INSEAD Professor of Strategy Andrew Shipilov along with Assistant Professor Nathan Furr recently conducted a survey of 317 alumni and participants in the Executive Education programs on technologies that would have a major impact on business in the near future.
Big data analytics has had the biggest impact on business, according to the survey that covered mostly senior executives with around 50% working in large companies. It helped in the creation of new revenues, core business protection, improvements in operational efficiency, new customer acquisition, increased retention and loyalty of existing customers, says Shipilov.
Among the other technological innovations that transformed business are augmented reality, virtual reality, mixed reality, blockchain and 3D printing.
In the past two years, big data analytics, cloud and machine learning have all had a significant impact on business in the past two years, says Prof Shipilov, writing in the INSEAD blog Knowledge. Big data analytics seems to have changed almost all business areas Cloud computing primarily helped improve operational efficiency.
“Looking ahead to the next two years, however, our respondents expect that the use of artificial intelligence will increase in almost all business areas, except those concerned with the attraction and retention of talent.
“The use of cloud is likely to decrease, or reliance on cloud technologies may simply become more of a staple in all companies’ business models, much like smartphones today. Interestingly, the use of the Internet of Things (IoT) and blockchain is likely to increase in the next couple of years. The expectation is that blockchain might primarily help companies improve operational efficiencies while IoT might help them create new revenue,” he says.
Over the long term, in the next five years, Prof Shipilov expects big data, machine learning and artificial intelligence to have the most potential for disruption. The virtual and augmented reality, as well as 3D printing, would be the least disruptive while IoT and blockchain would be somewhere in the middle.
How would companies deal with new technology? They have three options—build competencies internally, form alliances and partnerships with others who have mastered them or make acquisitions. Less than a third of the survey respondents tried to implement a new technology on their own.
Almost 70% of them formed at least one alliance or joint venture involving the new technology. In e case of acquisitions, close to 70% of the respondents chose not to exercise that option. It was found that companies use partnerships as the dominant strategy for dealing with digital technologies.
Interestingly, the board of directors seem to be playing an important role. The board’s traditional function is to ensure compliance, manage risk and supervise the top management team. “However, over a third of our respondents (working for companies with a board of directors) indicated that their board strongly encouraged top management to pursue risky initiatives that could help reinvent the company’s business.
ALSO READ: INSEAD Employment Report: Average Annual Base Salary Up At $104,800
“This is an interesting finding: It seems that many companies are using directors as “innovation boards”. My own interviews with top management indicate that, in some companies, board members actively suggest potential alliance partners and review the company’s alliance portfolio.
“In some firms, the CEO even actively takes his or her board members on tech discovery safaris, so that they can become more acquainted with opportunities (and partnerships) to challenge the CEO later on,” Prof Shipilov says.
The survey also revealed that about 40% of companies joined start-up accelerators. Some of them were start-ups searching for corporate partners; the others were in the reverse situation. The needs of start-ups and corporate partners were different.
It was also found that corporate partners do not automatically benefit from participating in accelerator programmes. There could be situations where the company is unable to transform the start-up idea into a concrete project.
Corporate partners that reported the most satisfaction from start-up accelerator programs had individuals whose formal role was to act as an interface between the chosen start-ups and the rest of the firm. An engagement manager ensures that the company execute on projects with start-ups, as well as learn from them, Prof Shipilov says.