Blockchain, IoT, digital twins, key transformation technologies

Contributed Article
February 5, 2019 9:32 pm

REGIONAL TRANSFORMATION OUTLOOK 2019

Gartner has identified blockchain, Internet of Things, city operations centers, smart city frameworks, digital twins and smart contracts as being among the technologies that will achieve mainstream business adoption in the next five to 10 years in the GCC. Of the 29 technologies on this year’s Hype Cycle, eight are entering the Slope of Enlightenment and climbing toward the Plateau of Productivity. This shows that the GCC region is entering an important stage and growing in maturity.

However, technologies fuelling digital transformation in the region are taking longer to reach mainstream adoption. Local organisations are cautious about adopting new technologies. At the same time, system integrators are not fully equipped to handle complex digital projects due to a shortage of skills.

Of the six technologies, enterprises should focus on blockchain, IoT and digital twins, as these are growing rapidly. In addition, local organisations know that these technologies will help create competitive differentiation and enhance service delivery. Although blockchain technology maintains high visibility, Gartner does not expect blockchain architectures to be suitable for many enterprise activities, especially taking account of issues of decentralisation, risk and governance. However, startups may continue to seek disruptive opportunities using the original block and chain concept, and Gartner recommends that business executives undertake scenario planning accordingly.

In GCC, blockchain technology has received significant interest from the governments and financial institutions, due to the increase in the number of digitalisation projects currently underway. Organisations should consider proof-of-concept experimentation, but remain aware that the general public may not readily accept non-intermediated information management and transaction execution models and decentralised governance.

CIOs considering implementing blockchain technology should use clear language and definitions in internal discussions about the nature of this technology. They should also identify the points of integration with their existing infrastructures such as digital wallets and core systems of record to help determine future investment plans.

IoT has a business transformation and evolutionary impact on most organisations as it can be used as a key enabler to deliver services and create new business opportunities. IoT projects will impact most organisations’ competitive position, product development strategy and internal operations, as connected things will help generate revenue and lower costs.

While respondents of our global CIO survey said that 12% of their organisations have deployed IoT, and 24% are actively experimenting it, businesses in the Middle East face increasing costs, complexity and scaling challenges when they implement IoT solutions that actually deliver value. Gartner places IoT at the Peak of Inflated Expectations as they believe it will take up to ten years to achieve mainstream adoption by local businesses.

A digital twin is a virtual representation of a real object that is designed to optimise the operation of assets such as aircraft, power plants and buildings. The primary short-term use is to lower maintenance costs and increase asset uptime. In GCC, Gartner analysts expect oil and gas and manufacturing companies to combine digital twins and IoT solutions for asset performance management and streamlining processes.

Digital twins enable businesses to optimise or transform their business model and will become the dominant design pattern for solutions in the next decade. The challenge for organisations will be to change their thinking from a hardware-centric to a hardware-plus-software-centric perspective in order to fully integrate digital twins internally.

Organisations considering the use of digital twins should focus on identifying a portfolio of digital twin initiatives that provide short paybacks within one year and midrange paybacks within five years. Simultaneously, they need to conduct a threat and opportunity analysis of their current business ecosystem, incorporating digital twin developments by competitors or partners.

Key takeaways

  • Gartner does not expect blockchain to be suitable for many enterprise activities, taking account of decentralisation, risk and governance.
  • Digital twins enable businesses to optimise or transform their business model and will become the dominant design pattern for solutions.
  • Gartner analysts expect oil and gas and manufacturing companies to combine digital twins and IoT solutions for asset performance management in GCC.

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