The Promise of Consumer Technologies in Emerging Markets

Across Asia, Europe, and the Americas, consumer technologies are finding a home away from home. Employees increasingly use their own IT devices, such as tablets and smartphones, to solve problems within the enterprise that employs them. They use these resources in addition to—and sometimes in lieu of—tools supplied by the company.

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Indeed, employees themselves are driving this IT consumerization trend. Influenced by their personal experiences with IT, employees perceive their own devices as more valuable as well as easier and more enjoyable to use than the tools provided by their organization. As part of our survey of more than 4,000 employees worldwide, we found that a majority (52%) is already harnessing the capabilities of consumer gadgets for business purposes. More than 23% are using personal consumer devices at work on a regular basis (see Table 1); for example, to stay connected with colleagues or customers. And 29% are using them at least once during an ordinary work week.

But IT consumerization does not stop there. In addition to consumer devices, employees are also using consumer software apps that are not part of the corporate enterprise IT portfolio, but are available for easy consumption through the cloud by home users and employees alike. Google Apps, Facebook, and Skype are just a few examples of consumer apps that employees are regularly using as work aids. From boosting personal productivity on the job, to strengthening social and business relationships, to empowering virtual communications among colleagues, consumer applications are used daily by more than 20% of employees worldwide, according to our survey (see Table 1); 29% use such apps at least once a week.

Interviews we conducted at the out-set of our research with more than 47 senior executives across multiple industries showed that while most had recognized IT consumerization as a pressing and even threatening topic, they had not attempted to formally quantify its organizational impact. When prompted about the benefits of IT consumerization for the organization, executives typically identified one (or more) of three themes: employee innovation, employee productivity, and employee satisfaction.

Employee innovation, particularly in business processes, was commonly mentioned as a potential outcome that, over time, would also likely turn into cost savings. A CIO of a hospital, for instance, described a nurse’s innovation regarding bandaging wounds. When nurses change patients’ dressings, it often happens that the attending doctor arrives late, but still needs to inspect the wound. Instead of taking off a fresh bandage, the nurse had taken pictures of the wound with her phone and was able to show and document the healing progress. Later, the IT group helped to institutionalize a new process by providing a wizard for uploading and storing the image and linking it to a streaming viewer that allowed the doctor to securely retrieve the image. This example also illustrates another potential benefit: employee productivity.

Several executives mentioned the value to the organization of employees using the technology to productively link to resources while outside enterprise boundaries and normal working hours. Others mentioned the opportunity to enrich the interaction with customers—such as a pharmaceutical representative using a tablet computer and an interactive app or short video in a dialogue with a busy physician. The most commonly discussed benefits, however, related to employee satisfaction. Many interviewees recognized the changing characteristics of the generation of employees now entering the workforce, particularly their high comfort levels with, and expectations about, social networking and consumer technologies. IT consumerization was seen as a valuable tool in attracting and harnessing these new hires. Current employees, on the other hand, were perceived as valuing the independence and even the enjoyment that came from being able to choose their own tools as well as the convenience of working with up-to-date technology that paralleled what they used outside of work and better suited the characteristics of their job.

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Distinctive Usage Patterns

While adopting consumer technologies for work purposes is a worldwide phenomenon, it is by no means a uniform one. Our subsequent survey of 4,097 full-time employees from large organizations in 16 different countries reveals the adoption of consumer tools and applications in the workplace is more prevalent in emerging markets than in mature markets. Brazil, China, India, and Mexico, for instance, show disproportionately higher consumer IT utilization in the workplace (see Table 1). Even when controlling for the type and number of devices employees receive from their employer (desktops, laptops, smartphones, tablet PCs), employees in those nations are twice as likely to use a consumer technology in the workplace as their counterparts in mature economies, such as Germany or France, whose usage rates are below 10%.

What explains these differences in consumer IT usage patterns? One possibility is that many people in emerging-market countries have leapfrogged earlier forms of communication technology, particularly landline phones and personal computers. Another is that rising income levels of a wide middle class and mass-market pricing in emerging markets have made consumer technologies particularly affordable and appealing tools in these areas—for home and work. Consumer IT is small, cheap, modular, and ready to go. Not surprisingly, adoption rates of consumer IT in emerging economies are accelerating. While the overall usage of consumer technologies is increasing at an average of 5% for devices and 11% for applications around the globe, the fastest uptake in the near future, according to our study, will be in China (16% increase forecasted for devices; 35% for applications) and Mexico (11% forecasted increase for devices; 29% for applications, see Table 1). The size of the population using consumer technology is already much bigger in emerging markets and is growing much faster than in mature markets. In addition to these developments, differences in attitudes regarding the value of consumer IT in the workplace may shed further light on the usage patterns we found.

