Emerging technologies: Businesses accelerate unproven technology
- Posted on December 10, 2020
- Estimated reading time 4 minutes
We’re excited by the possibilities and potential of emerging technologies (which is a good thing, considering it’s our job!). But even we were surprised to learn in our recent research how much value businesses already receive from these tools, which are, almost by definition, unknown. Given the relatively fast growth cycles and the potential of these technologies to be disruptive, executives often question which ones they should invest in and what they can expect from them. They also want to know if they’re ahead or behind their peers with their investments.
To help answer those questions, we built on our previous Avanade Trendlines research by asking 800 global leaders across eight countries and six industries about 12 technologies. Those ranged from more-established techs like IoT and conversational AI to less well-defined techs like human augmentation (example: brain-computer interfaces) and bioconvergence (the intersection of machine learning, digital applications and biology). Following are five key takeaways that IT and business leaders should keep in mind as we move into 2021.
Key takeaway 1: Get the most value out of emerging technologies by testing early, often and in combination. While testing emerging technologies is near ubiquitous (97% of our respondents have tested or adopted at least one), top performers go all-in. The 6% of companies that are receiving significant value from all the technologies they’ve tested tend to have higher budgets, deploy the technologies across more business units, test in combination more frequently and are more advanced in their digital transformation.
But the great news is that you don’t have to be digitally mature or spend a significant part of your budget on emerging technologies to get value. Depending on the technology, between 77% and 91% of all respondents are receiving at least enough value to make the investment worthwhile, and over half are getting significant value from at least one of the technologies they’ve tested. It’s never too early (or too late) to start testing.
Wherever you are in your testing plan, one key action to take is testing in combination as frequently as possible. We found that companies that do so 80% of the time reliably receive more value from those tests than those that tend to test technologies in isolation. Essentially, the more you do, the more you’ll get.
Key takeaway 2: Your mileage may vary, but your testing portfolio should include conversational AI and AI recognition. IoT/edge computing was far and away the most tested technology (out of our six key industries, five listed it as the most commonly tested technology and it came in second for the sixth). However, the technologies that delivered more significant value, defined here as receiving notable returns, were actually conversational AI and AI recognition (facial and/or emotional recognition).
We did find nuances based on industry. For example, if you’re in financial services, you’re more likely to receive significant value from blockchain or next-generation connectivity, while retailers found that robotics topped conversational AI in returning significant value.
The specific value that companies receive can also vary greatly by industry. For energy and utilities companies, IoT/edge was most valuable in helping them create or validate a new business model, but consumer goods and services companies enjoyed cost savings.
Key takeaway 3: Anticipate accelerating your spending and testing in the wake of COVID-19. The pandemic is having a direct effect on the testing and adoption of emerging technologies. On average, 45% of companies are testing or adopting or intend to adopt these technologies faster than they otherwise would have, and budgets are expected to increase by an average of 1.8% (the most digitally advanced companies plan to spend even more than that).
Extended reality (XR) topped the list, with 54% of organizations accelerating XR testing or adoption. This aligns with other signals we’re seeing: More of our clients are asking about remote assist and guidance, as well as virtual meeting spaces. Other drivers, like maturing software development kits from mobile platforms, are also making these experiences more familiar to the general public. It seems clear that these factors are making XR more attractive in a world that works and plays more remotely.
Key takeaway 4: Improve your customer and employee experiences through emerging technologies. Many organizations started testing emerging technologies for economic or operational reasons – improving efficiencies and gaining a competitive advantage. What they didn’t expect was the benefit for people, both inside their organization and out. Improving the customer experience ranked second in terms of value received overall, while 83% of companies increased employee engagement more than they thought they would.
We already know there’s a positive relationship between employee experience and customer experience. In a world where skilled talent is hard to find, increasing your investment in emerging technologies may help to keep the employees you have and bring in new ones with the skills you’ll need – and still deliver to your customers. Which could create a competitive advantage after all.
Key takeaway 5: Make sure your digital tools and data are ready and build in privacy and security from the start in order to truly scale. Despite the talent shortage, it doesn’t seem to be stopping most companies from testing and beginning to adopt emerging technologies; it only topped the list as a key constraint for blockchain. Instead, whichever technologies you test, you’ll need to keep in mind the maturity of your digital infrastructure (specifically around legacy tech/tech debt, and data and tools maturity) and take into account privacy and security implications. Those were the most common barriers to broader adoption of the emerging technologies.
Our exploration of findings will continue into specific industry perspectives, so watch this space for additional posts. We’re also continuing to add to our data set; if you’re interested in sharing your thoughts, or asking us more, please reach out to firstname.lastname@example.org.