Emerging technologies are helping organizations stay ahead of the curve and position them as pioneers in the industry. However, the adoption of such technologies poses certain questions as we transform to the digital way of life: Are we ready to embrace technology ahead of the conventional thinking? Do we understand the risks associated with adopting new technologies?
The changing times demand that business decision-making be based on thorough analysis of technologies and their long-term impact on the business. Technology adoption must lead to greater value to the business, improved customer satisfaction, and increased productivity. However, these benefits cannot be realized unless the risks associated with them are effectively managed.
Let us look at technology trends that have tremendous potential to transform business processes and operations, and explore key risks associated with them.
Deep Learning (DL)
DL as a concept is part of an extended view of machine learning (ML) algorithms and their evolution in terms of usage. Revenues from Artificial Intelligence and cognitive-based systems are expected to continue at a five-year compound annual growth rate (CAGR) of 55 percent to surge past USD 47 billion in 2020. This paves way for broader use of ML based algorithms. Today small and medium-sized enterprises are actively adopting these technologies to bring data points together to provide greater value to their clients.
Over the past few years, DL has gone from an esoteric branch of AI, focusing on theory, to becoming a mainstream phenomenon. While the rise of DL over traditional ML methods is transformative and impressive, cases of algorithms going awry or being misused have also increased significantly. Risks such as increased complexity, lack of transparency in algorithms, and inappropriate use combined with weak governance mechanisms in implementation and usage make it difficult to trust the algorithms’ decision choices.
Blockchain is advancing toward broader adoption with proofs of concept shifting toward production, real-time use cases, etc. Leading organizations are exploring multiple concurrent use cases of increasing scope, scale, and complexity. Moreover, the initial coin offerings (ICO) and smart contracts are finding more applications and creating more diversity throughout the Blockchain ecosystem. A leading American research and advisory firm has projected that Blockchain’s business value will grow to USD 176 billion by 2025.
Blockchain implementation is often associated with risks related to poor infrastructure and third-party services. One such example of improper Blockchain implementation led to a USD 460 million theft by hackers at Mt. Gox’s. Additionally, smart contracts rely on Oracles (data from outside entities) to trigger contract execution, thereby making robust testing and adequate controls essential in mitigating potential risks to Blockchain-based business processes.
IoT – Internet of Things
IoT units in India are expected to grow 31 times over to reach 1.9 billion units by 2020 from its current base of 0.06 billion. In terms of revenue, this opportunity could represent USD 9 billion by 2020 from the 2016 number of USD 1.3 billion – a growth of 700 percent. The Government of India aims to create a USD 15 billion IoT industry in India by 2020. The application areas that could see investments in the immediate future include infrastructure, industrial manufacturing logistics, healthcare, agriculture, and digital supply networks.
The disruptive nature of IoT is forcing many technology, media, and telecommunications business leaders to reassess such decentralized systems as these tend to connect enterprises and their operations in unexpected ways. Safeguarding the IoT technology gets complicated with the increase in scale with tremendous amount of data being generated and collected; majority of which is held or accessed by third parties.
Digital Reality – Augmented Reality (AR)/Virtual Reality (VR)
International Data Corp. (IDC) projects that the total spending on AR/VR products and services will soar from USD 9.1 billion in 2017 to nearly USD 160 billion in 2021, representing a CAGR of 113.2 percent.
The AR and VR revolution has reached a tipping point. The market leaders are laying the groundwork for broader deployments by tackling complex issues like core, cloud deployment, connectivity, and analytics. AR systems and content channel however are exposed to various risks such as spoofing, sniffing, man-in-the-middle attacks, data manipulation, and theft.
5G is the next-generation wireless network technology that promises speeds upto 10 gigabits per second with lower latency in transferring data.
As such, 5G is expected to bring an entirely new experience to consumers, a new possibility to global telecommunication companies; by expanding various immersive media services, users will experience a realistic dimension beyond real and virtual. At the Winter Olympics in Pyeongchang, 5G was used to beam ultra-high resolution 360-degree videos of the events around Olympic venues. They also showcased 5G-connected buses, with passenger seat windows made of transparent displays instead of traditional glass that serve as screens for watching movies or displaying fictional landscapes.
While 5G provides greater benefits such as enhanced bandwidth and connectivity, it also introduces risks associated with improper design of software defined networks (SDN) nodes, heterogeneous access by different devices, and improper privacy protection of data.
The influx of the drone technology is leading to innovations, and its growth brings new capabilities and uses for flying robots beyond fun and entertainment. The sales of unmanned aerial vehicles (UAV) are expected to nearly triple in the next 3 years, according to the Federal Aviation Administration of the United States of America. New sensing technologies not only provide enhanced vision to drones enabling them to fly in fog and all-weather environments but also reach new levels of optimization in real world use cases such as increased accuracy of measurement, continuous forecasting, asset inspection, site logistics, and safety. Well-known aircraft makers conduct drone-led airplane inspections that capture high-definition images of aircraft and computers which help find imperfections by quickly analyzing these images.
The risks involved in using drones are potentially huge as not only could drones be used illegally upon humans or cause destruction to property but also as they incur privacy issues. They are potentially a cyber-liability if the data captured is not handled securely. Unauthorized takeover of drones could result in grave consequences if used for illegal purposes by hostile states and/ or private organizations for surveillance purposes, etc.
Key Risks in Emerging Technology Trends
- Lack of transparency around algorithm design and weak governance in learning algorithms may lead to inappropriate usage, malicious acts, bias, and uncertainty in decision-making
- Lack of adequate controls around third-party services and poor implementation may lead to trust issues in the ecosystem. For example – theft of cryptocurrencies
- Inadequate security controls in connected environments may lead to risks like unauthorized disclosure of location, sensitive data, etc.
- Inadequate zoning and weak access control policies in connected environments could cause organizations to open up their internal networks beyond the security perimeter exposing to risks such compromise of technology landscape
- Disclosure of AR content through unauthorized channels may lead to risks such as theft of intellectual property (IP), personal data due to sniffing, snooping, and data manipulation
Enterprises should evaluate how the new technological trends could enable them to become more responsive and agile as part of their comprehensive digital strategy before investing in any specific platforms or solutions. They should experiment enthusiastically but pragmatically with possible applications. The data generated from the emerging technologies would require immense processing, and the result would give a completely new experience to the consumers leading to a blurring line between the physical and the digital worlds. Enterprises must have a strong cyber security strategy to deal with the risk related to identity theft, data privacy, human safety, data breaches, and other factors while adopting these technology for their sustainability and long-term benefits.