What is augmented reality and how can it help businesses?

Augmented reality (AR) is a technology that allows you to bridge the gap between the digital world and the physical world by overlaying digital images onto the real world that you can see.

By contrast, virtual reality (VR) places you into an imagined world, such as a video game.  Virtual reality uses an opaque headset, to fully immerse you in a virtual world.

Most augmented reality (AR) is viewed through smartphones and smart glasses.  AR has more of a business focus and benefit.  It is not just a “game thing”.

Surprisingly, AR is not a brand new technology.  One of the earliest successful applications of AR was in the 1970’s with the “heads up” display of key performance data onto the screen of a jet fighter pilot’s screen.  

In 2016, the augmented reality game Pokemon Go was launched and the world went mad for AR, with a peak of 45 million daily users.  This phenomenon demonstrated AR’s potential to be adopted by mainstream culture.

The business benefits of augmented reality are well established. Our physical reality is three-dimensional, while the rich digital data we work with, such as plans or manuals, is two-dimensional on computer screens and on paper.

It is not easy to mentally translate 2-D plans or drawings into 3-D images, as anyone trying to follow instructions to assemble furniture, for example, will be well aware of.

By superimposing digital information directly onto physical objects or environments, augmented reality improves our ability to rapidly absorb information and complete required tasks quickly and efficiently.

Boeing Aircraft is a pioneer in the use of augmented reality.  Boeing assembles complex military and commercial aircraft.  Errors in assembly can have very high downstream costs.  

Boeing funded a University study to compare the effectiveness of traditional 2-D drawings on a PC screen with 3-D augmented reality.  The use of AR resulted in a 90% reduction in error rates and a 30% increase in productivity.

Augmented reality also provides firms with an ability to capture and retain “tribal knowledge” in the AR routines.  That is, skills and know-how of older, more experienced workers may be captured before they retire or move on.

As with most emerging technologies, the real value of augmented reality will not be found in applying it to today’s processes, but in reimagining every process to capitalise on the power of AR.

At present, the barriers to adoption of augmented reality are largely technical.  Smart glasses need to improve their performance in terms of cost, size, weight and power requirements.  

Other barriers include a lack of standards, which is typical in an early stage market. Cultural barriers also exist, including status quo bias, or an aversion to new ways of doing things.

Is AR ready for broad adoption by business?  Realistically, no, not yet.

These are early days and the market is still fragmented. There needs to be more “plug-and-play” solutions.  Over the next few years, there will be substantial innovation that reduces the cost and raises the performance of smart glasses.  This will help to ignite a market take-off. 

How should businesses prepare for augmented reality?  A useful first step is to analyse your company’s value chain for links that can be enhanced by AR.

Pilot trials to measure where the best cost-reduction, quality improvement and customer experience enhancement may come from will help prepare you for when the timing is right for wider adoption.

Should you start using AR if the technology is still not fully developed?  The value proposition for AR seems real.  As an early adopter, you will gain immediate benefits of reduced errors, improved productivity and better use of more engaged labour.  

More importantly, you will be positioned to become more competitive because of learning curve benefits, early cultural adoption and preparation for the rapid refinement of augmented reality technologies.

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