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Can blockchain become as sexy as virtual reality or the Internet of Things? And of trillions of signals potentially being processed, how do we isolate the few that are meaningful? Bill Briggs discusses 2016’s tech trends with Tanya Ott.
I get it. Potential. Great. A lot of things business would love. How do we make that real? How do we shift that from irresponsible white boarding, pass the hookah moment of what would be possible, to what’s the actual road map and things we need?
TANYA OTT: We’re talking the big, bold world of tech trends today on the Press Room. I’m Tanya Ott, and this is Deloitte University Press’s podcast on the issues and ideas that matter to your business today. And today we’re talking about what’s going to really pop on the tech front in the next 18 to 24 months. Every year, Deloitte Consulting’s chief technology officer Bill Briggs and his team survey more than 3,000 chief information officers to find out what they’re thinking about: What excited them? What might worry them?
BILL BRIGGS: There’s so much change happening on so many different fronts—so how do we take a step back? And you have to understand the “what” of all the change, but the point of it is to try to get as quickly into the “so what”: how it affects our core business, how it affects operations, how we run our core business, how we think about our customers, engage with our customers and we evolve our business models.
TANYA OTT: This year there are three big tech trends that have people talking. We’ll get to those in a moment—but first, Bill wants you to know . . .
BILL BRIGGS: We’re not talking about aspirational. I’m a big Beach Boys fan, but this isn‘t “Wouldn’t it be nice . . . you hope and wish and dream it might come true.” We‘ve got to have enough proof points to show it could be the bread crumbs toward the broader adoption, of full impact. We have to have enough examples to show how it makes sense in some fashion. What does it mean to the business? What does it mean to enterprise? It’s got to be grounded. I firmly believe you can’t talk about tomorrow without how do you get there from today—at least to move it [from] dinner party conversation or a parlor game, if you want to actually guide a strategy, a roadmap, a series of investments.
TANYA OTT: And away we go. Trend #1: Blockchain.
BILL BRIGGS: Yeah, the one that has the most potential dramatic impact as we look back at this time. The simplest way to explain blockchain is it’s a distributed ledger. It’s a way for us to have a source of the truth of an asset. An asset could be currency. We’ve seen a lot of early adoption of blockchain with cryptocurrency—bitcoin and the like—that underneath the covers is being run on top of blockchain. But it could be electronic medical records. It could be customer loyalty information. It could be voting rights. It could be ways just to manage physical assets in a digital realm like land or deeds to properties or other things.
TANYA OTT: So it’s a way to have contracts or sharing of information amongst various parties where it doesn’t actually live in one party’s custody?
BILL BRIGGS: Today, when we think about trust or contracts, there is a third party that’s overseeing the integrity of that trust or contract in financial institutions, in governments, for financial services and currency to large companies: credit card companies or travel hospitality companies that own loyalty programs. And it’s shifting it from one player who controls that marketplace, controls that asset pool, controls that contract type, into more of an open shared model where, instead of it being the authority of one group, it becomes a function of (and this is where it gets a little bit heady) computer science and cryptography. So we collectively agree on, “Here’s the rules that are going to be used to define this ledger we’re going to own and be distributed across multiple parties.” And then anyone can participate in theory, and everyone is controlling that. No single person can go and do something with malfeasance or manipulate the record or have faulty access to it.
The two things I use to talk about it: First, go back hundreds of years in the middle of a town square. There was a big tome, a physical book that everyone would go to actually look up who was married to whom, who begat whom. Child legacy and lineage, property ownership, and transfers: that was all being written in one central ledger that was owned by the town, and there was control about who could go and write to it. There’s one physical place you would go and see the history, and you would literally would cross off, so I sold my cow to my neighbor. I would write a new entry to say that I sold my cow to my neighbor and you could actually go back, if you had the patience, and find who I bought that cow from a year ago, and the whole history of it was right there in a place that everyone could see.
Part of blockchain is that ledger is as open and transparent so people can look and see. Actually it’s a chain of blocks, individual entries, linked so they’re always adding to the narrative, the story of what’s happened. [The] point was, in theory, there was only so many people could go and write [in] that book. I always tell the story: Envision this octogenarian [who is] bent over with a long beard. He controls the pen and would have the official record—and blockchain’s moving to technology is going to define that. The same idea plays: that anyone can see and understand what’s happened. But instead of it being through one octogenarian with a pen, suddenly you can allow most people to participate all [with] the same definition of trust.
