5G for the enterprise: A status check

It’s no secret that the world is buzzing about what 5G means for the consumer – any ad you see from a major mobile network operator these days confirms that. But what about what this next-generation network means for businesses?

5G offers a tremendous opportunity for enterprises to transform their business, but many might not yet recognize it. That’s because 5G technology for the enterprise is still in the very early stages, with a ways to go before we realize its full benefits.

So what lies ahead with 5G for the enterprise? First, we must reset on what we can truly expect from the technology, where it is on the adoption curve today – including what might be holding it back – and the critical steps for businesses to capture the potential of 5G, something that has been hyped up for some time.

The promise of 5G

The benefits of 5G for businesses are much different than the benefits of 5G for consumers. For the enterprise, 5G offers an incredible promise in three main areas.

The first is with operations, with 5G providing a path for improving operational performance and cost, using increased connectivity, faster speeds, and lower latency to apply intelligence and automation to routine tasks. This could include everything from factory and warehouse automation to intelligently monitoring the flow of traffic from major sporting and entertainment events. It can also enable initiatives such as using large quantities of sensors to reduce the usage of electricity and water.

The second key area is employee experience. Enhancing employees’ ability to perform their jobs, be efficient, and remain safe while doing so is a key priority for businesses, especially with more than 90% of executives at tech, media, and telecommunications companies reporting higher turnover within their organizations than normal. 5G can help here. For example, it can be used to enable augmented reality to train and enhance the performance of repair technicians. It can also be used to better monitor worker performance to anticipate and schedule breaks. And it can be leveraged to provide information where and when it is needed so that employees can better serve customers and do their job effectively.

The third is with the customer experience which, thanks to a stronger employee experience from 5G, can also be elevated, creating new opportunities to delight and amaze customers. This could be everything from enabling virtual try-on experiences (“magic mirror”) for clothing retailers to allowing diners at restaurants to have multi-media access around how their food is sourced and prepared. It can also be used to reimagine experiences at concerts, sporting events, and even in theme parks.

5G for business adoption

While these incredible opportunities are in sight for businesses, they aren’t fully here yet. Some large businesses have enabled 5G for their standard corporate mobile device plans, since the major national mobile network operators have made this the standard, but most large enterprises have not yet deployed 5G-dependent applications and services.

There are a couple of key reasons for this. One is simply that 5G networks are yet to fully mature and reach the required performance, coverage, and consistency needed to make many of these more ambitious goals a reality. But this day will come and businesses need to be prepared for it.

In addition to the lack of network maturity, the availability and cost-effectiveness of 5G-capable devices, particularly the myriad of IoT devices needed to make the promise of 5G a reality, is still in its infancy. With more devices being rolled out every month, the cost will continue to decline. But for now, selection is limited and the cost remains high.

Initial interest is strong among some organizations to start preparing for the future, with a select number of enterprises beginning to do some trials with 5G devices and networks, including private 5G networks. But the relative immaturity of the device and network equipment ecosystems, plus the lack of clear business cases in some areas, is making progress slow.

The road ahead

Many business leaders feel daunted by obstacles they expect to face on their 5G journey. The main hesitancies for investing in 5G often come from a lack of understanding around what 5G could offer the enterprise, a lack of a clear business case to support 5G investment, and a lack of clarity on the additional benefits that other emerging technologies, like edge computing, could bring to the table, as well as what the potential business models are for employing it.

As a first step, enterprises need to be educated to better understand the art of the possible with 5G. What can it do for their businesses in terms of operations, employee experience, and customer experience? Are the use cases localized in their facilities or dependent upon wide-area network capabilities and coverage? The time to ask these questions is now.

One way enterprises can find the answers to some of these key questions is by conducting controlled pilots to test the possibilities of 5G. In the months ahead, look for major systems integrators and/or OEMs to increasingly partner on pilots to test out the potential of 5G to recognize what works, what may not, and make any other discoveries along the way.

Approaching this phase with one eye on the future is a must. For example, one attractive concept that has often grabbed interest from organizations is the concept of edge computing, which on paper complements the low-latency performance of 5G and could very much be a path that opens up new business opportunities. This will be beneficial to the enterprise by bringing the computing elements physically and logically closer to the edge of the network where usage takes place. This supports more responsive experiences, which is a necessity for applications such as augmented reality.

But the main challenge with edge computing is the question of what the business model is and who pays for the improved performance. Right now, this is incredibly unclear and a looming issue that is holding back edge computing from taking hold.

A 5G-connected future awaits

Businesses where operations are localized, such as manufacturing, education, and retail, will likely be the industries to realize more near-term benefits of 5G, while more distributed businesses such as transportation and those with distributed workforces such as field sales, maintenance, repair, and logistics are still a ways out from fully exploring 5G.

But regardless of the exact path and timeline, 5G will become a reality for organizations across the board. The ones that begin the investment now and in the right way will rise above the rest. While the path for a 5G-connected enterprise may seem muddy and complex at times, taking it will definitely be worth it.

Dan Hays is a Principal at Strategy&, part of the PwC network.