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For all the fear that Artificial Intelligence (AI) will take over the world or that automation will cost jobs, IT organizations sure are happy with what they see. AI finishes first in satisfaction, and robotic process automation (RPA) is second in our annual survey of technology trends. In terms of ROI, the two flip flop with RPA leading and AI second. No matter how you slice it, AI and RPA are a success in their early days.
As shown in Figure 2 of the Computer Economics Technology Trends 2020 study, RPA and AI rank first and second on our risk-reward analysis, which compares ROI success with the success of bringing in projects within budget (TCO). Ranking high on the upper right of this chart means that not only are companies seeing ROI from their projects, but they are also having success meeting budget constraints.
“It isn’t too surprising to see relatively new technologies in the upper right quadrant,” said David Wagner, vice president for research at Computer Economics, an IT research firm based in Irvine, Calif. “Early adopters of any technology typically have a well-defined use-case for the technology. However, AI and automation sometimes have a reputation for being complex or the stuff of sci-fi movies. The fact that early adopters are having a strong experience shows that maybe the reputation is not well-earned.”
On the other side of our risk/reward analysis, ERP is dead last again with a very poor combination of cost success and ROI. ERP, along with CRM and HCM —two other low achievers on this chart—are complex deployments that often lead to cost overruns. One interesting addition to the bottom of this chart is infrastructure as a service (IaaS). Until recently, IaaS enjoyed many of the advantages of an early adopter technology, such as AI and RPA. However, it seems that the now relatively mature technology is showing growing pains.
Each initiative falls into one of nine sectors, representing low, moderate, or high reward, and low, moderate, or high risk. The findings are as follows:
Low Risk/High Reward: Technologies with the most successful economic experience profiles are in the low-risk, high-reward sector. Seven technologies are in this category. For the most part, organizations are achieving success with these technologies. Mobile devices/wearables (1), mobile applications (2), robotic process automation (3), enterprise asset management (4), Internet of Things (5), e-commerce (6), and IaaS (7) are technologies that all IT executives should be tracking closely because of their positive risk-reward characteristics.
Low Risk/Moderate Reward: Business and data analytics (8) is the only technology that falls into this sector. With technologies in this sector, cost is predictable, but return on investment is sometimes difficult to measure or is unclear.
Moderate Risk/High Reward: The technologies in this sector have uncertain costs associated with them, but they usually exhibit a return on investment in the end. SaaS (9) is the only technology in this sector. It is noteworthy, as cost certainty is supposed to be one of the strengths of SaaS.
Moderate Risk/Moderate Reward: There are four technologies in this sector. It should be pointed out that most technologies in this sector have ROI that is often difficult to determine. AI (10) is increasingly being embedded in business systems to the point that users often do not realize they are working with it. Supply chain management (11) is technology that has an ROI that is often easy to quantify. HCM (12), like most large software deployments, lacks some cost certainty, and it is difficult to judge its impact on employees or productivity. Security technology (14) does not really have an ROI in a traditional sense. However, security is much like a field goal kicker: You only notice him when he misses.
High Risk/Moderate Reward: The only technology in this sector is CRM (13). CRM systems, like many complex software systems, can be difficult to implement. Costs can often get out of hand. However, generally speaking, once these systems are in place a reward can be measured, and if done right it can be substantial.
High Risk/Low Reward: The sole technology in this sector, ERP (15), has a poor track record in these areas, and consistently so. ERP success requires user adoption and willingness to change, which increases the risk of failure. Because these systems are an essential part of the application portfolio of most organizations, the high-risk/low-reward nature does not mean organizations should not invest in ERP. Rather, it means that they should focus on mitigating the risks as well as managing the people side of change.
The full study is designed to give business leaders insight into the staying power of 15 technologies that are currently top of mind for many companies. It provides a glimpse into how quickly an emerging technology is being adopted, how deeply more-established technologies are penetrating the market, and how positive the customer experience is with each technology. The study also delves into the specific types of solutions under consideration.
By understanding the adoption trends, investment activity, and customer experience, business leaders are in a better position to assess the potential risks and rewards of investing in each of these technology initiatives. They also can gain insight into just how aggressively competitors and peers are investing in these initiatives.
The full study also takes a quick look at an additional 18 early adopter and future technologies. These include blockchain, digital currencies, digital assistants, drones, autonomous vehicles, virtual reality, augmented reality, quantum computing, 5G, no-code/low-code, electronic tattoos, microchip implants, smart dust, 3-D printing, 4-D printing, self-healing systems, volumetric displays/holograms, and digital twins. The study evaluates whether IT decision makers are familiar with these, whether they see a potential use for them, and whether they have already implemented them or have them installed.
Sample pages from the full study are available for free download.
This Research Byte is a brief overview of our study, Technology Trends 2020. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website (click for pricing).