That’s why it’s important: We’re in the earliest days of the adoption cycle. If we look back to the early 90s, we suddenly added a new protocol for communication. That was the Web, the broader Internet. Blockchain could become the new protocol for trust, contracts, and assets where we don’t need the same controls in place. It becomes more open and distributed, and allows us to do much more sophisticated things than we ever could before. It kind of blows up boundaries. It blows up control. It doesn’t mean that traditional players that owned the authority [and] integrity of government’s financial institutions and large companies [are] being completely disintermediated, but they have to rethink the value they’re creating inside of those asset loops in this new reimagined world. Blockchain doesn’t mean the end of currency, the end of banks, the end of government. But it means there’s a different way we handle some of the things that government, banks, and companies manage today.
TANYA OTT: So you see the blockchain issues as sort of growing pains. It’s new. We’re going to have to work through some of this stuff.
BILL BRIGGS: For sure, we’ll see an ecosystem around blockchain—platforms that will be put in place to help manage pieces of the growing pains, brand-new industries and business models that don’t exist today built around it. The flip side is when I think about what it means to a big client of ours, or even our own strategy of how we invest around topics like blockchain, it’s the applications into an industry, business process, function, domain that are really important. Clarity of what the potential is, where are the limitations of technology are, and the adoption pattern at large.
TANYA OTT: So the advantage of blockchain is that you are able to sort of cut out a middleman that would, in the past, have to be the central keeper of information or the, I won’t say mediator because that’s a legal term, but someone in the center there. But what you’re essentially doing is cutting that portion out of it. So there could be financial implications for a company. They don’t have to then deal with that third party.
BILL BRIGGS: Yes. Think of any time there’s friction in the way a transaction, a contractor, an asset in how it’s being managed—it’s an interesting opportunity. A lot of the earliest use cases are for a big company that does a lot of cross-border payments or intracompany transfers. Could the blockchain be a new vehicle to do that without having the same cost and the days it takes, and processing? Several different institutions have to participate in that, to certify it, settle and clear a transaction. So suddenly that potentially becomes near instantaneous, like we’re doing it with electronic transfer of funds between friends, settle up in private. It could be that easy. Instead of T +2 or T + 3 days, it becomes T + 3 milliseconds, and it’s done.
TANYA OTT: Because all of the rules that would govern that kind of transfer are built into the algorithm of the block.
BILL BRIGGS: The protocol itself. That’s right. So for electronic medical records, as more and more not only health care companies but insurance plans and life sciences companies [are] making new devices and treatments, there’s a collective need to be able to create a common medical record [so] everyone can have potentially all these different pieces of an extended value chain around health that they can be a participant in and take advantage of. And any one player, any health plan, any provider, any medical device manufacturer is only going to be able to represent a piece of the story for what my broader health and wellness is. If I had a blockchain that the broader industries agreed to, they each individually have to give up control. The way everyone thinks about it today is, “we should own the electronic medical record,” as the government or as an insurance provider or as your health care provider. Suddenly you say, there’s a lot of value with me as a patient of having all of them being able to take advantage of one shared infrastructure to create a full view of my medical history and health and wellness that I can decide, as the individual, to selectively share depending on my comfort level and the incentives be handed to me, which wouldn’t be possible today.
TANYA OTT: So in that application, then, you’re talking about the consumer being empowered to actually own their own data in a more meaningful way than we do currently.
BILL BRIGGS: Yeah, potentially.
TANYA OTT: That’s a great transition into the next trend in this year’s survey. It’s a trend where there’s also a lot of conversation about who owns personal data, and what they can and should do with it. Trend #2: The Internet of Things, or IoT. All of those tiny sensing devices embedded in cars, fitness trackers, smart thermostats, manufacturing plants—they’re everywhere! And have been for a while.
