June 7, 2016
How to assess emerging technologies to know if they’re worthwhile investments for your company.
“What emerging technology should we invest in?” was a question I was asked during a client presentation for an IT Leadership team of a global software development company.
It wasn’t a difficult question, and I had five answers that all could have been correct. “Tell me about your strategy,” I queried. The CTO quickly laid out their technology roadmap over the next few years. I thought about what he said. I could talk about specific technologies that would make their technology strategy more robust, more efficient, and more cost effective. I could talk about the bleeding edge and share insights on what is around the corner – what to start thinking about now, or next quarter, or next year. Actually, there were hundreds of technologies I could have recommended based on my experience and research. But as opened my mouth, I realized I had asked the wrong question.
After the CTO walked me through their roadmap, I restated my question in a better way, this time not omitting any words. This new question began the real conversation. It was something so simple. “Tell me about your business strategy.”
Below are five things I’ve learned in the last two years about helping our clients answer the question, “What emerging technologies should we invest in?”
Rarely, is the answer just one technology
Occasionally, a single technology disrupts the enterprise. An example might be the internet in 1996 or smartphones in 2007. Artificial Intelligence or Blockchain might be the next big disruptor. However, in reality, research demonstrates that disruption occurs when you combine many topics (technologies, processes, business models) in unique ways. That nexus is where true innovation is realized. Most clients are aware of the big topics (Cloud Computing) but can miss ones that drive differentiation (Context Aware Computing). Sometimes, they may not see the spin on an approach to deal with a legacy problem (Drones in logistics). Despite awareness of emerging technologies, the ability to understand how they work in concert can allude all but the most astute technologists.
Researching emerging technologies is like surfing a tsunami
At best, large organizations have a handful of subject matter experts (SMEs) with experience and / or knowledge in some emerging technologies. The challenge is there are hundreds of potential emerging technologies – and trying to stay on top of what is happening is challenging at best. The very nature of emerging technologies is that they are changing all the time. What is nascent today could quickly become emerging or even mature (or disappear) in less than 12 months. It is important to stay up-to-date on the latest information – but due to resources – keeping a master catalog current is next to impossible.
Assessing an emerging technology using only technical viability is a mistake
An issue arises when you become dependent on analysts and other third-party research. These organizations tend to focus on technical viability (how likely that a technology will become a mainstream product). However, not all technologies are relevant to all industries—what is critical for financial services may have no relevance to manufacturing. To reduce risk, it is important to look at technical viability and business relevance (how relevant a specific technology is to the organization). Focusing on both will provide you not only with low-risk portfolio of technology – but business relevant ones too!
Qualitative and quantitative insight will lower your risk
A best practice is to not only depend on qualitative research (opinion) but one should also overlay quantitative data to reduce the risk of picking the wrong technologies. At PwC, we track nine dimensions of emerging technology – and we are always looking for new ways to use data to support our conclusions. All too often organizations do not have access to quantitative tools to help them collect the data necessary to make a good decision.
Explain emerging technologies in business terms
If you cannot demonstrate the value and the benefit of an emerging technology in business terms (customer impact, operational efficiency, brand awareness, etc.) then all you have is some really cool technology – with no funding. If you can demonstrate the value of your ideas in the context of a business problem you are solving – you’ll realize the business rarely cares about HOW you do it – they just want you to do it, and fast.
These are just a few of the things we have learned over the last 24 months identifying emerging technologies, processes, and business models. Do you have a story to share – or tip? Let us know below.