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What's the Status of Remote Jobs in the UK?

Did you know that at least 56% of companies offer remote work?

From that number, an impressive 16% of those companies are set up to be fully remote with no headquarters, allowing staff to work from home, a coffee shop, a coworking space, an exotic beach, or wherever else they may feel most productive. Wherever there is wifi, remote workers are able to put in their office hours without ever needing to set foot in an office.

The remaining 40% of companies that offer remote work are actually hybrid companies, which means they hire for both in-office and remote positions. Some companies even allow their employees to freely switch between working remotely and coming in to the office. More and more companies are seeing the rising trend of remote workers, and are altering company structure to accommodate for this changing work environment.

How Popular Is Remote Work Across the UK?

In 2012, 4.2 million people in the UK worked from home, either full- or part-time. In 2018, 4.4% of the entire workforce in the UK, from ages 15-64, was working remotely. Remote work is becoming increasingly popular year after year, and it is easy to understand why.

Staff members are happier with the increased freedom to set their own schedule and maintain a work life balance, not to mention the cost and time savings from eliminating the daily commute. Surprisingly, a work-life balance is not the main reason people choose to work remotely. Productivity is the most popular reason people choose remote work. Happy employees are more productive and efficient about their work, as they can choose the best hours and environment for their work styles. The popularity of remote work is increasing so quickly, that half of the UK workforce is expected to work remotely by 2020.

Why do UK companies prefer to hire remotely?

Companies benefit from hiring remotely by having team members who work efficiently, because workers can choose their most productive hours. Hiring remotely gives companies a better chance of hiring the best candidate for the job, not simply the best in the area near the office. Remote workers have a much bigger talent pool to choose from.

Overhead costs for the company are also much lower due to less office space and office equipment being required. Productive and happy staff members and lowered costs make hiring remotely a smart business move for companies to consider. The higher morale leads to significantly improved staff retention, decreasing the need to spend time and funding on constant hiring and onboarding efforts.

From small startup companies to huge enterprises, there are many companies across the UK that are fully remote or are offering remote positions. Whether you are seeking remote work in marketing, education, IT, sales, app development, or something else, there are a lot of UK companies currently looking to hire remote workers. Have a look through the list below for some of the best remote-based UK companies. Happy job hunting!

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UK companies ordering staff back to the office this year

Our experts

Written and reviewed by:.

All good things must come to an end. For some UK workers, that includes remote working, thanks to the number of large employers that are rolling out return to office (RTO) policies .

While small businesses lean into flexible working , large employers are putting their foot down. Their bosses might have embraced hybrid or remote working post-COVID, but the message now is simple: “get back to work, or wave goodbye to a promotion .”

We’re keeping track of all the businesses that have U-turned on remote work below. We’ll also explore their motivation for doing so, and the potential impact on employees.

Back in March, beauty chain Boots announced it would ask 3,900 administrative staff to return to its shiny white walls for five days a week by this coming September (up from three). The firm said it gave remote work the boot because of its poor impact on company culture .

Perhaps expecting a backlash from employees, Boots immediately clarified that remote work wouldn’t be discarded just yet. “There will of course still be times when working from home is necessary for either personal or business reasons,” said a spokesperson.

Putting the onus on managers to oversee the return to the office might backfire, however. According to research by Owl Labs, 70% of UK managers have admitted to allowing staff to work remotely from home in defiance of company policy.

At the start of May, JD Sports told employees based in its head office in Bury that they must return to the office for at least four days a week . The new rules will be in place from July 1. Previously, staff at the sports retailer could work from home as often as they liked.

JD, which has a global workforce of 51,297 employees, claimed it had changed its policy to ensure a fair approach for all staff. However, like Boots, JD managers will be asked to appraise requests for flexible work , suggesting approvals will still be subject to personal bias.

Manchester United

There’ll be no home advantage for Manchester United staff this year. The club’s minority-owner, Jim Ratclife has announced that its 1,000 workers will no longer be given work-from-home privileges during an all-staff meeting held earlier this week.

So why has remote work been shown a red card? Ratcliffe thinks it impacts productivity. He revealed email traffic fell by 20% when teams worked from home one Friday.