BILL BRIGGS: The dialogue has been the novelty of all those different sensors available in all the different devices that are connected and have intelligence baked in. So in a way, the noun of the sensor, the things being connected, has become the hero of the story. And we’re shifting emphasis to the collection of the visibility I get from, you know, maybe all those intra-vehicle sensors you’re describing. What does that tell us about maintenance cycles for the car? And if we apply it to a commercial setting, how could I actually offer fleet-management services in a better way, to schedule driving, to schedule repairs, to schedule matching [an] individual driver optimized to the type of vehicle and route we’re going to put them on? It’s this move from sensing—and sensing is shorthand for the things that we have visibility into that we didn’t before, because of all the things around us potentially participating [to] give us insight and intelligence—into “Now what do we do with them? How do we apply them?” It’s typically going to be a combination of these sensors that we’re putting together, which is an interesting challenge [that] companies have to now deal with. Historically, I had to deal with system integration; or I’ve got my financial system that needs to talk to my manufacturing system and my HR system, my sales system, which is the bane of IT. It’s been the big complexity point over the years, and now suddenly it’s now everything around us having potentially hundreds, if not more, sensors. And what do we do with that information? How do we manage the data? How do we get insight out of the data?
And then the doing piece is, how do we not just use it for visibility and analytics, which is the temptation. All of a sudden they can actually see how [things act in] real time, like an instrument in my oilfields that knows exactly what the flow rate is and yield is of any individual head. It suddenly says, well, how can I move it to doing, actually take action, do something because of this collection of insight I couldn’t have had before—which is really exciting. It’s not just I understand that I have a different flow pattern than I expected out of that oil. I can actually start automating the releasing of the valve in real time.
And when we think about the “so what,” I apply it to next-generation customer engagement. Having so much more visibility not just into my core demographics but in my behavior, my action, in whatever I’m willing as a consumer to share. We have the data that describes most of everything that will be important to a marketer, to someone trying to sell us the next iteration of services and the like. A little less controversial is, inside a manufacturing facility across the supply chain, even something like facility management . . .
One of the stories we wrote about in Tech Trends is our office in Amsterdam. It’s a part of the smart building The Edge, where they have IoT enablement to guide you to your parking spot in the morning. You don’t just mindlessly go across levels to find where to go. It’s dynamically hoteling, so that knowing the expected occupancy for that day, they’ll actually route people to individual floors and sections of floors so that the others can remain dark, not being cooled or heated. Now you’ve got this unprecedented line of sight into so much around us we can actually automate and control action on The Edge in the device on location. We’re trying to get to, “So now what?” Part of that is we need to start experimentation. We need to start prototyping, because we’re introducing a whole new language of possibilities into not just operations and the people who manage business processes, but in new products and service offerings and the business model as well.
TANYA OTT: When you were talking to CIOs two years ago about Internet of Things, they were probably very much in “sensor” land. Where are they now in their thinking or their comfort with the idea that their companies actually have the data scientists or other people that can take all of that information that they’re collecting and actually do something meaningful with it?
BILL BRIGGS: . . . And control the access to and understand the difference between, hacking a prototype to show the potential into something that’s enterprise scale. That first piece is an interesting problem, which is like the earliest days of mobile, when we started seeing enterprise adoption of mobile, and, all of a sudden, how do we control access? How do we control devices? How do we control data applications running on devices? The same is happening with sensors and the things that would fall under IoT.
The more interesting one is, how do we have (I like to call them) edge architectures. So if I’m a retailer, and I’m trying to do a combination of cameras and sensors, what’s in your shopping cart and what you’re walking by on the shelf, and I want to be able to understand, with your permission, your buying pattern in history. Companies have products on shelves, which they’re trying to do some selective marketing around, but I want to be able to do it in real time as you’re walking by: do a point offer, either with dynamic pricing that’s showing up because of who you are, or it’s coming across your phone or some way. That has to happen in milliseconds, if not microseconds. Because if you get that offer when you’re in the parking lot or even if you’re in the next aisle, it doesn’t mean anything to you. It’s an entirely different problem that we have to solve for technology, and we’re dealing with potentially millions of signals coming across hundreds, thousands, millions of things. All of a sudden, it’s this really interesting technical issue of, “How do I deal with a bunch of noise and turn it into signals? And how do I deal with the signals take action in the moment on site?”
