The Metaverse: A New Space for Business

The?Envision Beyond Journal ?is a monthly publication of the?Intelligent Enterprise Institute, the think tank of SAP to help business leaders inspire and accelerate change.

This issue is about?The Metaverse. Read and discover new insights on how metaverse can go beyond the hype and have a deep impact on existing and new enterprise business processes and business models.

Don’t miss the?Food for Thought?and?Snapshots?sections below to hear from other perspectives!

by Thomas Eckert & Marco Cigaina

Can we leverage the metaverse to run enterprise business processes more efficiently, reflecting the reality of today’s hybrid working models, where people frequently switch between remote and onsite work?

Can the metaverse, a concept which has its roots in the gaming sector, and which is perceived by many primarily as the future of social media or entertainment, play an important role in the digital transformation of businesses and even unveil new business opportunities?

If you look at the current news and figures, the future of the metaverse is still undecided. There is still a lot of enthusiasm: for example, according to Gartner , by 2026, 25% of people will spend an hour or more in the metaverse each day. On the other hand, according to Crunchbase News , AR/VR funding is currently decreasing due to a lack of mass adoption. ?

First, let’s find a definition of the metaverse. There are many definitions out there, but what is common to most is the idea of persistent, shared, and interoperable digital spaces enabling virtual human interaction with an immersive user experience (e.g., via extended reality technologies). Beyond that, there are several enabling technologies which are part of the metaverse concept and sometimes also placed under the umbrella of the Web3 term (e.g., digital identity, non-fungible token?(NFT), cryptocurrency, decentralized autonomous organization?(DAO)).

Looking at this definition, the metaverse could influence the way people (as employees, consumers, and citizens) interact among them and with organizations. For example, business activities of employees, which require remote interaction are typical use case suspects for the application of metaverse technologies. We are talking about a segment which is nowadays covered with the well-known tools for remote collaboration.

But hold on a moment: Aren’t we a bit fatigued from remote working after Corona lockdowns and have a strong desire to meet people in person again?

Sure, but this will not remove the need for human interaction without physical presence in the future. In a globalized economy there will always be a need for this, and the hybrid working model is here to stay. The pandemic has accelerated the digital transformation of work, making remote work a widely adopted option.

However, there is still a lot of room for improvement regarding the true-to-life remote interaction experience. Here, the strengths of the metaverse concept like immersivity and 3D user experience could have an impact. Ultra-realistic avatars play an important role here. But also think of the way data is shared. For example, what if business data could be experienced and shared within a 3D digital space, in an integrated fashion, without cumbersome desktop sharing of 2D screens?

What we see already today, and what could be perceived as a first step towards the metaverse, are dedicated apps for specific use cases which provide immersive access to business data, be it for joint exploration or individual analysis. As an example, a salesperson could use augmented 3D models of real-world assets, enhanced with actual ERP data (e.g., supply time), to demo products in a much more visual way to customers. A virtual showroom with remote support from experts could make the sales situation even more appealing.

Moving forward, we expect to see more and more use cases and an increasing level of immersivity and interactivity. There will be an evolution from dedicated apps for specific use cases to an entirely interconnected metaverse consisting of integrated and interoperable spaces, where people can carry on their digital identity and context from one space to another and seamlessly transition between physical and digital worlds at any time.

However, to avoid the metaverse being felt as a de-humanizing dystopia, the degree of involvement in the digital space should be an individual choice: each of us, depending on the type of task, the circumstances, and – why not – our own temporary emotional state, should be able to choose the right amount of immersivity and interactivity of our own personalized digital workplace.

Let’s shift our view from individuals to enterprises. What could the metaverse concept mean for the value chain and business model of companies (e.g., the value proposition, customer channels and partnerships)? How might the Metaverse impact the way we run business processes?

A good starting point to answer this question might be a look at the sectors where we currently can see most metaverse activities. The picture below is one of many possibilities to cluster those sectors.

All those sectors include use cases, which could transform business processes or the business model of enterprises. Here are some examples:

Gaming, entertainment, and social media use cases are well known to most people, be it massively multi-player online games like Fortnite or virtual concerts of pop bands like ABBA or virtual meet and greets with vocaloids, just to name a few. With 230?million monthly users, Roblox an online game platform and game creation system, is the biggest virtual world in the metaverse.

The industrial metaverse is about to revolutionize the design and prototyping process by creating virtual collaboration spaces for engineers, where new products could be collaboratively designed based on digital twins. Factory lines could be planned, simulated, and optimized by visualizing digital twins of complete plants.

