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Scott Buchholz and Bill Briggs, technology leaders at Deloitte, recap their 2019 Tech Trends report with a look at how today’s technology landscape is driving businesses strategy and laying the groundwork for future innovation.
“The organizations that are waiting or treating things like experiments that they do every once in a while and then they wait a while and see what happens—my concern on their behalf is that if they're not starting to embrace change and move more quickly, they're likely to find themselves outclassed and outmaneuvered by those who have embraced our new digital reality and the new speed and rate of change.”
TANYA OTT: I’m Tanya Ott and this is The Press Room—the podcast where we dig into the biggest issues facing business today. And today, I asked two of Deloitte’s leaders in the realm of technology to give us a tech trends update for 2019.
SCOTT BUCHHOLZ: So, I’m Scott Buchholz.
TANYA OTT: Scott is the chief technology officer for Deloitte LLP’s government and public services practice. And before that …
SCOTT BUCHHOLZ: Oh, goodness. I used to work in France for a metadata management company and before that I worked for a startup in France.
TANYA OTT: And my other guest is Bill Briggs, the chief technology officer for Deloitte Consulting. He spends a lot of his time talking to people about emerging technology research and incubation innovation.
BILL BRIGGS: Always makes people chuckle that home is Kansas City. I like to say Silicon Prairie—obviously the heart of emerging technology and broad transformation.
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TANYA OTT: Together, Bill and Scott produced produced the 2019 Tech Trends report. A lot has changed in the ten years since they started the report, so I asked Bill to give us the warp-speed summary of the last decade.
BILL BRIGGS: When you looked at it 10 years ago, it seemed like there was so much change happening. Any way that you'd look at the time, it seemed like it was overwhelming. Well, fast forward now and that same feeling holds, but you look back 10 years ago and say, wow, how quaint it was. How quaint it feels like it was back then.
What is the really fascinating shift is that ten years ago our audience was mostly a CIO (chief information officer) or CTO (chief technology officer) and the folks with the technology agenda. It was business-led and technology-enabled, where the tech was looked at as, “How do we help fulfill the needs, the ambitions of the business?” It was not “plumbing,” but it was certainly much more of that foundational type of positioning. Now, technology is driving business strategy and you're seeing this incredible potential response. On one end is this unprecedented opportunity for innovation, where we can think about disrupting markets and going into new businesses, and how tech allows us to do that in ways we couldn't before. And on the other end, you have this looming threat of disruption in every industry. How do we make sure that we stay relevant and we evolve? And with that, this technology discussion has moved from the behind-the-scenes enablement into the CEO and a board level collectively. The leadership team needs to embrace and understand what's happening in technology and then create a strategy. And most importantly, executing it.
TANYA OTT: Scott, those technologies that you started talking about ten years ago promised a whole lot of value. Have they delivered?
SCOTT BUCHHOLZ: The adage has it that we overestimate what we can do in a year and underestimate what we can do in ten. And if you think back ten years, people were moving from flip phones to these new iPhone things. The cloud was a thing that people were just getting set up. Nobody really knew if they could trust it. Nobody really knew if it worked. And if you look forward to where we are today, people are now in the cloud, using machine learning. We have all sorts of capabilities. People are inseparable from their phones. The phones now do more today than we ever could have imagined ten years ago. In a lot of ways the pace of change has really, I don't know if it exceeded our expectations, but I don't know that ten years ago we could really predict the impact that these things would have.
What we did was, we tried to say, “Look, these things could be highly impactful.” Cloud could be highly impactful in terms of how it was going to enable enterprises to change, but from there to envisioning how Netflix and others have fundamentally changed the way that we think about cloud computing and other things—the Amazons, the Googles, the Microsofts, etc.—what that means for enterprises is, I think, even further than our imaginings, and our imaginings were considered pretty wild at the time.
TANYA OTT: It was considered really disruptive—this idea of cloud and some of these other technologies back then. But now they're pretty much table stakes. You have to be in that business. Let's break those down in terms of what you've seen happen with these trends. Let's talk about cloud, for instance, since this is a really big one. As you've alluded to, it's evolved from people wondering, “Is this really even going to work?” to, now we're in a situation where we have all kinds of services that are based in the cloud that are not just working but are massive. Where does it go from here?
SCOTT BUCHHOLZ: If you look at the capabilities that the cloud providers have been setting up and providing, what is clear is that the level of capability increases over time. The level of abstraction, the level of performance, what we can do in the cloud. One of our trends this year is actually about serverless operations in the cloud, which doesn't really mean that there are no servers. It means that increasingly, organizations are able to outsource management of the IT nibs and nobs to the cloud providers and others and focus more on how they get value out of what they're doing. So, if you look at what's going on, the capabilities that are being provided are increasingly allowing IT to focus less on the minutiae of IT and more on going fast, meeting the business where they are, helping the business project out to the future, and focus less internally on technology and more on what's actually going on in the business world. In many ways that's a really positive trend that we've seen over the past 10 years. The increase in capability is enabling more focus on the external work.