Paranoia about remote workers slacking on the job has caused many companies to lean into employee monitoring software . Also known as ‘tattleware’, these methods can have the opposite effect, however, as knocking staff morale can lead to a decrease in output.

Laing O’Rourke

As the construction firm behind the much-delayed HS2 project , Laing O’Rourke has faced plenty of challenges over the past few years. Still, the Dartford-based business appears to see remote work as its biggest threat.

The company told its 8,000-strong workforce to return to the office full-time in April 2024, and attributed the shift to a “challenging FY2023 financial performance”.

In an email, Group Chief Operating Officer Cathal O’Rourke, also blamed low employee engagement for the change. “Our offices are too often sparsely populated and our lack of face-to-face connectivity and collaboration has added to the challenges.”

Civil Service

More than half a million people are employed in Civil Service roles. On average, they work just 2.1 days at their workplaces . Efforts to improve attendance have so far had little impact.

The latest campaign began in January, when the Cabinet Office announced that Civil Service managers who failed to improve on office attendance would face disciplinary action. Staff had been previously instructed to work in-office at least three days per week.

Staff have reacted poorly to the mandate, arguing a return to work could make them less productive. Public sector union PCS is exploring if there is appetite for members to go on strike — a move that will certainly lower productivity.

Deutsche Bank

Deutsche Bank, which employs more than 7,000 people across Birmingham and London, instructed staff to return to work for at least three days a week, starting in June.

While not as strict as some other employers, the bank also stipulated that staff must work in-office on either Friday or Monday, putting an end to the prolonged work-from-home weekend that many had enjoyed. Senior managers must attend the office four times a week.

In a memo, CEO Christian Sewing and COO Rebecca Short wrote: “we realized that our decision would not be received positively by everyone and we appreciate your feedback and frank words.” These words did little to quell staff anger , however.

“This is an unnecessary battlefront for Deutsche Bank that destroys reputation and trust,” said Stephan Szukalski, head of labour union DBV, which represents Deutsche Bank staff.

Dell Technologies

The technology firm previously requested staff to return to the office full-time amid concerns it would have an impact on productivity. In January, it amped up efforts, telling employees they would miss out on promotions and pay rises if they continued to work from home.

Commenting on its new policy, Dell explained: “We believe in-person connections paired with a flexible approach are critical to drive innovation and value differentiation.”

Dell is not alone in linking remote work with performance reviews . Google has begun to use in-person attendance as part of employee feedback meetings. Still, this strategy risks sending the wrong message to staff that being present is more important than performance.

IBM Consulting

IBM first ordered staff to return to the workplace in September 2023. Reaction was lukewarm at the time. Employer-employee relationships at the firm had already soured after CEO Arvind Krishna publicly declared that 30% of his workers could be replaced by AI .

In January, the company doubled down on its RTO policy. Managers were told that they must be at the office, or meeting a client, for a minimum of three days a week. If not, they could leave the company.

Threatening staff with redundancy unless they come back into the office is certainly a bold move. It’s one of the most extreme messages we’ve seen so far in the return-to-office debate. But likely it won’t be the last.

Planning to implement a return to office policy at your business? Don’t be like these guys. Read about the Flexible Working Bill and your legal obligations as an employer.

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London Firms Are Letting More Staff Work Entirely From Home

London’s employers are letting more staff work entirely from home, according to a prominent recruitment firm, with workers keen to earn the premium paid by jobs in the capital without enduring its high living costs.

The proportion of white-collar jobs at companies in London that are entirely remote has risen from 18% to 22%, a survey by Hays Plc found. That puts London equal with the east of England as the regions where fully remote working is most common.

Firms in the capital are having to fill specialist roles in the tech and compliance sectors, Hays said, which typically come with a smaller pool of candidates. Some job-seekers are reluctant to live in London, where even outer-borough rent prices have soared by double digits.

“If employers can’t fill a position with their usual hybrid framework – over time they will consider remote contracts,” said Lorraine Twist, a finance director at Hays. “This is obviously attractive for candidates as they can enjoy a London salary without the commute and high property prices.”

Hays surveyed close to 12,000 staff and employers between Feb. 26 and March 18.

