Physical-Digital-Physical: the business opportunities of merging digital and physical worlds

6 min

The boundaries between the digital and physical worlds are becoming increasingly blurred. We barely notice the activities we touch with our hands and continue digitally a second later. We walk to the office and sit at our desks and check on the app how many steps we have taken and how many calories we have consumed. The production of data collected in the physical world and processed in the digital world is just one of the big opportunities that companies can take from this interaction between the physical and the digital. How do we approach this phenomenon to get the most out of this exchange? Let’s analyze the steps.

Digitalization: the transition between real and virtual worlds

In a few years’ time, no one will wonder when the transition from digital to virtual took place because we will be living in a hybrid reality to which we will gradually become accustomed. What this world will look like is still hard to imagine: perhaps we will no longer use a physical telephone to make calls at home, but talk to a hologram of the person; or the diary of our daily activities will appear on our bathroom mirror as we brush our teeth. Futuristic films offer their own assumptions about what we might expect, but in reality the pace of technology and innovation is so fast and unpredictable that it will surprise us even in the immediate future.

We got to know the digital world through the first computers and then the Internet and the World Wide Web, but the real step that is increasingly blurring the line between these two worlds was the invention of the smartphone and social networks. Before that, digital technologies were confined to narrow spaces: the desk with the PC, at home or in the office. The smartphone, on the other hand, has allowed us to act digitally everywhere, merging work with social relationships, daily activities with entertainment.

We are about to talk about the technologies that have emerged from the needs of a particular historical moment. In the post-industrial era, as the world of production became more complex and offices were filled with more and more paper, with archives that were inaccessible because of their size, people looked for a way to digitalize everything. In fact, the first to set foot in the digital world were data: sheets, folders and entire archives are still being dematerialized and taking their place in libraries and online archives.

But the conversion of images or sounds into digital formats has also opened up great opportunities for streaming platforms and music apps.The transformation of writing into bits and bytes has been a huge change that has improved production efficiency, streamlined processes, reduced paper consumption and paved the way for another major evolution: the transformation of connected digital devices into smart devices that collect data from the physical world through their sensors and allow us to process it digitally.

physical-digital-physical

What are the processes and technologies that are merging the physical and digital worlds?

Technological innovation is a key driver in accelerating this connection between the physical and digital worlds. Social changes, however, have come about through processes that have incorporated new technologies and opened up new scenarios.

Physical-Digital Transition: Information Acquisition

If computers and digitalization made it possible to convert physical data and information into files, it was communication networks such as the Internet that made it possible to share and transmit it. This process involves:

  • Physical cables, such as fiber optic or Ethernet cables, or wireless technologies, such as Wi-Fi or mobile networks;
  • Communication protocols, which ensure that information is sent correctly and securely. Examples of communication protocols are TCP/IP (Transmission Control Protocol/Internet Protocol) for the Internet and Bluetooth for communication between wireless devices.
  • The Internet of Things, which includes technologies that connect the physical and the digital. These include augmented reality displays, smart watches, the smart home with smart appliances, or the connection of machines in manufacturing realities.

The combination of these different technologies makes it possible to integrate digital information from different physical sources located in different places. We can collect data from systems such as ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), PLM (Product Lifecycle Management) and non-transactional internal systems such as email. Then let’s not forget all the IoT devices, the collection of information in the field or at the facilities involved in the process, and the results of predictive models.


Only by completing the cycle and initiating a continuous, interconnected flow of data can organizations finalize their journey to Industry 4.0. Click To Tweet

Digital-Digital interaction: transforming raw data into information

Data processing is a crucial process in Industry 4.0. Analyzing data, manipulating information, or running algorithms and calculations are seemingly mechanical actions that require a thoughtful approach to generate productive actions. Without the proper transformation of raw data into useful information for production or decision-making, business growth slows dramatically. Data allows me to make predictions, understand trends in sectors, and highlight gaps or bottlenecks. Thanks to technology, we have such enormous value in our hands that it would be a shame to waste it.