BILL BRIGGS: I like the way you frame that, and just to riff off Scott's thought there, it seems like cloud has been the way we look at it now forever and it was inevitable. Ten years ago, most of the conversation was, “What is it?” And then, “Why would I care?” That was focused on the lowest end of the technology stack, into the infrastructure team of a CIO or an IT department. And now it's this broad way that we think about driving to innovation, agility, and technology from not just the infrastructure, [but] all the way up. And that's the important thing—the way the cloud providers are expanded into blockchain and artificial intelligence and augmented reality and virtual reality. Things like blockchain; things like cognitive, which is how we talk about machine learning and artificial intelligence and automation; things like digital reality, which is how we talk about Internet of Things (IoT) and augmented reality and virtual reality and computer vision; and conversational voice—the way that we were going to interact with systems—we think those are going to feel as inevitable and foundational as cloud feels today when we look back in a few years.
TANYA OTT: I'm glad you mentioned blockchain, because I've talked to a few people who have told me, I know it's important and it's going to revolutionize how we do things. Everybody's talking about blockchain, but then they admit that they still really have no idea what it is. And these are people who are even working in business and having to make decisions around blockchain. First of all, give a quick explanation of what blockchain is and then what advice do you have for business leaders who are looking at this and know they should be thinking of it as a big thing, but aren't quite even sure what to do with that knowledge?
SCOTT BUCHHOLZ: Sure. Blockchain, for the uninitiated, is the protocol that was created to support the cryptocurrencies—Bitcoin and others—that actually supports basically a distributed database that is able to support a distributed cryptocurrency.
SCOTT BUCHHOLZ: It's hard to explain without a lot of technical mumbo jumbo and jargon.
BILL BRIGGS: Can I give a shot of trying to make it maybe a little bit more accessible here? My three big words I always use here are “distributed consensus ledger.” And those three words might seem opaque, but just take a second to unpack each one.
We're all familiar with the ledger, even if we don't spend our days thinking about them. It's a way to track assets. And in blockchain's case, those assets could be digital assets, like digital media or the identity that I have to take advantage of government services, or it could be a digital way of tracking a physical asset. So suddenly I have a digital way to track a piece of artwork or the like. The point of the ledger piece is it's not limited to just currency, like Bitcoin and cryptocurrency has kind of made it fashionable. If people have heard of it, they've probably heard of it in that context. It could be electronic medical records. It could be your title for a piece of land or a deed. It could be all kinds of things. That's the first piece. And what's exciting is if we can record those assets, then maybe we can start exchanging those assets. We can put rules on top of those assets that don't have to have a bank or a government or a big corporation at the center, completely owning all the integrity interaction between them. So that's the ledger piece.
Then the distributed and the consensus are kind of the magic of why this technology is different than just a shared database or a system that a big government or a big bank is going to drive. I don't like to go too deep in that, other than to say there are characteristics of a blockchain that make it really exciting—the fact that everyone has a copy, the fact that you basically are using cryptography and computer science to enforce the integrity, and that everyone is following the rules of what they can do using the blockchain. It can be private and encrypted, but you can decide who can have access to pieces of a block, pieces of a ledger. We could go as deep as you want on describing what the distributing consensus pieces are, but the important thing is that the technology works as it is described. Just like 25 or 30 years ago, most people still don't understand how networks work and how the internet works, but it does. That's the equivalent of consensus, and describing the really detailed protocol of how the magic happens within blockchain. And it's technically sound and people are curious. It's a really interesting thing to be able to pull out at a dinner party.
SCOTT BUCHHOLZ: Can I do my simplification now? Because I agree with everything Bill said and still find he makes it really complicated. (Bill laughs.) Because, what I tell people, and I continue to do so is that at the end of the day: It's a database with a bunch of nifty characteristics. I wonder if 40 years ago people got as excited about relational databases as we're getting excited about blockchain today. A better question is what can I use it for, not what is it. And if you think about it, blockchain is a piece of technology that enables us to do business process reengineering (BPR) across organizational boundaries. That's really all it is. But what it's really well-suited for is basically BPR—we know how hard it is to do inside our organizations—that allows us to do it across organizational boundaries, and I find that's even easier than “distributed ledger,” blah, blah, blah. It's not a ledger, you can just use it as one. So, anyway, we'll all agree to disagree but that's the way I look at the world and I feel that that's a lot simpler for most people to understand and grasp what they can do with it from there.
TANYA OTT: OK. Throw down on blockchain. Let's move on. One of the other three more recent trends that you write about is cognitive, and I think a quick explanation just for folks who probably already interact with it but don't understand that they are, what do you mean by cognitive?