TANYA OTT: Is there the bandwidth to handle all of that noise?
BILL BRIGGS: If it all had to go across the network and come back to the home office, there wouldn’t be. So part of that is, what do we do on a device? If there are trillions of signals potentially being processed, how do we take the few that mean something, and those are the signals to get published? Or it’s on location just so it doesn’t have to go anywhere beyond the local network. But that’s exactly the type of question that the more nuanced discussions have moved to: I get it. Potential. Great. A lot of things business would love. How do we make that real? How do we shift that from irresponsible white boarding, pass the hookah moment of what would be possible, to what’s the actual road map and things we need?
TANYA OTT: So, speaking of making things real, we now have augmented and virtual reality. Wow! So sci-fi from the 1960s.
BILL BIGGS: I know! In this year since we published, we’ve seen four or five big pushes in the consumer realm around our AR and VR. A lot of that dialogue is rightfully focused on gaming and entertainment, which are for sure very compelling. I’m a recovering gamer. It’s a different experience than even the latest-generation consoles can give you. By the way, that adoption cycle is going to take some time because today either it’s a low-fidelity experience that’s being done, or it requires a high-end PC with graphics cards to run it. It’s going to take time, and we’re in the earliest days of it.
TANYA OTT: What’s the enterprise business application?
BILL BRIGGS: The point of the trend this year is the “enterprize-ification.” The enterprise adoption pattern is going to be, and we’re seeing it be, much more aggressive. If you break down the difference between augmented and virtual reality, virtual reality is really good for immersive training education simulation in places that it wouldn’t be feasible or would be very costly to try to reproduce. We’re seeing it in industrial products, in really interesting, complicated government scenario training. I can give you an immersive way to go through and recognize issues that fit with heavy machinery, industrial products. I can give you a way to have way more potential simulated events happening than would ever be possible to do with actual physical training equipment, and you being guided through the right protocol for repair or for incident management, [and you retain the information] because you’re experiencing, which is the big benefit. It’s this immersive engagement where the retention we’ve seen is way higher than conventional means.
TANYA OTT: Rather than sitting in a training conference room somewhere, or doing a webinar, or whatever it might be.
BILL BRIGGS: Yeah. Webinar or watching someone else do it. The best ways would be hands-on training that some folks can do. But typically there are only a handful scenarios that you can reasonably do, and it doesn’t scale well. Suddenly it’s the ability to have it distributed. That’s interesting, and the corollary is in the field service, which is more augmented than virtual reality, where suddenly I can put tools in your hands out in the field to help you do the diagnostic, and guide you through a repair; or it could be a service scenario where all the job aids you typically need are available to you in such a way that you are completely hands-free, heads-up. Someone could potentially be looking and seeing what you’re seeing, guiding you through in real time, so that you have the access to the best people in your company or the best experts potentially in the world, in that moment, onsite in the middle of a complicated repair or service issue. Which is truly fascinating. And then there’s the automation of the workflow behind it. I don’t need to go back and fill out paperwork because I have video imagery of you actually making the repair. They’ve got a sensor embedded in the device that’s telling me it’s been fixed. So suddenly, that five hours of work that went around the one-hour repair can go away.
Then you flip that and have two other interesting scenarios that are growing and getting a lot of attention. One of them is around enhanced collaboration, and it’s more virtual reality than augmented reality. In this case, it’s not next-gen video conferencing; it’s the fact that I can have different people across the globe interacting inside a shared virtual space, with shared objects. R&D is a great example of people actually working with models together even though they’re 3,000 miles apart, and have that ability to have that meaningful face-to-face, hands-on design, joint collaborative session that I couldn’t do with even the best collaboration tools and traditional means.
TANYA OTT: So that’s actually happening in the field right now?
BILL BRIGGS: It’s happening in multiple places right now.
TANYA OTT: So these things are really sexy and shiny: virtual reality and Internet of Things. Blockchain, maybe, doesn’t sound quite as sexy, but it is.
BILL BRIGGS: Oh, it will be sexy in time!
TANYA OTT: Sexy blockchain! Everybody is talking about them, but what is it that we’re not talking about as much that we should be?
