Emergence of cyber-physical work environments
Working in cyber-physical environments can enhance diversity and inclusion, but could also lead to cultural, organizational and technology-related issues.
Depending on their industry sector and business model, enterprises operate in very different working environments ranging from office spaces to manufacturing floors, warehouses and retail premises. These working environments have different characteristics and communication requirements. The underlying assumption for this research has been that all working environments are in one way, or another affected by a digital transformation strategy.
In this report, “cyber-physical workplaces” are defined as workplaces where physical working space and digital systems for remote collaboration are integrated to enable and enhance work processes. Digital tools and systems can be used to enable remote meetings, remote education and product development. Emerging digital tools such as Generative AI (Artificial Intelligence) and XR (extended reality) can enhance these use cases further. As analyzed in detail in “Human-centric driven value creation” chapter, the main driver for enterprises to implement such solutions is to advance operations.
When transitioning to cyber-physical work environments, a wide range of cultural, organizational, technological, and regulatory factors need to be considered. Cultural factors include the adaptation of leadership culture to virtual work environments, enhanced sensitivity for cyber security protection, and, in some cases, a changed attitude towards the perceived value of in-person interaction. Organizational factors are primarily caused by changes in roles and responsibilities caused by a digital transformation. Regulatory factors include safety standards, data privacy, cyber security, accountability and insurance and other areas. On the technical side, a digital infrastructure needs to be in place that facilitates advancement of immersive technologies, interoperability and integrability, cyber security, as well as health and safety. This is discussed further in the chapter “How enabling digital tools and technologies can boost the value creation capability for human centric use cases”.
The paradox of digital collaboration: Employees see opportunities while decision-makers are skeptical
Work and leadership culture in an organization is impacting ways of working. At the same time, a transition to a cyber-physical workplace will also impact work- and leadership culture. As researched in the Ericsson Industry and Consumer Lab report “Future of Work Life”, new mechanisms of employee monitoring are on the rise for the purpose of performance monitoring [1]. Changes of this type have the potential to create friction within an organization, which may limit the full value creation potential of a transition to cyber-physical work environments. It is therefore important to secure a shared understanding of opportunities and challenges posed to an organization by such a transition.
This study shows that there are currently significant differences in viewpoints between decision-makers and employees in companies across all industries about key aspects of digital collaboration. This can be seen as the paradox of digital collaboration: Employees see opportunities, while decision-makers are skeptical.
One aspect of this paradox are significant differences related to meeting preferences between employees and decision-makers. 7 out of 10 decision-makers state that people in their organization prefer in-person meetings (see figure 13), but only half of the employees say that they do so. Meetings are done for different reasons, and some types of meetings may benefit more from in-person interaction than others. Particularly meetings with the purpose to build initial personal trust and where highly impactful decisions must be taken, are often best held face-to-face. However, this may also be subject to perception and/or biases. Upper management leaders might base their views on how their immediate subordinates act and reason, rather than on the voices from the people further down in the corporate hierarchy.
The other aspect of the paradox of digital collaboration is business travel. Business travel has long been seen not only as a business necessity, but also as a privilege for many employees and decision-makers. At least among employees, this seems to change now. Almost 6 out of 10 employees are willing to give-up business travel, but only 4 out of 10 decision makers believe that employees in their organizations are willing to do so (see figure 13). While the need for business travel is of course linked to the perceived need for in-person meetings, the difference in viewpoints between employees and decision makers is still very significant.
Figure 13: Differences in viewpoints between decision-makers and employees regarding in-person meetings and business travel
50% of all Employees prefer in-person meetings
70% of all Decision-makers believe that employees prefer in-person meetings
40% of all Employees are not willing to give up travel
60% of all Decision-makers believe that employees aren't willing to give up travel
Despite the above-described paradox, employees and decision-makers have similar viewpoints related to the business benefits provided by human-centric use cases. This is discussed in more detail in the chapter “Human-centric driven value creation”.
Remote meeting and education applications are not yet perceived to be good enough for a full transition to virtual workplaces
To what extent enterprises will embrace the transition to cyber-physical workplaces also depends on the digital user experience with human-centric use cases. Currently 52% of all employees still prefer in-person meetings and even 67% prefer in-person education.
While there can be several reasons for these preferences, one of them is that most employees see current solutions for remote meetings and remote education still as not being “good enough”. 61% of all employees state this is the case for remote meetings and 64% state this for remote education.
There can be a broad range of reasons why users perceive current solutions for remote meetings and remote education as not yet good enough to substitute in-person meetings. Technical issues ranging from software bugs to audio and video quality may exist, user interfaces may still be too complex, joint working with documents could be cumbersome. According to the Ericsson Consumer and Industry Lab study “The future of Work Life”, 40 percent of employees struggle with overlapping technology and tools that are too complex to use or have too many unnecessary features [1]. All this has a negative impact on the digital user experience.