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Contrasting Attitudes

Employees perceived the value of consumer IT in the workplace similar to those mentioned by our executives interviewed for this study—namely as one of three things: innovation, productivity, and satisfaction. But unlike our interview data, our survey data of more than 4,000 full-time employees indicates fundamental differences exist regarding each of the three categories across the globe. Specifically, employees in emerging-market economies, more so than those in developed economies, see consumer IT as a tool that can drive innovation, increase personal productivity, and help companies attract and retain talent. (Note: The survey sample was drawn equally across industry and age groups, with approximately 250 employees from each of the 16 countries. All survey participants worked at companies with more than 100 employees. For demographics, refer to the appendix available online).

Driving innovation. Consumer technology’s potential to drive innovation in the workplace is reflected in the variety of ways employees use such IT to approach, tackle, and solve problems. Employees in countries such as Brazil, China, India, and Mexico are more than twice as likely as those in mature markets to use or download consumer applications from the Internet to solve a work problem, according to our study (see Table 2). They are also more inclined to create their own tech-based solutions or use their personal social contacts (gained through social media technology) to solve a problem. Instead of relying on established processes, for example, employees in emerging markets have the unique potential to create their own practices from scratch, with the help of consumer IT—and they happily do so.

Admittedly, improvisation (or creative problem solving) is an inherent characteristic of markets that, historically, have been resource deprived. Those cultures are also inherently more relational, that is, they utilize personal contacts to a greater extent in order to get business done. In addition, those countries typically invest less in IT when compared to mature markets. But even when taking all these explanations into account and considering our data was collected from large organizations—organizations with significant IT investments and formal IT governance structures—stark discrepancies in innovation perceptions between emerging and mature markets still exist. It almost seems that consumer IT is the perfect tool that is able to harness those improvisation and connectedness tendencies of emerging markets, and bring them to fruition. Employees in emerging and developed countries alike also see a direct relationship between permitting the use of consumer technologies in the workplace and innovation. However, those in emerging-market economies believe more strongly that use of such technologies can make a significant difference in their innovativeness. When prompted to indicate whether they expect consumer IT to help them be more innovative in their job, employees in emerging economies rated their perception consistently higher—on average between 21% to 35%—than the world average (see Table 2).

Enhancing productivity. Our study also showed that employees in Brazil, China, India, and Mexico spend considerably more time (as much as 19% to 46% more) than those in other countries seeking out applications they think will make them more productive at work (see Table 3). When asked whether they believe consumer technology would lead to better use of their resources or higher-quality work, employees in emerging economies consistently “agreed” or “strongly agreed” on such IT’s positive impact. More than 70% of our study participants from India and Mexico, and 82% of our China respondents, showed strong agreement—compared to much lower percentages of participants from developed nations.

For emerging and mature economies, productivity and technology seem to perpetuate one another. But for emerging markets specifically, this effect seems remarkably pronounced. As those markets ramp up their economies, consumer technologies are becoming increasingly available to a broad spectrum of people. This, in turn, could fuel economic growth even further. The World Bank has found that with the addition of one mobile phone per 10 people, the per-capita GDP of a typical emerging nation will increase by approximately 0.8%.⁶

In this context, the availability of cloud-based data and applications accelerates opportunities for value creation, making workers more productive irrespective of time and location with lower investment upfront. Cloud computing provides tools in a more accessible, cheaper, and easier-to-use-manner than technologies traditionally used by corporate IT. Indeed, compared to their Western equivalents, employees in emerging economies use the cloud almost twice as often in the workplace (see Table 3). This effect may stem from the lack of existing enterprise systems, the lack of IT policies, or both.

Capturing and keeping top talent. Lastly, our study revealed differences in attitudes regarding the power of consumer IT to attract and retain talent. As companies strive to compete by recruiting the best employees and keeping them on board, they are finding that offering these workers access to leading-edge technology can help. In particular, encouraging the use of consumer technologies sends a clear message that employees will have the most current tools available as well as maximum flexibility and freedom in carrying out their work. Yet again, this effect is remarkably more pronounced for consumer technologies in emerging-market economies than in mature ones.

For example, our survey respondents from emerging nations showed consistently higher levels of job satisfaction if allowed to use consumer technologies for work purposes (see Table 4). While the impact is noticeable around the globe (sample average is 59%), employees in emerging markets feel most influenced by the type of tools available. With rates well above 70%, employees in countries such as Brazil, China, India, and Mexico assign more importance to the use of the latest consumer IT than their mature-markets counterparts. In fact, having the latest technologies at hand is so important to emerging-market employees that a large percentage is willing to pay for their own IT. And as their country’s middle class grows, more of them can pay. More than 36% of our study participants from emerging economies have no objection to paying for some of their devices and applications for work, contrasted by mature-market countries, where employees are less inclined to shell out for such tools (see Table 4).

This figure is particularly interesting in the light of differences in purchasing power, which is 2 to 15 times lower in emerging markets than in mature markets.⁵ Despite these differences, the prospect of using a consumer device or application for work and home seems to hold more appeal for people in emerging economies. The novelty of these tools may be one reason. Another may be that IT policies are still nascent in emerging markets, owing to the lack of a preexisting infrastructure. Employees who have long been restricted to using certain mandated technologies may perceive consumer technologies as desirable must-haves.

