Adoption of Augmented Reality Potential use-cases in an industry context Master’s Thesis in the Master’s Programme Management and Economics of Innovation IDA EKELÖF EMELIE HEDQVIST Department of Technology Management and Economics Division of Science, Technology and Society CHALMERS UNIVERSITY OF TECHNOLOGY Gothenburg, Sweden 2017 Report No. E 2017:059

MASTER’S THESIS E 2017:059

Adoption of Augmented Reality Potential use-cases in an industry context

IDA EKELÖF EMELIE HEDQVIST

Tutor, Chalmers: Erik Bohlin Tutor, company: Dan Matthews

Department of Technology Management and Economics Division of Science, Technology and Society

CHALMERS UNIVERSITY OF TECHNOLOGY Gothenburg, Sweden 2017

Adoption of Augmented Reality Potential use-cases in an industry context

IDA EKELÖF & EMELIE HEDQVIST © IDA EKELÖF & EMELIE HEDQVIST, 2017. Master’s Thesis E 2017: 059

Department of Technology Management and Economics Division of Science, Technology and Society Chalmers University of Technology SE-412 96 Gothenburg, Sweden Telephone: + 46 (0)31-772 1000 Chalmers Reproservice Gothenburg, Sweden 2017

ACKNOWLEDGEMENTSWewould liketoexpressoursinceregratitudetoeveryonewhohelpedustomakethisthesispossible.WewouldfirstlyliketothankDanMatthewsatIFSforhishelpandguidancethroughoutthestudy.Inaddition,wewouldliketothankoursupervisorsErikBohlinatChalmersUniversityofTechnology,forprovidinguswithfeedback,valuableinsightsandinspirationthroughoutthestudy.Lastly,wewouldliketoexpressourgratitudetotheintervieweeswhohavecontributedwiththeirknowledgeandexpertise.

Gothenburg,14/6-2017

_________________________________ _________________________________

IdaEkelöf EmelieHedqvist

ABSTRACTIndustries of today experience increased competition and cost pressure, further the trendsIndustry4.0andservitizationhaveemerged.Atechnologythatcouldfacilitateforthenecessarybusinesstransformation,furthersupporttheincreasedamountofdigitalcontent,isAugmentedReality.

This report aims to give a comprehensive understanding of what, positively or negatively,influences the adoption of AR amongst asset intensive manufacturers, from an externalenvironment-,organizational-,andatechnologicalperspective.Furthermore,differentuse-casesforARhavebeenevaluatedinordertodeterminewhethertheseareapplicabletoday,orratherinthefuture.

Theresearchwasofqualitativenatureandbothprimary-andsecondarydatasourceshavebeenused.Theprimarydatawerecollected frominterviewswith industryexperts,ARexperts,andmanagersoremployeesinvolvedinARinitiatives.Thesecondarydataweremainlycollectedfromconsultancyreports,butalsofrompaneldiscussionsandseminars.

ItwasfoundthatARisacommunicationandvisualizationtool,thathasgreatpotentialtodeliverbusinessvalueduetoitsabilitytosupportamixedreality,inotherwordsthemergeofthereal-and the digital world. Furthermore, by the usage of a head-mounted-display (HMD) device,additionalvaluepropositionscouldbereceived,suchashands-free.Therefore,itisbelievedthatARbytheusageofHMDbringsthehighestbusinesspotential,furtherthatitwillbecomethenextcomputerplatform.However,therearemanytechnicallimitationsthatmustbesolvedinorderforARtoachieveitsfullpotential.Furthermore,itwasfoundthatthecurrentAR-marketishighlyfragmented, and there are no standards regarding hardware, platforms, and how to describeinformation. Similarly, companies are uncertain regarding AR’s capabilities, and the cost andbenefitsofanARinvestment.Therefore,theseconcernmustbesolvedinorderforARtotakeoff.

Tendifferentuse-caseswere foundvaluable forasset intensivemanufacturers,andacommonthemeamongstthesewerethatARfacilitatedforincreasedunderstandingandcollaboration.Thefocusinashorttime-horizonshouldbeonapplicationsthatsolvesacriticalproblem,aswellasprovidinghighbusinessvalue.Furthermore,thecurrentfocusshouldbeonapplicationswithlowtechnicalrequirements,andwhere it ispossible toreuseexistingcontent.Therefore, themostvaluableuse-areasfromashorttime-horizonare:remoteguidance,visualizationof3Dmodels,anddashboarding.However,severaloftheotheruse-caseswillbecomebeneficialinanearfuture,furthernewapplicationswillariseinthefuture.

Keywords:AugmentedReality,MixedReality,Servitization,Industry4.0,adoptionanddiffusionofinnovation,remoteguidance,visualizationtool,communicationtool,disruptiveinnovation.

TABLEOFCONTENT1.Introduction................................................................................................................................................1

1.1Background..........................................................................................................................................1

1.2Purposeandresearchquestions..................................................................................................2

1.3Scopeanddelimitations..................................................................................................................3

1.4Disposition...........................................................................................................................................3

2.Theoreticalframework...........................................................................................................................4

2.1Disruptiveinnovation......................................................................................................................4

2.2Technologylifecycle.........................................................................................................................5

2.3Technologyecosystem.....................................................................................................................6

2.4Networkscope....................................................................................................................................6

2.5Adoptiontheory.................................................................................................................................7

2.5.1Organizationallevelofadoptiontheory..............................................................................................7

2.5.1.1Technological-organization-environmentalframework.......................................................................72.5.1.2Innovationdiffusiontheory................................................................................................................................8

2.5.2Individuallevelofadoptiontheory.....................................................................................................12

3.Method........................................................................................................................................................13

3.1Theresearchprocess......................................................................................................................13

3.1.1Pre-studyanddeterminationofthetopic,aimandresearchquestions.............................13

3.1.2Determinationoftheappropriateresearchdesign.....................................................................14

3.1.3Datacollection..............................................................................................................................................15

3.1.3.1Literaturereview..................................................................................................................................................153.1.3.2Interviews................................................................................................................................................................153.1.3.3Paneldiscussions.................................................................................................................................................17

3.1.4Analysis...........................................................................................................................................................18

3.2Qualityoftheresearch...................................................................................................................19

3.2.1Validityandreliability..............................................................................................................................19

3.2.2Credibilityofthesources.........................................................................................................................20

4.Externaltrends........................................................................................................................................22

4.1Convergenceofthephysicalandvirtualworlds...................................................................22

4.2Industry4.0........................................................................................................................................22

4.3Servitization......................................................................................................................................23

4.3.1Organization’sadoptionoftechnologiesinaservitizationcontext......................................25

5.AugmentedReality.................................................................................................................................26

5.1Therealandvirtualenvironment..............................................................................................26

5.2DefinitionofAugmentedReality................................................................................................27

5.3Organizations’adoptionofAR.....................................................................................................28

5.4TheARlandscape.............................................................................................................................30

5.5ARexperience...................................................................................................................................30

5.5.1ThetechnologyecosystemofAR.........................................................................................................315.5.1.1TechnologicalcomponentsincludedinAR...............................................................................................325.5.1.2Thecurrentstateofthetechnologyecosystem......................................................................................32

5.5.2Applications,content,andcontentauthoring................................................................................34

5.5.3InteractioninAR.........................................................................................................................................34

6.Empiricalfindings...................................................................................................................................36

6.1Findingsfrominterviewsandpaneldiscussions..................................................................36

6.1.1Externaenvironment................................................................................................................................36

6.1.2ThecurrentstateofAR............................................................................................................................37

6.1.3ThefuturestateofAR...............................................................................................................................38

6.1.4Companies’awarenessandknowledgeofAR................................................................................39

6.1.5OrganizationaladoptionofAR..............................................................................................................40

6.1.6User’srequirementsofAR......................................................................................................................41

6.1.7CurrentandfutureARusageanditsvalue......................................................................................41

6.1.8TechnologicallimitationsandconcernswithAR..........................................................................43

6.1.9Existing3D-modelsandlimitations....................................................................................................44

6.2Use-cases.............................................................................................................................................45

6.2.1Remoteguidance.........................................................................................................................................46

6.2.2Dashboarding...............................................................................................................................................47

6.2.3Visualizationof3Dmodels.....................................................................................................................48

6.2.3.1Designphase...........................................................................................................................................................486.2.3.2Salesphase..............................................................................................................................................................48

6.2.4Spatialdesign................................................................................................................................................49

6.2.5Visualizationofvirtualdata...................................................................................................................49

6.2.6Localization...................................................................................................................................................50

6.2.7Warehousepicking.....................................................................................................................................50

6.2.8Smartworkinstructions..........................................................................................................................50

6.2.9Augmentedtraining...................................................................................................................................51

6.2.10Intuitiveinterfaces..................................................................................................................................52

7.Analysis;adoptionofAR.......................................................................................................................53

7.1.Externalenvironmentperspective...........................................................................................53

7.1.1.Convergenceofthephysicalandvirtualworlds..........................................................................53

7.1.2Industry4.0...................................................................................................................................................54

7.1.3Servitization..................................................................................................................................................55

7.2Organizationalperspective..........................................................................................................56

7.2.1Themanufacturers’socialsystem.......................................................................................................57

7.2.2Organization’sawarenessandknowledge......................................................................................58

7.2.3ThepersuasionofanARexperience..................................................................................................60

7.2.4Theinternalresourcesandconditions..............................................................................................617.2.4.1Financialimplications........................................................................................................................................617.2.4.2Existingtechnologyandassetsimplications............................................................................................617.2.4.3Know-howimplications....................................................................................................................................627.2.4.4Culturalimplications..........................................................................................................................................62

7.3Technologicalperspective............................................................................................................63

7.3.1Disruptiveorsustainingtechnology..................................................................................................63

7.3.2TheARnetworkandthefuturedevelopment................................................................................65

7.3.3TheARexperienceandassociatedcomponents...........................................................................67

7.3.3.1Technologyecosystem.......................................................................................................................................677.3.3.2Thestateofcurrentdevices............................................................................................................................687.3.3.3Inrelationtothephysicalworld-3D-Capabilities................................................................................707.3.3.4Content,contentauthoring,andapplication............................................................................................717.3.3.5Interaction...............................................................................................................................................................727.3.3.6Individualoruserfactors.................................................................................................................................737.3.3.7Thephysicalenvironmentandnetworkconnectivity.........................................................................737.3.3.8Privacyandlegalfactors...................................................................................................................................74

7.4Summaryoftheexternalenvironment-,organizational,andtechnologicalperspectives..............................................................................................................................................75

8.Analysis;potentialuse-casesofAR...................................................................................................77

8.1Requirementsforthespecificuse-cases..................................................................................77

8.2Specificuse-casesofAR.................................................................................................................78

8.2.1Remoteguidance.........................................................................................................................................78

8.2.1.2Howremoteguidancewillbeusedandbywhom.................................................................................80

8.2.2Dashboarding...............................................................................................................................................81

8.2.3Visualizationof3Dmodels.....................................................................................................................828.2.3.1Designphase...........................................................................................................................................................828.2.3.2Salesphase..............................................................................................................................................................838.2.3.3Real-sizeobjects...................................................................................................................................................83

8.2.4Spatialdesign................................................................................................................................................84

8.2.5Visualizationofvirtualdata...................................................................................................................85

8.2.6Localization...................................................................................................................................................86

8.2.7Warehousepicking.....................................................................................................................................87

8.2.8Smartworkinstructions..........................................................................................................................88

8.2.9Augmentedtraining...................................................................................................................................90

8.2.10Intuitiveinterfaces..................................................................................................................................91

8.3InsightsofcurrentandfuturepossibilitieswithAR............................................................91

8.3.1Insightsfromashort-termperspective............................................................................................92

8.3.2Insightfromalong-termperspective................................................................................................93

9.Conclusion.................................................................................................................................................95

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1.INTRODUCTIONThefollowingchapterpresentsthebackgroundofthepaperandthesubjectAugmentedRealityinrelationtoanassentintensivemanufacturingcontext.Furthermore,thepurposeoftheresearchandthefollowingresearchquestionsarepresented.

1.1BACKGROUND

Derivedfromthegrowingglobalcompetitionandtheincreasingdigitalworld,low-costcountriesoutcompetewesternmanufacturers and they are forced to find newways to compete anddobusiness(Oliva&Kallenberg2003).These implicationshavespurredtheadoptionofnewandinnovatingtechnologiesandoneofthosetechnologiesisAugmentedReality(AR).ARenhancestherealworldwithdigital information,andinitssimplestformitcouldbecomparedwiththepopulargame“PokémonGO”.However,inamoreadvancedformARhasthepossibilitytocreatenewbusinessopportunities(PwC,2016a).AtFacebook’sF8conference2017,MarkZuckerbergargued that AR technology will be the next big innovation, which will take over the existingsmartphonemarket.

