Generative AI use surges & firms double digital twin investment

PEX Network’s weekly news bulletin rounds up the latest research, reports and publications in operational excellence (OPEX), digital transformation, artificial intelligence (AI) and automation, business process management (BPM), process mining and process intelligence and more.

This week includes:

• Generative AI use surges as businesses see significant ROI
• Digital twin spend doubles as businesses invest in the industrial virtual metaverse
• Researchers address lack of process discovery standards
• SAP automation spikes as companies scale digital transformation
• Businesses to outsource security operations amid widening skills gap

Generative AI use surges as businesses see significant ROI

Generative AI usage in organizations jumped from 55 percent in 2023 to 75 percent in 2024, according to new research from Microsoft and analyst firm IDC. The Business Opportunity of AI Study surveyed more than 4,000 global business leaders and AI decision-makers, reflecting a tipping point as AI gains momentum across industries. It found that for every $1 a company invests in generative AI, the return on investment (ROI) is $3.7x, with the top leaders using generative AI realizing an ROI of $10.3!

The ROI of generative AI is highest in financial services followed by media and telecommunications, mobility, retail and consumer packaged goods, energy, manufacturing, healthcare and education, according to the research. Almost half of respondents (43 percent) cited productivity use cases as providing the greatest ROI. Within the next two years, most organizations plan to expand beyond pre-built AI solutions to advanced AI workloads that are customized or custom-built.

“Our focus on generative AI not only drives operational efficiency but also empowers our community to unlock new levels of creativity and impact, further positioning USF [University of South Florida] as a leader in AI adoption, which includes being among the first universities in the nation to form a college dedicated to AI, cyber security and computing,” said, Sidney Fernandes, CIO and VP of digital experiences at USF.

Tariq Munir, APAC financial planning transformation lead at PepsiCo, discusses measuring the impact of AI and intelligent automation

Digital twin spend doubles as businesses invest in the industrial virtual metaverse

Almost a third (30 percent) of organizations are spending over $10 million on digital twin technology, with manufacturing leading adoption. That’s double the proportion from the previous year, according to new research from Siemens and S&P Global. The pair carried out a study of 907 businesses across seven countries, revealing a sharp increase in “industrial virtual metaverse” technology investments. These technologies provide a network of virtual replicas that mirror physical factories, supply chains and product development processes, using digital twins – detailed virtual models of physical objects and processes – in combination with real-time sensor data and AI to optimize manufacturing processes, predict maintenance needs and simulate new product designs.

These systems can reduce costs by identifying inefficiencies in production lines, preventing equipment failures and reducing waste in product development cycles, with 81 percent of surveyed businesses either implementing, testing or planning to deploy industrial metaverse technologies. “The fundamental technologies that enable the industrial metaverse are being rapidly developed worldwide,” commented Peter Koerte, CTO and chief strategy officer at Siemens AG. “Many companies are not only experimenting with these technologies but are already employing and scaling concrete use cases that demonstrate the added value of the industrial metaverse.”

Researchers address lack of process discovery standards

Researchers from universities in Germany and The Netherlands examined the lack of conventions or standards for experimental design in process discovery, an issue hampering process discovery innovation and research. “Process mining aims to derive insights into business processes from event logs recorded from information systems,” they wrote. “Process discovery algorithms construct process models that describe the executed process. With the increasing availability of large-scale event logs, process discovery has shifted towards a data-oriented research discipline, aiming to design algorithms that are applicable and useful in practice.”

However, currently, contributions can only be considered in isolation, the academics argued. “Researchers conduct experiments to show that they move the field forward, but due to a lack of reliability and validity, the individual contributions are hard to generalize.” The researchers therefore propose “process discovery engineering” – a methodology for process discovery consisting of a shared terminology and a checklist for conducting experiments. “We demonstrate its applicability by means of an example experimental evaluation of process discovery algorithms and discuss the implications of the methodology on the field.”

Tony Benedict, president of the Association of BPM Professionals International, reflects on breaking down silos in process management

SAP automation spikes as companies scale digital transformation

Automation usage among SAP customers continues to grow with a 15 percent increase in the use of automation for digital transformation projects from 2023 to 2024. That’s according to new research from Precisely and the Americas SAP Users Group (ASUG), based on a survey of 193 SAP stakeholders including IT professionals and business users worldwide.

Citizen developers are increasingly important in expanding automation initiatives, the research indicated. In 2024, there was a 9 percent increase in organizations recognizing the value of citizen developers, highlighting the growing adoption of low-code/no-code platforms to address automation needs at the business-user level. However, as companies advance in automation adoption, integration challenges are becoming more pronounced, with a 22 percent increase in reports of integration issues as the top challenge in 2024.

Ramnath Natarajan, director of information technology at Johnson Controls, outlines running an automation center of excellence 

Businesses to outsource security operations amid widening skills gap

The majority of UK businesses will soon be outsourcing their security operations amid ongoing cyber security skills shortages, according to the European Cybersecurity Sector 2024 report from Logpoint. The survey of 1,762 senior decision makers and influencers in leadership, technology and security roles across Europe found that while 48 percent of UK firms manage their security operations inhouse versus 52 percent who use a third party, more than a quarter (28 percent) of businesses intend to outsource over the course of the next two years.

In comparison, 65 percent of French businesses currently take an inhouse approach while 24 percent intend to increase outsourcing. In Germany, 77 percent of companies opt for inhouse and 27 percent pan to expand outsourcing and, in the Nordic region, 54 percent keep operations inhouse with 14 percent intending to externalize. All of these markets are experiencing a swing in favor of outsourcing that will see the practice become equal to or outstrip inhouse provision, with many respondents citing a lack of internal skills and knowledge as a key factor in deciding to outsource security operations.

READ MORE PEX RESEARCH & REPORTS NEWS

• Process mining market set for robust growth & media firms face digital transformation hurdles

• Deficit in skills needed for digital transformation & NHS uses Celonis' SE process mining platform

• AI used by a quarter of doctors & private bank uses process mining to transform logistics