Flexibility

Companies and staff are still grappling to find a balance between in-person and remote work after the COVID pandemic drastically changed habits. The Labour party, which is far ahead in the polls and expected to win a general election later this year, has pledged to make flexible working a right for all employees from their first day in a job.

Separate figures from Reed Recruitment last week showed that job adverts across England are offering less part-time and remote work.

Still, Hays’ findings suggest that parts of Britain’s labor market remain tight, with firms competing for talent even as unemployment starts to pick up. The Bank of England is keeping a close eye on hiring trends and pay growth for signs of lingering inflation.

The proportion of London staff working entirely in the office dropped to 25% from 28%, while hybrid jobs fell one point to 53%, the survey said. Office landlords in the city have already been hit by a mix of flexible working, weak economic conditions and aging buildings.

Photograph: A street cleaner employee sweeps London Bridge as commuters make their way into work during the morning rush hour in the City of London, UK, on Tuesday, April 16, 2024. Photo credit: Chris J. Ratcliffe/Bloomberg

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End of working from home? Your rights to flexible working explained

• Thursday 9 May 2024 at 7:14pm

A growing number of employers are asking their staff to return to working in the office as companies edge further away from post-Covid attitudes.

Working from home has become a popular choice for millions of people around the United Kingdom, with many now used to a hybrid model.

So, with a return to the office being mooted in a number of industries, what are your rights if you wish to submit a flexible working request?

ITV News spoke to an employment law expert to answer the key questions.

What are the rights of an employee?

Earlier this year, all employees in England, Wales and Scotland gained the legal right to request flexible working. Different flexible working rules exist in Northern Ireland.

Consequently, all employees have the legal right to request flexible working, and can ask for a change to the following:

The number of hours they work

When they start or finish work

The days they work

Where they work

What must an employer do?

Employers are required to deal with a flexible working request in a "reasonable manner", according to gov.uk .

For example, this could include evaluating the pros and cons of an application, or discussing potential alternatives to a request.

Karen Baxter, an employment law partner, told ITV News that an employer has two months to reach an outcome "unless a longer period is agreed".

Flexible working requests can be refused if an employer has a good business reason for doing so. There are eight possible reasons as to why this could be the case, including:

Burden of additional costs

Detrimental effect on ability to meet customer demand

Inability to reorganise work among existing staff

Inability to recruit additional staff

Detrimental impact on quality

Detrimental impact on performance

Insufficiency of work during the periods you propose to work

Planned structural changes

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know…

What if I'm in disagreement with my employer?

Ms Baxter advised that in any potential dispute, the more "conversation and discussion" that an employee can have with an employer the better.

She added: "There is a massive difference in the sort of likelihood of succeeding in a flexible working request which just says 'this is what I want to do' as compared to one that says 'this is what I want to do, this is how I think it might affect the business, but this is how I think we can address that'.

"A request which shows that the employee thought about it from the company's perspective from the off, it's much harder to say no to those sorts of requests."

What does a 'reasonable manner' mean?

Ms Baxter said a reasonable manner could be reduced to an employer dealing with a request in "good faith, being honest about the reasons [and] not giving a misleading response as to why something has or hasn't been agreed, and progressing it without an unreasonable delay".

Can you appeal a decision?

Ms Baxter said it is possible to bring a complaint to an employment tribunal when contending that your "flexible working request hasn't been properly considered, the employer hasn't followed the process or has relied on an unfair reason to reject my request".

Employees can take an employer to a tribunal hearing if the latter does not handle a request in a reasonable manner.

Anyone looking to bring forward a tribunal claim should be aware that you will need to contact the Advisory, Conciliation and Arbitration Service (ACAS) in advance.

Have you heard our new podcast Talking Politics? Every week Tom, Robert and Anushka dig into the biggest issues dominating the political agenda…

The four-day work week is here to stay at UK companies that tried it

Commuters cross London Bridge during the morning rush hour in January 2023, in London. For six months between June and December 2022, workers at 61 organizations in the United Kingdom worked 80% of their usual hours. Credit: Leon Neal/Getty Images via CNN Newsource

London (CNN) —  One year after the conclusion of the  world’s biggest trial  of a four-day work week, a large majority of companies that took part were still allowing their employees to work a shorter week and more than half had made the change permanent.