ARisnotanewphenomenonandcanbetracedbacktothe60’s(Augment,2016).However,theconsultant firmPwC,whohaveconductedatechnologyforecastregardingAR,arguethatwithrecenttechnologicaldevelopments,companieshavestartedtoshowinterestforthetechnologyand the potential business opportunities it can create (PwC, 2016a). On the one hand, PwC(2016b),believethatARenablesnewwaystoperformbusinessactivitiesinwhich“peoplelookatoperationsfromacombinedviewofdigitalandphysicaloperationsandexternalizethecognitiveburden that is inherent in the task”. On the other hand, there are still some limitations andimpedimentsrelatedtoARasPwC(2016a)considerthat“ARis limitedbyahighly fragmentedecosystemofhardwareplatformsandoperatingsystems,alackofstandardsforsharingdataandsupporting interactions, and technical barriers in optics, 3-D capabilities, authoring tools, andinteraction methods” (p. 2). Despite these limitations, PwC (2016a) believe that a betterperformanceoftheAR-deviceandadecreaseinpricewillspurthegrowthofAR,andtheypredictthatthetimehorizonofenterprisesadoptingARisbetweenthreetosevenyears.Additionally,ARisexpectedtogeneraterevenueof$90billionsby2020(IDG,2015).

Duetohigherrivalryamongstmanufacturingcompaniesandthefactthatalsocomplexproductsare becoming commodities, it is harder for companies to differentiate themselves (TheManufacturer,2017).Historically,companieshavebeenabletocompetewithquality,buttodaytheyarebeingoutcompetedbycompaniesfromtheeastwhoprovidethesameproductswiththesamegoodqualitybutforalowerprice(ibid).Consequently,westernmanufacturingcompaniesare forced to find newways to differentiate themselves rather than compete with price andquality.Thisalsoappliestoassetintensivemanufactures(AIM),whicharecompaniesthatprovidecomplexandexpensiveproducts.Duetotheseconcernsatrendcalledservitizationisemerging,where companies incorporate an increasing number of service components in their offerings(Desmet,2003).

The servitization trend is a way for companies to strengthen their competitiveness(Vandermerwe&Rada,1988).This isbecauseservicesare inherentlymoredifficult to imitate

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becausetheyareintangibleanddependentonthepeopledeliveringtheservice(Heskettetal.,1997). However, despite the servitization goal studies have shown that far from all projectssucceedwithit(Ulaga&Reinartz,2011).AccordingtoMartinezetal.(2010)andBrax(2005)thisfailuredependsonthedifferentwayofdoingbusinessanditincorporatesachangeineverythingfrom sales, R&D, and service tomanagement. In addition to the servitization transformation,companieshavetostandintheforefrontofthedigitaldevelopmentandtoadaptnewandhelpfultechnologies in order to survive in the high rivalry amongst manufacturing companies(CambridgeServiceAlliance,2015).

Historically,worldleadingcompanieshavecollapsedwhennew,unexpectedandgamechangingtechnologieshaveattackedfromunderneath(Christensen,1997).Suchtechnologieshavebothcreated new markets and taken over existing ones, such as Nokia’s fall when Apple came.Technologyhasdevelopedrapidlyover thepastdecadeand the linesbetween thevirtualandphysicalworldhave started toblur (Deloitte, 2015). Fromamanufacturingpoint of view thisimpliesthatfactoriesandproductionsystemsneedtobecomecommunicatingandcollaboratingentitiesandbythissmarterandmoreautonomous(ibid).ThiscurrenttrendiscalledIndustry4.0,andARisoneofthepotentialtechnologiesthatcouldsupportmanufacturersintheIndustry4.0context.Monostori (2014) states that theaimof Industry4.0 is toobtain totally collaboratingentitiesthatexchangedataregardingtheirongoingprocesses,bothfromthedigitalandphysicalworld. Furthermore, ISRA & Acatech (2013) argue that an Industry 4.0 initiative has “hugepotential” to optimize decision making, increase resource productivity and efficiency, meetindividualcustomer’srequirementsandcreatevalueopportunitiesthroughnewservices.

AcombinationofIndustry4.0andServitizationcansupportwesternAIMcompaniestoincreasetheircompetitivenessbysmartproductionsystemsandbetterserviceofferings.SinceARisoneofthepossibletechnologiesthatcouldsupportsuchasystemoractivities,itisofgreatvaluetoinvestigateAR’sbusinesspotential.Therefore,thisthesisaimstoinvestigateandanalyze,whataffectstheadoptionofARandhowARcanbeusedinpractice.

1.2PURPOSEANDRESEARCHQUESTIONS

This thesis investigates Augmented Reality from a business perspective for asset intensivemanufacturers, and that is companies who provide complex and expensive products, namelyassets.

Thepurposeoftheresearchistwofold.Firstly,itaimstogiveacomprehensiveunderstandingoffactorsthatpositivelyornegativelyinfluencetheadoptionofAR.Secondly,differentapplicationareasforAR,thatcouldbeapplicableforassetintensivemanufactures,areexamined.

Inordertoperformthisstudythefollowingresearchquestionshavebeenconstructed:

• Whataffect thewillingness toadoptAugmentedReality,positivelyornegatively, fromanexternalenvironmental-,technological-,andorganizationalperspective?

• WhattypeofAR-applicationscouldbeuseful inanasset intensivemanufacturingcontextandaretheseapplicabletodayorratherinthefuture?

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1.3SCOPEANDDELIMITATIONS Firstly, this thesis only considersAugmentedReality anddonot focus onother substitutionaltechnologies such as Virtual Reality (VR). The justifications to only focus on AR was timelimitations, further the prediction thatAR is themediumwhichwill provide highest businessvalueforenterprisesinthefuture,comparedtoVR.Additionally,theprecisionisthatARandVRwillconvergeinthefuture.

Secondly, this study is limited to only consider manufacturing companies of complex andexpensive products, therefore the findingsmight not be applicable for other industry’s areas.Additionally,asthisthesisiscarriedoutonthebehalfofthecompanyIFS,whoareanenterprisevendorcompany,thepossibleapplicationareasofARareevaluatedfromIFScustomers’pointofview,andthereforemightnotbeapplicableforallassetintensivemanufacturers.

1.4DISPOSITION

Chapter1-Thefirstchapterprovidesabackgroundandintroductiontothetopic,followedbythepurpose and the research questions of the thesis. After this, a declaration of the scope anddelimitationsarestated.

Chapter 2 - In the second chapter the theoretical framework that are essential for the furtheranalysisoftheresearchquestionsinchapter7andchapter8.

Chapter3-Thischapterprovidesthereaderwithunderstandingofthemethodologiesusedforthis thesis and needed in order to answer the research questions. The chapterwill also divedeeperintothemethodsfordatacollectionandtheanalysismodel.Moreover,thequalityandthereliabilityofthethesiswillbediscussed

Chapter 4 - In the fourth chapter a summary of the external environment is presented. Theemergenceof thedigital and thevirtualworld, and the trend Industry4.0andServitization ispresented.

Chapter5-ThefifthchapterprovidesanoverviewofthephenomenaAugmentedReality.

Chapter6-Thischapterpresentstheempiricalfindingsbutalsopresenttheuse-casesfoundforassetintensivemanufacturers.

Chapter7-Thefindingsareanalyzedbasedfromanexternalenvironmental,anorganizationalandatechnologicalperspectiveinordertoanswerthefirstresearchquestion.

Chapter8 -Findingsrelated to theuse-casesare thenanalyzed inorder toanswer thesecondresearchquestion.

Chapter9-Inthelastchapterthethesiswillcometoaconclusionandtherebyanswertheresearchquestions.

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2.THEORETICALFRAMEWORKThefollowingchapterprovidestheoriesrelevanttoanswertheresearchquestionsandthesetheoriesare:disruptiveinnovation,technologylifecycle,technologyecosystem,networkscope,andadoptiontheoriesfrombothanorganizationalandindividualperspective.

2.1DISRUPTIVEINNOVATION

According to Christensen (1997) disruptive technologies are described as technologies thatinitiallyunderperformingthedominantonesbutatsomepointintimetakesovertheestablishedmarket.Hedescribesthatwell-establishedandsuccessfulcompanieswerereplacedbynewonesthatfromthebeginningweresmallactorswhouseddisruptivetechnologiesastheirweapon.Heconsiders that a disruptive technology often offers a different value proposition that existingtechnologies, and has features that are valuable to some of the customers in themainstreammarketbutatthesametimethedisruptivetechnologyisoftenunattractivetocurrentcustomerbase since it underperforms. However, these disruptive technologies have generally othercharacteristicssuchascheaper,simpler,smaller,ormoreconvenienttouse(Christensenetal.,2002).Anexampleofadisruptivetechnologywasthedigitalcamera,whichtookoverthemarketfromtheanaloguecamera(Christensenetal.,2015).

Incumbentfirmsareboundedbytheircurrentcustomerbase,andtheyfocusonsatisfyingtheirneeds,whichinturnpreventthemfromexploitingnewopportunities(BowerandChristensen,1995).Christensen(1997)makesadistinctionbetweensustaininganddisruptivetechnologies.He considers sustainable technologies to give increased performance of existing services orproducts.Further,hearguesthatthemostcommontechnologyadvancementsintheindustryareofsustainablenature.However,as incumbentactorscontinuously increasetheperformanceofthetechnology,itwillfinallyovershoottherequiredperformance.Atthesametime,asseeninfigure2.1,theperformanceofthedisruptivetechnologyisalsoincreasingandsoonitwillbe“goodenough” to compete with the existing technology, but then also with an additionally feature(Christensen, 1997). However, according to Tushman and Anderson (1986), incumbent firmsbenefitfromtechnologicalchangeifitenhancestheircompetence.

Figure2.1.Anillustrationofthetechnologyovershooting(Christensen,1997).

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2.2TECHNOLOGYLIFECYCLE

Thetechnology lifecycle,presented in figure2.2,consistsof threephases: the fluidphase, thetransition phase, and the specific phase (Utterback, 1994). The model describes the rate ofinnovation in the different phases from two perspectives; product innovation and processinnovation.TornatzkyandFleischer(1990)arguethatorganizationsthatareinindustrieswithahighgrowratealsotendtoinnovatemorerapidly,meanwhileinmatureordecliningindustriesinnovationpracticesare“notclear-cut”.

Figure2.2Thefigurevisualizesthetechnologicallifecycle(Utterback,1994).

The fluid phase is characterized by high rate of product innovation and low rate of processinnovation (Utterback, 1994). Tushman and Anderson (1986) argue that this phase could berelatedtotechnologydiscontinuity,anditcouldeitherbecompetenceenhancingorcompetencedestroying.Inthisphase,therearemanydifferentproposedproducts,duetouncertaintiesamongboth users andmanufacturers regarding the user’s preferences (Klepper, 1996), further newtechnologiesusually createuncertainty, experimentationsandentryofnew firms (Sandström,2016).Thelengthofthisphaseisrelatedtoboththeamountofnewknowledgeassociatedwiththeinnovationandiftheexistingtechnologyhastobeabandoned,sinceexistingfirmsprobablywill defend the old technology (Anderson and Tushman, 1990). This further creates anuncertaintyrelatedtoifthetechnologywillbecomedominantornot.

The transitionalphase ischaracterizedbydecreasedrateofproduct innovationand increasedrateofprocessinnovation(Utterback,1994).Klepper(1996)arguesthatinthisphaseanindustrystandardemerges,whichmeansthatadominantdesignemergesandthenumberofproducersandnewentriesdecreases.However,AndersonandTushman(1990)arguesthattheprocessofchoosingatechnologycouldberisky,sinceifthewrongtechnologyischosen,thatdidnotbecomethedominantdesign,itwillresultinswitchingcosts.

Thespecificphase,ischaracterizedbystabilizationofproductandprocessinnovation(Utterback,1994).Utterback(1994)arguesthatinsteadoffocusingonprocessandproductinnovationfirmstypically focusoncost,volumeandcapacity.However, there is still someproductandprocessinnovationsbutthesearecharacterizedbyincrementalimprovement(AndersonandTushman,1990).

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2.3TECHNOLOGYECOSYSTEM

The technology ecosystem consists of different components and technologies that areinterdependent. Adomavicius et al. (2006) argue that a technology ecosystem could be verycomplexsinceitconsistsoftechnologiesthathaveseveraldifferentrelationshipandroles.Theyargue“Inpractice,however,amanagerisinterestedintheanalysisofaspecificsetoftechnologiesin a specific context” (p. 3). Furthermore, Adner and Kapoor (2016) argue that the realizedperformance of the technology ecosystem and the perception of it can be hindered by thecomponentsintheecosystem.Finally,Moore(1993)arguesthatcompetitionwithintechnologyintensive industries are not taking place between firms, but rather between platforms andecosystems.

