Keeping up with trends in technology can provide genuine financial gains and competitive advantage. But when it comes to implementing technology that is clearly relevant and being applied elsewhere, there is often a lag. The reason? Skills shortages and risk aversion, both combining to keep many firms off the pace around maturing trends like big data, let alone emerging ones like artificial intelligence and the internet of things (IoT).
That is a key out-take from the “Trends vs Technology” research carried out by Capita in partnership with Cisco. Surveying 125 business ICT decision makers across finance, insurance, legal and manufacturing, it found a clear recognition of the role of technology - 86% agreed there were financial benefits to be had from responding to trends and 86% that they could gain competitive advantage within their business.
But converting this vision into reality is a different matter - big data, for example, which 90% said was relevant to their industry, is only being implemented by 64%. For IoT, the gap is between 70% seeing its relevance and 30% who are implementing it, while with artificial intelligence, half (50%) see the relevance, but only one quarter (25%) believe their industry is adopting it, with just 8% having a live project in their own business.
“I still feel that analytics is not mainstream, but is a real cottage industry. It is very early in its lifecycle,” noted Adam Jarvis, managing director, Capita Technology Solutions when discussing the survey findings with DataIQ. “Insurance has been an early adopter of IoT and is at the forefront of analytics, but in other areas it is less well developed. Certain sectors have been strong adopters, whereas others are weak - it is not consistent. What works for an organisation that has one culture, doesn’t necessarily work in another even when the approach they use is the same.”
He believes that some of this opportunity gap is the consequence of differing investment strategies between UK companies and those in the US and Far East. Many of the 12 technology trends considered in the survey are being driven by American or Asia-Pacific manufacturers and developers, rather than originating domestically. This helps to explain the sense that trends like big data, AI and IoT are happening “out there” in the broader business world or elsewhere in industry, whereas actual implementations “in here” within the organisation are less developed.
Cloud-based solutions showed the highest level of adoption at 56%, reflecting a shift in mindset within those ICT decision makers. “The natural risk aversion of IT departments is reducing and there is more willingness to innovate. So the figure is no surprise,” says Jarvis. Cloud-based services have a lower upfront capital cost, which means the business can innovate at less risk. This is becoming vital for projects originating out of new areas of the organisation.
“As technology advances, especially with the internet of things, the distance between the technology required and the benefit it delivers is growing wider as that technology becomes more complex,” he says. “With IoT, there is no obvious case as to why or how it helps the business. The time and effort to integrate that can also be considerable. It is possible that companies have not invested because they are concerned about the disruption to the business.”
While hype may cause decision makers to be sceptical about some of the trends considered, such as 3D printing, pressure to adopt others is growing from within their own organisation, let alone the broader business world. “There is a tectonic shift in the benefits to be gained from technology towards areas of the business that have not had a great level of interest in IT. So there is also a gap between areas of investment and areas of the business which have a greater appetite, because they are different sets of people,” says Jarvis.
That only serves to emphasise one of the biggest barriers to adoption which emerged from the research - a lack of skills. Two-thirds of respondents (66%) said they do not have the skills to implement a big data project, despite this being the most relevant trend, with 69% lacking the skills to capitalise on the data collected. This gap is even higher for IoT, with 71% identifying a lack of skills to identify the opportunity, 74% saying they do not have the skills to introduce an IoT project and 80% not being properly skilled to capitalise on any data which might result.
Jarvis says the issue is often one of data silos which require specific knowledge: “Often that data is living in different areas of the organisation to the ones that need it. Each might not have the skills to understand the data presented - that is a training issue. There is also the fact that more people in the business want access to increasing volumes of data.”
He also recognises that it is very challenging for technology practitioners and decision makers to keep their skills sets up-to-date. “The pace of change of technology is relentless. You can invest in a particular infrastructure and in two or three years’ time things will have moved on. For example, with IoT capabilities, you typically need to change the underlying infrastructure in order to get it operational despite the absence of a clear business case,” says Jarvis.
For IT departments, there is a growing tension between their core task of keeping operational systems running and responding to new demands from areas of the business which might ultimately become the new core. (Think how manufacturers are transforming into service businesses through providing equipment, from printers to airliners, on a per-click or per-flown-mile basis and you get the idea.)
That does create new commercial opportunities for a company like Capita Technology Solutions which has a long track-record of supporting both existing infrastructures and also helping to drive transformation. “There is a huge opportunity for us to develop services that help businesses and in engaging with different departments in the business so they can gain a return on investment from this new technology. That is different to the services we have traditionally offered,” acknowledges Jarvis. His company’s work with NHS Trusts, where it is taking big data sets to provide strategic insight and support around resourcing planning, is a good example.
Aligning the investment cycle with technology trends is no easy matter. Firms like the ones responding to the survey will need to decide where they want to set the balance between the potential benefits of emerging technology trends and their aversion to the risk of investing in unproven solutions. For Jarvis, it is clear that this is a big stakes game: “The current cycle of IT is the most challenging it has ever been, but that creates the greatest opportunity.”