Due to the fast-paced technological transformations, enterprises are investing in innovations, but they often find it difficult to incorporate those innovations in their business. A survey from Ernst & Young reports that 81 percent of organizations invest in Cloud computing while 45 percent adopt internet of things (IoT) related innovations in their business. About 24 percent of the respondents believe that artificial intelligence (AI) will impact their business in the next five years followed by machine learning (ML).
Leveraging data and designing new services and products for business insights are among the top priorities pertaining to innovation. There is a notable paradigm shift in the HR policies as well. About half of the respondents (46 percent) accepted that their companies are restructuring the hiring processes to acquire talents who are likely to match the company’s future based skill set.
Following the path to innovation led by technology is a daunting task that takes time. While half of the respondents accepted that their respective company spends more than 5 percent of the annual budget on technology led innovations, 42 percent agreed over the ineffectiveness of their budget to have any real impact on their business. Market volatility is also a distracting factor that can restrict an enterprise to spend on innovations.
Leveraging technologies such as augmented reality (AR), that allow data-driven visualization layers to product selections, with algorithms enabling customer interaction and investing on innovations like cloud computing, where most of the applications and services are headed, is essential. However, spending more money and time on technology does not necessarily impact the innovation capabilities of an enterprise. From the survey, it's clear that there is a sharp contrast between the investment in innovation and the incorporation of those innovations for business growth. Instead of bridging this gap, the executives, often end up spending more on technology. These “trapped assets” must be utilized to reap real business benefits. Unless this problem is addressed, pouring more money into innovation will further widen the gap between “trapped assets” and the returns from their actual business conversions.