According to Adomavicius et al. (2006) a technology could have three different roles in anecosystem: component, product and application, or support and infrastructure. The authorsdescribethecomponentroleaswhenthetechnologyispartofalargersystemandthesystemisdependentonthecomponenttofunction.Anexampleistheprocessorwhichneedstobeinplacefor thesystemto functionandcould furtherbeacomponent indifferent typesofsystems, forinstanceinacomputer,aphoneorinanAugmentedRealitydevice.TheproductandapplicationroleassociateswithamorespecificapplicationoruseandAdomaviciusetal.(2006)describetheroleasasetofcomponents,formingatechnology,whichfunctionistoperformaspecifictaskorsatisfyaspecificneed.AnexampleisaMP3-playerwhichserveasaproduct,anditcompeteswithothertechnologiessuchasCDplayers.Thesupportandinfrastructureroledescribesatechnologythat supports other technologies, but it is not needed in for the technologies to function. Anexample is a printer, which provides functionality, but it is not needed for the computer tofunction.

Figure2.3.Atechnology’sdifferentrolesinanecosystem.

2.4NETWORKSCOPE

Historically,afirm’sscopehaseitherbeendefinedasmarketorhierarchy,wheremarketinvolveslow customer and partner integration, and hierarchy involves high customer and partnerintegration.However,industriesoftodayareoftenorganizedascomplexnetworksoffirmswhoseintegratedeffortisnecessarytobringcustomervalue(Iansiti&Richards,2006).Powell(1990)arguesthatthisisneithermarketnorhierarchybutratheranetworkscopeoforganizations.Inanetwork scope the customer and partner integration is neither high nor low, but rather inbetween, further it provides some flexibility, some scalability and some knowledge transfer.Companies and actorswithin a network scope are dependent upon each other, further theseactorsareinterdependent.

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A network scope has some benefits but it is also associated with challenges such as pathdependency, interdependency, collective action problems (Powell, 1990; Adner, 2006), andintegrationrisks(Adner,2006).Pathdependencyreferstothatdecisionsmadeinthepasthaveatendencytoalsoshapedecisionstodayandinthefuture.Interdependencyreferstothefactthattheoutcomeisbeyondone'scontrolsincetheactorisonlyapartinalargersystem.Collectiveactionproblemsrefertothefactthatallindividualsinthenetworkwouldbenefitfromacertainaction,buttheassociatedcostofachievingthebenefitmakesitimplausibleforoneindividualtoundertakeitalone.RegardingintegrationrisksAdner(2006)describesthatitreferstotheriskthatnotallconcernedpartiesadoptthesolutionortheriskthattheinnovationdoesnotreachthetargetgrouporcustomerin-timeduetodelaysintheinnovationecosystem.

2.5ADOPTIONTHEORY

There is a difference between theories related to adoption factors at an organizational level(Rogers,1995;Tornatzky&Fleischer,1990),andatanindividuallevel(Davis,1989;Venkateshetal.,2003).WhenevaluatingtheARtechnology,itisnecessarytoexaminetheadoptionbothinanorganizationalandinanindividuallevelsinceitistheindividualsintheorganizationsthataresupposed to use the AR technology. Therefore, both levels, organizational and individual, arepresentedinthefollowingsection.

2.5.1ORGANIZATIONALLEVELOFADOPTIONTHEORY

Theadoptionofanewtechnologyatanorganizationallevelareoftenmorecomplexcomparedtotheadoptionatanindividuallevelsinceanorganizationhastoconsiderseveralaspects(Furneaux&Wade,2011).Theadoptiondecisionhastobemadebyagrouporpersoninauthority(ibid).Anorganizationgeneratesoradoptsaninnovationoftenwiththeobjectivetoincreaseprofitortoimprove operational processes (Damanpour and Gopalakrishnan, 1998). Oliveira andMartins(2011) consider there to be two theories commonly deployed for technology adoption at anorganizational level. These theories are; the Technology Organization Environment (TOE)framework,andtheInnovationDiffusionTheory(IDT).

2.5.1.1TECHNOLOGICAL-ORGANIZATION-ENVIRONMENTALFRAMEWORK

TheTOEframeworkexplainstheorganizationaladoptionofatechnology.Asfigure2.4visualizes,therearethreeelementsintheTOEframeworkthatexplainthedecisiontoadoptaninnovation,namely technological, organizational and external task environment. Tornatzky and Fleischer(1990) state that these elements show “both constraints and opportunities for technologicalinnovation”(p.154).

Thetechnologicalperspectiveconsidersbothinternalandexternaltechnologiesrelevanttothefirm,includingcurrentpractices,equipment,andavailabletechnologies(Tornatzky&Fleischer,1990). The authors argue that internal technology has similar or higher effect for facilitatingadoptioncomparedtoexternaltechnologies.Moreover,thecostofadoptinganewtechnologywillbesignificantlyreducediftheexistingequipmentandinternalcompetenceintheorganizationarealignedwiththenewtechnology(ibid).Furthermore,TushmanandAnderson(1986)arguethatwhen evaluating a technology that will cause discontinuous change, it has to be consideredwhether it is competence enhancing or competence destroying. They state that a competence

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enhancing innovation makes it possible for firms to build on existing expertise, meanwhilecompetence destroying innovations result in an abandonment of existing technologies andobsoleteofexpertise.

The secondperspective,organizational, concerns the internal resource and conditions in theorganizationthataimtosupporttheadoption(Tornatzky&Fleischer,1990).AccordingtoChauand Tam (1997) the organization’s characteristics normally consider size, formalization,centralization degree, the managerial hierarchical structure, and the skills of the humanresources.Zhuetal.(2003)believethatsincelargerorganizationsoftenhavesufficientlyfinancialand human resources they have several advantages over smaller organizations. AnotherimportantfactoristheskillsetoftheITemployees(Mijinyawa,2008),sinceITemployeeswithsufficientcompetenceandengagementcouldaffectmanagementbydemonstratingthebenefitsofanewtechnology.Furthermore,managementsupportplaysacrucialroleandiftheydonotsupporttheadoptiontheywillbeanimpedimentfortherealizationoftheinnovation(Premkumar&Ramamurthy,1995).

Finally,theexternaltaskenvironmentperspectiverelatestothesurroundingcontextthefirmispresentin,suchasbusiness,industry,trendsandcompetition(Tornatzky&Fleischer,1990).The external environmentwill influence the technology adoption, and according toMansfield(1968)acompetitiveenvironmentstimulatestheadoptionofinnovation.Furthermore,KamathandLiker(1994)believethatadominantactorinthevaluechaincouldinfluenceotheractorsinthevaluechaintoadoptacertaintechnology.

2.5.1.2INNOVATIONDIFFUSIONTHEORY

TheIDTmodelisthemostcommonlyusedtheoryforstudiesofITadoption(Pervanetal.,2005).Themodeldescribesthefactorsrelatedtotheincentivestoadoptaninnovation,butincontrasttoTAMmodel,presented innextsection, italsoexplainstheprocessaround it.Rogers(2003)considerstheoriesofdiffusionandadoptionofinnovationstobevital,tounderstandhow,why,and at what magnitude technologies are spread and adopted. He defines diffusion with four

Figure2.4.ThefigurevisualizestheTechnological-Organizational-EnvironmentFramework,andtheincludedfactorsforeachoftheperspective(Tornatzky&Fleischer,1990).

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importantelements;innovation,communicationchannel,time,andsocialsystem.Hestates,“theprocess inwhich an innovation is communicated through certain channels over timeamong themembersofasocialsystem”(p.5).

The innovationdecisionprocess, as seen in figure2.5, couldhelp to foresee the innovationofdiffusionovertime.However,itisnotalwaystruethattheadoptionofaninnovationfollowsthissequentialprocessanditmightbeacircularprocessbetweenthestepsinthedecisionprocess.RejectioncanhappeninanystageprocessaccordingtoRogers(ibid).

Figure2.5.RogersInnovationDecisionProcess.

Rogers(2003)definesthefirstelement,innovation,as“anidea,practiceorobjectperceivedasnewbyanindividualorotherunitofadoption”(p.12).Rogers(2003)considersthattheexistingdegree of uncertainty about the innovation’s functioning, and reinforcement from the socialsystem,areaffectingtheattitudetowardsthetechnology.Further,heconsiderstheadoptionrateof an innovation to depend on the persuasion of five innovation attributes, namely relativeadvantage,compatibility,complexity,trialabilityandobservability.Thesefiveattributescanbeseenintable2.1,andtheyareperceivedasinnovationcharacteristicsandpertinentattributestothe AR technology. Altogether, Rogers (2003) argues that an innovationwhich offers relativeadvantage,compatibility, trialability,observabilitybut lesscomplexityaregoingtobeadoptedfaster than other innovations. Therefore, he believes that those attributes are vital for theadoptionanddiffusionprocess.

Table2.1Theattributesexplainingtherateofadoptionofaninnovation(Rogers,2003).

Attribute Explanation

RelativeAdvantage thedegreetowhichaninnovationisperceivedasbeingbetterthantheideaitsupersedes.

Compatibility thedegreetowhichaninnovationisperceivedasconsistentwiththeexistingvalues,pastexperiences,andneedsofpotentialadopters.

Complexity thedegreetowhichaninnovationisperceivedasrelativelydifficulttounderstandanduse.

Trialability thedegreetowhichaninnovationmaybeexperimentedwithonalimitedbasis.

Observability thedegreetowhichtheresultofaninnovationisvisibletoothers.

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Thesecondelement,Communicationchannel,refersto“aprocessinwhichparticipantscreateand share informationwith one another in order to reach amutual understanding” (p. 5). Theadoption rate of an innovation can increase depending on the effectiveness of the usedcommunicationchannel(Rogers,2003).Thereexistalotofdifferentcommunicationchannels,forexample interpersonal communication, television, radio,magazines and channels through theInternet.Thecommunicationchannelsare important formostdiffusionprocessesdueto theirabilitytorapidlyspreadinformationtoawideaudience.However,advicethatcomesfromclosecolleagues,peersandfriendsoftenhavehighercredibilityandaremoreconvincing,comparedtoinformationrevealedfromoutsideexpertsorscientificresearches(Rogers,2003).

The thirdelement,time, is involved inmanyaspectof the technologydiffusionprocess.Asanexample,timeisneededforanorganizationtodecidewhethertoadoptorrejectatechnologyoraninnovation.Rogers(1995)registeredthattheinnovationdecisionprocesswasnotaninstantact,but itratherconsistsofmanysequentialactions,asseenin figure2.5.Thefirststep is theknowledge stage whereas the user becomes familiar with the technology and starts to gainunderstandingofthetechnology.Thisphaseisassociatedwiththequestions“what?”,“how?”and“why?”,theseinturncorrespondstothreedifferenttypesofknowledge:awareness-knowledge,how-to-knowledge,andprinciples-knowledge(Rogers,2003,p.21).Theawareness-knowledgerefers to theawarenessof the innovation’s existence, and thehow-to-knowledge refers to theknowledgeregardinghowtouseaninnovationcorrectly(Rogers,2003).Thelasttype,principles-knowledge,referstotheknowledgeofhowandwhyaninnovationworks,butaccordingtoRogers(2003)an innovationcouldbeadoptedwithout thisknowledge,but it isnot favorable for theinnovationsinceitmightbemisused.

Thesecondstepistheadoptionprocessispersuasion,wheretheuserbecomesmoreawareofthetechnology and takes a favorable or an unfavorable stand-point towards the innovation. Thepersuasionphaseismorefeelingcenteredandregardstheindividual'screationofanegativeorpositive attitude towards the technology,meanwhile the knowledge phase is rather cognitivecentered.The third step in the adoptionprocess regards thedecision,which incorporates thedecisionofwhethertoadoptorrejectatechnology.Thefourthstepistheimplementationandthestartofusingtheinnovation.Finally,thefifthstepisconfirmation,andthisiswheretheuserseeksreinforcementofatechnologyoraninnovationdecisionthatalreadyhasbeenmade.

