- October 15, 2019
- Posted by: Ramkumar
- Category: Strategy
Emerging Digital Technologies in the last 2 years
Over the last two years, there have been an explosion of emerging digital technologies like Augmented reality, Blockchain, Quantum computing, virtual reality, 3D printing and mixed reality. A lot of hype was created around these technologies and some of them were even projected as the technology for the future.Despite all these hype, many of these technologies did not have a major impact.
Big Data, Analytics, Cloud computing and Machine Learning are the few technologies that have created real impact on business outcomes and on improving customer experience. This is evident on the number of acquisitions of Big Data and Analytics companies by acquirers globally.
Big data analytics has created positive business outcomes by creating new revenues streams, improving operational efficiency, new customer acquisition followed by improving customer loyalty by increasing retention of loyal customers.Cloud computing on the other end primarily helped to improve Operational efficiency.
Digital Technologies bets for the future
- Artificial intelligence will be the technology for the future and will be used rampantly in almost all business areas except in those areas where attraction and retention of talent is required.
- Cloud computing has lost its charm as majority of the larger companies globally have either moved their infrastructure to cloud or have made decisions to move to the cloud.Hence cloud will become more as a staple in the business models of all the companies.
- Internet of Things and Blockchain will see an increase in adoption from the companies in the next two years.Companies expect that Blockchain would help improve Operational efficiency where as Internet of Things can help create new revenue streams.
- Over the longer term, AI, Machine learning and Big Data will have the maximum potential for disruption while virtual reality, augmented reality and 3D printing are expected to be least disruptive.IoT and Blockchain is somewhere in the middle.
Alliances, Innovation boards and Startups in Digital technologies
- Companies can build their expertise and capabilities on these new technologies broadly by engaging in three different ways.
- They can build competencies internally, form alliances or partnerships with companies who have these capabilities or carry out Mergers and acquisitions.
- Majority of the companies do not chose to go through the acquisition route to improve their digital transformation initiatives.This is because of the differences in cultures between the acquirer and target company along with the inability of the acquirers to retain key employees of the target organization. At the same time, very few companies have been able to build internal competencies because they do not have the talent inhouse to build such capabilities.So majority of the companies decide to opt for partnerships as their dominant strategy for dealing with digital technologies.
- Business leaders also turn to their Board of Directors as a source for innovative ideas.This is interesting because the Board traditionally exists to ensure compliance, manage risk and supervise the executive team.Many companies use their directors as innovation boards.The Board of Directors also encourage their executive teams to pursue risky initiatives that could help reinvent their company’s business. Many boards suggest alliances partners or review the company’s alliance portfolio.
- Few companies have built startups accelerators where some of the startups are looking for corporate partners, while some companies are looking to invest in startups.Startups need funding, credibility and advice where as corporate partners look for innovative ideas, exposure to startup talent and investment opportunities.
- Corporate partners and companies do not benefit immediately from their collaboration with startups. This is because many of the startups ideas might not be strategically relevant to the companies.Hence most of these ideas will not turn out into long term projects.Successful collaboration between startups and companies have happened only when there are individuals assigned whose formal role is to act as an interface between the startup and companies to execute projects.
- The digital technologies to watch out in future and that has potential to create maximum disruption is Artificial intelligence and Machine learning, followed by Blockchain and IoT.
- Companies have multiple options to deal with impact of technologies on their business models – Partnerships, Corporate board engagement and Startup Accelerators.