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Consumer Technologies and Economic Growth

The arrival of consumer-originated devices and applications into the workplace is empowering a second iteration of an employee-driven IT revolution. The first revolution, over 40 years ago, was the invasion of corporate offices by employees armed with personal computers. While this revolution was largely mitigated by IBM whose endorsement precipitated acceptance by information systems departments and, in time, policies for appropriate use, today no dominant vendor with the clout of the near-monopolistic IBM exists that could come to the rescue. The number of consumer devices and applications are too many, their functionalities are too diverse, and their price points are too low.

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The adoption of consumer tools and applications in the workplace is more prevalent in emerging markets than in mature markets.

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While the majority of companies are still in the contemplative, reactive, or experimentation phases, ranging between the extremes of “authority,” such as the exercise of tight control over the scope and number of consumer devices and applications entering the organization, and “laissez-faire,” that is, the boundless tolerance for allowing consumer devices and applications into the workplace, they have acknowledged, voluntarily or not, that IT consumerization poses a new set of challenges that will need to be adjusted for. By broadening the scope of allowable devices and applications, for example, or by providing employees with IT allowances as job benefits, or by segmenting users based on consumerization profiles, companies around the globe have a variety of options to choose from.

Companies with workforces that are already embracing consumer IT and extracting measurable business value from it will be best positioned to capture those opportunities. Emerging markets might be one of them. Worldwide, emerging markets will serve as the primary engine of economic growth in the years to come, accounting for 70% of it.³ The increasing use of affordable consumer technologies in such economies will help drive that growth by opening untapped markets. While consumer IT might only be one factor in fueling this growth, it is certainly an important one. The Indian government, for example, has provided subsidized tablet PCs to some of its most rural areas,¹ while the southern state of Karnataka is issuing iPads to all its state ministers.⁴ The Four Seasons Hotel in India has adopted iPads in both its hotel lobbies and restaurants,² and an agricultural company in India has developed a mobile app that lets farmers use their personal cellphones to sell produce. Delivered mostly in a pictogram format, farmers can see what current market prices are for specific types of produce, how much of each type is needed and where it is needed. These are just a few examples of how consumer IT is applied and utilized in those countries.

New supply chain strategies are presenting additional opportunities to use consumer IT in emerging-market workplaces. Already, Western firms are rethinking their traditional strategy of inventing at home and then exporting to developing markets. Of the Fortune 500, 98 companies now have R&D facilities located in China; 63 have them in India. In addition, vendors and manufacturers are increasingly concentrating on selling to emerging markets before entering mature markets.³ Consumer IT used in the workplace could help accelerate this ongoing trend. Many consumer tools are cheaper, easier to use, and quicker to implement than traditional enterprise IT, and they appeal more to emerging markets’ entrepreneurial appetite.

Furthermore, consumer technology presents a first-of-its-kind opportunity to transform what has historically been a liability—lack of IT infrastructure—into an advantage. Such technologies, particularly when linked through cloud computing (such as software-as-a-service), can inexpensively compensate for the absence of enterprise systems that, in the past, limited the growth of organizations in developing economies.

For companies that have long boasted established systems, this development means they can no longer rely on their IT infrastructure to differentiate themselves from aspiring rivals. On the contrary, what used to function as a barrier of entry against upstart competitors might now become an obstacle for all players. Just as Japanese manufacturers in the 1980s learned from and avoided early adopters’ mistakes, emerging-market companies might have the opportunity to leapfrog over an entire era of legacy systems by embracing consumer technologies. And while they may have smaller overall budgets, they can selectively deploy only those technologies—taken straight from the consumer market—that are most relevant to their needs.

While unknown, one might wonder what are the long-term implications of IT consumerization. A change in work culture seems inevitable, painting a world in which devices are easily substitutable, working hours surreptitiously extend into personal hours, office locations vanish or become irrelevant, and only the bandwidth to access cloud-based applications counts. One can easily envision employees bringing their own technology tool-belts to a job interview, just like the apprentices had to do in the middle-aged guild model. Judged not only by experiences, but also by the ability to contribute to, and interlink with, existing members and work practices might be of new concern for employers that try to recruit in a post-PC era world. Admittedly, those are pure speculations, but business and IT executives alike will have to understand that the use of consumer technologies in the workplace—the “consumerization” of IT—is a global phenomenon. Throughout the world, they will have to address it, not with piecemeal measures, but with strategies that help them get the most out of these technologies while still maintaining adequate control. In emerging markets, employees see even greater possibilities for the use of consumer IT at work.

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Employees in emerging markets see consumer IT as a tool that can drive innovation, increase personal productivity, and help companies attract and retain talent.

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As the landscape becomes ever more competitive, companies operating in those markets cannot ignore these attitudes. To maintain high growth at the business or national level, leaders will have to harness their employees’ enthusiasm for consumer IT as a tool for competitive advantage.

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