Thefourthandlastelement,Socialsystem,iswherethemembersofasocialsystemisengagedinjointproblem-solvinginordertoachieveacommongoal.Rogers(2003)considersthediffusionofaninnovationtobeinfluencedbythesocialstructureofthesocialsystem.Inotherwords,foratechnologytospread,anadopterofthetechnologyisneeded.Theadopterthenactin,andaffect,thesocial system.Rogers (ibid)argues that thereare fivecategoriesofadopters,visualized infigure2.6,andtheseare; innovators,earlyadopters,earlymajority, latemajorityandlaggards.Thesecategoriesofadoptershavedifferentcharacteristics,especiallyregardingproductneedandspecificbuyingbehaviors(Moore,1991).

Theinnovatorsareassociatedwithahigh-risktolerancethatallowsthemtoadoptinnovationsthatmightfail.Furthermore,theycanhandleunfinishedproductswithhighcomplexity,furtherprovideknowledgeregardingproblemsthathavenotyetreachedthemajority.Theinnovatorsarethegatekeepertotheearlyadopter,buttheydonotinfluencetherestofthesocialsystemtoadoptaninnovation(Moore,1991).

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Theearlyadopterstendtotaketheleadershiproleinthesocialsystemandaffectotherstoadaptthrough advising or by providing information about the technology to others. Moore (1991)argues that the early adopters play a crucial role for the adoption of a technology to beginspreading.Toreachtheearlymajorityonehasto“crossthechasm”,whichisthehardestpartforinatechnologicaldiffusion.Theearlyadopterisbuyingarevolutionarychange,meanwhiletheearly majority is rather buying evolutionary productivity improvements. Further, the earlyadoptersplayakeyroleof fundingthedevelopmentof thetechnology.Theearlyadoptersareclosertotheearlymajority,hencetheyareimportantactorsinthesocialsysteminordertoreachtheearlymajorityandbythereforeimportantforthediffusionofthetechnology.

Theearlymajorityadoptersarenotrisktakers,andthereforetheyfocusonprovenapplicationsandprefertogowiththemarketleaders.Hence,theyrequireverticalreferences,suchasgoodreferences from trusted colleagues or a reference site, which already have the solution inproduction.Additionally, theseearlyadoptersexpectabugfreeproduct,anindustrystandard,anda lowcostofownership (Moore,1991).As saidbefore, to reach theearlymajority,hencecrossingthechasm,isthehardestpartinorderforthetechnologytobecomemainstream(Rogers,2003).

Thelatemajority’skeyroleistoextendtheproductlifecycle,furthertheseadoptersaccountforamajorpartofthesocialsystem,asseeninfigure2.6.However,latemajorityhaveotherneedsand characteristics compared to the other actors in the social system, such as avoidance ofcompetitivedisadvantages,pricesensitivity,andaneedofcompletelypre-assembledsolutions(Moore,1991).

Finally, the laggards are not really a customer and their key role is rather to retard thedevelopmentof high-techmarkets.These actorsoften take a contrarianposition and seeks toblockpurchasesofnewtechnology,sincethedoesnotbelieveontheproductivity-improvementarguments(Moore,1991).

Figure2.6.Visualizationofthediffusionandthedifferentcategoriesofadopters(Rogers,1995).

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2.5.2INDIVIDUALLEVELOFADOPTIONTHEORY

One popular model for individual level of adoption is Technology Acceptance Model (TAM),visualized in figure 2.7. The framework explains and predicts the individual’s intention andbehaviorconcerningnewtechnologies(Venkateshetal.,2003;Wangetal.,2003).Therearetwokeyvariablesinthemodel,andtheseaimstoexplainwhyhumanacceptorrejectatechnology,andtheseare;perceivedusefulness(PU)andperceivedeaseofuse(PEoU).ThedefinitionofPUis“thedegreetowhichapersonbelievesthatusingaparticularsystemwouldenhancehisorherjobperformance”(Davis,1989,p.320).WhilstthedefinitionofPEoUis“thedegreetowhichapersonbelievesthatusingparticularsystemwouldbefreeofeffort”(ibid).

Figure2.7.TheTechnologyAcceptanceModel(TAM)

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3.METHODFollowingchapterdescribeshowandwhytheresearchwasconductedinthewayitwas.Firstly,theresearchprocessisdescribed,whichincludesthedetermineofthetopic,aimandresearchquestions,thechoiceofresearchdesign,thedatacollectionmethodsandtheusedanalysismodel.Secondly,thequalityoftheresearchisdiscussed.

3.1THERESEARCHPROCESS

Theresearchprocess,visualizedinfigure3.1,providesanoverviewofhowthestudywascarriedout.Theprocessconsistedoffourmainsteps,andthewritingactivitywasconductedinparallelthroughoutthewholethesisprocess.Thisresearchprocesswasself-composed,withinspirationfrombothEasterby-Smithetal. (2015)andCreswell (2003). In the followingsection,all thesestepsareexplainedandjustifiedintermsofhowandwhythethesiswasperformedthewayitwas.

Figure3.1.Theresearchprocessusedinthisresearchanditsincludedsteps.

3.1.1 PRE-STUDY AND DETERMINATION OF THE TOPIC, AIM AND RESEARCHQUESTIONS

ThecompanyIndustrialandFinancialSystems(IFS)weretheprincipalofthisthesis.IFSdevelopanddeliverenterprisesoftwaresystemsforcustomersaroundtheworld,andthesecustomersmanufactureanddistributegoods,maintainassets,andmanageservice-focusedoperations.IFSoffermany different enterprise software solutions and these are offered in amodular design,meaningthatcustomerscanpickandchoosebetweendifferentsolutionstobestfittheirspecificorganization. Thewhole package is called IFS Applications business software and it providesEnterpriseResourcePlanning(ERP)functionality,includingCustomerRelationshipManagement(CRM), Supply Chain Management (SCM), Product Lifecycle Management (PLM), EnterpriseOperationIntelligence(EOI),EnterpriseAssetManagement(EAM),andMaintenanceRepairandOperation (MRO) capabilities. IFS strive to always stand in the forefront of offering theircustomersusefulandrelevanttechnology.Forthatreason, IFSwere interestedtoexaminetheupcomingtechnologyAR,whichalsobecamethetopicofthismasterthesis.

First, a pre-studywas conducted in order to get a brief understanding of AR from a businessperspective.Whereafter, togetherwith IFS, the initialaimwith theresearchand theresearch

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questionsweredetermined.Astheknowledgebaseofthethesisauthor's increasedduringthethesis process, both the aimand the researchquestionshavebeen revised several times. Thehardestpartwastosetthescopeofthisthesis,sinceIFShavecustomersinmanydifferentfields,industries and regions. This, in combination with the opportunities found regarding the ARtechnology,madeitdifficulttodecidewhereandhowtofocus.Inaddition,thetimewaslimitedforthisthesis,andthereforeitwasapossibletradeoffbetweenfindingthebestopportunitiesbyworkingbroad,orperforman in-depthstudyand find themost importantdetails inaspecificfield.However, since theAR technology is new andnot commonly used among enterprises, arelativelylongexplorativephasewasconsideredsuitableinthiscase.

3.1.2DETERMINATIONOFTHEAPPROPRIATERESEARCHDESIGN

Afterdeterminedresearch topic, aimandresearchquestions, the researchdesignwaschosen.Easterby-Smithetal. (2015) consider it important to focuson the researchdesign inorder toconductahigh-qualityresearch,andfortheresearchobjectivestobemet.Aresearchdesigncouldbehelpfulsinceitisaroadmapforhowtoanswertheresearchquestions(Saundersetal.,2012;Krishnaswamy&Satyaprasad,2010).Additionally,Easterby-Smithetal.(2015)explainthattheresearchdesignalsoincorporatesexplanationsandjustificationsaboutwhatdatatogather,howandwherefrom.Furthermore,theresearchdesignexplainshowthedatawillbeanalyzedandhow this will provide answers to the research questions. Therefore, a planning sessionwereconductedinordertosetanappropriateresearchdesignforthisthesis.

Easterby-Smith et al., (2015) argue that during a constructionist research design, qualitativeresearch is often used, since several truths may exist. Furthermore, Bryman & Bell (2015)considerthataqualitativeresearchstrategyusewordsinthedatacollection,andanalyzethedatainordertoacquireadeeperunderstanding.ThisresearchdidnotaimtomeasureanythingbutrathertogetadeeperunderstandingofARandassetintensivemanufacturers,furthertherewerenopredeterminedresultsandmanytruthscouldexist.Therefore,theauthorsfounditappropriatetousequalitativeresearchstrategiesandmethods.Furthermore,thisthesisaimedtounderstandhowandwhyassetintensivemanufacturerscoulduseAR.Therefore,thedatahavebeencollectedfromseveraldifferentindividualswithdifferentfieldsofexpertise.Inaccordance,Easterby-Smithet al. (2015) argues that the data collection for a constructionist research design shouldincorporateexperiencesandviewsfromdifferentindividualsandobservers.

Several different approaches and strategies for how to conduct a research exists. The mostcommondistinctionisbetweenaqualitativeandaquantitativeapproach(Bryman&Bell,2015).Themaindifferencebetweentheseapproachesisthataquantitativeapproachusesquantificationin thedatagatheringandanalysisofdata inorder to findstatisticalcorrelations,meanwhileaqualitativeapproachdoesnotquantifythedata.Inthisthesisqualitativeapproacheshavebeenused since the aim was to get a deeper understanding of the situation rather than findingstatistical correlations.However, as Creswell (2003) argued, both qualitative andquantitativeresearchstrategieshaveweaknessesandstrengths,andthereforeacombinationofbothcouldhavebeenusedtoneutralizebiases.Furthermore,thecombinationofqualitativeandquantitativeresearch strategies is considered a mixed method strategy (Easterby-Smith et al., 2015).Therefore, the fact that this thesis only used a qualitative approach could affect thetrustworthinessoftheresearch.However,sincetheARtechnologyisrelativelynew,atleastina

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manufacturingcontext,therearestilllimitedstatisticsandquantitativegenerationopportunities.Therefore,amixedstrategywasnotseenasappropriateforthismasterthesis.

3.1.3DATACOLLECTION

Bothprimaryandsecondarydatahavebeenusedinthisresearch.Primarydatawascollectedbyin-depth interviewsandparticipationsat fairs, andsecondarydatawascollectedby literaturereviewfromanumerousofsources,andbylisteningtopaneldiscussionsandpodcasts.

ThefindingsregardingARandassociatedcontext,arepresentedinchapterfourandchapterfive,meanwhilethefindingsfromtheinterviewsandthepaneldiscussionsarepresentedinchaptersix.Inchaptersix,section6.2,thepotentialuse-casesforaugmentedrealityinamanufacturingcontextarepresented,andinthissection,wefounditmoreintuitivetonotdistinguishprimaryandsecondarydataandinsteadprovideacollectiveviewoftheuse-cases.Therefore,thissectionincludes,literaturefindings,andfindingsfortheinterviewsandthepaneldiscussions.

3.1.3.1LITERATUREREVIEW

Aftertheresearchdesignwaschosenacomprehensiveliteraturestudywasperformed.Easterby-Smithetal.(2015)arguethatinaliteraturereviewresearchersdescribe,evaluateandclarifywhatisalreadyknownaboutthetopic.Inotherwords,literaturereviewisatooltolearnaboutexistingresearch. Hence, to extend the authors’ knowledge-based regarding the subject area. TheliteraturereviewwasperformedregardingthetopicofARandARinamanufacturingcontext,furtherregardingmanufacturers’currentproblems,ServitizationandIndustry4.0.Findingsfromtheliteraturereviewpresentsinchapterfourandchapterfive.

To compile the theoretical framework, a research was conducted in order to find suitabletheoreticalmodelsandmethods.Thetheoreticalframeworkaimstoprovidesuitabletheoriestouseintheanalysisandtherebybeingabletodrawconclusionsfromtheempiricalfindingsandinorder to fulfill the research’s purpose. Theories used for the theoretical framework was:disruptivetechnology,technologylifecycle,technologyecosystem,networkscope,andadoptiontheories.Easterby-Smithetal. (2015)considera literaturereview tobeacontinuousprocess,whichwasalsotrueforthisthesiswork.

Tofindappropriateliteratureforthethesis,severaldatabasesandmanydifferentsourceswasused.Thiswasimportantinordertoexpandboththeviewpointofthetopicandtogetvariationsregarding literature. The academic databases that were used were; Gartner, Google scholar,ChalmersUniversityofTechnologylibrary’sownsearchengineSummon,andsoforth.Formtheseseveral academic papers were collected. Additionally, reports from different managementconsultant firmswere usedwithin this thesis. Moreover, othermedias, such as podcasts andYouTube,wereusedinordertogetabroaderunderstandingofthetopic,inordertogainamorerealisticandvisualunderstanding.ThepodcastsusedwereVR-poddenandVoiceofVRpodcast-DesigningforVirtualReality.