BILL BRIGGS: The modernization across the different stacks of IT. And that doesn’t matter to just the technology executive listening. There’s this recognition that we’ve invested trillions across all of our existing IT assets, and we’ve basically codified a way of thinking about delivering technology that is seeing a pretty dramatic shift. So as we try to break down [to] the lowest level of this infrastructure modernization, we talked about autonomic platforms.
TANYA OTT: What does that mean?
BILL BRIGGS: Yeah it’s a mouthful. It’s twofold. One, the physical infrastructure we used to need: the servers that are running our IT solutions, the networks that we put in place to allow them to talk to each other, the storage systems we put in place for all the data we’re collecting and providing. If suddenly we can shift from having to own all of them and have them dedicated in our own premises, all these expensive pieces of capital spend to make our IT visions a reality, we’ve moved to the ability to basically virtualize. Instead of having everything that we do with a dedicated system stack that is making that solution work, you start having bigger gear that starts getting sliced virtually to allow multiple projects, to use it as a way to make sure you’re not having a lot of expensive assets sitting idle, because each one is being scoped out just for the one project solution is delivering on. It actually lets me start becoming much more nimble, to stand up all of the infrastructure I need.
Once I virtualize it, I can automate it. So projects that used to need four months to get all of the actual environments ready, infrastructures provisioned and procured, suddenly that can be done in seconds. The projects can start immediately, and it’s running on the same template, the same version that we want everyone to be running on. We have controls in place [that we] couldn’t have before. Out of that, you say, I should be able to spend less to make my technology spec work, and I can do things faster, which is great. And we’re starting to see investments and true autonomics, which would mean I don’t have to have a bunch of people waiting for requests to do things like maintain my infrastructure like I have today. There are a lot of ops, there’s a lot of labor costs by an IT operations today. So suddenly not only can I start automating, standing up a new set of infrastructures that are systems to run a given new project or solution, because I’ve set it up in a way it can be automated, I don’t need a lot of manual intervention for the full life cycle behind it. Instead of just saying, I can get my people to work smarter, I can automate pieces of what my people had to do and allow them to be doing much different things than ever before.
TANYA OTT: That points to the sort of age-old debate even when all of this was purely hypothetical or theoretical, which is, do we put people out of work as we become more autonomous in this sort of thing, or are we simply freeing up their time from the sort of mundane things that can be taken care of in an autonomous process, and allowing them to really be more creative and push the edge a little bit more?
BILL BRIGGS: Two of the other trends kind of hit on it. One is this idea of right-speed IT, which is how do we elevate that mandate, the purpose of the IT department to beyond just efficiency plays in operations to delivering on the strategic needs of the business. How do we think about changing the way that we organize, the way that we deliver, the way that we operate, to make it faster and more in line with the needs of the market, of the business? There’s so much demand, and one of the issues has been that so much of the capacity of the IT organization within a big company, within a big government agency, has been dominated on these lower-level, relatively mundane tasks that are repetitive in nature and just need to get done. But the demand for folks to help guide the vision, the potential, to think about advanced solutions to help deliver on top of just the care and feeding of the environment beneath them is very high. In that is, how do we retool IT and help our people learn new skills, rewire how we think about taking ideas and doing rapid experimentation, prototyping, and understanding design and experience needs? There’s so much more that we could be doing it in different ways we detect the problem, but we just don’t have the capacity today.
TANYA OTT: Bill, you’ve given me and, I’m sure, our listeners a whole lot to wrap our heads around, and there’s a whole lot more there that we haven’t even gotten to, really digging into the ethics. At what point do we start living in a simulation? What happens when computers can think for themselves? And all that sort of stuff. Will you come back and talk with us more about that at a later date?
BILL BRIGGS: I would love to. All of this is a bit of speed dating. What’s great about it is a couple of forums for the report itself.
BILL BRIGGS: It’s great light reading. We’re almost finished [with the] beach season, but as we go into the fall . . .
TANYA OTT: It’s available at dupress.com.
BILL BRIGGS: I would love to come in; [there’s] much more we could talk about.
TANYA OTT: Sounds good. Well thank you so much for your time. Appreciate it.
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