For six months between June and December   2022, workers at 61 organizations in the United Kingdom worked 80% of their usual hours — for the same pay — in exchange for promising to deliver 100% of their usual work.

At least 89% of those firms were still operating the policy and at least 51% had made the four-day week permanent at the end of 2023, according to a  report  published by one of the organizers of the trial. Two companies did not respond to the researchers compiling the   report.

The study   was released Wednesday by Autonomy, a think tank that ran the 2022 trial with nonprofit 4 Day Week Global and the 4 Day Week UK Campaign in partnership with researchers from Cambridge and Oxford universities, and Boston College.

The effects of reduced working hours have been overwhelmingly beneficial for staff and their companies, according to the report.

At the end of the trial, employees reported enjoying better physical and mental health, greater work-life balance and general life satisfaction, and less exhaustion from work — and these improvements have been maintained one year on.

“The key point is that the strong findings at six months are not due to novelty or short-term impacts. These effects are real and long-lasting,” said Juliet Schor, professor of sociology at Boston College, which surveyed staff at the companies that participated in the trial.

Managers and CEOs at 28   of the organizations also agreed to answer additional questions. All said the four-day week had a positive impact on their company. Staff turnover fell at half of the organizations, almost a third said the policy had noticeably improved recruitment, and 82% reported beneficial effects on staff well-being.

The Autonomy report also highlights the  methods  organizations have used to sustain a four-day week, including revising the norms around meetings, work communications and prioritization.

“In this study, it has been clear the four-day week is not just a flash in the pan: companies around the UK have successfully been ‘making it stick’,” the authors wrote.

Close to half of the 61 organizations that took part in the 2022 trial are in marketing and advertising, professional services, and the nonprofit sector. The remainder span a range of industries, including construction, manufacturing, retail, healthcare, and arts and entertainment.

Calls to shorten the working week have multiplied in recent years. These calls have grown louder after millions of employees switched to remote work during the pandemic and stopped commuting, saving time and money.

There have been a number of experiments with the four-day week around the world, including a  trial  in 2022 across 33 companies, with the majority of workers based in the United States and Ireland.

(Copyright (c) 2024 CNN. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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Eurovision 2024: everything we learned – from the Abba swizz to the UK’s wild unpopularity

Why did Olly Alexander fall flat in the public vote? Why didn’t Abba show up? And how did the trophy get smashed?

I t was the most politically charged Eurovision song contest in memory – but it was won by a famously neutral nation. As the glittery dust settles from Saturday night in Malmö, here’s what we learned …

1. Switzerland was a smash hit

After a week of turmoil, thankfully we got a popular winner. Swiss singer Nemo, who identifies as non-binary, came into the night as bookies’ third favourite but romped to a widely welcomed victory . Their poperatic, drum’n’bass-driven song The Code wasn’t just naggingly catchy but imaginatively staged, with the 24-year-old hitting high notes while balancing on a giant spinning turntable. Like a young Freddie Mercury striking poses on a satellite dish he’d fished out of a skip, the committed performance was impossible to resist.

Just a shame about the awkward ending. Not only was Nemo’s interminable walk from the green room to the stage like something from This is Spinal Tap, but they smashed the glass trophy during their triumphant celebrations. Seconds after UK commentator Graham Norton warned “Don’t break the trophy”, Nemo appeared to do just that. Maybe they can visit The Repair Shop in a special BBC crossover.

2. Europe still doesn’t love the UK

It started so well. For a man who said last week that he was “ambivalent” about the union jack, Olly Alexander draped himself in a giant one for the flag parade, giving a cheeky wink to camera. The UK entrant’s whole-hearted performance of Dizzy went down well enough in the arena. When jury votes were counted, he’d made it on to the fabled “left-hand side of the leaderboard”. Then the wheels came off. He received the dreaded “nul points” in the public vote. Although he smiled gamely, Alexander plummeted to 18th out of 25 with just 46 points – a fraction of the top scores, which were way up in the 500s. So what went wrong?

