The technology opportunity

Bruno Schenk, September 2022

Technology, Technology, Technology – but how much do we really need?

The advancement of technology is, in my view, one of the most important aspects of our society. From stumbling out of caves to boarding trains, planes and cars – and now autonomous vehicles – transportation is just one of a million examples where technology has helped us excel. Healthcare, education, agriculture and technological advancement in general are the fuels that make us better today than we were in earlier times.

At a business level, the digital age has seen us collectively speed up every conceivable process. Today, literally trillions of data transactions happen every second, replacing millions of legacy manual processes that unlock new ways of providing goods and services for the 7.7 billion people across our planet. Also, new technology is becoming more sustainable as the energy consumption, production processes and materials that they use are much greener and more environmentally friendly. Increasingly, brands and companies will offer modern financing and replacement models for products and services once they no longer work. You might think at first that this is all about profit, yet it’s also reminding us to reuse, return, recycle, refurbish and even buy less. The latest remarkable project I have seen has come from On , a Swiss shoemaker for runners. Two years ago I signed up for a project called “Cyclon - shoes made out of beans, which you will never own” – and two months ago I received my shoes, based on a subscription, with the option to get them exchanged whenever they are broken or too worn out. ON’s ?idea with the Cyclon project, is to manufacture products which are lean and green. Cradle to cradle is a massive innovation and a big step forward – as they say: Run. Recycle. Repeat.

Value (ROI) first, technology second

Before you think of me as a Luddite, let me qualify this statement by saying that technological innovation,?just like?research and development, must always be tied to a return on investment. Sometimes, that return on investment is not immediate. And in the case of pure research, like The Large Hadron Collider near Geneva, the gain might be a shift in our fundamental understanding of the universe. In my view, the most important thing when it comes to technological innovation is to think more broadly about the goal rather than the technology needed to achieve it.

If we consider the last century, business technology investment has moved in two big waves. The first was the industrial revolution of physical plants such as machinery to make things faster, better or cheaper. The second half has seen the introduction of digitalization to help businesses improve the ways in which they create, manage and sell goods and services. The rise of ERP platforms like SAP and e-commerce are great examples. Yet, as we progress further into the internet age, we are more focused on areas such as software. From intelligent tractors ploughing the fields to ride-sharing platforms, it is the ability to gain advantages such as agility, automation, and speed through powerful software platforms that decides the success of so many businesses.

The benefits of technological innovation are also highly dependent on how it is applied. For example, in the 1990’s, most large enterprises either built or rented large data centers to deploy servers running their core applications. If you look at the latest data from analysts like Gartner, private data centers are declining as more firms turn to hyperscalers offering cloud and SaaS with the advantages of OPEX over CAPEX, scale, resiliency and faster time to market.

Staying ahead of the game

Another answer to the question: "How much technological innovation do we need?" might be?“Just enough to keep us advancing at the pace of our peers in the industry” – and sometimes to stay ahead of an unexpected new entrant into the market. We all need to be open for changes or even disruptions in the ecosystem - here probably technology, the value creation and people habits will be changed in the most extreme way.

Take, for example, the humble taxi. Although starting with the horse-drawn carriage, the first gasoline-powered vehicle with a taximeter entered service in the late 1800’s. While vehicles have gotten more comfortable and faster, the business model has stayed roughly the same for 150 years. Yet in just 13 years, Uber disrupted an entire industry that McKinsey estimates is worth just under half a trillion dollars with clever software, an indigenous business model and the ubiquity of smartphones. The traditional taxi industry failed to keep up with technological innovation and is being forced to adapt – quickly!

This might sound like an extreme example, but it happens every day, across hundreds of industries where intelligent investments in technology can push one company ahead of its rivals. Whether it’s better delivery, improved customer service, more product reliability and increasingly meeting the needs for sustainability in a climate crisis world that is fast running out of resources.

The answer to the question of how much technology innovation we need is not a simple one – but in essence, we need as much as we can to gain a competitive advantage. Or potentially, enough to turn a great idea into the next iPod, Google search, Uber, or whatever game changer comes next. Like I said before, one of the most important aspects to consider is ensuring that whatever is produced is more green, sustainable and reusable and it creates great value.?

Challenge and adapt.

But how do we make these decisions? I would argue that it takes a lot of critical thinking and data. It means being aware of what your industry is doing – even cross-industry developments, such as advances in artificial intelligence or emerging platforms like edge computing. It might also mean gaining advice from external sources. We have teams at Atos that do exactly that for our customers – to challenge, advise, and often take a defined need and use the application of technology to deliver an outcome. But crucially, this must be geared towards a return on investment. Whether it's financial saving, supporting sustainability e.g. with less power consumption, business improvement, or even a radical idea that could change the course of your entire organization.

There is one final ingredient: Vision. Our Chief Technology Officer, Sophie Proust exemplifies many of these visionary qualities, and I asked her to contribute on the concept of technological innovation:

“The use of technology in digital transformation is a journey where we have moved from managing things (ERP), replicating the physical world (emails), optimizing (smart cities) and now augmenting our traditional world with the characteristics of the digital space. Digital is adding to our world a new dimension that completely transforms our ways of operating (in a hybrid virtual/physical world), relating (human and robotics), making business (raise of data economy) and being (virtual expressions of our human existence).

For me, there is a race between usage and technology, one is sometimes ahead of the other, but both are constantly pushing each other: AI has been there since the 1960s but was enabled thanks to computing power very recently; on the other side, take virtual medicine appointments, technology was there, but before COVID such an experience was not acceptable. What is key for me, is to consider in the design of technology as an approach that is driven with an ecosystem: a lean and sustainable mindset. Research needs to continue even if use cases are not there to sustain its application, the race between usage and technology needs to carry on!”

Technology innovation is not a “one size fits all” baseball cap. It requires subtlety, proper application, industry nuance?and courage. The last part is critical, as it takes courage to admit that we can always do better than we did yesterday. Investing in new technology and being ready to adapt to new ways of doing things is not always easy. But in the modern world, standing still is simply not a viable option.

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What are some key takeaways from your own technology experience? Please feel free to share and discuss in the comments below!

Disclaimer; Content Bruno Schenk and pictures Gettyimages, licensed via Atos