Digital transformation is everywhere. New technologies are changing the way we connect, compute, and collaborate to previously unimaginable levels.
Unfortunately, the process of digital transformation itself has already become overhyped across the technology media spectrum and in countless conference keynotes and presentations. How do we decide what deserves our consideration, and what’s just hyperbole?
SAP has attempted to drill down into the real nature of digital transformation in the enterprise with a Forrester Consulting survey designed to highlight the technologies that matter most. SAP is calling these still-new parts of IT “innovation technologies.”
It may be a while before we use this label to denote the real mechanics of digital transformation, but SAP’s decision to work with Forrester to analyze the effects of the current “big five” could give us a much-needed benchmark.
In the Forrester survey of more than 740 respondents, up to 93% of companies agreed that innovation technologies are key to achieving digital transformation goals.
The core technologies heralded as most important for digital transformation initiatives to be successful are the Internet of Things (IoT), artificial intelligence (AI), machine learning (ML), augmented or virtual reality (AR/VR), and blockchain.
The survey criteria stipulated that participants must be actively implementing at least two of the big five. In terms of actual implementation the figures read as follows:
- Internet of Things: 92%
- Artificial Intelligence: 78%
- Machine Learning: 77%
- Augmented Reality and Virtual Reality: 70%
- Blockchain: 68%
So why are we concentrating on these five technologies and what do they typically bring to the organizations now looking to bring them online? Looking at the numbers is all well and good, but how do these platforms, products, and tool sets really change the way we do business? Let’s look at each one and answer that question.
Internet of Things (IoT)
The IoT encompasses new technologies including web-connected security cameras, machine equipment sensors designed to detect wear and tear, smart car parking bays that record capacity, and the use of digital twins to create virtualized software-based working representations of everything from industrial turbines to your office’s air conditioning system.
If you’re in the retail industry, for example, you can use IoT sensors for cross-selling, to deploy smart store technology to increase shopper value, or to react to supply chain changes in real time.
This isn’t the AI you knew from the 1980s sci-fi movies. In short, AI is the simulation of human intelligence and our brains’ abilities. It has now become a reality due to the coming together of three key forces. First, the post-millennial years have allowed us to grasp much more computing power (from storage, to memory, to processing speeds). Second, we have developed our ability to create massively complex levels of algorithmic logic. And third, we have access to big data sources.
When we combine all three factors, we can start to change everybody’s job with AI insights in a way that no human could ever hope to reasonably do for themselves.
If we accept artificial intelligence to be “intelligence” that humans have programmed into a system, then it’s easier to appreciate the difference between AI and machine learning. ML is an application of AI that creates intelligence for a machine brain (essentially, a software system) to be able to learn on its own through exposure to a job or task without being explicitly programmed.
Businesses can use this technology for anything from predictive maintenance to better understanding when there will be a peak in e-commerce traffic.
Augmented Reality and Virtual Reality
We’re already used to seeing gamers using AR headsets. Taking that technology to the workplace, we’re now able to train everybody from industrial engineers to paramedics and army cadets on how to interact in real-world scenarios that they have yet to experience firsthand.
Applications of VR follow in much the same vein with information presented as an “overlay” onto a view of the real world created by a camera lens. Where VR may become even more common is through its implementation in smartphone apps.
For those that would like a reminder, blockchain is best described as an immutable (i.e., robust, solid, and secure) ledger system that was originally developed as the unpinning for cryptocurrencies like bitcoin. Blockchain gets its strength as a result of its essentially distributed nature (for example, it lives on many computers). If one record is changed in one place, then that record needs to be updated on all the other machines, thus making it hard to fake, crack, or compromise.
Smaller custom blockchains can be used by companies looking to establish control of all types of information.
The Forrester survey suggests that organizations are increasingly optimizing existing processes to improve efficiency, extending processes to capture new value, and transforming business models to gain new revenue streams. There is also acute interest in platforms that can unify data collected by and used across all intelligent technologies and business processes.
ASUG’s 2019 State of the Community
As valuable as SAP’s market studies will always be, they always come with an inevitable element of corporate “big picture” positioning. As you will know, ASUG moves a little closer to grassroots-level, real-world implementations. Because of this, our own State of the Community study looks at how ASUG Members view and use emerging technologies, among many other areas.
ASUG’s breadth of questioning encompassed not just those organizations already in the middle of digital transformation, but also those without specific transformation programs. These are companies that have an innate interest in innovation technologies, but who are currently more routinely occupied with keeping the lights on in what are already established business operations.
Where ASUG Members Are Spending Their Time
According to ASUG’s Market Research Manager Adam Page, ASUG Members are spending almost 70% of their time executing current strategies, on average. This means that fully blown digital transformation (across the big five) is certainly likely (but not always realistic) for most of our members. ASUG was also able to break out the use of digital twin technologies over and above all the other IoT-related technologies being implemented throughout our membership base.
“Of course, AI is of interest. But it may not be feasible to actually implement. More of our membership (49%) is either focused on maintenance or infrastructure update projects than on digital transformation (37%),” Page noted.
What Work Do You Do, Really?
In what we hope may be a more realistic representation of the market, ASUG has found, when questioning people on what their job is really focused on, that 68% of members are focused on executing current strategies, leaving 32% focused on planning for the future.
There is clearly some distance between the wide-ranging use of AI-powered VR headsets and the realities that most organizations face today. We know that these technologies are around the corner, but how we are going to architect them into our daily operations remains to be seen.
Learn how your organization can turn to help from SAP Leonardo to solve challenges and improve your outcomes by adopting emerging technologies in this interview with David Judge, VP of SAP intelligent enterprise solutions.