According to David Cearley, Vice President and Gartner Fellow, “The continuing digital business evolution exploit new digital models to align more closely with the physical and digital worlds for employees, partners, and customers.” He adds further, “Technology will be embedded in everything in the digital business of the future.”
Emerging technologies have a significant potential to disrupt various industries at scale. CIOs and executives know that this is the time to invest in such technologies to grow their business and stay competitive. But it is difficult to gauge the value and impact of the technology for a specific business or industry until it is put to work.
To avoid the guesswork, it is useful to examine various technology trends derived from thorough research conducted by leading analysts and technology companies.
Let’s look at the business impact of some key technology trends.
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” Don & Alex Tapscott, authors Blockchain Revolution (2016)
Today, more than 300 million transactions later, assets worth more than $270 billion are being managed by this distributed ledger technology. But as per the findings from leading industry analyst Gartner, the state of blockchain adoption and deployment is massively hyped.
According to the 2018 Gartner CIO Survey, only 1 percent of CIOs reported that they have implemented blockchain technology, and only 8 percent of CIOs were in short-term planning or active experimentation with blockchain.
The PwC’ 2017 Global Digital IQ survey shows some interesting insights on how the adoption of blockchain compares with other emerging technologies.
Only 3% of the respondents are making a substantial investment in Blockchain, and that is the least compared to the other technologies.
The study further breaks down the blockchain investment by industry.
Hospitality and leisure firms under gaming and sports category, commercial banks, capital markets and asset management firms are the top investors in blockchain technology. They expect to achieve reduced risks, fraud and operational costs for various transactions and record keeping.
Though blockchain has broader potential, it is perceived as disruptive mainly for the financial industry, considering its implication for various operations such as cross-border payments, smart contracts, and online identity management.
However, the adoption of the technology is still far from the mainstream in financial services as it currently does not have adequate scalability, performance tracking mechanisms, operational flexibility and manageability and wider functional scope.
Robotic Process Automation technology automates repetitive, rule-based, time-consuming operations that are manually performed by humans. Enterprises have already realized reduced operational costs, increased speed and agility and quick ROI with enterprise-wide RPA implementation. Moreover, when RPA is integrated with core existing systems, it delivers enhanced process control and visibility.
According to Grand View Research, the current global market for RPA is worth $125.2 million, and it is expected to grow to $8.75 billion by 2024.
Let’s have a look at its global adoption trend.
As per the Deloitte’s Global RPA Survey 2018, which covered over 400 respondents from around the world; continuous improvement and automation remain at the top of the strategic agenda for many companies.
Key findings of the RPA technology adoption:
RPA technology has delivered measurable successful results primarily for Banking and Finance, Insurance, Manufacturing and Healthcare industries.
If we talk specifically about the financial services; several dozen US financial service industry professionals, actively engaged with RPA, were surveyed by PwC in 2017. As per the survey, 11% of the total respondents find themselves “leading” with enterprise-grade adoption, and another 19% are heading in that direction.
So undoubtedly the adoption of the RPA technology is rising, and it has been accepted as an organizational game changer.
But as no technology remains static, RPA is also moving to the next level of evolution in digital labor, in terms of intelligence and sophistication which is called Intelligent Process Automation (IPA). IPA combines Artificial Intelligence and Machine Learning to allow intelligent bots to learn from users’ prior decisions and auto-adjust themselves.
With IPA, robots can replace manual tasks (Robotic Process Automation), interpret text-heavy communications (Natural Language Generation), make rule-based decisions that need not be pre-programmed (Machine Learning), offer customer-centric suggestions (Cognitive Agents), and provide real-time tracking of handoffs between systems and people (Smart Workflows).
This leads us to another emerging technology – Artificial Intelligence (AI).
Artificial intelligence (AI) is intelligence demonstrated by machines that work and react like humans. Computers/machines with artificial intelligence are designed for speech recognition, learning, planning, and problem-solving abilities.
AI is an incredibly broad term that simply means making computers act intelligently. It encompasses subfields such as machine learning, robotics, natural language processing, general intelligence etc. A few examples of such AI-based applications are voice-powered personal assistants, suggestive searches, and autonomously-powered self-driving vehicles having predictive capabilities.
According to the latest market research report, the artificial intelligence market is expected to grow from USD 21.46 Billion in 2018 to USD 190.61 Billion by 2025, at a CAGR of 36.62% between 2018 and 2025.
As the new generation of AI applications is based on the foundation of digitization, leading sectors in digital tend to be leading sectors in AI and are expected to drive the growth. While digital giants such as Google and Baidu dominate the AI investment with heavy spending on R&D, AI adoption outside of the tech sector still remains at an early, often experimental stage.
According to the Mckinsey Global Institute’s survey of 3000 AI-aware C-level executives, across 10 countries and 14 sectors, only 20 percent said they currently use any AI-related technology at scale or in a core part of their businesses. Many firms say they are uncertain of the business case or return on investment. A review of more than 160 use cases shows that AI was deployed commercially in only 12 percent of cases.
If we talk about the business value of AI across all the enterprise vertical sectors, there can be three different sources; namely customer experience, new revenue, and cost reduction, as per Gartner Inc. The analyst projects the global business value derived from AI to reach $1.2 trillion in 2018, an increase of 70 percent from 2017.
High-tech, telecom, and financial services sectors are the leading adopters of AI technology, having the most aggressive investment intentions.
Financial services are more likely to use AI in customer experience – related functions, while other firms in retail, healthcare, electric utilities, manufacturing, and education are using AI to improve forecasting and sourcing, optimize and automate core business operations, develop targeted marketing and pricing plans, and enhance the user experience.
Early adopters of RPA, Blockchain, and AI are already creating competitive advantages. Irrespective of any technology, businesses are required to address many elements of a digital and analytics transformation for a successful program; identify the business case, set up the right data ecosystem, build or buy appropriate technology tools, and adapt workflow processes, capabilities, and culture.
If you’ve started your digital transformation journey and are analyzing disruptive technologies for your business growth, register for our on-demand webinar on ‘How to leverage Robotic Process Automation (RPA) with Blockchain technology?’