But even larger transportation networks could be visualized within a Metaverse by using digital twins of entire cities.

Customer experience, online commerce, retail, and marketing are areas where most enterprise use cases and prototypes can be observed today. This ranges from virtual showrooms, virtual shopping experiences with virtual fitting rooms for fashion, and NFT-based loyalty programs to omnichannel advertising and new digital brand experiences like the one from Gucci .

In the future, will it be equally common for enterprises to present themselves with a metaverse space as they do today with classic website content and contact options?

Moreover, core enterprise business processes could benefit from the metaverse. Today’s digital transformation often seeks to automate business processes as far as possible, with human activities reduced to a minimum, but there are (and will be) business activities that require human interaction, switching between digital platforms and live in-person communication.?

Here the metaverse can make a difference, as digital spaces facilitate human interaction and can make those interactions more efficient and advanced. An example is a virtual boardroom, where executives can meet virtually, review the latest business figures, and evaluate new market opportunities. Other employee roles could also benefit from virtual offices (e.g., Microsoft Mesh ), as these might allow them to access business data in an immersive way.

Education is another fit for metaverse capabilities. In the context of enterprise education, new employee onboarding and safety training are just two examples.

?“Native” metaverse business will arise as well. Examples are trading platforms for all kinds of digital goods and artifacts. Those goods can be used by people when interacting in digital spaces (e.g., digital avatars). Other examples are platforms where people can buy virtual pieces of land or apps for creating personal avatars.

The whole value chain of enterprises might become hybrid, just like the working model of people becomes more and more hybrid. Besides the traditional value chain we know from the physical world, we can expect a virtual value chain that spans any sort of virtual asset (currency, goods, etc.). As the metaverse concept implies that the virtual and the physical will merge, “inbound” and “outbound” mechanisms need to be in place to ensure transfers between both worlds are possible. For example, physical assets need to be transferable into the virtual world. One prominent way of doing this is the digital twin. Vice versa, virtual assets like NFTs should be transferable (sellable) into fiat currency (Dollar, Euro). We expect that enterprise information systems will need to evolve to enable these hybrid value chains.

Business networks deserve special attention within the metaverse context, as these networks are about the collaboration of several companies. This intercompany collaboration is partly based on automated data exchange but requires human interaction as well.?

Virtual business networks could transform the way enterprises interact with their supply chain members. Complex supply chains and their operations could be visualized in joint virtual spaces. Digital innovation spaces for collaborative virtual workshops could be used to jointly identify bottlenecks and optimization potentials.

We also expect that platform businesses (think of Airbnb, Amazon, and others) will engage with and facilitate interactions between their providers and consumers in virtual, interactive spaces in increasingly sophisticated ways.

Consortiums of complex projects could use virtual spaces for coordination purposes. Sustainability initiatives across companies could also be orchestrated in virtual, shared spaces where environmental data are effectively represented.

If you are interested in reading more about business networks and related developments, please have a look at this recent?Intelligent Enterprise Institute article.

Let us have a closer look at the sustainability aspect of the metaverse. Many enterprises seek to reduce physical travel of employees not only for time and cost savings, but also for achieving sustainability goals. The metaverse can help achieve those goals, but of course the carbon footprint associated with the use of computing power needs to be taken into account.

However, research indicates that the comparative environmental impact of physical travel is much more intensive (Technavio ). Enterprises that restrict physical travel to business occasions, where it really makes sense, and leave other meeting needs to metaverse encounters, can significantly reduce emissions.

We also think the metaverse has the potential to make the UN Sustainable Development Goals much more visual, tangible, interactive, and engaging. Let us imagine a digital twin of the whole planet Earth, which is universally accessible: companies would be able to simulate and see the impact of joint sustainability initiatives on the environment and citizens would be more effectively engaged in those! The potential impact of such a shared, interactive, vivid common view to accelerate the green transition and address climate change would be enormous.

Looking at the variety of potential use cases related to enterprise value chains and business models, the question arises how to identify scenarios where the metaverse might make a difference and could improve the way people interact when running their business. What criteria qualify use cases for the application of metaverse technologies??

At SAP we have developed a unique approach to identify high-value scenarios and explore high-impact metaverse cases.