BILL BRIGGS: It's our shorthand to bundle together under the broad umbrella of artificial intelligence, but there are specific techniques and technologies that are here today and people are taking advantage of. We find it important to make a distinction between them individually, but to put them under a broad [category]. Machine learning and automation, sometimes shorthanded as robotics process automation. Also, natural language processing, [which] allows us to understand and be able to have systems talk in a more natural, humanistic way. So basically, this is [a way of] bundling of the things we can do with data that doesn't just give us a better view of what's happened or what's happening, which is historically what analytics focused on—by the way, still really important and most of our clients haven't cracked the nut to get that right yet—but cognitive is this idea that we can use these advanced techniques to not just visualize and understand, but we can start predicting what's going to happen. We can start prescribing what you should do because of what we think is going to happen, and maybe even take action. It's this shift from, “I'm going to give you visibility,” into “Potentially I can actually drive a response—and I can fill in the blanks what that might be.” It could be financial information that could affect pricing decisions. It could be the extreme case of a self-driving car that's taking all of the input from the environment and it's deciding when to slow down and when to turn and the like. So cognitive is a shorthand for us to talk about a lot of different things that all have the same broad characteristics, but are different.
TANYA OTT: It’s deeply embedded in a lot of what consumers do these days. It's deeply embedded in what businesses do these days. As you're looking forward, what's the landscape going to look like?
SCOTT BUCHHOLZ: From a consumer perspective, when we interact with all of the things we're talking to, all of the things that are using facial recognition, all of the things that are speaking back to us when we talk to them, all of the simpler ways of interacting with things that make interacting with technology more natural and fluid—pretty much all of those things are underlined by some level of machine learning, natural language processing, and other things. On the business side, what we're seeing is increasingly, particularly for routine and administrative things, the ability of computers to actually automate those, make reasonably good decisions with them, and then give human beings the more interesting cases and more interesting things to do so that human beings can spend time doing what they're good at—which is reacting to complexity and complex cases and being smart and creative—and computers can do the things that are routine and rote, dull and boring, basically.
TANYA OTT: The bulk of your report focuses on emerging technology trends. And you focus on the things that are really going pop over the next 18 to 24 months. I would love to tackle a couple of them in a lightning round, one-by-one. You game?
TANYA OTT: Artificial Intelligence. What are you guys expecting?
BILL BRIGGS: What's been really exciting is that it's become more of a corporate strategy discussion than a tactic. When we talk about cognitive, a lot of the early, “How do we decide what to manufacture?” or “What do we decide to price?” or “Who to call next as a customer?”—that's been a lot of the places cognitive has been making a lot of real inroads. What we're seeing is the shift in AI to, “How do we think about the future of our products and services and offerings, even our business at large?”
There's a great example in there about one of the health plans launching a brand-new entity that's a combination between a technology-based startup, a research hospital, a traditional provider, and health plan that's saying we're going to use AI to not just lower cost in the system around allergens, but we want to understand at the individual level what's triggering [allergies], between your own biology, between your environment, between your clinical history, and what medicine are you taking. We want to actually eliminate the disease completely. And so, it's this complete shift from a very low level, here's something we can use to do something incrementally better, into a business that couldn't exist without it.
TANYA OTT: The next thing on the list is intelligent interfaces. Can you give us some concrete examples of what you mean by intelligent interfaces?
SCOTT BUCHHOLZ: Intelligent interfaces are interacting with computers and technology in a way that is no longer keyboards and mice and flat screens. It can be virtual reality, where you have the headset over your head forcing what you see, or augmented reality, which you can think of as maybe a pair of glasses or something that's overlaying digital information into what you can see, your field of view. But there's also the voice interfaces. There's also, as Bill likes to describe, a belt at MIT that actually registers what's going on in your gut. You strap it on and, because your gut senses your emotions before you tend to react to them in your brain, they can actually tell your mood with relative accuracy. There's facial recognition. There's now mood recognition. All sorts of different things that are essentially enabling technology to become more transparent, more natural, more simple, disappearing from what you do, disappearing from having to interact with technology. You can envision a line cook who's running out of something speaking to the computer instead of having to wait to the end of their shifts to type an order into an obnoxious order-management system or order-entry system. Things like that, moving from making people stop their flow of work to actually interact with technology to making it an actual piece of their workflow.
TANYA OTT: Interesting. That MIT belt example intrigues me because I would imagine some people would hear that and go, “Oh, my gosh, they're going to know everything about me now.” What are the implications of that from an ethical standpoint?
