Digital value is no longer science fiction
It’s time to embrace the changes we’ve seen in the movies.
Editor’s Note: This is our first guest post on the NExT team’s Substack! Going forward, you’ll see other thinkers and tinkerers from Deloitte Consulting LLP share their own field notes from the future on occasion to broaden our perspectives. Onward, together.
We’ve all seen the sci-fi movies: Terminator. Minority report. Ready Player One. Emerging technologies capture the imagination. That includes the amazing potential to build realistic robots, predict future outcomes, and enter virtual worlds. At the same time, these movies often voice our fears about dystopian tech futures: gnawing concerns of robots overtaking humankind, moral quandaries around acting on predicted outcomes (versus actual ones), and debates over the psychology of living in the real world versus the virtual.
Those questions aren’t just fodder for the cinema. We now live in a world where AI and the metaverse are here, and our global leaders are actively debating in the private and public sphere, all the way to the United Nations, on these very issues. Imagination may have helped us prepare for a better future, but that future, in some ways, is upon us. And we need to deal with the change.
While the potential to innovate and create value from technology is certainly present in droves today, there’s a natural human instinct to resist the turning tides.
Change management is hard, especially when there’s so much that workers and citizens may not know about technologies and how they work. In fact, even technologists do not know all the ways in which emerging technology will disrupt our status quo.
Organizations are bracing for these challenges and seeking ways to embrace digital transformation. Our team’s research found that Fortune 500 companies with a tightly knit transformation plan (comprised of a solid digital strategy, forward-looking tech investments, and you guessed it: change management) have as much as a $1.25 trillion upside, while the downside risk is as much as $1.5 trillion. That’s a $2.75 trillion differential between getting digital transformation right and wrong.
So: What does successful digital transformation look like? And how can organizations assess that they’re getting the value they want, or need, from their investments in emerging technologies?
Luckily, we've got more research to answer that question. We recently published a report that details three simple categories for businesses to consider when evaluating their investments in technology and the change it brings.
First, consider how a given technology investment is optimizing existing value your organization has achieved. Study measures related to increased efficiency, productivity, operating margin, and ROI, among others. Most organizations tend to do a good job here.
Second, evaluate whether the technology investment enables you to preserve and protect value for your organization. Here, it’s more of a mixed bag. Some organizations do a good job of measuring risk. However, there are many other areas that organizations can and should be thinking about, such as how to measure trust, benchmark progress related to tech integrity, and answer ethical questions about a technology’s impact.
Third, find out how your technology investments support your ability to create net new value through growth and innovation. That might mean revenue, workforce equity, or another measure entirely. This is where most organizations fall short, as technology investments (unless closely tied to the enterprise strategy) are seldom linked to topline objectives, despite nearly every company now being a technology company.
Emerging technologies bring with them so many different new capabilities on their own, which becomes exponential when combined. While it can be difficult for organizations to keep up with that pace of change, having a solid strategy can serve as a north star as companies feel (to quote the ever-poetic Ed Sheeran) “lost within a stormy ocean.” It all comes down to finding the right business case for cutting-edge technology, one that harnesses its potential while building with integrity.
To bring that idea home, let me end with a recent marketing example that caught my attention: Jennifer Lopez became an early adopter of generative AI with “JenAI,” a virtual version of the entertainer that customers can program to create custom invitations to cruises. Issues of IP and copyright abound with large language models, but businesses who work with content creators and compensate them are seeing the value-driving forest through the trees. They’re finding ways to embrace today’s changes while avoiding the pitfalls we know all too well from the movies. The science fiction of years past is no longer fiction, nor is it hardcore science practiced by PhDs – it’s the tools we’re using here and now. Is your organization ready to embrace the change?
- Diana Kearns-Manolatos, Research Lead, Deloitte Center for Integrated Research
Have a question or comment you’d like to share with the editor? E-mail usnextteam@deloitte.com - we’d love to hear from you!
Other Glimpses of the Future:
Of course, we have to talk about LK-99: On July 22, 2023, a team of Korea University researchers published notes on the potential breakthrough discovery of a new material known as LK-99, in a piece titled “The First Room-Temperature Ambient-Pressure Superconductor”.
A superconductor, by definition, is any material which can conduct electricity with zero resistance. Currently, superconductors are utilized in MRI machines and quantum computers, but require extremely cold temperatures to operate. A room-temperature superconductor would pave the way forward for immense changes to energy systems, such as lossless power grids, levitating trains, and nuclear fusion reactors. Once news of this potential spread, research teams across the globe began replication efforts to evaluate the legitimacy of LK-99.
Unfortunately, the science has spoken, and claims of LK-99’s conductivity have turned out to be greatly exaggerated. Building the future is rarely a linear process, and incidents like these that energize the worldwide science and technology community are still important steps toward a shared goal. And who knows? Something about near-discovery may lead to the real deal.
Now, some other glimpses of the future:
The Workers Behind AI Rarely See Its Rewards. This Indian Startup Wants to Fix That
It looks like the Batmobile, works on solar energy, and could be the future of cars
Special thanks to Benjamin Shore for contributing research and prose to this section.