Chapter 1 - Technology transformation
Factors driving the adoption of business-critical technologies are multifaceted, showing technology to be not just an enabler for business, but a way to transform it
| Technology is already interconnected, omnipresent and unavoidable. Emerging technologies like AI, smart contracts and blockchain reinforce the importance of technology for modern businesses. In a period of rapid societal and business change, organisations could be forgiven if they failed to pause for long to consider the risks of technology. But that would be a mistake. Technology is more than simply a tool for efficiency gains, sold and managed at enterprise level. Organisations now use various technologies that suit their needs to fulfil strategic objectives. Those businesses able to effectively harness novel technologies and extract value from them will have a competitive advantage over rivals. Technology has undergone a shift, from a tool applied to day-to-day challenges, to a long-term, strategic necessity, central to how organisations compete. This shift presents new challenges in risk management. Once organisations’ long-term success is tied to the adoption of new technologies, investment will very likely follow, and risks must therefore be confronted. |
Because new technologies carry novel risks, they may be adopted with reluctance but will be necessary to maintain market position.
This kind of push-and-pull, of recognising the need to change, but finding compelling arguments not to change now, characterises many boardroom debates the world over regarding the adoption of technology. Organisations feel competitive pressure to invest in cutting-edge technologies to help achieve strategic goals. Four in five (81%) of respondents agree with the statement “We constantly need to update our technologies to ensure we can compete with other companies in our sector”. As figure 1 shows, the factors influencing that competition vary, and include technologies with inherent risks. |
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Similarly, more than two-thirds (69%) of survey respondents expect their organisation to make greater use of novel technologies like AI over the next three years.
But it is not only new technology that presents risks. Existing technologies, such as cloud services, can be infinitely scaled and extended, providing significant business benefits but with new risks arising in tandem.
Figure 1: Principal drivers in the adoption of business-critical technology
Q: From the perspective of your role, what are the principal drivers in the adoption of business-critical technology (ie technology crucial to achieving your strategic business objectives)?
Two in five (40%) of respondents agree that new technologies result in wasted investments on older technologies. This rises to almost half (47%) for the energy and infrastructure and (46%) financial services sectors.
How organisations embrace, confront, manage or avoid risks will, in part, determine their share of future rewards.
