Fast-forward to future opportunity: exponential technologies on the horizon

As part of Deloitte’s eighth annual Technology Trends report, we sat down with Michael Rosemann, Professor and Executive Director, Corporate Engagement, at Queensland University of Technology to get his take on the impact of exponential technologies on the horizon. Here’s what he had to say.

It is difficult to think in forward-looking, exponential terms because it is a challenge to comprehend the speed and scale at which things are going to develop. A company created today might have one billion customers in five years.

As a university, we need to consider what we teach students to enable them to think and design in exponential terms. It requires defining “What does exponential really mean?” from the onset, then sharing business models, design paradigms and tools that capitalise on a capacity for scale.

Transformation management in exponential times

An exponential organisation must have ‘direct network effects,’ that is, it gets better the bigger it is. The model typically hinges on community-based business models based on customer to customer interactions, such as for platform providers. Indirect network effects then facilitate revenue models by capitalising on this community with relevant third parties.

Purpose-led innovation is crucial. Leaders need to be in the driver’s seat and have a clear, technology-independent understanding of the direction of the organisation often far beyond the boundaries of established industry sectors.

While Industry 4.0 is about extreme digitisation within an industry, an emerging Industry 5.0 model is about the blending of value propositions across industries. For example, an asset comes with an in-built insurance service or the visualisation of a gamified and virtual sports reality is provided by a professional visualisation company.

Another example is a Brisbane utility company that realised the data it collects offers opportunities in the health care sector. They can, together with their business partners, measure and create data through new technologies that could diagnose diseases such as kidney failure and provide the information back to the customer at a minimal cost. Technology is allowing the utility provider to step outside the traditional business model by developing ‘smart toilets’.

Companies will need to not just explore the desirability, viability and technical feasibility of their new innovations, but also to consider ethical and regulatory considerations. In an environment where increasingly policy follows delivery, exponential environments can operate within an increased periods of uncertainty for which we lack governance models.

Leapfrogging

Exponential environments increase the gap between digital and non-digital business models. It is important to boost transformational performance, that is, to reduce the internal innovation latency which is made up of the time it takes to identify new digital capabilities, to assess the relevance of these and to build and roll-out, where relevant, new products and services.

The faster and the more exponential the speed of change is, the more frequently organisations need to conduct environmental sensing.

Often the only way to cope with the speed of exponential change is by leapfrogging between technologies; taking three steps at the same time, as shown by start-ups who enter markets without legacy.

The art of leapfrogging needs to become part of the transformational capability of organisations as widely used agile approaches will probably not be sufficient. For example, the utilities company created the dedicated role of a Chief Opportunity Officer who identifies and manages new revenue opportunities.

E-Bay for data and the rise of data economists

The exponentially growing amount of data increasingly creates an over-supply of digital assets with monetary value beyond the organisation. Data created by the modern car, for example, has the potential to be valuable to the transport, construction, and manufacturing industries. Companies that want to capitalise on these digital assets will require data scientists as well as data economists who can assess the commercial value.

We are increasingly seeing well-orchestrated bilateral arrangements based on data exchange such as between utilities and health care, or airlines and banks (to exchange information about customers who will use their credit card overseas). However, we still lack data trading marketplaces.

New wave of skill sets

The opportunity-rich environment of the digital, exponential age has already had a tangible impact on the new generation of talent.

Students are increasingly striving towards entrepreneurial career pathways and typical fulltime employment is increasingly replaced by a plethora of micro-revenue channels and part-time/project-based employments.

However, entrepreneurship is much more about design than analysis and as such we need to complement the problem-centred toolset born in the age of automation (lean management, six sigma, workflow management) with nurturing mindset and toolsets ready to embrace exploration, design, inspirational leadership and entrepreneurial thinking. Exponential times mean that it will get increasingly difficult to predict the mid- and long term future. Agile, adaptable minds are needed.

In response, the education sector itself has to make a big shift from competing on production of content to the (mass) personalised curation of content.

Towards longevity

The often ignored factors of the successful exponential organisation are ethical considerations and the regulatory and policy implications, particularly in sensitive domains such as biotech. Products with significant social implications must address the challenges to be viable. The emergence of companies such as Uber and Airbnb showed governments that they need to be more agile in policy development to keep up with the pace of the digital age. Personally, I believe there is a lot to be learnt from agile software development when redesigning policy development processes (minimum viable policies).

The rise of digital identities (bring your own data) and big private data are two other emerging issues that need to be considered and appropriately governed.

 

Dr Michael Rosemann is Professor for Information Systems and the Executive Director, Corporate Engagement, at Queensland University of Technology. He is also the Honorary Consul for Germany in South-East Queensland.

Dr Rosemann’s work is focused on creating exciting future worlds with today’s possibilities making current practices obsolete. He is globally known for his contributions to revenue resilience, opportunity management, digital mindfulness, a BPM maturity model and innovation systems.

As Head of QUT’s Information Systems School he established the Woolworths Chair in Retail Innovation, the Brisbane Airport Chair in Airport Innovation and the PwC Chair in Digital Economy.

Dr. Rosemann is the author/editor of seven books, more than 250 refereed papers, Editorial Board member of ten international journals and co-inventor of US patents. His publications have been translated into Russian, Mandarin, German and Portuguese. His research projects received funding from industry partners such as Accenture, Australia Post, Infosys, PwC, Rio Tinto, SAP, Suncorp and Woolworths. Michael is a frequent, global keynote speaker and provides advice to organisations from diverse industries such as telecommunication, finance, insurance, professional services, utility, retail, public sector, logistics and the film industry.


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