How do resources work together in the digital world? Sharing digital data is a key aspect of any business context and is possible through devices such as computers, smartphones, tablets, or wearable devices. Their interfaces can display, create, edit, or share digital data. They are associated with output devices such as monitors, speakers, or printers. Their role is to convert digital data into user-accessible formats such as text, images, video, or sound. Finally, we must not forget the storage of this data: an important step that must be carefully organized, whether we choose to store and manage it on local servers or in clouds outside the organization.

Interaction in the digital world is not only between people but also between machines. If we think about edge devices, their ability to process operational data close to the machine allows immediate action without the need for resource intervention.

If we separate all the steps of Edge Computing, we have a perfect example of physical-digital-physical: a physical object moving along a production chain has an imperfection; the machine controlling this process detects an inconsistency between the digitally loaded specification and the object and triggers an alarm in the form of data; the Edge processes it and transforms it into a physical action; a mechanical arm picks up the object and throws it into the waste bin.

Digital-Physical transition: bringing digital processing back into the physical world

The flow of data and information seems monotonous when we interrupt it at the point of processing. However, according to a survey published by Deloitte, 54% of companies say they are able to use data to make decisions in real-time, while 45% say they do not yet have this capability but are building it. This figure is still too high, as it is this last step that will complete the journey to Industry 4.0.

Among the technologies that bring something conceived, created, and processed in the digital world back into the real world are 3D printers. An example of the importance of this step is additive manufacturing. Starting from a digital design, processed with computer-aided design software, we can create objects that could serve as prostheses in healthcare or parts to repair a machine that has broken down in a particular place. Not only that, but thanks to connectivity, we can also print a graphic design made in America on another continent.

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What are the benefits generated by the Physical-Digital-Physical paradigm?

The processes and technologies we have analysed show us that communication between the physical and digital worlds is a continuous and interconnected process. There is a constant transfer of information that increasingly unites these two worlds. In the business world, we can no longer imagine working completely offline. But even in our private lives, we find it hard to switch off connected devices.

The Physical-Digital-Physical (PDP) paradigm is not only indispensable today, but also offers a number of advantages that can have a positive impact on various sectors and areas. Here are a few examples:

  • Advanced automation: The interaction between the two worlds allows us to integrate physical systems with digital technologies, enabling advanced process automation. This leads to greater operational efficiency, a reduction in human error, and faster production times.
  • Process optimization: By digitalizing data from the physical world, processes can be analyzed and optimized in real-time. We can proactively identify inefficiencies, critical points, and areas for improvement, helping to optimize efficiency and overall productivity.
  • Improved decision-making: By collecting, analyzing, and visualizing digital data from the physical world, we gain structured information that is essential for improved decision-making. Real-time data provides an up-to-the-minute view of operations and early identification of trends or emerging issues.
  • Personalization and enhanced user experience: By adapting physical production with digital creation, personalized experiences can be created. By analyzing digital data, users’ preferences and needs can be better understood, and products and services can be better tailored to their specific needs.
  • Increased connectivity and collaboration: PDP creates greater connectivity between physical objects, digital devices, and people. This fosters real-time collaboration and information sharing, improving communication and coordination between the various actors involved.
  • Innovation and new business models: PDP opens up new opportunities for innovation and the development of business models based on the convergence of the physical and digital worlds. The integration of advanced technologies such as Artificial Intelligence, the Internet of Things, and Augmented Reality enables the creation of new products, services, and ways of interacting with customers.
  • Monitoring and Predictive Maintenance: Through the continuous monitoring of digital data from physical systems, predictive maintenance strategies can be implemented. This enables the detection of impending anomalies or failures, reducing downtime and improving asset reliability.

We can conclude, therefore, that the Physical-Digital-Physical paradigm improves the efficiency, productivity, customization, and innovation of organizations that accept the challenge. Only then can the full potential of digital technologies and the opportunities of the digital era be exploited.

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