Converge and emerge:

A roadmap for making the most of new technologies

Many organizations are at the early stages of applying emerging technologies, such as blockchain, robotic process automation (RPA), the Internet of Things (IoT) and artificial intelligence (AI). In our 2018 Risk in Review survey, 53% of Canadian respondents said they’re implementing new technology to improve existing products or customer experience. The survey also found 56% of respondents are implementing new technology to develop new products and target new customers. At the top of the list of technologies predicted to have the biggest impact in the near future is IoT, cited by 33% of respondents, followed by RPA, AI, robotics and blockchain.

These emerging technologies are changing business processes and how society operates. But when combined, they become more powerful and offer tremendous potential to support growth. What are the benefits of such a convergence, and what risks should organizations be aware of as they look to make the most of the opportunities from current technological advances?

Breaking it down

To better understand the opportunities from convergence, it’s important to have a firm grasp of what some of these emerging technologies are and what they can do. Imagine the four technologies working together like a car:

Robotic process automation 

Robotic process automation (RPA) allows organizations to automate traditionally manual, labour-intensive activities. Removing human involvement reduces error and frees up employees to focus on activities that add value. In the car example, the transmission is the RPA that, when functioning smoothly, allows the engine to power the tires more efficiently.

 

Internet of Things 

The Internet of Things (IoT) refers to devices with sensors that collect and exchange data. They can pick up information on an ongoing and real-time basis to help organizations make better decisions. Some industries are now able to access critical information, such as safety or environmental data, that they didn’t have in the past or get access to it in a more agile fashion. On a car, imagine lights and windshield wipers equipped with sensors that detect conditions and then interact with the other components to take action.

 

Artificial intelligence 

Artificial intelligence (AI) is the brain of the technology suite. It lets organizations better analyze information (perhaps made available by IoT sensors, secured by the blockchain and optimized by RPA solutions) to draw insights and make decisions. Increasingly, AI can help organizations make use of existing data to predict future outcomes. In our car analogy, AI is the engine.

 

Blockchain

Blockchain is, in essence, a distributed ledger. With multiple copies of the ledger spread around the world, blockchain allows for enhanced transparency and collaboration among participants. Most importantly, once enacted and processed, a transaction cannot be changed (also known as immutability). In our car example, on more advanced vehicles, blockchain is like the shell that provides the driver with enhanced safety and protection.

 

The power of convergence

This suite of emerging technologies offers many benefits, including enhanced transparency and immutability (blockchain), streamlined business processes with less error (RPA), access to timely data (IoT) and the ability to foresee customer needs (AI). Most organizations are still in the exploratory phase of these technologies. But it’s worth looking at the big picture to understand how they can interact to reach their full potential.

One possible scenario is smart contracts, which would use AI-powered blockchain to track the delivery and receipt of a good, with RPA and IoT also playing a role. For example, for perishable or high-value goods that need to be at a specific temperature, IoT sensors can be incorporated into the transportation cycle. If the temperature goes outside the specified range, the IoT device records the incident in the blockchain. The smart contract (AI) will then refuse to accept the delivery. But if the transaction meets all of the parameters, the AI tells the RPA system to issue a goods receipt. It then has the RPA software log into the bank’s automated system to pay the invoice.

 

Risks and challenges

In our 2018 CEO Survey, 67% of respondents said changes in technology would disrupt their business within the next five years. But it’s important to understand the business objectives of adopting breakthrough technology before jumping ahead and trying to fit a problem to it. Due diligence is essential. The risk considerations include:

 

Governance

It’s important to determine how these emerging tools fit within the organization’s larger technology infrastructure. A small group that gets excited and introduces a new technology without considering security or the bigger picture may expose the organization to new risks.

 

User adoption

Some people may resist emerging technologies due to the impact on jobs, changing processes and new ways of working. Providing training to help people boost their technological skills can raise their comfort level and increase user acceptance.

 

Security and privacy

These technologies raise a number of security and privacy challenges, particularly given the involvement of third parties and the growing focus on data protection and regulations. Through new channels that may circumvent traditional controls, many of these new tools make information available to more participants in a network. So organizations need to develop solutions that strike the right balance to achieve the benefits of enhanced transparency and collaboration while still meeting security and privacy requirements.

 

Where do you start?

With the pace of change and investment in emerging technologies picking up, many organizations will be wondering how they can start the process of adopting them. It’s important for organizations to:

Get up to speed

Organizations can start on the journey by educating themselves about emerging technologies. Invest the time and effort to educate teams about what the technology does, the potential risks and the controls that need to be put in place. For example, it’s important to maintain the principle of segregation of duties to address the risks of overlapping functions performed by an automated process.

Get a handle on governance

In a fast-paced environment, it’s important for executives to buy into the idea of building an agile governance framework, since traditional oversight models will create delays and barriers to entry and deployment. But while agile development techniques are often used in deploying emerging technology solutions, organizations need to strike a balance between moving quickly on rolling out a new service and making sure the right checks and balances are in place to prevent a mistake from becoming a disaster. Those that get ahead of risk and governance issues may be able to turn them into opportunities by shaping the evolving environment rather than reacting to it.

Take the journey

As organizations explore this convergence, they should keep up to date on how these technologies are evolving and be ready to adapt to even newer developments that may emerge. Given the speed of change today, organizations can never assume they’re at the end of their digital transformation.

Contact us

Jennifer Johnson

Jennifer Johnson

National Financial Services Leader, PwC Canada

Tel: +1 416 947 8966

Peter Hargitai

Peter Hargitai

Partner, PwC Canada National Digital Risk Solutions Leader, PwC Canada

Tel: +1 416 941 8464

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