3.1.3.2INTERVIEWS

Primary data were collected in order to gain a greater knowledge of the asset intensivemanufacturingindustry,thepotentialadoptionAR,andtheusageofAR.Thisdatawasprimarily

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collectedbyin-depthinterviews,butalsobyinterviewswithexpertsatseveralfairs.Easterby-Smithet al. (2015) consider interviews tobe themost commonlyusedmethod to carryout aqualitative research method. They argue that information such as ideas, thoughts, values,behavior and other valuable data can be collected through interviews. According to theminterviewsarethebestwayofgatheringinformation,butitmayalsobemoredifficultandcomplexthanfirstconsidered.Furthermore,in-depthstudiesaresaidtobeoptimalforcollectingdatasuchasindividuals’perspectives,personalhistoriesandexperiences(Macketal.,2005).

Theinterviewsweresemi-structured,whichisacombinationofastructuredandanunstructuredapproach (Easterby-Smith et al., 2015). Thismeans that the interviews had a pre-determinedstructurebutallowedforflexibility,furthertheintervieweescouldanswerthequestionsfreely.Creswell(2003)pointsoutthatthiswayofworkingcouldgeneratemoreanddeeperinformationfromtheinterviewees.Asmentionedpreviously,interviewshaddifferentfocuses,thiswassincethe interviews aimed to answer different research questions, whereas the interview for thesecondresearchweremorespecificandstructured.Allinterviewswereconductedcontinuouslyduringtheresearchprocessandthedifferentintervieweesarepresentedintable3.1.

Table3.1.Intervieweesconductedforthisthesis.

Name Company Title Otherinformation

OlleAlvemark IFS IndustrydirectorforManufacturinginIFSScandinavia

AnthonyBourne IFS GlobalIndustrydirectorforHigh-techandManufacturing

ColinBeaney IFS GlobalIndustryDirectorforEnergyandUtilities

MarkBrewer IFS GlobalindustrydirectorforServiceProvider

UlfStern IFS Co-founderofIFS

DanLi ChalmersUniversityofTechnology

PhDStudent,div.ofProductionSystems,ProductandProductionDevelopment.

MarcusEnered VolvoGroupTruckTechnology

InnovationManager ProjectregardingvisualizationofCAD-modelsinAR.

TonyGustavsson VolvoGroupConstructionEquipment

ManufacturingEngineeringcoordinatorofOperationsinEurope

ProjectregardingsmartworkinstructionsinAR.

OliverEdsberger HiQ BusinessUnitDirectorVisualization(VR/AR)

ManageprojectsregardingVR/ARinassetintensivemanufacturingcompanies

TorbjörnGustafsson XmReality Co-founderofXmReality ARremoteguidancecompany

BertilThorvaldsson ABBRobotics GlobalProductManagerforSoftwareProducts

ProjectsregardingAR

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3.1.3.3PANELDISCUSSIONS

Information from two panel discussions are incorporated in the thesis. The first of the paneldebate was seen live at the Electron fair in Gothenburg, and the participants in this one arepresentedintable3.2.Thesecondpaneldiscussion,TechtrendsinAugmented/VirtualRealityatthetransformingmanufacturingfair inSanFrancisco,wasstreamedovertheInternet,andtheparticipants are presented in table 3.3. Participants in both panel discussions were eithermanufacturingexperts, researchers,AR-expertsor similar, and thereforevaluable informationwasprovidedfrombothdiscussions.Incontrasttointerviews,theauthorsconsiderthatapaneldiscussioncouldbringadditionally information,sinceexperts in the fieldexchangeknowledgewitheachother.Theparticipantscouldpossiblyspureachotherandhighlightaspectsthatduringaninterviewwouldnothavebeendetected.Apotentialdrawback,comparedtointerviews,couldbethatonecannotleadthediscussion.However,intheendofthepaneldiscussionsthereweretimeforquestionsfromtheaudience.

Table3.2.TheparticipantsfromtheVirtualRealitypaneldiscussion

VirtualRealitypaneldiscussion,Electronicfair,Svenskamässan,Gothenburg,8thofmars2017.

Name Company Title

ViktorPeterson CLVRWorks CEO

TobiasFröberg BoldArc CEO

ElenaMalakhatka KTH Ph.D.research

CarinaSundqvist IBYR Digitalstrategy

OliverEdsberger HiQ BusinessUnitDirectorVisualization(VR/AR)

JonathanTiedtke VRVision CEO

SteveHogan VRSafety Director

Table3.3.TheparticipantsfromtheTechtrendsinAugmented/VirtualRealitypaneldiscussion

TechtrendsinAugmented/VirtualReality,Transformingmanufacturing,Galvanize,SanFrancisco,June22nd2016

Name Company Title

Dr.MohsenRezayat SiemensPLM ChiefSolutionsArchitect

NathanChristensen OrbitalATK Seniormanager

MattMiesnieks SuperVentures Partner

MattKammerait DAQRI VicePresident

MikePegler PwC Partner

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3.1.4ANALYSIS

The analysis model, presented in figure 3.2, aims to find consensus regarding the literaturefindingsandtheempiricalfindings.Asseeninthefigure,theanalysiswascarriedoutintwosteps.The first step consisted of analyses of external environment, the AR technology, andorganizational impedimentsandfacilitatorsforanAR-adoption.Thisanalysisaimedtoanswerthefirstresearchquestion“Whatfactorsaffect,positivelyornegatively,thewillingnesstoadoptAugmented Reality?”. Based upon the first analysis, the second analysis aimed to answer thesecond research question “What type of AR-applications could be useful in an asset intensivemanufacturing context and are these applicable today or rather in the future?”. In the secondanalysisthefindingsfromthefirstanalyseswerecombinedwiththeempiricaldataofusecases,presentedinsection6.2.Foreachcase,itwasevaluatedifthespecificcasewasapplicabletodayorratherinthefuture.Additionally,thespecificfacilitatorsorimpedimentsforrealizationofthespecificuse-case,werealsoidentifiedandanalyzed.

Theanalysismodelwasbasedupontheadoptiontheoriespresentedinchaptertwoandtheseare;TechnologicalOrganizationalEnvironmentalFramework(TOE)andInnovationDiffusionTheory(IDT).TheTOE frameworkwasused for the first analysis toprovide insight fromanexternalenvironment,technologicalandorganizationalperspective.Further,theIDTwasusedtoprovideamorecomprehensiveanalysisforeachoftheseperspectives.ForthesecondanalysisonlytheIDTmodel,andespeciallythestagepersuasion,wereused,incombinationwiththefindingsfromthefirstanalysis.InadditiontotheTOEandIDT,theothertheories,presentedinchaptertwo,werealsotakenintoconsiderationforbothoftheanalyses.

External factors include the industry trends; digitization, Industry 4.0, and Servitization.Furthermore,externalfactorsaccountforthefactthattheorganizationoperatesinanetworkthatconsistsofdifferentactorswhoareinterdependentofeachother.

Technology factors includes factors derived from AR. These regards the technologicalcomponentsandthetechnologicalecosystem.Furthermore,factorsrelatedtotheARexperience,forinstanceapplication,contentetcetera.

Organizational factors include technicalandnon-technical factors thatmightaffectadoption,positivelyornegatively,frombothanorganization'spointofviewandforanindividual’spointofview.

The use-cases was analyzed from the factors; relative advantage, compatibility, complexity,trialabilityandobservability,andwerebaseduponthethesisauthors’collectedunderstandingoftheadoptionofARforaspecificapplicationinaspecificcontext.

Alimitationofthisresearchisthatatestofthespecificareas/usecaseswithinanorganizationcouldnotbeconductedandthereby truthfullyanalyzed.Therefore,any furtheranalysisof thedecisionofadoption,andanalysisofanindividual'sattitudetowardsusingthetechnology,couldnotbemadeforarealusecase.However,alternativewaystoinvestigatespecificuseareashavebeen used instead of testing in reality, and the information have been collected by theintervieweespreviousexperiencesandexpectations.

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Figure3.2.Theanalysismodelusedintheresearch,consistedoftheTOE,IDT,andTAMframework.

3.2QUALITYOFTHERESEARCH

Inthissection,thequalityofthisstudyhasbeenevaluated.

3.2.1VALIDITYANDRELIABILITY

Itisnotpossibletocompletelyvalidatearesearch,butitispossibletoclaimthattheresearchhasstrong validity (Drost, 2011). Depending on the researcher's standpoint, positivist orconstructivist, they are likely to use different criteria for judging the quality of the study.Furthermore,theresearcher’sviewpointwillaffectboth,howtheirownresearchisdesignedbutalso how they judge others’ work. From a positivist viewpoint validity should consider thequestion “Does the design make it possible to eliminate plausible alternative explanations?”(Easterby-Smith et al., 2015, p.103). In contrast, for a constructivist viewpoint validity shouldconsider thequestion “Havea sufficientnumberofperspectivesbeen included?” (ibid). Further,whileconsideringreliabilitythemainquestionsis“Willsimilarobservationsbereachedbyotherobservers?”foraconstructivistviewpointand“Dothemeasuresusedprovideagoodapproximationtotheunderlyingconceptofinterest?”forapositivistviewpoint(p.103).Asthisthesisisconductedfrom a constructivist viewpoint the aspect of validity and reliability are discussed from thatperspective.

Toincorporateasufficientnumberofdifferentperspectiveswithinthisresearch,theauthorshaveconducted a literature review and compared this with findings from panel discussions andinterviews. It is impossible tobe certain that research findings reflecting reality.However, byinterweaving several different persons with different expertise and background, and collectmaterialfrommanydifferentsourcesitiseasiertobemoreconfidentthatamorerealisticviewhasbeenfound.TheabovereasoningsupportsthatthethesisauthorshavetriedtheirbesttogainadeeperunderstandingofARinanassetintensivemanufacturerscontext.However,issuesthataroseduringtheliteraturereviewprocesswasregardingthetechnology’srapidlydevelopment.Thefactthatthemarketcontinuouslyischangingmakesitdifficulttobeup-to-dateandusethelatest information.Questionsthatwereconsideredwereforexample:Arearticlesoutofdateiftheyareoveroneyearold?Willthisthesisbelessvalidwhenit isfinishedcomparedtowhenthematerialwascollected?Duringthisthesis,aninformationsearchhasbeenmadecontinuously,but

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the authors cannot be ensured that thematerial is up-to-date and valid, since the amount ofinformationontheInternetismassiveandthetechnologicaldevelopmentisimprovingrapidly.

To strengthening the validity, and to avoid leading questions, the interview questions wererevisedseveraltimesbeforeaninterviewwasconducted.AccordingtoMacketal.(2005),leadingquestionsareformulatedinawaythatcould influenceparticipants’responses.Suchquestionsrisktobiasandimposingaperspectiveonparticipant’sanswer.Furthermore,inthebeginningofaninterviewtherespondentwasaskedifheorshewantedtobeanonymous.Macketal.(2005)considerthataskingparticipantsaboutconfidentiality is important inordertoearntheirtrustandthuselicitinggooddata.Contradictory,theinterviewswererecorded,andaccordingtoMacketal.(2005)thiscouldmaketheintervieweesuncomfortable,andthereforenotrevealthewholetruth. However, by ensuring the participant that the recording only would be used fortranscription purpose, further being deleted after the work is finished, mitigated this risk.Hopefully,therecordinghasnotaffectedthevalidityoftheresearchbutthiscannotbeensured.Therecordingsoftheinterviewsweremadeinordertobeingenabletolistentotheinterviewsagaininaretrospective,andtherebyconductbetterandmoretrustworthytranscriptions.Thismadetheempiricalfindingmorereliablesincethematerialcouldnotbeinterpretedinsuchwayasifittheyonlywouldbebasedonmemoriesorunclearnotes.

3.2.2CREDIBILITYOFTHESOURCES

Today,thereisaninformationoverloadandthereforetheauthorshavehadacriticalstandpointwhenselectingandanalyzingthecollectedinformation.Furthermore,theinformationgatheredmightbemisinterpretedandtherebyinfluencedbyboththesenderand/orthereceiver(Carlsson,1995).Ontheonehand,theinformationthathasbeenselectedwasderivedfrommainlywell-citedarticlesandliteraturereleasedbyreliablesources,thisinordertomakeatrustworthystudy.Ontheotherhand,thereliabilityofasourceissubjectiveandthusitdependsonthejudgerofthisthesistoconsideriftherearecrediblesourcesornot.