BILL BRIGGS: It's a huge piece and we talk about the risk implications of each one of the trends. And the historical treatment was focused more on security and privacy. Privacy now gets into this idea of ethics and responsibility. The MIT case is being used specifically for immersion therapy that's helping folks get over PTSD or chronic phobias. The whole idea is it's giving them the ability to regulate the treatment before it becomes overwhelming. In that case, it's not [like] a worker is being judged about [whether] they like the new policies being rolled out in this store. It's very specific to a patient, where it's helping make that as good of an experience it can be. But you can easily take a leap and say, “OK, where could this go, and just because we can, should we?” That's a really important dialogue that we're helping our clients wrestle with right now.
TANYA OTT: One of your other emerging trends is DevSecOps, which is quite a mouthful. What is it and why is it so important as we're moving into the next 18 to 24 months?
SCOTT BUCHHOLZ: DevSecOps is the natural next step of DevOps, or, some would say, what should have been in DevOps in the first place. DevOps is short for development and operations and what's happened over the past 30 or 40 years in most IT organizations is that the people who are writing the code and the people who are managing the servers were distinct groups who interacted with one another by throwing stuff over the wall. So, as a longtime developer, I would write a bunch of code, we would test it, and we would then hand a really complex deployment procedure to the group in operations. They would try to install it and if something broke they would try to fix it and if they couldn't they would call us. They worked as separate teams, sort of loosely affiliated but not together. What DevOps did was it said, in order to move at the speed of the internet, organizations needed to break down the walls that had been established between development and operations and get them to work together as a team. DevOps really started with a cultural journey, that if we separate these two things we can't move at the speed we need to. Let's get them set up.
What happened was we discovered was that our security folks sometimes hadn't actually been brought along on their journey, and in a number of organizations, security was something that happened at the end, that took a long time, that was very tedious and painstaking. And what's happening is those security folks can no longer afford to wait until the very end. They have to join the team, join the process, and basically transform the way that they're working. They’re trying to keep our systems and our data safe and secure by actually being part of the team with the developers and the operators. So, it's Dev for the developers, Sec for our security, and Ops for our ops people. So now what we're doing is changing the speed and forcing people to act more like a team.
TANYA OTT: And I imagine that has to be really critical moving forward because as technology is changing so rapidly. Much further down the road we've got quantum computing looking like a thing, and that then increases exponentially the cyber risks that we face. Security being involved in that in a very integrated way is probably very important.
SCOTT BUCHHOLZ: That's absolutely true, and security is getting, as you said, exponentially harder as time goes on, as people get significantly cleverer about how to get into things and get at our data. And so, doing security in a different way, in a differentiated way as we go forward, is really important.
TANYA OTT: Scott, on first pass, all of this can seem really, really overwhelming. So many technologies, so many different directions to go. How does a business leader decide where to put their attention? Do they have to be looking at everything, or how do they strategically wrap their heads around this?
SCOTT BUCHHOLZ: There are three trends that are really impacting the business in our report this year. They're around AI, intelligent interfaces, and reimagining marketing. There are three trends that are around internal technology operating efficiency: DevSecOps, serverless ops, and connectivity of tomorrow. And the combination of those things together is helpful. You can think about the things that are impacting my business on one side, and the things that are helping the technology organization do things cheaper, better, faster on the other. As a business owner, I focus on the first three.
TANYA OTT: Any final thoughts as we're wrapping this up? What message do you want to leave people with?
SCOTT BUCHHOLZ: These are really exciting times. Yes, there's a lot going on. By the same token, what we're seeing is the organizations that are embracing the journey, that are trying to figure out how these things combine together to have a vision for what their organization is going to look like in the future, they're actually out there making progress, doing things, and moving ahead at speed. The organizations that are waiting, or treating things like experiments that they do every once in a while and then they wait a while and see what happens—my concern on their behalf is that if they're not starting to embrace change and move more quickly, they're likely to find themselves outclassed and outmaneuvered by those who have embraced our new digital reality and the new speed and rate of change. Everybody has to get their heads in the game and actually figure out how to start moving out on all of these areas.
BILL BRIGGS: It's tempting to think if I'm in a given industry or if I'm in a given geography or a certain size in a company that these things don't matter to me. What we've found is that THEY are universal. And the fact that you might feel like you're behind—everyone feels that way. We have 30 or 40 examples of individual organizations doing a particular trend, but they all feel like there's so much to do and they're not world-class. Don't allow yourself to feel complacent because there are excuses like, “We've got too much technical debt,” or, “We're in an industry that traditionally is a slow follower behind these trends.” But these [technologies] are real. There's potential value to be taken from them. The flip side is, you don't have to do all of them at once, and strategy can be a series of very deliberate and bounded investments to make progress and the fastest way to make progress is to start.
TANYA OTT: There you have it—the fastest way to make progress is to start. And one place you can start is with the information Bill Briggs and Scott Buchholz have gathered into their 10th annual Tech Trends report. You’ll find it at deloitteinsights.com. You find us on Twitter at @deloitteinsight (no S) and I’m on Twitter at @tanyaott1. Thanks for listening and have a great day!
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