Developed specifically for our customers, workshop participants will be guided through metaverse search fields and business patterns to apply these to their organization’s value chain and business model. Key guiding questions in this process are:

• Which people related to your business could engage in a shared digital space?
• What are the typical interactions these people could have within that digital space?
• What are the objects (digital twins) these people need?

The exploration process is animated by use case search fields and inspirational metaverse cards with practical examples and additional food for thought. Participants will explore their organization’s value chain, identify focus areas and generate unique metaverse use case ideas.

A canvas helps to describe identified metaverse scenarios at a high level before moving forward to low-fi prototyping.

Like any new technology, the metaverse must overcome the hype. To reach the plateau of productivity, both technology and use cases must further evolve and mature.

The convenient access to the metaverse via respective hardware devices is key for broad user adoption. This could be classic 2D screens (like gamers use), head-mounted devices (glasses) or a completely new kind of device. Although we have seen significant progress in this area, it appears like the perfect breakthrough device for immersive access to digital spaces is still not there yet.

But hardware devices will get smarter and support immersive user experiences beyond what we know from today's augmented reality and virtual reality devices. This could be a game changer for the whole sector, similarly to the invention of touch screens for mobile computing.

There are also still some limitations regarding the required infrastructure (computational power, network bandwidth and latency). This is at least true when we talk about lots of people sharing the same digital space at the same time or about very large 3D assets like digital representations of huge buildings (e.g., railway stations), including construction details. We can expect that 5G-Advanced and, even more so, 6G will address the connectivity requirements for a fully developed metaverse.

Standards need to cover interoperability and other topics like interactive 3D assets and photorealistic rendering, avatars, identity management, financial transactions and many more.

Building a pervasive, open, and inclusive metaverse at a global scale will require cooperation and coordination between a constellation of international standards organizations, including the Khronos Group, World Wide Web Consortium (W3C), Open Geospatial Consortium, OpenAR Cloud, Spatial Web Foundation, and others.

Because of the early stage of the metaverse concept and technologies, the exploration and design of metaverse scenarios is currently dominated by technical considerations. Typical questions are: What is possible? What can we already do today? What kind of photorealistic avatars can we use?

We expect that, over time, using metaverse technologies will become as natural as building mobile apps based on mobile technologies is today. On the other hand, questions related to the business value of the metaverse will become more important and respective methodologies and approaches are needed.

We believe the metaverse has potential to go beyond gaming, entertainment, and social media and could have a deep impact on existing and new enterprise business processes and business models. How this will precisely unfold is still unclear, yet one thing is for sure: the journey will require an intensive exchange of ideas, knowledge, and perspectives within the technology sector, among businesses, across industries and involving society at large.

We are curious to learn more about your opinion. Please leave your comments. We would like to know whether the following statement by the author Neal Stephenson, who coined the term “metaverse” in his novel “Snow Crash”, is true:

“A speech with magical force: nowadays, people don’t believe in these kinds of things… except in the metaverse, that is, where magic is possible. The metaverse is a fictional structure made out of code. And code is just a form of speech – the form that computers understand.”

• Let's start with what exactly the metaverse is. Read here a beginner’s guide to tech’s latest obsession from Singularity Hub.
• Beyond the hype here is a compelling business case for moving to the metaverse, says John Licata from SAP Future Hub.
• McKinsey & Company argues that "with its potential to generate up to $5 trillion in value by 2030, the metaverse is too big for companies to ignore".
• With the mission of moving from theory to practice, World Economic Forum explores the role of companies on defining and building an open and inclusive?metaverse.
• Is metaverse a distraction from our planetary problems or a promising direction to save the planet? Find out more from Forbes.

• The dedicated apps for specific use cases can be considered as the first steps towards the metaverse. Here is an example of an augmented reality app for service technicians of the BEUMER Group to execute an inspection visually, reliable and paperless. Watch the UX Design Award submission video below to get a snapshot of such a use case.

• Taking its roots from there; the metaverse continues to revolutionize the entertainment industry. Read here the story of a Vermont startup that could be the Disney of the metaverse and get inspired on which other business areas these technologies could spread to.

The?Intelligent Enterprise Institute?helps business leaders understand the transformative potential of different forms of intelligence and use it for their organizations and life. It provides a platform to inspire and accelerate change, supported in market trends and SAP’s vision to help the world run better and improve people’s lives. By generating new insights and bringing together unheard voices and unique perspectives from leading thinkers and doers of the world, the Intelligent Enterprise Institute aims to foster different qualities in enterprises and their stakeholders alike taking it into action for desirable outcomes.?