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  • Artificial Intelligence
  • Irving Wladawsky-Berger
  • NOV 22, 2019

The Business Value of Augmented Reality

I recently heard a very interesting presentation at the 2019 MIT CIO Symposium, - Why Companies Need an Augmented Reality Strategy, - by Harvard professor Michael Porter and James Heppelmann, CEO of PTC, an industrial software company.  The talk was based on their HBR article A Manager’s Guide to Augmented Reality.

We generally think of products as physical entities built with a combination of mechanical and electrical components, - e.g., appliances, cars, agricultural machines, industrial equipment, - some quite simple and some highly complex.  But, in a 2014 HBR article, Porter and Heppelmann introduced the notion of smart connect products (SCPs), a whole new class of products that, in addition to mechanical and electrical components, use digital components like microprocessors, sensors, data storage, software, and connectivity in a wide variety of ways.  Smart connected products are radically reshaping companies and exposing them to new competitive opportunities and threats, while altering industry boundaries and creating entirely new industries.

Through its first five decades, IT helped companies become significantly more productive, by automating many of their processes, reengineering their overall operations, and reaching out beyond the boundaries of the enterprise.  But, their actual products were largely unaffected.  This is all now changing with the rise of the Internet of Things (IoT)cloud computingBig DataAI, and other innovations whose combined impact is driving the new era of smart connected products.

As the world’s digital and physical infrastructures converge, IT is now an integral part of the products themselves. Digital technologies are designed right into the products.  Massive amounts of product-usage data can now be gathered, stored and analyzed by a variety of applications in the product’s cloud counterpart.  The cloud might also include a digital twin of each specific physical product, that is, a highly realistic 3-D digital model that monitors the real-time status of the digital twin’s physical counterpart, - e.g., a jet engine, elevator or turbine, - and helps make important decisions such as the need for preventive maintenance to prevent a product failure.

In  A Manager’s Guide to Augmented Reality, Porter and Heppelmann note that the constraint of dealing with highly complex products is no longer a lack of data and insights, but rather, how humans best assimilate and act on them.  “There is a fundamental disconnect between the wealth of digital data available to us and the physical world in which we apply it.  While reality is three-dimensional, the rich data we now have to inform our decisions and actions remains trapped on two-dimensional pages and screens.  This gulf between the real and digital worlds limits our ability to take advantage of the torrent of information and insights produced by billions of smart, connected products (SCPs) worldwide.”

We need smart connected humans to help us better deal with our complex SCPs.  Their article argues that augmented reality (AR) will become the key interface between humans and machines that’ll help bridge the gap between the digital and physical worlds.

AR comprises a set of technologies that superimposes computer generated digital data, images and animation on real world objects.  The technology is still in its early stages.  Today, most AR applications are focused on entertainment and delivered through smartphone and tablet apps, e.g., Pokemon Go.  But, they’re being increasingly applied to commercial and industrial applications.  And, in addition to smartphones and tablets, they’re being delivered through hands-free devices such as AR smartglasses, head-mounted displays, and heads-up displays in cars.

AR enables a new information-delivery paradigm.  “Though the web transformed how information is collected, transmitted, and accessed, its model for data storage and delivery - pages on flat screens - has major limits: It requires people to mentally translate 2-D information for use in a 3-D world.” That isn’t always easy, as anyone can attest who’s assembled IKEA furniture by following its associated step-by-step instructions, who’s tried to learn how to use their new car’s entertainment and navigation system, or who’s used a manual to fix an office copier.

“By superimposing digital information directly on real objects or environments, AR allows people to process the physical and digital simultaneously, eliminating the need to mentally bridge the two. That improves our ability to rapidly and accurately absorb information, make decisions, and execute required tasks quickly and efficiently…  The web, which began as a way to share technical reports, ultimately transformed business, education, and social interaction.  We expect that AR will do the same thing for communication - changing it in ways far beyond what we can envision today.  Companies will need to think creatively about how they can use this nascent channel.”

The article discusses three key AR capabilities: visualize, instruct and guide, and interact.  Let me say a few words about each.

Visualize. “AR applications provide a sort of X-ray vision, revealing internal features that would be difficult to see otherwise.”  For example, a medical device company, AccuVein, uses AR to convert the heat signature of a patients veins into an image superimposed on the skin, improving the success rates of blood draws and other vascular procedures.

Instruct and guide.  This is one of the most important applications of AR.  Written instructions for assembly tasks or to learn how to use a new product are frequently hard to follow.  Instructional videos help, but one needs to constantly map the video to the physical tasks at hand.

AR-enabled devices address these issues by providing real-time, step-by-step visual guidance on product assembly, both for consumer and industrial applications.  “Complicated 2-D schematic representations of a procedure in a manual, for example, become interactive 3-D holograms that walk the user through the necessary processes.”  In addition, AR-enabled devices can transmit the real-time images an on-site user sees to a remote expert, who can further assist with detailed guidance.

Interact.  “AR takes the user interface to a whole new level.  A virtual control panel can be superimposed directly on the product and operated using an AR headset, hand gestures, and voice commands… A worker wearing smart glasses, for instance, will be able to walk a line of factory machines, see their performance parameters, and adjust each machine without physically touching it.”

AR is having an impact on just about all aspects of a product’s value chain.  In product development, AR allows realistic 3-D models to be superimposed on the physical world as holograms, helping engineers evaluate and improve designs.  In manufacturing, where processes are often complex and mistakes are costly, AR can deliver just the right information to factory workers the moment it’s needed, while making visible important data about each machine, thus reducing errors, improving productivity and preventing downtimes.  In marketing and sales, AR can show customers how products will look in their homes or other real settings before buying them.

In after-sales service, AR has the potential to help companies switch from transactional selling to a long-term, service-oriented customer relationship.  AR assists technicians serving customers in the field by showing them the status of the product based on the analysis of real-time product data, visually guiding them through needed repairs, and connecting them with experts as necessary.

“While the advances in artificial intelligence and robotics are impressive, we believe that combining the capabilities of machines with humans’ distinctive strengths will lead to far greater productivity and more value creation than either could generate alone.  What’s needed to realize this opportunity is a powerful human interface that bridges the gap between the digital and physical worlds.  We see AR as a historic innovation that provides this. It helps humans enhance their own capabilities by taking full advantage of new digital knowledge and machine capabilities.  It will profoundly change training and skill development, allowing people to perform sophisticated work without protracted and expensive conventional instruction - a model that is inaccessible to so many today.  AR, then, enables people to better tap into the digital revolution and all it has to offer.”

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