Togetabetterunderstandingofthemanufacturingcontext,interviewshavebeenconductedwithIndustrydirectorsat IFS.This couldbias the resultof the research since the intervieweesareemployedbythecompanywhosupervisethisresearch.However,IFSaresuccessfulwhentheircustomersaresuccessful.Therefore,IFSmusthaveagoodunderstandingofwhattheircustomers’problemsare,anditistheseissuesthathavebeentakenintoconsiderationinthereport.However,thedirectorsmighthaveinfluencedthedirectionofthereportandthereforethereisariskthattheinformationaboutassetintensivemanufacturersisbiasedandnotreflectsarealisticviewofthereality.AmongstcompaniesandARexperts,onlyearlyadoptersandvisionarieshavebeeninterviewed,duetothelackofknowledgeandexperienceofthetechnologyinarealcontext.Sincetheserespondentsmighthaveatooenthusiasticorvisionaryviewpointonthesubject,thiscouldincreasetheriskforbiasintheresearch,

IntervieweesthatwereexpertsinthefieldofARwerefirstlyfoundthroughresearchofthetopic,and lateronby further recommendationsof thosepeople.Additionally, anemailwassentoutamongst members in the visual arena network at Lindholmen Science Park, in Gothenburg,Sweden.VisualArenaisanopenandneutralcollaborationplatformforthedevelopmentanduseofvisualizationinGothenburg.Fromthisemail,thethesisauthorscameintocontactwithmanydifferent persons that had experience or knowledge about AR. In this case, the difficultywas

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rathertochoosewhomtotalkto,sinceallcouldnotbeinterviewedduetotimelimitations.Theauthorsconsideredthismethodtohavebothprosandcons,sinceoneriskisthattheresearchermissacertainviewpoint,butatthesametimetheseexpertswouldprobablynothavebeenfoundwithoutthismethod.

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4.EXTERNALTRENDSThe following chapter describes trends that affect asset intensive manufacturers. Firstly, theconvergenceofthephysicalandthevirtualworldispresented.Secondly,theservitizationtrendisdescribed, but also the adoption of new technologies in a servitization context, and lastly, theIndustry4.0trendisdescribed.

4.1CONVERGENCEOFTHEPHYSICALANDVIRTUALWORLDS

Since the development of personal computers in the 1960s the modern society has evolvedthrougharevolutioninadigitalcontext(PwC,2016b).Nowadaysithasbecomepossibletostore,createandretrieveinformationrapidlyandinreal-time.Theseabilities,combinedwithnetworkinterconnectionandaccessiblecomputers,laptops,tabletsandsmartphones,haveledtoseveralinventionsandinnovations,whichhaveincreasedtheaccessibilitytoinformation.AccordingtoPwC(2016b)recentresearchesshowthatbusinessesareexperiencinganinformationoverloadandthishasfurthergeneratedacognitiveoverloadofworker’sabilitiesto“makedecisions,processinformationandprioritizingtasks”.

Nowadays,we take it forgranted thatpeopleareavailableboth in thephysicalworldand thedigitalworld,butithasnotalwaysbeenlikethis.PwC(2016b)arguethatthemovementbetweenthephysicalandthedigitalworldhasincreasedinfrequency.Fromthebeginningworkerswereincorporatedinthedigitalworldthroughcomputersattheworkspace,thiswasfollowedbytheintroductionofthepersonalcomputer,hencethedigitalworldwasbroughthomeintheeverydaylife.Smartphonesandtabletshaveincreasedthefrequencyofmovementevenfurtherandtoday’sgenerationisconstantlymovingbetweenthephysicalandthedigitalworld.However,wehavebeendoingthingsdifferentlyinthephysicalandthedigitalworld,forinstanceinteractionhavebeenmade throughkeyboards andmousses in thedigitalworld and in thephysicalworldbygestureandvoice.Therefore,wehavebeenforcedtolearnhowtohandlebothoftheseworldssimultaneouslybut indifferentways(PwC,2016b;Deloitte,2016;GoldmanSachs,2016).PwC(2016b)believethatthedivergingofthesetwoworldsandtheincreasingvolumeofinformationarethereasonstothecognitiveoverload.However,PwC(2016b)arguethatatoolthathastheabilitytomergethephysicalandvirtualworldwillreducethecognitiveburden,sincethereisnoneedtochangefocusbetweenthebothworlds.

4.2INDUSTRY4.0

Industry4.0,alsocalledthe4thIndustrialrevolution,referstothedigitalization,andintegration,ofallphysicalassetsintheecosystemandthroughoutthewholevalue-chain(PwC,2016g).Thisincludes“integrationanddigitalizationofhorizontalandverticalvaluechain”, “digitalizationofproductsandservices”,and“theformationofdigitalbusinessmodelandcustomerrelationship”(p.6). Monostori (2014) argues that companies try to obtain totally collaborating entities thatexchangedataregardingtheirongoingprocesses.Further,thisdatacomesfromboththedigitaland physical world and the collaboration is facilitated by the use of data-accessing and dataprocessingservicesprovidedontheInternet.Theideaisthatitcouldresultinsmart-networks,-cities,-productionsystems,-communicationand-products(ibid).

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Industry4.0 isbasedon cyber-physicalproduction systems (CPPS),whichmerge the real andvirtualworld(Deloitte,2015).CPPSenablesmartcommunicationbylinkingITwithmechanicalandelectronic components, these can thereby communicatewitheachother (ibid).Monostori(2014)arguesthatCPPScouldenableandsupporttheinteractionandcommunicationbetweenmachines,humansandproductsalikeandthefundamentalconcernregards“exploretherelationsofautonomy,cooperation,optimizationandresponsiveness”(p.10).

The characteristics of Industry 4.0 are interoperability, information transparency,decentralization,real-timecapability,serviceorientationandmodularity(Gilchrist,2016).ISRA&Acatech(2013)arguethatanIndustry4.0initiativehashugepotentialinseveralareassuchas;individualcustomerrequirements,flexibility,optimizeddecision-making,resourceproductivityandefficiency,andfinallycreatingvalueopportunitiesthroughnewservices.

However, to obtain the aimof Industry4.0, and to receive thepotential benefits of it, severaldifferent technologiesandcomponentshave tobe successfully implemented, andoneof thesetechnologiesisAugmentedReality.Additionally,technologiesthatareimportantforIndustry4.0arepresentedintable4.1.Inadditiontotechnologies,theworkorganizationanddesign,butalsothetraining,havetobechanged,duetonewskillsandnewwork-tasks’requirements(ISRA&Acatech,2013).

Table4.1.Technologiesidentifiedasimportantfortheenablingofservitization

Technology Description

SystemIntegration Severalindependentsystemsareinterlinkedwitheachotherinordertoworktogether.

Simulation Theabilitytosimulateorvisualizedataandsystems.

BigData Thelargeamountofdatathatiscollectedandstoredtodayandthedifficultiesofusingtraditionaldatabasetoolstoprocessthislargeamountofdata.

InternetofThings Connectivitybetweeneverything,frommachinesandtoolstohomeappliances.Itisbasedontheintegrationofsensorsandprocessorswithinthesethings.BythisthethingscouldcommunicatewitheachotherbytheuseoftheInternetorbybeingphysicallyinterlinked.

CloudServiceandCyberSecurity

TheabilitytostoreandprocessdatabytheInternetonadistanceservice,calledcloud,insteadofonalocalserverorcomputer.ThisraisesquestionsregardingCyberSecurity,forinstanceexaminationofaccesspermissionandthesafetyofcloudstorageandprocessing.

4.3SERVITIZATION

Servitization is awidespreadphenomenonwhichmeans that the industry shift theirbusinessmodels to add or incorporate service in their offerings (Cambridge service alliance, 2015).Vandermerwe and Rada (1988) explain servitization as “increasingly offering fuller marketpackagesor“bundles”ofcustomer-focusedcombinationsofgoods,services,support,self-serviceandknowledge” (p.314). The process of offer services instead of products can be a game changer(Baines & Lightfoot, 2013), since there is a huge difference between products and services.Jagstedt (2016) explains that a product is tangible, and made or manufactured meanwhile a

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serviceisintangibleand“everythingelse”.Further,sheexplainsthataserviceisheterogeneous(highvarietyofservices),perishable(itcannotbesavedorstored),anditcharacterizesbythesimultaneousproductionandconsumption.However,servitizationasaconceptisnothingnewandSchmenner(2009)arguesthatservitizationgoes150yearsbackintimeeveniftheconceptof“servitization”wascoinedin1988(Vandermerwe&Rada,1988).

AccordingtoJagstedt(2016)thereistwowaysforacompanytomoveintoasolutionprovider.Thefirstistoaddserviceupontheproduct.Inthiscase,thefocusshouldbeonaddingservicesthat could be linked, but not integrated, with the product. Examples are services as repair,training,maintenanceorfinance.Theotherway,orthenextstep,istointegrateproduct,serviceandknowledgeintheoffering.Thefocusshouldinthelattercasebeonthecustomer’sprocesses,resultsorusages.Additionally, the integrationofproduct, serviceandknowledgecouldcreatevaluesurplus.Examplesofsuchcharactercouldbetooptimizethecustomer’sflow,facilitatethecustomer’sprocesses,ormanagethecustomer’sactivities. InaresearchbyBaines&Lightfoot(2013),regardingcompanieswhoareintheprocessofchangingtheirbusinessmodelstowardsservice focus, they found that suppliers often offer a product as a basis and as a service theyincorporate theoverall responsibility for thesolution.Thismeans that thesuppliermaintains,optimizesandprovidesfunctionalityfortheircustomers.

Therevenueisbasedontheoutcomeorvalueforthecustomers,andthesupplieriscompensatedaccordingly,meaningthecustomer’svalueofusingtheoffering.Baines&Lightfoot(2013)arguethat this way of doing business opens up for longer contracts with long-term relationships.Furthermore,itcouldcreatealock-ineffect,whichinturncouldgeneratestablerevenues(ibid).Asseenabove,therearedifferentformsofservicesofferings.However,Jagstedt(2016)believesthatoptimallythecombinationofproductandserviceshoulddependonthecustomer’soverallneedsandthatisallaboutsellingasolution.Jagstedt(2016),basedonBaines&Lightfoot(2013)work,gaveanexampleofRolls-Royce,who transformed fromaproduct toa serviceprovider.TheychangedfromprovidingAeroenginesasaproducttoflyinghoursasaservice,andforRolls-Roycethismeantthatthenewofferincorporatedmaintenance,logisticmanagement,repairandoverhauloftheenginesinsteadofonlyenginesasbefore.

Baines&Lightfoot (2013)argue that theservitization transformation isachallengeandmanycompaniesfailtogainthebenefitsthatservicesolutionscouldoffer.AccordingtoMartinezetal.(2010)andBrax(2005) this isdue to thedifferentwayofdoingbusiness,which incorporateseverything from management to sales, R&D, and service. Jagstedt (2016) argues thatmanufacturers have major difficulties in the transformation towards servitization due to thechange in business model. However, in comparison to pure service providers they have acompetitiveadvantage.Thereasonisthatserviceprovidershavetointegrateaproductintheiroffering,meanwhilemanufacturershavetointegrateaservice,buttheyalreadyowntheproductbasisandtheassociatedknowledge.

CambridgeServiceAlliance (2015) concluded that technologyplays an increasingly importantrolefortheenablingofservicesandservitization.Theyarguethatiffirmscanidentifyandutilizetechnologiesthatsupportservitizationthesefirmscanstayintheforefrontofthemarket.Further,theyarguethattheemergenceofnewcapabilitiesandtechnologiesenablemorecompleteandadvanced service options. To allow full employment of technology they believe that,organizational change, the culture and internalmindset, and the organizational infrastructure

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must be aligned. In the research, several technologies were identified as important for theenablingofservitizationandsomeofthosetechnologiesarepresentedintable4.2.

Table4.2.Technologiesidentifiedasimportantfortheenablingofservitization.

Technology Description

Predictiveanalytics Topredictthefuturestateofaproduct,suchaspredictspecificfailuremodeofequipmentormachines.

Remotecommunication Relatedtothetechnology’sabilityto“receive,storeandtransmitdataremotelyandwouldenablesomeonetoremotelyadjust,fixorsendsoftwareupdatestomachines/products”(p.9).

Pushinginformationandmobileplatform

TechnologiestofacilitatecommunicatingwithcustomersandaccessdataforERPactivities.

Analysisofexistingdatasets

Relatestofindingsofcausalityandpatternsoffailureincontrasttoanordinarytrendtrackingtechnology.

Dashboarding Makeservicesmoretangibleandvisiblebyhighlightissues,providepossiblestrategiestoaddressproblems,andsupporthuman-decisionmakinginaservicesystems.

Positionaltracking Concernstrackingofmachines,products,peopleorcomponentsviaGPSorGeo-spatialtechnologies.

