30%? Process simulation answers these questions by running thousands of virtual process instances through your model, using real timing distributions, resource capacities, and arrival patterns. You get quantitative predictions of cycle time, throughput, resource utilization, and cost before making any real-world changes.

Digital Twin Solutions: Key Capabilities to Look For

When evaluating digital twin solutions for business processes, look for these capabilities:

With ProcessMind, you get all of these in one cloud-based workspace. See our features  and pricing .

Real-World Applications of Digital Twins

Digital twin technology is used across many industries. Here are some notable applications:

Manufacturing

Manufacturers use digital twins to simulate production lines, optimize layouts, predict equipment failures, and reduce waste. A factory floor twin can test the impact of new machines, changed sequences, or different shift patterns before any physical changes are made.

Supply Chain and Logistics

Supply chain digital twins model the flow of goods across sourcing, production, warehousing, and distribution. They help organizations anticipate disruptions, optimize inventory, and evaluate alternative suppliers or routes.

Healthcare

Hospitals use digital twins to optimize patient flows, staff scheduling, and resource allocation. In clinical settings, patient-specific digital twins help simulate treatment plans before implementation.

Urban Planning and Smart Cities

City planners build digital twins of urban environments to simulate traffic patterns, infrastructure changes, and environmental impact. These models use real-time data from IoT sensors to continuously reflect city conditions.

Energy and Utilities

Energy companies use digital twins to monitor and optimize wind farms, power grids, and renewable installations.

Business Process Optimization

Any organization can create a digital twin of its core business processes, whether order-to-cash, procure-to-pay, customer onboarding, or IT service management.

Digital Twin vs. Simulation vs. Process Model

These terms are closely related but distinct:

A process model is the blueprint. A simulation is the engine. A digital twin is the complete system: model + real data + simulation + continuous feedback.

Benefits of Digital Twinning Your Business Processes

A process digital twin delivers a few concrete benefits:

• Faster decision-making: Test ideas in minutes, not months, with simulation-based what-if analysis.
• Lower risk: Validate process changes virtually before committing real resources.
• Higher efficiency: Find and remove bottlenecks, rework, and waste.
• Better resource allocation: Simulate staffing scenarios to find the right balance of cost and performance.
• Continuous improvement: Keep your digital twin updated with fresh data to track progress and adapt.
• Cross-functional alignment: A shared, visual digital twin helps teams across departments understand how work flows end to end.

Organizations that deploy digital twins report returns above 10%, with over half seeing at least 20% ROI, according to a 2025 Hexagon survey.

Getting Started with Your First Process Digital Twin

You do not need a big budget or a dedicated data science team to create a process digital twin. Here is how to start:

1. Pick a process: Choose a high-impact, data-rich process like order-to-cash, procurement, or customer support.
2. Export your data: Extract event log data from your systems. Most ERP, CRM, and workflow tools can export CSV or XLSX files with case IDs, timestamps, and activity names.
3. Upload and discover: Use a process mining tool like ProcessMind  to upload your data and automatically discover the real process flows.
4. Refine the model: Use BPMN modeling to clean up, annotate, and structure the discovered process.
5. Simulate scenarios: Run what-if simulations to test improvements, such as adding resources, automating steps, or changing routing rules.
6. Act and iterate: Implement the most promising changes, then feed new data back into the twin to track results and keep improving.

The Future of Digital Twin Technology

Digital twin technology is evolving rapidly. Key trends shaping the future include:

• AI-powered twins: Generative AI and machine learning are making digital twins smarter, enabling automated anomaly detection, predictive optimization, and natural-language interaction with twin models.
• Digital Twin as a Service (DTaaS): Cloud-based digital twin platforms are lowering the barrier to entry, allowing organizations of all sizes to deploy twins without heavy infrastructure investment.
• Process-level twins: As more organizations digitize their workflows, process digital twins are becoming a standard tool for operational excellence beyond physical assets.
• Connected twin ecosystems: Multiple digital twins, spanning products, processes, supply chains, and facilities, are being linked together for end-to-end enterprise visibility.

The shift toward accessible, process-focused digital twins means that any organization can use this technology for continuous improvement and competitive advantage.

Where ProcessMind Fits In

ProcessMind  is built for creating digital twins of your business processes. It combines process mining, process modeling, and process simulation in one cloud-based platform:

• Discover how your processes actually run, from real data
• Model your ideal process with BPMN
• Simulate changes and predict outcomes with what-if analysis
• Monitor and continuously improve over time

No sensors required, no complex integrations. Upload your data and start building your process digital twin.

Learn more about our process mining features , see pricing , or try ProcessMind for free .