How technology companies can navigate the metaverse with confidence
Technology company leaders frequently face risk, given their products often challenge conventional norms and create new paradigms. Yet it seems today’s leaders are facing more numerous and critical risks than ever before spawned by the economy, geopolitics, global health crises, climate change, cybercrimes, regulatory evolution, and increasing digital demands on today’s talent pool.
Another risk that has moved to the forefront for tech company leaders is the threat of new technologies disrupting their business models. Executives constantly confront the decision of which emerging technologies to invest in, and how much, to make their businesses more successful in the near term while mitigating risk. These decisions are made with today’s best available information, hoping that some new and unforeseen innovation won’t disrupt them tomorrow. As a result, emerging technology risk has consistently ranked as one of the top threats to growth for technology companies in the KPMG Technology Industry CEO Outlook surveys.
The metaverse is one of the latest emerging technologies to challenge tech company leaders, especially since it has varying definitions and different opinions on when the technology will reach maturity and mass adoption. As the metaverse expands the boundaries of the internet, new and evolving cyber considerations become apparent, including digital impersonation, interoperability, account takeover risk, and data protection.
Metaverse use cases are also developing, but for technology companies, the top near-term ones (from the present to 3 years out) center around employee training and collaboration, Internet of Things with metaverse experiences, and digital twins.
Perhaps, then, in a recent study of 767 technology, media, and telecommunications (TMT) executives conducted by Forrester Consulting on behalf of KPMG International, it’s not surprising that many respondents appear reluctant to invest heavily in the metaverse in the near term:
Source: A commissioned study conducted by Forrester Consulting on behalf of KPMG, December 2022
are spending less than 5% of their tech budgets on the metaverse
Only a third are building a business case to enable a metaverse strategy, and one quarter(25%) are not planning to pursue metaverse opportunities at this time.
However, the surveyed TMT leaders are more bullish about the metaverse’s longer-term potential:
6 Out of 10
believe the metaverse will have a huge impact on consumers and businesses. Three out of ten go so far as to believe it's the future of human interaction.
plan to increase or maintain metaverse investments two to four years from now
In the five-to-ten year outlook, plan to increase or maintain metaverse investments
There is risk with investing heavily in new technologies. There is also risk in doing nothing. How can technology companies leverage the metaverse while mitigating risk? Here are some considerations:
While hype and excitement are not a basis for investment, don’t rule out being an early adopter. With many companies holding back on investment until customer demand increases, a near-term investment plan can bring first-mover advantage and avoid the need to play catch-up.
Establish a solid business case and identify expected impacts. Be clear about what you hope to achieve by moving into the metaverse. Set realistic key performance indicators.
Quantify the upside for your specific organization and compare it with the risk of not moving fast enough—because wait-and-see is conversely a high-risk strategy.