RFIDand3Dbarcodes Enablesstoringofinformationassociatedwiththeproductwhenusedthroughoutthewholesupplychain.

Sensornetworkintegration

Integrationofsensorsinassetsandcomponents

4.3.1 ORGANIZATION’S ADOPTION OF TECHNOLOGIES IN A SERVITIZATIONCONTEXT

CambridgeServicealliance(2015)investigatedthedriversforadoptionoftechnologieswiththeaim to give insight regarding the main trends that drive technology adoption by CapitalEquipment Manufacturers (CEMs). The top five drivers were; generate new revenue source;improved maintenance efficiency and effectiveness; demand for increased data gatheringincludingsmartsensorswithnetworkcapabilities,GPSandmobilephones; improvingproductperformance;andincreased/improvedaccesstoinformation.

AccordingtoCambridgeServiceAlliance(2015),CEMslagintheiradoptionoftechnologiesandtherebyalsointheadoptionofintegratedproduct-servicetechnologies.Theauthorsarguethatthisisduetobothstrugglestoidentifyrelevantfuturetechnologiesandslowinternaladoptionoftechnologies.Furthermore,theyarguethatthefocusamongstCEMsismostlyoftentechnologiesthatimprovetheproductperformanceandtheauthorsbelievesthatthereisalackinfocusonrevenuesfromtheaftermarketbusiness.

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5.AUGMENTEDREALITYFirstly, the following chapter provides a description of the real and virtual environment, thedifferencesandsimilaritiesbetweenARandothersimilartechnologies,andfurtherhowARisdefined.ThisfollowsbyadescriptionoftheelementsincludedinanARexperience,andthecurrentlimitationsandconcernsrelatedtotheseelements.Thereafter,theindustrylandscapeofAR,andorganizations'currentadoptionofAR,aredescribed.

5.1THEREALANDVIRTUALENVIRONMENT

Theenvironmentoftodaycouldbedescribedasreal,mixedorvirtual,asvisualizedinfigure5.1.Therealenvironmentisourphysicalworldandthevirtualenvironmentcouldbeexplainedasourdigitalworld,orwithotherwords,VirtualReality(VR).ThemixedenvironmentorMixedReality(MR)isacombinationoftherealandvirtualenvironment.

Milgram(2016),thefounderofthe“virtualitycontinuum”,describesMRtobeaspectrumthatinvolvesthewholerangeofrealnessbetweenfullyrealandfullyvirtualenvironment,hestatesthatMR is a superset of Augmented Reality (AR) and Augmented Virtuality (AV). Further, hearguesthatthemixtureofrealityandvirtualityclassifieswhetherit isARorAV.However,thedefinitionofAR,AVandMRisnotgenericandseveralcontradictorydescriptionscouldbefound.SomearguethatAR,AVandMRare interchangeablyandthetermusedisratherbasedonthecurrent trend, meanwhile other argue that there is a distinction between AR/AV and MR(Foundry,2016).Thosewhoargueforadistinctionstatethatthecontentfromtherealworldandthe content from virtual-world are not able to interact and respond to each other in AR/AV,meanwhilethisispossibleinMR(ibid).However,inthisresearchthetermsAR/AVandMRareinterchangeablybutthetermusedisAR,sinceitcurrentisthemostcommonlyusedterm.

Figure5.1Thespectrumfromrealtovirtualenvironment

ARisdescribedasanot fully immersivemedia,wheretherealworld isenhancedwithvirtualelements inreal-time.Thismeans thatARenablesadirector indirectviewofaphysical, real-worldenvironmentcombinedwithaugmentedelements,forinstancetheuserispresenceatthephysicallocationoftheAR-experienceasstatedintable5.1.

VRisalso,asAR,anupcomingandhypedtechnology,butthereareimportantdifferencesbetweenthesetechnologies.VRisdescribedasafullyimmersivemedia,wheretherealworldisreplacedwith a simulated one. This means that the user interacts with information in an unreal andsimulatedworld.Craig(2013)explainsthateveniftheVRtechnologycantracktheuser’slocation,

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togenerateanappropriatevisionon the screen, it isnotalways true itwilldisplay theuser'sspecificlocation,incontrasttoAR.GeneraldifferencesandsimilaritiesbetweenARandVRarepresentedintable5.1.

Table5.1DistinctionsbetweenARandVR.Source:(PwC,2016a).

Feature AugmentedReality

VirtualReality

Presence:Theuserisatthelocationofexperience Yes No

Realtime:Theuserisinteractinginrealtimewiththeenvironment Yes YesandNo

See-throughcapabilities Yes No

Movement:Theusercanphysicallymoveintheenvironment Yes No

5.2DEFINITIONOFAUGMENTEDREALITY

InAR,informationisprovidedinregistrationtothephysicallocation,and,asseenintable5.1,theuser“remains”intherealworld,buttherealworldisaugmentedorenhancedbyavirtualobjectsorinformation.TheideaofARisthattheusercouldusehisorhersenses,suchasbeingabletoseeandhear,inthesamewayasintherealworld(Craig,2013).Initssimplestform,thegame“PokémonGO”couldbeusedasanexampleofAR.Inthisgame,aPokémonappearsontheuser’ssmartphone-screenbaseduponhisorherlocationandthePokémonisfurtherdisplayedonaviewofthephysicalworld.

Craig (2013)definesARas “amedium inwhichdigital information isoverlaidon thephysicalworld that is in both spatial and temporal registration with the physical world and that isinteractiveinrealtime”(p.36).Fromanotherpointofview,Oxford'sdictionary(2016)definesARas“atechnologythatcombinescomputer-generatedimagesonascreenwiththerealobjectorscenethatyouarelookingat”.

InsummaryARcouldbecharacterizedbyfollowingcharacteristics(Maet.al,2011;Craig,2013):

Relationtocontext: Thephysicalworldisaugmentedbydigitalinformationsuperimposedonrealobjectsinaviewofthephysicalworld.Hence,itisdependentontheregistrationorthelocationoftherealworld,furthertheuser’sspecificperspectiveofthephysicalworld.

Real-timecapability: Theinformationisdisplayedinregistrationwiththephysicalworldinreal-time.

Interactivity: The AR experience is interactive. The information or objects aredisplayed in an intuitiveway and the user could sense it andmakechangestotheinformationprovided.Thelevelofinteractioncouldbesimple,suchaschangeduserperspective,andmoreadvance,suchasmanipulationandcreationofnewinformation.

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5.3ORGANIZATIONS’ADOPTIONOFAR

Ashavebeendescribed,ARmergetherealanddigital informationandtheusercouldtherebyinteractwiththeinformationinthesamewaysasintherealworldanditletstheuserstointeractwithbothworldssimultaneously(Craig,2013).Inotherwords,ARwillmergethephysicalanddigital world with a seamless integration (PwC, 2016b; Kipper, 2012; Deloitte, 2016).Furthermore,ARwillgiverisetonewandnovelwaystofilterandcontextualizetheinformationgiventotheuser(PwC,2016b;Deloitte,2016),andPwC(2016b)pointoutthatonewaytohandlethe cognitive overload is to use AR and thereby reduce the cognitive burden by filtering andcontextualize the information presented to the user. Finally, AR opens up for a new lens onbusinessactivities(ibid).PwC(2016b)argues“peoplelookatoperationsfromacombinedviewofdigitalandphysicaloperationsandexternalizethecognitiveburdenthat is inherent inthetask”.Additionally, Goldman Sachs (2016) argue that AR could create a change in current businessmodelsandfurtherchangethewaysinwhichwetransact.

PwC(2016h)arguethatAR/VRareheadingtowardsmainstreamadoption,furthertheybelievethatUSmanufacturersprobablywillexperienceaneedtoadoptARinordertocompeteinthefuture,duetotheimprovementsthetechnologydemonstratewithinseveralareas,forinstanceproductivityandproductdevelopment.However,currentlymanufacturersareusingAR“prettymuchanywaytheycan”(PwC,2016h,p.4).Furthermore,therearestillsomeconcernsthathavetobeaddressedinordertospurtheadoptionandGoldmanSachs(2016)argue“Weviewtheuserexperience, technology constrains, the development of content and application, and price as keyhurdlestoadoption”(p.4).

According to Goldman Sachs (2016) consumer, enterprises and public sector will drive theadoption of AR. This could be compared to PC and smartphones, where companieswere thedriversofPCandconsumersthedriversofsmartphones.TheyfurtherbelievethatwhentheARtechnologymaturesstrongerenterpriseusecaseswillemerge.Asseenindiagram5.1,mostUSmanufacturesin2015plannedtoadoptAR,andoneoutoftenwereatthattimeadoptingAR(PwC2016h).However,incomparisonwithdiagram5.3,itcouldalsobeseenthatalmostthreeoffourrespondentsthoughtthatlessthan25%oftheUSmanufacturerswilladoptARbeforeyear2025.

InPwC’sresearch,itcouldbeseenthatoneoffiverespondentsnotadoptingARexperiencealackofpracticaluseofAR-applications,furtheroneofthreedidnotconsideredARreadyforits“primetime”,asseenindiagram5.2.However,GoldmanSachs(2016)believethereisachicken-and-eggissue, related to the development of application and content, and enterprises investment ininstalledbased.EnterprisesarehesitanttoinvestinAR-hardwarewithoutARapplications,anddevelopersarehesitanttocreateappsandcontentwithoutAR-hardware.However,VRSverige(2016)arguethatthetechnologiesofVRandARisgettingcloser,andsinceVRismorematureandseveraluse-casesarealreadydeveloped,itwillalsobecomeeasiertoidentifieduse-casesforARwhenARandVRconverge.

GoldmanSachs(2016)believethatARhavethepotentialandqualitiestobecomeasubiquitousasthesmartphone.Theyarguethatoneofthemainreasonsforthemassappealofsmartphonesistheeasy-of-useinterfacederivedbyitstouch-screenandtheybelievethatARwillexperiencethesame,furtherdrivetheintuitiontothenextlevelbyitsinteractionmethodsand3Dinterface.PwC(2016h),regardingHMDs,arguesthat“ARnotonlygetsthingsdonefasterandbetter—butmoreefficiently.Hands-free,workerswhomightpreviouslyneedtoconsultanotherdeviceormanual

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orhand-heldscanner,forexample,nowaccessdatawiththetiltofthehead,aspokencommandora simple touch--all shaving seconds or even minutes off tasks frequently carried out” (p.4).Furthermore,VRSverige(2016)believethatthecurrentstateofhardwareandsoftwarewillspurthedemandforAR.

Diagram5.1.USManufacturerscharacteristicsofARadoption.Numberofrespondents:21. Source: PwC and Zpryme survey and analysis, “2015 Disruptive ManufacturingInnovationsSurvey,”conductedinNovember2015.

Diagram5.2.USManufacturerscharacteristicsofARadoption.Numberofrespondents:21. Source: PwC and Zpryme survey and analysis, “2015 Disruptive ManufacturingInnovationsSurvey,”conductedinNovember2015.

Diagram5.3.USManufacturerscharacteristicsofARadoption.Numberofrespondents:21. Source:PwC and Zpryme survey and analysis, “2015 Disruptive ManufacturingInnovationsSurvey,”conductedinNovember2015.

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5.4THEARLANDSCAPE

PwC(2016a)arguethatindustrylandscapeishighlyfragmentedandtodaythereisnodominantdesign presented on the market. They state that there are no standards when it comes tohardwareplatforms,operatingsystems,anddata formats.However,PwC(2016a)believe that“Overtime,platformsshouldemergethatcanoperateacrossthediversityofdevicesandconnecttotheexistingbackendsthatmostenterpriseshave.Today,nosuchplatformisdominant.Emergenceofadominantplatformwouldlikelysignaltheinflectionpointwhereadoptionaccelerates”(p.5).However,accordingtoGoldmanSachs(2016)ARhavethepotentialtocreatenewmarketsanddisruptexistingmarketandtheybelievethatARcouldbecomparedwiththeentrancedofPCandsmartphones.

The sales of VR/AR were not as high as expected in 2016, but people who had a realisticunderstandingofthetechnologyknewthattheexpectationsweretoohigh(VRSverige,2016).However, several large companies, suchasHTC,Microsoft, Facebook, andSamsung, expandedtheirinvestmentsinthetechnology,whichisanindicatorthatthesecompaniesstillbelieveinthetechnology. For example, Facebook bought oculus for billions of dollars, and currently 750engineersanddevelopersareworkingfulltimewithVRandARdevelopment.

