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How Businesses Can Unlock Potential for Innovation

Innovation

Digital disruption appears to be the new constant across the world of business. From changing how enterprises interact with customers, to accelerating the pace of production and transaction, this phenomenon has rapidly changed the way companies innovate and grow, only to plateau once again and then repeat the same process.

Taking into view how organizations can adapt and respond quickly to ongoing technology disruption, a new report by Deloitte captures the intersection of digital technologies, human experiences, and increasingly sophisticated analytics and artificial intelligence (AI) technologies in the modern enterprise. (Read the full report here).

As more organizations are exploring how they intersect to create greater value from disruptive technologies, Deloitte expects to see more CXOs working together to develop new flexible approaches for funding innovation at the speed of Agile, the report says.

“Technology is the number-one differentiator for businesses today and that will only accelerate in the years to come as even more powerful innovations take hold,” says report author Scott Buchholz, emerging technologies research director and public services CTO at Deloitte Consulting LLP.

“The most successful businesses today are combining cutting-edge technologies like machine learning and IoT with disruptive IT architecture and supercharged talent to create entirely new ways of working – and they already see the benefits,” says Buchholz. Presented below are some of the key takeaways of the report:

Digital Twins – Bridging the Physical and Digital

The idea of using virtual models to optimize processes, products, or services is not new. But organizations are finding that increasingly sophisticated simulation and modeling capabilities, power visualization, better interoperability and IoT sensors, and more widely available platforms and tools is making it possible to create simulations that are more detailed and dynamic than ever.

Digital twins can increase efficiency in manufacturing, optimize supply chains, transform predictive field maintenance, aid in traffic congestion remediation, and much more. Organizations making the transition from selling products to selling bundled products and services, or selling as-a-service, are increasing use of digital twins.

“As capabilities and sophistication grow, expect to see more organizations use digital twins to optimize processes, make data-driven decisions in real time, and design new products, services, and business models. In the long term, realizing digital twins’ full promise may require integrating systems and data across entire ecosystems,” says Buchholz.

Ethical Technology and Trust

Leading companies are realizing that every aspect of their organization that is disrupted by technology represents an opportunity to gain or lose trust. They are approaching trust not as a compliance or public relations issue, but as a business-critical goal to be pursued. In this light, trust becomes a 360-degree undertaking to ensure that the many dimensions across an organization’s technology, processes, and people are working in concert to maintain the high level of trust expected by their many stakeholders, the report observes.

Business leaders are reevaluating how their products, services, and the decisions they make—around managing data, building a partner ecosystem, and training employees, among others—build trust. CIOs are emphasizing “ethical technology” and creating a set of tools to help people recognize ethical dilemmas when making decisions on how to use disruptive technologies. Leaders who embed organizational values and tech ethics across their organization are demonstrating a commitment to “doing good” that can build a long-term foundation of trust with stakeholders, it says.

Finance and the Future of IT

As technology strategy has increasingly become a core part of business strategy in organizations, the demand for improved outcomes has grown. To achieve this, we expect to see more IT and finance leaders working together to develop flexible approaches for innovating and operating at the speed of agile. Whether under the name of supporting innovation, defending against disruption, or enabling digital transformation, IT will need finance’s support to effectively rethink governance of technology innovation, adapt to agile methodologies, and secure creative capital.

The work of transitioning to new finance, budgeting, and accounting processes that support innovation will not happen overnight, says Deloitte report. However, there are strong incentives for both CIOs and CFOs to find ways to effectively fund innovation. Some companies are already embracing this trend and are exploring possibilities. They are at the leading edge and will likely be the first to enjoy the competitive advantages that come when finance funds innovation at the speed of agile.

Human Experience Platforms

A growing class of AI-powered solutions — referred to as “affective computing” or “emotion AI”— is redefining the way we experience technology. In the coming months, more companies will ramp up their responses to a growing yet largely unmet demand for technology to better understand humans and to respond to us more appropriately, say the report authors. Historically, computers have been unable to correlate events with human emotions or emotional factors, but that’s changing as innovators are adding an emotional quotient (EQ) to technology’s IQ, at scale.

By combining AI, human-centered design techniques, and technologies currently being used in neurological research to better understand human needs, human experience platforms will be able to recognize a user’s emotional state and the context behind it, and then respond suitably. Indeed, the ability to leverage emotionally intelligent platforms to recognize and use emotional data at scale is one of the biggest, most important opportunities for companies going forward.

Architecture Awakens

Growing numbers of technology and C-suite leaders are recognizing that the science of technology architecture is more strategically important than ever. Indeed, to remain competitive in markets being disrupted by technology innovation, established organizations will need to evolve their approaches to architecture—a process that can begin by transforming the role technology architects play in the enterprise. In the coming months, we expect to see more organizations move architects out of their traditional ivory towers and into the trenches. These talented, if underused, technologists will begin taking more responsibility for services and systems. Likewise, they will become involved in system operations.

Investing in architects and architecture and promoting their strategic value enterprise-wide can evolve this IT function into a competitive differentiator in the digital economy, the study shows.

The Road Ahead

There’s growing interest among enterprises in looking beyond what’s new to what’s next, and no wonder—an understanding of what’s coming may inform early planning and enable relationships that could make reaping future rewards possible, the authors note.

The study notes that leading organizations have disciplined, measured innovation programs that align innovation with business strategy and a long-term technology landscape. They take a programmatic approach to sensing, scanning, vetting, experimenting, and incubating future macro technology forces—such as ambient experiences, exponential intelligence, and quantum—until the technology, the market, and the business applications are ready on an enterprise-wide scale.

The report authors recommend that other organizations should consider following suit, using the knowledge gained to transform their enterprises, agencies, and organizations before they themselves are disrupted. In a world of seemingly infinite unknowns, it is possible to focus attention on a meaningful collection of known technologies that, taken together, can help you chart a path to the next horizon.

“Technology is constantly in motion. Executives should take tomorrow’s cues from today’s trends. Evolving technologies are evolving out of today’s core trends, sometimes in unexpected ways, giving rise to new opportunities,” says Bill Briggs, Chief Technology Officer, Deloitte Consulting LLP.

“The trends of 2020s will disrupt entire industries and redefine business as we know it in the next decade, even as digital innovation becomes the norm for organizations of all sizes. Some of these trends may not come to fruition exactly as envisioned, but the technologies underpinning them will fundamentally change the way we work,” he concludes.

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Sohini Bagchi
Sohini Bagchi is Editor at Trivone Digital, a published author and a storyteller. She can be reached at sohini.bagchi@trivone.com