Some blamed the song – a derivative Pet Shop Boys-esque synth-pop number which lacked cut-through appeal. Others pointed to sound issues, with vocals muddy and low in the mix. Others thought that the staging, with writhing dancers in what resembled a serial killer’s bathroom, was more suited to an edgy video than family-friendly Eurovision. Others pointed to our unpopularity post-Brexit. Chances are it was a combo of all the above. Hey, at least he improved on last year, when Mae Muller was second from bottom.

3. Eurovision had gone goth

The contest once had a reputation as the home of cheesy novelty pop. Not so much nowadays. Judging by the mix of musical styles on show at this 68th edition, melodramatic emo-metal has joined thumping doof-doof Eurodisco as the contest’s dominant genre. Perhaps it’s time the UK got the guitars and black clothing out. Well, we couldn’t do much worse.

4. Graham Norton’s still got it …

All the controversy meant this wasn’t an easy gig for Norton, but he pitched it pretty much perfectly. Shrugging off awkward audio problems as the broadcast began, he struck his usual note – withering at times, warm at others, like your sarky friend on the sofa. He issued a nightmare warning to children ahead of Ireland’s demonic diva and a nudity warning ahead of Finland’s trouser-free funster. He raised the traditional glass to predecessor Terry Wogan at the ninth song (when Sir Tel would pour his first booze).

After Spain’s booty-shaking male dancers stripped down to thongs, he said: “I can only imagine the cheers in Sitges right now.” He gave a sweet shoutout to Alexander’s cats, the fizzily named Fanta and Sprite. As the Abbatars appeared in a laboured skit, Norton drily noted: “They really lift the script off the page, don’t they?” When the Spanish jury spokesperson wore elbow-length rubber gloves, he simply asked: “Is she a vet?”

5. … And so has Joanna Lumley

The beloved actor appeared as UK jury spokesperson and was impressively multilingual with impeccable pronunciation. Naturally, Dame Joanna clutched a glass of champagne throughout her report, while managing to squeeze a “darling”, a “sweetie” and an “absolutely fabulous” into her 60 seconds on screen. What a pro.

6. Abba’s no-show was a slight swizz

With the contest held in Sweden on the 50th anniversary of Abba winning with Waterloo, speculation was rife about guest cameos from Agnetha, Björn, Benny and Anni-Frid. The hosts repeatedly trailed a surprise appearance.

Please welcome a Scandi supergroup beginning with A (it was Alcazar). Please welcome the Abbatars, live-but-not-really from London. Please welcome a tribute act formed of previous winners Charlotte Perrelli, Conchita Wurst and Carola. The big teases.

7. Israel defied the controversy

Since Thursday’s semi-final, thousands of pro-Palestinian protesters had gathered in Malmö , indignant at Israel’s inclusion while the war in Gaza rages on. There were calls for artists to boycott the competition. LGBTQ+ venues cancelled viewing parties . Israeli entrant Eden Golan’s song was hastily rewritten to be less lyrically provocative. She was loudly booed during dress rehearsals and advised to remain in her hotel room for her own safety. Security was stepped up and organisers were braced for stage invasions.

Not only did Saturday night pass off without major incident but Golan fared well. The 20-year-old from Tel Aviv came second in the public vote (top in the UK poll) and finished fifth overall. “United by music” is the slogan for this year’s contest. After a fraught buildup, perhaps it came true in the end.

8. The hosting duo shone …

Hollywood actor Malin Åkerman and much-loved comedian Petra Mede helmed proceedings with a winning blend of sincerity and silliness. Eurovision regular Mede cracked deadpan gags about the winner receiving a Gilmore Girls season three DVD and official Euro-merch including a rune stone. Åkerman interviewed veteran former host Karin Falk (“I’m 92, I’m not dead”) and her own mother-in-law, the British choreographer Chrissy Wickham – who duly ripped off Åkerman’s skirt Bucks Fizz-style. “There’s an awkward Christmas,” muttered Norton.

9. … but cult hero Martin lost his lustre

The European Broadcasting Union boss, Martin Österdahl, fared less well. He’s built up a reputation as something of a Eurovision legend, complete with his own catchphrase. See the spoof song from comic Sarah Dawn Finer, reprising her role as fictional EBU representative Lynda Woodruff: “When Martin licks his lips and says you’re good to go!”

