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CEOs rate productivity 'very low' from emerging tech

CEOs rate productivity 'very low' from emerging tech

Execs need to be more creative thinkers in optimizing internet of things, artificial intelligence, blockchain and 3D printing, analyst says

The internet of things, artificial intelligence, blockchain and 3D printing promise to improve productivity on a grand scale for enterprises, cities and other organizations.

Even so, CEOs and other senior enterprise managers rate such breakthrough technologies "very low" in terms of productivity improvement in the next five years, according to a new Gartner survey of 388 senior executives. But it may be too early in the game to fully appreciate the potential benefits of these technologies, Gartner suggested.

"There seems to be a big, unexplored future," said Gartner analyst Mark Raskino in a summary of the survey released Monday. "That [future] amounts to a leapfrog opportunity for a new generation of brave and creative business technology thinkers."

Raskino said CEOs and CIOs need to "completely reinvent" the operating models they use for improving productivity that rely on the radical changes promised with IoT, A.I., blockchain and 3D printing. Those four, which Gartner calls general-purpose technologies (GPTs), can be applied in a variety of ways and are "capable of changing the way business and society work."

Of those four GPTs, only 2% of the 388 CEOs and senior executives in the survey listed IoT as their top enabling technology for improving productivity, while just 1% of respondents each picked blockchain, 3D printing and A.I. Older and existing technology fared better, with ERP at 10%, following by cloud (7%), analytics (7%), CRM (4%), mobile (3%) and marketing tools (3%). "We notice very low mentions for the four potential breakthrough GPTs," Raskino noted.

When asked what level of business change the four technologies would bring in the next five years, the CEOs seemed well aware of the technologies even if the executives couldn't credit them with major productivity improvements. For IoT, 49% said the technology would be transformational or major in the level of business change to come. For A.I., 37% said it would be major or transformational, while blockchain was rated at 25% and 3D printing at 26%.

Raskino said it's not surprising that CEOs are struggling with how to measure productivity from GPTs, since CEOs are still largely judging productivity based on management theory from the industrial manufacturing era.

"CEOs lack a major new theory," Raskino wrote. "The really big management ideas of the past like business process management (BPM), total quality management (TQM) and lean [management] are less helpful in an ephemeral product and services world where social networks, business model innovation, design thinking, brand values and customer experiences are at the center of value creation …There is still little in the way of management theory on how to optimize the new kinds of inputs and work …There is no new big idea or major trend in contemporary productivity thinking."

Gartner's survey found that almost half of the 388 CEOs surveyed judged productivity in an operation based on revenues. But Rakino said that revenue metrics fail "to focus management attention squarely on how many units of value are produced per amount of input."

To shift focus requires CEOs and CIOs to think creatively about how to judge the value of new technologies like IoT. Many CIOs in private manufacturing, smart cities and utilities rely on pilot projects using sensors and wireless networks conducted at a small scale to detect problems and evaluate benefits before expanding. With open data projects for smart cities, the benefits are sometimes weighed in improved citizen approval ratings, with little or no revenue potential, analysts said.

"CIOs should be experimenting [with GPTs], that is for sure," Raskino said in an email. "What's really needed is new business-transforming management science ideas. Those include methods of framing, modeling, measuring and changing productivity to take advantage of the pile-up of new high-power technologies. Big, creative thinking may be more valuable than yet more new technology right now. The smartest CIOs of this generation have the opportunity to come up with new methods as powerful as Lean or BPM were in prior decades."

Jack Gold, an analyst for J. Gold Associates, said it isn't a surprise that CEOs don't see high productivity from these new GPTs. "Most companies, including high-level execs, hear about all the new technology coming and expect it to affect their companies," Gold said. "But most also have no idea how" to bring about an impact.

"The vast majority of companies don't really measure return on investment (ROI) and the impact a new technology has given them in competitive advantage," he added. Gold's surveys show that only about 15% to 25% of companies do any kind of measurement of the impact of new technology, including cloud, mobile, IoT, virtual reality and more.

"Much of the impact is seat of the pants guessing," Gold said.

What's needed, Raskino said, is a "new generation of breakthrough, creative CIOs for the second half of the information age — like the Max Hoppers of the first half."

Hopper in 2000 was named by Computerworld as one of the top 25 greatest contributors to the field of information systems. Hopper, who died in 2010, served for part of his career as CIO of the Bank of America.

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