First, let’s be clear: Although simulation technology and digital twins share the ability to execute virtual simulations, they are not the same. While traditional simulation capabilities found in computer-aided design and engineering (CAD-CAE) applications are powerful product design tools, a digital twin can do much more. In both cases, the simulation is happening on a virtual model, but the model becomes a digital twin once the product is produced. When a digital twin is powered by an Industrial Internet of Things (IoT) platform, it can receive real-world data quickly and process it, enabling the designer to virtually “see” how the real product is operating. Indeed, when powered by an IoT platform, the model becomes an integrated, closed-loop digital twin that, once fully deployed and connected via the digital thread, is a business simulation tool that can drive strategy at every stage of the business. Here’s how:
The Difference Between a Simulation and A Digital Twin


- Static vs. Active: A CAD-based simulation focuses on creating a model of a product or process into which designers can introduce and test various design elements, including materials, operating conditions, etc. The CAD simulation is static until a designer introduces a new parameter. While a digital twin begins its life as such a model, it becomes more powerful when it starts to receive real-time data from its real-world counterpart. The digital twin simulation then becomes active, changing as the data are delivered. Because it dynamically changes based on this data, the digital twin matures through the product lifecycle. As a result, the digital twin yields valuable information that is not generated by a traditional simulation—and that can drive business decisions.
- Could Be vs. What Is: A CAD-based simulation replicates what could happen to the simulated product in the real world if specific changes are made to the design. Such changes are limited by the designer’s imagination. An IoT-powered digital twin learns from what is currently happening to its real-world counterpart, which allows the designer to see if the product is being used as intended and to make improvements based on the actual usage. With insights gleaned from the digital twin, the designer can identify improvements that wouldn’t be possible—or even possible to imagine—using only a CAD-CAM-based model. By leveraging the near real-time data from its integrated digital twin, a manufacturing business can become more flexible and agile, able to quickly react to fast-changing customer demand or business conditions.
- Product-Focused vs. Business-Focused: A CAD-based simulation tends to be the purview of product designers and engineers, allowing them to test if/then scenarios as they change the simulation’s parameters while designing a product. As such, the simulation tends not to involve other parts of the business beyond research and development (R&D). With an integrated digital twin, data from all stages of a product’s lifecycle is fed back into each step, as needed. That means professionals can leverage a digital twin in as many parts of the business workflow as it simulates, providing access to the information they need to improve their processes and make business decisions.
Why Business Leaders Need to Know The Difference
Because of the similarities between simulation technology and digital twins, too many business and technology leaders fail to understand the profound differences between the two—or even why they should care. Though the technological differences are substantial, the crucial difference is that, unlike traditional simulation technology, integrated digital twins have the power to drive business strategy. It’s time to move beyond thinking about digital twins solely as a technology to thinking about how digital twins can be leveraged to drive business competitiveness and growth.