However, fans clearly held him responsible for this year’s dramas – not just Israel’s participation but the late disqualification of Dutch entrant Joost Klein – and booed Österdahl whenever he appeared on screen. Not so good to go after all.

10. Eurovision eccentricity is alive and well

The night produced its trademark mix of bizarrely bananas, magnificently camp moments. We had a man called Baby Lasagna bellowing about milking cows while draped in lace doilies. We had a bloke with a blond mullet hatching out of a giant blue egg and setting his flesh-coloured Y-fronts on fire. We had a rap about Mother Teresa, a screeching witch, disco strippers, boyband twins, nasal armour, plentiful pyrotechnics and an eye-popping amount of near-nudity.

Even when the performances were over, the Maltese jury spokesperson was randomly covered in teddy bears. Douze points for effort. Don’t go changing, continental cousins.

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Digital twins: The art of the possible in product development and beyond

Industrial companies around the world rely on digital tools to turn ideas into physical products for their customers. These tools have become increasingly more powerful, flexible, and sophisticated since the 1960s and 1970s, when computers first began replacing drawing boards in design offices. Today, product life-cycle management (PLM) has become engineers’ first language: PLM systems help companies to capture, codify, process, and communicate product knowledge across their organizations.

About the authors

This article is a collaborative effort by Mickael Brossard , Sebastien Chaigne, Jacomo Corbo, Bernhard Mühlreiter , and Jan Paul Stein, representing views from McKinsey’s Operations Practice.

Yet as engineering tools have become more capable, the demands placed upon them have also increased. Product functions are increasingly delivered through a combination of hardware and software. Sensors and communications capabilities allow products to offer more features and to respond more effectively to changing operating conditions and user requirements. Advanced, adaptable user interfaces have simplified the operation of complex and sophisticated machines.

Evolving business models are also blurring the boundaries between design and use. Customers expect the performance and functionality of products to improve during their life cycle, enabled by over-the-air software updates or the ability to unlock new features as needed. Many products operate as part of an ecosystem of related products and services. Increasingly, customers are not buying products outright, but paying for the capabilities they provide on a per-use or subscription basis.

The birth of the digital twin

These changing requirements have triggered a transformation in digital product representation and the creation of a new tool: the digital twin. Digital twins combine and build upon existing digital engineering tools, incorporating additional data sources, adding advanced simulation and analytics capabilities, and establishing links to live data generated during the product’s manufacture and use. A conventional PLM system uses one digital model to represent each variant of a product. A digital twin, by contrast, may have one model for each individual product, which is continually updated using data collected during the product’s life cycle.

The digital-twin approach can be applied to products, manufacturing processes, or even entire value chains. In this article, we will focus on their application to products, specifically to product design.

Digital twins offer multiple potential benefits for product-based companies and users. They can aid design optimization, reduce costs and time to market, and accelerate the organization’s response to new customer needs. Digital twins can also be a critical enabler of new revenue streams, such as remote maintenance and support offerings and “as a service” business models.

Based on the experience of companies that have already adopted the approach, we estimate that digital-twin technologies can drive a revenue increase of up to 10 percent, accelerate time to market by as much as 50 percent, and improve product quality by up to 25 percent. Digital-twin technology  is becoming a significant industry. Current estimates indicate that the market for digital twins in Europe alone will be around €7 billion by 2025, with an annual growth rate of 30 to 45 percent. 1 Infinium; MarketsandMarkets; MarkNTel Advisors; Meticulous Market Research; Mordor Intelligence; SBIS; Technavio, last accessed April 2020.

Digital twins in practice

Companies in many different industries are already capturing real value by applying digital twins to product development , manufacturing, and through-life support (exhibit).

An automotive OEM, for example, has used the digital-twin approach to create a concept configurator for early phase development . The start of the development process is especially challenging for complex products because the various stakeholder groups, such as sales, engineering, and finance, may have different or even contradictory product requirements. The OEM now balances these trade-offs using a digital concept configurator that allows for simultaneous evaluation of customer requirements, technical concepts, and product costs. When a technical concept within a system or subsystem of the product is changed, the implications for meeting customer requirements or product cost targets become immediately transparent.

