We live in an age where the digital transformation of business is having a profound effect on the way we work, consume, access services, and how businesses operate.1
In fact, by enabling new businesses models, technology is even affecting entire markets. Brands like Uber, Netflix, Airbnb have disrupted their industries and changed the way we think about taxis, TV, and accommodation.2
Those are extreme examples, and not every use of new technologies will have such a dramatic effect. There are, however, a number of emerging technologies today that have the potential to enhance your business. For instance, by enabling innovative new products and services, or by creating more efficient ways of working.
Two such technologies are Virtual Reality (VR) and Augmented Reality (AR). The question is, will these technologies enhance or disrupt your business?
First, it is important to understand what they are and how they are already being used to drive innovation and efficiency in the real world.
What are Virtual Reality and Augmented Reality?
Virtual reality is essentially a computer-generated environment that can be explored and interacted with. Usually via a specially designed VR headset. It is probably best known for its applications in gaming, where VR heads allow users to explore virtual worlds as part of their game play.3 However, it is increasingly being used in business and commercial applications.
Augmented reality, meanwhile, is the layering of computer-generated content over real-world environments. AR lets you aim your smartphone camera at an object, landscape or building, and see additional information in that same view (usually in the form of text, graphics or audio).4 Perhaps the best-known example of AR is Google Glass, which are essentially smart glasses that overlay digital information onto the real-world view.5 Again, AR is increasingly now being used in business settings.
AR and VR: Real world business applications
This is not just theory. Both AR and VR are already being used in a wide variety of businesses settings, including:
1. Automotive
Automotive engineers and designers are using VR to experiment with the look and build of a vehicle before commissioning expensive prototypes. This is saving the industry millions every year.6
2. HR
In HR, both VR and AR are being used to efficiently deliver highly effective, immersive staff training. While VR is used in recruitment to give potential recruits a ‘real world’ feel for the working environment.7
3. Healthcare
In healthcare, VR is being used to help surgeons prepare for complex surgery. As well as in treating conditions like PTSD.6
4. Retail
Retailers are using both VR and AR to enhance the shopping experience, particularly online. For instance, using AR to enable ‘virtual changing rooms’.6
5. Manufacturing
Manufacturers are using AR enabled devices overlaying technical information on real world views to guide employees through complex workflows more efficiently. Also, to enable maintenance engineers to quickly identify and repair machinery or equipment.8
Those are just a few examples. However, as interest in these technologies grows, many experts agree that both VR and AR hold huge potential to drive efficiency and innovation. Ultimately changing the way businesses operate.9
VR and AR: Enablers or disruptors?
These technologies could prove to be significant business enablers in future, as new applications are identified, and their use becomes more widespread. As the examples above demonstrate, both have the potential to create:
- new business models;
- new ways of working;
- innovative products and services;
- and real efficiencies.
Yet, seizing these opportunities is not as simple as just buying VR or AR technologies. Making the most of them requires real thought about how they will be used, by whom, why they will use them, and what the benefits will be.10
On the other hand, failure to keep pace could see businesses left behind. Just as Blockbuster eventually went bust after Netflix came along and disrupted the video rental market. The risk is that your business will be left behind if competitors are the first to adopt AR or VR. These technologies can enable innovation, better service, or lower costs that traditional ways of working cannot match.10
In short, whether AR and VR will enable your business or disrupt it comes down to when and how they are applied. Not just in your own business, but by competitors and in the wider market. That does not mean you should rush to adopt these technologies. Instead, they should be part of long-term planning and integrated into your thinking around innovation. It is crucial to stay aware of what is happening in the wider market to avoid being left behind.11
VR, AR and technology risks
More often than not, new technology brings new risks, and AR and VR are no different.
Intellectual property (IP)
Perhaps the most pressing risk is related to intellectual property (IP), which related both to licencing AR or VR technology and any the use of content within it. With that in mind, businesses involved in developing content for AR and VR need to carefully consider how to protect the IP associated with their creations. They must also focus on mitigating the risks that come with using third-party content.
This could include ensuring licenses are in place to cover the use of third-party imagery, characters, music, and other AR or VR content. It is also important to address the IP rights attached to user-generated content in terms of service. Pay particular attention to the use of trademarks or copyrighted material, as IP infringements are rarely black and white.
Data privacy
Data privacy is another important risk to consider, since AR and VR technologies typically process large amounts of personal data. Including users’ identity information, appearance, body-tracking data, location, communications, and other behaviour. Given that many AR and VR technologies require this data to function, there is a risk an application will fall foul of GDPR. Unless it can be proved that the application will function as normal without access to this data.
Cyber risk and security
Next is cyber risk and security, which is a serious consideration. AR and VR applications often require access to various data from sensors, including video, audio, and GPS. They may also utilise users’ other devices and social media accounts. As a result, a cyber incident like a hack or data breach can pose significant risks. For instance, the disruption and cost of dealing with a data breach.
In fact, the Kaspersky Security Lab points out that both AR and VR can open new doors for hackers to access a business’s computer systems. This increases the risk of viruses and a wide range of cyberattacks. Including social engineering, ransomware, and denial-of-service attacks.12
All these cyber risks can have serious consequences if the worst should happen. From:
- disruption;
- loss of revenue;
- fines and remediation costs;
- to reputational damage.
That means any business thinking about adopting AR or VR technology should also think seriously about these risks and how to mitigate them. This includes taking a close look at cyber insurance, which can help to minimise the damage if cybercriminals strike.
In summary, the potential benefits of AR and VR are significant. However, when it comes to choices around which AR or VR technologies to adopt or develop and how to use them, those benefits must be weighed against the risks.
For more information
You can find out more about the cyber insurance protection available from Marsh Commercial, or if you want more general guidance around AR and VR risks, find a local Marsh expert for help and advice.
Source
1. silicon.co.uk/disruptors-how-businesses-are-using-technology-to-radically-change
2. aurora.dawn.com/news/1144005
3. virtualspeech.com/vr-applications
4. daglar-cizmeci.com/augmented-reality-for-business
5. en.wikipedia.org/Google_Glass
6. virtualspeech.com/vr-applications
7. finextra.com/what-augmented-reality-and-virtual-reality-brings-for-business
8. blog.isa.org/augmented-reality-in-smart-manufacturing
9. business.com/best-augmented-reality-uses
10. investopedia.com/disruptive-innovation.asp
11. theguardian.com/netflix-marc-randolph-founder-blockbuster
12. kaspersky.com/security-and-privacy-risks-of-ar-and-vr