Several emerging digital tools for human-centric use cases including device handover and meeting continuity, AI and XR are expected to enhance the digital user experience significantly and, thereby, impact the current user preferences.
One of the essential tools to enhance the user experience is the device handover feature already introduced in the chapter ”Human-centric driven value creation”. This feature allows a seamless transfer of ongoing meetings between devices. Combined with a smooth handover of ongoing meetings across different connectivity technologies, such as from WiFi to cellular (referred to as meeting continuity), it removes technological boundaries and enables both flexibility and scalability.
Such advanced digital user experience are a likely reason for the expected major uptake of emerging digital tools and technologies within the next 3-5 years as analyzed in the chapter “How enabling digital tools and technologies can boost the value creation capability for human centric use cases”.
Over 60% of employees think that the existing digital solutions for remote meeting, remote education and digital product development are not yet adequate substitutes for their in-person counterparts.
Different sensitivity for cyber security protection in digital collaboration puts enterprise-wide adherence to security policies at risk
Digitalization can create cyber security vulnerabilities which must not be underestimated. Such vulnerabilities can be of technical nature such as insecure communication channels or result from user behavior, for example if users are tricked to reveal login credentials, or simply share sensitive information with wrong recipients. For human-centric use cases, it is therefore of pivotal importance that security policies are understood and fully embraced by all employees and decision-makers across an organization. Different viewpoints on cyber security in digital collaboration can risk consistent adherence to security policies across an enterprise.
Yet, this study has uncovered that different viewpoints about cyber security protection do exist in many enterprises between decision-makers and employees and between different human-centric use cases.
One alarming observation is that employees across all industry segments are significantly less concerned about cyber security for remote meetings and remote education than decision-makers. In the case of remote education, 75% of all decision-makers, but only 48% of all employees see cyber security as a key challenge. As for remote meetings, 54% of all decision-makers, but only 41% of all employees see cyber security as a key challenge. This is illustrated in figure 14.
Figure 14: Viewpoints of decision-makers and employees on cyber security protection
- Stephen Crowley, former Transformation CIO at Covetrus Inc.
Decision-makers may have deeper insights into technical vulnerabilities of remote meetings and remote education solutions and may also have a better understanding of data sensitivity. But such a significant difference in cyber security concerns for human-centric use cases is certainly a warning sign.
It is also noteworthy how cyber security concerns vary between different human-centric use cases. On average, 60% of all decision-makers and employees see cyber security protection as a key concern for digital product development, but only 48% share this concern for remote meetings, see figure 15.
Figure 15: Average share of decision-makers and employees who identify cyber security as a key challenge for remote meetings and digital product development
This means that nearly 30% more employees and decision-makers see cyber security as a key challenge in digital product development than in remote meetings.
Leakage of data related to digital product development can have a direct impact on competitiveness and intellectual property rights. Solutions for digital product development and remote meetings may have different technical protection against cyber security threats, but human behavior is also very important.
The identified, significant deviations in cyber security concerns between remote meetings and digital development could indicate that company staff underestimate cyber security risks in remote meetings, particularly once remote meetings have become a well-established way of working. Frequent usage can create a “comfort zone”, reducing the awareness for risks, potentially also when product-related topics are discussed.
Sustainability frontrunners are more likely to be aware of how important human-centric use cases are to diversity and inclusion in the workplace
Diversity and inclusion in business is evolving towards a key business success factor. The likelihood of financially outperforming other industry players is increasing significantly if executive teams are diverse in gender and ethnicity [2]. But the benefits of a diverse and inclusive workforce is spreading across all layers of an organization. Diversity and inclusion bring a broader range of experiences and perspectives into an organization, triggers creativity and enhances employee engagement. This ultimately leads to better problem solving, decision making and increases innovation capabilities.
Human-centric use cases are critical enablers to facilitate the implementation of diversity and inclusion strategies in the workplace as they have the potential to lower barriers for employees with disabilities, create flexibilities, and enable geographically distributed team collaboration. But the concrete value for an enterprise needs to be understood across the whole organization. This study reveals a close correlation between performing corporate sustainability reporting and recognizing the importance of human-centric use cases for diversity and inclusion across organizations. Corporate sustainability reporting includes environmental, social, and economic aspects, often referred to as “triple-bottom-line”. This framework is applied, among others, in the European Sustainability Reporting Standards.
30% more decision-makers from companies doing corporate sustainability reporting recognize the benefit of improved diversity and inclusion through the application of human-centric use cases, compared to those from companies without such reporting. Often seen as an administrative burden, sustainability reporting can also serve as catalyst in driving diversity and inclusion and thereby achieving related business benefits.
The number of decision-makers recognizing diversity and inclusion as a top benefit of human-centric use cases increases by 30% when enterprises engage in corporate sustainability reporting.