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Using the configurator within cross-functional development teams has helped the OEM to reallocate 5 to 15 percent of a new vehicle’s material costs to the attributes that drive the most customer value. Applying the approach to select customer-facing components has allowed the company to optimize costs and customer value simultaneously, improving the contribution margin of those parts by 5 to 10 percent. As a further benefit, the configurator helped the team reduce the time taken to reach agreement on changes by 20 percent, thus accelerating time to market.

Digital twins are even being used to replicate systems in complex mission scenarios. Using this approach, one aerospace and defense player has cut the time required to develop advanced products by 30 to 40 percent. The digital twin also aids discussion with customers during the development process, helping the company validate and improve its designs.

In the consumer electronics sector, a company is using product digital twins to boost quality and supply chain resilience . It stores detailed information on the content of its products, including the exact source of individual components. In the event of quality issues during production or early failures in the field, the company can trace problems back to specific supplier facilities, then take appropriate action to prevent reoccurrence of the issue. An automotive supplier uses the same approach to trace quality deviations in its production through to the upstream supply chain, and in the process has reduced scrap by 20 percent.

Digital twins are increasingly being used to improve future product generations . An electric-vehicle (EV) manufacturer, for example, uses live data from more than 80 sensors to track energy consumption under different driving regimes and in varying weather conditions. Analysis of that data allows it to upgrade its vehicle control software, with some updates introduced into new vehicles and others delivered over the air to existing customers.

Developers of autonomous-driving systems , meanwhile, are increasingly developing their technology in virtual environments. The training and validation of algorithms in a simulated environment is safer and cheaper than real-world tests. Moreover, the ability to run numerous simulations in parallel has accelerated the testing process by more than 10,000 times. Incorporating sensor data from real-world vehicles into these tests helps companies improve the veracity of their simulations and identify blind spots in the virtual test database.

The mainstreaming of additive manufacturing

A company in the renewable-energy sector is using a digital twin to automate, accelerate, and improve the engineering of hydroelectric turbines . Using the machine learning system to evaluate the likely performance of the new designs allowed it to rate more than a million different designs in seconds rather than the hours required for conventional computational flow dynamics (CFD) analysis. The winning geometry delivers the maximum theoretical performance, significantly higher than what is achievable by conventional optimization methods. Moreover, by using machine learning, the overall end-to-end design cycle time was cut in half compared with the conventional approach.

Digital twins in three dimensions

Digital twins can take many different forms. Organizations that want to take advantage of digital-twin technologies must select an appropriate form that will enhance its technical and business objectives. The design of a digital twin can vary across three dimensions (exhibit).

The first dimension encompasses the value chain steps that the digital twin will cover. An engineering twin covers value chain steps similar to those covered by conventional PLM systems, ranging from product definition to detailed engineering. A production twin replicates a product throughout the manufacturing process, incorporating data such as the components, materials, and process parameters used, as well as the results of tests and quality checks. A service twin incorporates data collected from the product in use, such as operating modes, performance, diagnostic information, and maintenance history. The most sophisticated digital twins span multiple parts of the value chain, allowing in-service data to optimize manufacturing processes or future design iterations.

The second dimension is the scope of the digital twin. A product may consist of several major systems, multiple subsystems, and hundreds or thousands of hardware and software components. Some digital twins cover only one or several components, for example, those that simulate the flow of liquids through a pipe. Others cover a full product, for example, those that simulate a car’s crash characteristics. Given the limitations of computing power, generally, the narrower the scope of a digital twin, the more precise its virtual replica will be. In contrast, full-product digital twins often need to abstract or simplify certain product behaviors to remain manageable.

The final dimension of a digital twin is its degree of sophistication . The simplest digital twins consist of various sources of data relating to a product, often from sources that have few or no links with one another. The second level of sophistication uses traditional simulation tools to perform analyses of design performance and integrate the various sources through a PLM system or similar platform.

At the third level of sophistication, a digital twin will use predictive or prescriptive analytics, as well as machine learning technology to run automated simulation refinements and yield new insights. This allows design and manufacturing teams to make informed decisions based upon direct results and performances.

At the last level of sophistication, digital twins use predictions of component failure rates or performance variations to react to changing environments and manipulate the real-world counterpart in a closed-loop setup. This approach might be used in a condition monitoring system, for example, where sensor data and simulations are combined to make inferences and predictions about the state and behavior of a specific product, and might allow a machine to compensate for wear or variations in operating conditions by adjusting parameters in real time.

Companies in other sectors are also starting to use digital twins to derive deeper insights into customer behaviors and preferences . For example, white-goods manufacturers can use data from in-service products to identify the most and least used features. That can inform future product development decisions, such as deleting rarely used features or revising the user interface to make the features more accessible.

The adoption of digital twins is currently gaining momentum across industries, as companies aim to reap the benefits of various types of digital twins. Given the many different shapes and forms of digital twins (see sidebar, “Digital twins in three dimensions”), and the different starting points of each organization, a clear strategy is needed to help prioritize where to focus digital-twin development and what steps to take to capture the most value.

How to start and succeed on your digital-twin journey

Embarking on a digital-twin journey can look daunting at first sight, especially since the breadth and depth of use cases can span the entire corporate landscape, including product portfolio choices, business model design, R&D, manufacturing, and through-life support.

This versatility can also be a strength, however, as it allows companies to start small and expand the scope, sophistication, and value-chain coverage of their digital-twin projects over time. The experience of companies that have applied digital twins in their own product operations leads to a few simple rules that can greatly increase your odds of success.

Define your aspirations

Be aware of digital-twin best practices. Do your homework and seek out perspectives on best practices and future trends in digital-twin technology. Assess and prioritize the elements of your vision. Evaluate the potential of digital-twin-related opportunities and prioritize them into an implementation road map.

Be clear about the business case. Quantify the value offered by different digital-twin opportunities and determine the minimum level of model sophistication required to generate that value. Successful projects focus on short development times and rapid ROI.

Test the waters by prototyping select use cases. Run a series of hackathons (possibly supported by digital-twin specialists) to assess your capabilities’ baseline, develop solution prototypes, refine, and adjust the initial concepts. This step calibrates the approach and prevents you from losing time and resources by attempting an impossible plan. It is part of a broader value assurance move aimed at bringing the entire project to a successful conclusion.

Know your strengths

Perform a maturity assessment. Understand your current digital product development capabilities along six main dimensions: development methodologies, PLM governance, data strategy, business processes, system complexity, and collaboration. Understanding the areas where you are most advanced and where you are lagging behind will help prioritize areas of investment for a balanced implementation of a digital twin and its use cases.

Access to appropriate talent and capabilities can make or break a digital-twin initiative. Many organizations need to develop additional expertise in areas such as advanced simulation and modeling or data analytics for user experience design.

Plan a step-by-step, agile implementation

Invest several months in developing a minimum viable product (MVP). Incubate a cross-functional, agile team dedicated to bringing priority use cases to life and building digital capabilities in the process. The MVP is now the must-do approach to maximize value gains from the start rather than waiting until the program is finalized before experiencing the first benefits.

Perform an MVP retrospective to pivot or persevere. Derive lessons from the first MVP phase to confirm your digital-twin aspirations or pivot them based on the findings (for example, the validity of use cases, complexity of implementation, and maturity of the organization). This is the second value assurance move that enables you to further calibrate the implementation plan and revise the scope to avoid generating sunk costs.

Scale up the digital-twin initiative and accelerate ROI. Optimize and standardize implementation based on insights from the MVP phase. Define an (internal or external) recruiting and capability-building strategy. Build an operating model to enable rapid scaling of successful approaches. The most advanced organizations typically consider digital-twin technologies a core strategic capability.

By following these simple best practices, you will be able to reap the benefits of digital twins in a scalable, progressive way. Are you ready?

Mickael Brossard is a partner in McKinsey’s Paris office, where Sebastien Chaigne is an associate partner; Jacomo Corbo is a partner in the London office; Bernhard Mühlreiter is a partner in the Vienna office; and Jan Paul Stein is an associate partner in the Munich office.

The authors wish to thank Roberto Argolini, Elia Berteletti, Kimberly Borden, Akshay Desai, Hannes Erntell, Alessandro Faure Ragani, Anna Herlt, Mark Huntington, Mithun Kamat, Michele Manzo, and Alessandro Mattozzi for their contributions to this article.

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