VRscout(2017)hasmappedtheaugmentedrealitylandscapeforthefourthquarterof2016.Thelandscapevisualizesthebiggestactorsthatareeitherdevelopingtheinfrastructure,thetoolsorplatforms, or applications. Some companies are involved inmany of these areas, for exampleMicrosoftareactorsinalldifferentfields.ActorsthatdeveloptheinfrastructurewasdividedintoHeadmounteddisplay(MR/AR)andcomponent.Componentswasfurtherdividedintodisplay,3Dcameras,inputorcomputervision.WhenVRScout’sresearchwereconductedtherewereintotal17hardwareproducersofHMD,whichforexample,wereMicrosoft'sHololenses,magicleap,DAQRI,andODG.

Actorsthatdeveloptoolsorplatformswasdividedintodistribution,standarddevelopmentkit(SDK),3DTools(engines/audio)and3DRealityCapture.Someactors,presentedintheindustrylandscape,arealsomorerecognizedwithinthefieldofAR.Forinstance,Vuforia,whowasplacedintheSDKslot,andUnity,whowasplacedinthe3D-toolslot.Additionally,Facebookwasoneofactors in thedistributionarea.MarcZuckerberg,CEOatFacebook, saidat theirF8conference2017thattheirmissionistomakeitpossibleforallpeopletoshareexperience,andthatARisabigpartoftheirlong-termplan.

Lastly, there were the developers of applications, which were further divided into games,consumer,enterprise,healthcareandeducation.Forexample,IKEAhasdevelopedanappwhereitispossibletoviewandplaceIKEAfurnitureinarealhomethroughtheuseofasmartphoneortablet.IKEAhasthereforeextendedtheordinarycatalogueinorderforthecustomerto“test”thefurnitureatitsintendedlocation.

5.5AREXPERIENCE

Toexperienceanaugmentedrealitythefollowingsixelementshavetobeinplace;technology,ARapplication, content, interaction, the physicalworld and a participant (Craig, 2013). TogethertheseelementscreatetheARexperienceandtheperformanceandsuccessofeachelementwill

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affecttheperceiveduserexperiences.However,ifthereareseveralpersonsinanAR-experiencetheycouldperceivetheexperiencesandenvironmentdifferently,sincetheirdifferentversionsmightconsistofdifferentinformationoverlays(TechPolicyLab,2015).

TherearemainlythreedifferentcategoriesofAR-systems,asseeninfigure5.2,thatcouldbeusedforanAR-experience(PwC,2016f).Inageospatialsystem,thevirtualcontentismainlydrivenbyGPS data, and the provided data is based upon location and orientation tracking. This is thesimplestformofsystemandithasevolvedwiththediffusionofsmartphonesandtheavailabilityof GPS (ibid). In a 2D augmented reality system the virtual content provided is based upondetectionofacertainobjectintherealworld,andthevirtualcontentusuallyreactsinapredefinedmanner.Anexample isaposterwhereavirtual-3D-model ispresentedwhenAR isused.Thissystemreliesonamarker,orsomekindofimagerecognitiontool,toidentifytheobject.Ina3Daugmentedrealitysystem,thevirtualcontentisbaseduponscanningofthephysicalenvironment,andinteractivevirtualcontentisprovidedinrelationtothephysicalenvironment.Forinstance,live and real-timedirections couldbe given to amaintenanceworkermeanwhile he or she isdisassemblingorservicinganengine.ThisisthemostadvancedformofAR,andaccordingtoPwC(2016f)itcouldenablenewgroundbreakingapplicationsforindustries.

For geospatial AR and 2D AR simpler devices, such as smartphone or tablets could be need.However,since3DARsystemsrequiresscanningofthephysicalenvironment,andprovisionofcontent in relation to that environment, 3D AR could only be performed by more advanceddevices. Currently it ismainly theHMD that has these abilities.However, there areupcomingsmartphonesdevicesthatalsohavesomeofthemoreadvancedabilities.

Figure5.2.ThethreecategoriesofAR-systems.

5.5.1THETECHNOLOGYECOSYSTEMOFAR

The included technologies in AR are input device, sensors, computer and display. ThesecomponentsformtheARtechnologyecosystemandthelevelofrequirementsdependenceonthespecificARexperiencesitaimstosupport,furthertheperformanceofthetechnologyecosystemdependsontheperformanceofthesecomponents(Craig,2013).

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5.5.1.1TECHNOLOGICALCOMPONENTSINCLUDEDINAR

Inputdevice Input device is a sensor for gathering of user input, such as keyboard andbuttons. There are several different devices that could be used as an inputdevice, for instance computers, laptop computers, tablets, smartphones andheadmounteddisplays(HMD),suchassmart-glasses.

Sensor Sensorsdeterminethepositionandstateoftherealworldandthereareseveraldifferentsensorsthathavetobeinplaceinordertorespondcorrectlytothephysicalworld.Forinstance,sensorsusedfortracking,whichdeterminestheposition and orientation, and sensors for gathering of environmentalinformation.Thesesensorshavetocollectinformationabouttherealworldinreal-time.

Computer Every AR system requires of a computer. The computer coordinates andanalyzessensorinputs,storesandretrievesdata,furtherithandlesthetasksoftheARapplicationandsendtherightsignalstothedisplay.ThecomputercouldbephysicallyintegratedintheAR-device,connectedtothedevicebyanexternaldevice, or accessible through servers located somewhere else.However, it isimportant that the computer is powerful enough to handle its tasks withminimumlaginreal-time.

Display Displays are used in order to display information to the user, it creates theillusion of coexistence between the real and virtual world and it gives theparticipant appropriated signals in order for he or her to experience anaugmentedreality.Thesignalsgiventotheparticipantcouldbevisualsignals(see),audiosignals(hear),olfactorysignals(smell),gustation(taste)orhaptic(touch).However,themostcommonarevisualsignalsandaudiosignals,furtherthesetwoareinfocusforthisresearch.

5.5.1.2THECURRENTSTATEOFTHETECHNOLOGYECOSYSTEM

AnARexperiencetakesplaceinthephysicalworld,thereforetheARexperiencealsohastobeexperienceinthreedimensions,inreal-time,anditisthe3Dcapabilitiesthatmakethispossible.Inordertomaketheexperienceseamless,withoutanydelays,thephysicalandvirtualworldmustmatchprecisely, further changeaccording to theuser’smovement.This requires that sensing,tracking,orientation,interaction,modelinganddisplayingallmusthappeninthreedimensionsandinreal-time(PwC,2016a).Additionally,allofthese3DcapabilitiesmustbeproceededfortheAR-equipment,suchascontrols,fortheARdevice,andinrelationtothesurroundingenvironment(ibid).Asseenintable5.2,therearedifferentkindsof3D-capabilitiesthathavetobeinplaceinorder to make the experience seamless. However, as will be seen, the specific usage andapplicationswillhavedifferentrequirementsofthesecapabilities.

AccordingtoPwC(2016a)andGoldmanSachs(2016)3-Dcapabilitieshavetoprogresswithinseveralareasincludedtracking,processinganddisplaying.PwC(2016a)arguethatoneofthekeychallengesistoidentifythelocationandorientation,furthertoprovidetherightcontentattherightplace,andtheprogressofthesearestronglyrelatedwiththeprogressof3D-capabilities.

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Table5.2.Differentkindsof3D-capabilitiesthatcouldbeusedinAR.

Capability Description

3Dperception Tosensedepthandcapture3Dinformationaboutobjectsorenvironment

3Dmodeling Tocollect3D-informationandcreateamodelinreal-timeoraheadoftimebaseduponthis3D-information

3Dmapping Tolocalizetheorientationandlocationoftheuser,thedevice,theequipmentandotherinformationinthe3Denvironment.

3Ddisplaying Todisplaycontentinrelationtothephysicalenvironment,inotherwords,therightcontentattherightplaceintheuser’sfieldofview.

PwC(2016a)arguethatimprovingperformanceisneededinareassuchasopticsinorderforARto takeoff.Theyargue “Theweight, size,andpowerrequirementsofoptical components canbeexpected to continue to improve.”. However, PwC (2016f) argue that the technology used forgatheringvisual andaudio information is sophisticated,matureandcapableofprovidinghighquality.Additionally, that3Ddisplaysareverygoodandareexpected togetevenbetter.PwC(2016f)furtherarguethattheexperience“dependsonafewkeyopticalcharacteristics:eyebox(relatestoheadfreedom),fieldofview,andimagequality.Ideally,eachshouldbeaslargeaspossible.However, increasing any of them leads to bigger optical components, greater size,moreweight,discomfort,andhighercost”.

Theavailabilityandperformanceofinputdeviceshaveincreasedtheabilitytostore,manipulate,andretrieveinformationquickly(Craig,2013).However,therearealsochallengesandlimitationsrelated to the AR device’s performance and these are; device interoperability, authoringlimitationsconnectedtothespecificplatform,anddeviceconstraintssuchasthelimitedsizeofthedisplay(Craig,2013).Today’ssmartphonesincludethenecessarysensorsforgeospatialARand2D-AR,thereforeoneofthekeybenefitswithmobileARisthatmanypeoplealreadyownaninput device (Craig, 2013). However, Craig (2013) also argues that many mobile devicesexperience limitations concerning memory, computational- and graphical capacities, and hefurtherexplainsthatmemorylimitationsishighlyrelatedtotheamountofcontentpossibletoprocessandstoreatagivenmoment.Furthermore,theadoptionofmobileARiscurrentlylimitedby the battery life and itsmobility (Goldman Sachs, 2016). Regarding 3D-AR there are somecomponentsthatareunique,forinstance3Dlensesandpositiontrackingsystems,whichisnotincorporated in a smart-phone today (ibid). According to Goldman Sachs (2016) thesecomponents drive the prices up for 3D-AR devices, but they believe the prices of these willexperiencesimilarcostreductioncurveassmartphonesandPCs,henceapricereductionby5to10percentagesannually.

ARcansenseinformationfromtherealworld(input)andprojectinformationontotherealworld(output). Cambridge Service Alliance (2015) argue that this type of abilities will have majorinfluencesoninformationaccessinthefuturesinceitcouldprovide“real-timeefficientdataaccessand,increasingly,context-awareanswers”(p.14).However,theseabilitiesalsoprovideconcerns,includingprivacy,distractionanddiscrimination(Rosteretal.,2014;TechPolicyLab,2015).Theinputissuesmainlyconcernprivacyinpublic,butalsoinfringementsofintellectualpropertyandtherighttorecordinpublic.Theoutputissuesconcerndistractionoftheuserandprovisionofincorrectinformationorinformationthatcouldbeusedunlawfulorunethicallyinthedecision-

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making.Theseconcerns,bothinputandoutput,dependsonthewhereandhowARisusedbutirrespectiveofAR’sdesign(ibid).

Inadditiontotheabovementioned,therearealsolimitationsconcerningtheenvironmentwherethedeviceissupposedtooperatein(Craig,2013).Theenvironmentcouldaffectdevices,sensors,computer,anddisplaysinsuchawaytheyarenotworkingcorrectly.Forinstance,thiscouldbecausedbythetemperature,humidity,pressureormagneticfields.Furthermore,theremightberestrictionsregardingthetypeofdevicesallowedtocarryanduse,andlimitationsthataffecttheperformance,suchasnetworkaccessibility,bandwidthandlatency.

5.5.2APPLICATIONS,CONTENT,ANDCONTENTAUTHORING

ContentisthekeyelementwithinAR,itisallelementsofthevirtual-andtheaugmentedphysicalworld,andincludesaspectssuchasideas,objects,stories,sensorystimuli,and“lawsofnature”fortheARexperience(Craig,2013).Contentauthoringisthesoftwareorenvironmentforcontentdevelopment.Furthermore,theARapplicationisthecomputerprogram,whichinteractswiththedifferent technology components. Craig (2013) argues that the AR technology is not yet fullydevelopedandthereforefutureapplicationsmightbeabletodothingsthatarenotpossibletoday.However,ifanapplicationiscreatedforbeingusedinAR,itisimportanttoevaluateifARistherightmediumtouseandiftheapplicationmakeuseoftheuniqueaffordanceofAR(Craig,2013).

RegardingauthoringmethodsforgeospatialARsystemsand2DARsystemsitislargelyamatterofcontentdevelopment(PwC,2016f).However,authoringmethodsandtoolsusedfor3DARarecomplex, require expertise, and in order to create high-quality and accurate content, highproduction effort is needed (PwC, 2016f; Craig, 2013). In addition, 3-D content is very dataintensive which increases the requirements of 3D-displaying, as described in table 5.2. PwC(2016f)states“authoringmethodstodayarecomplex,fragmentedacrossmediatypes,andnotwellintegrated…ForARtotakeoff,theabilitytorapidlycreate,manage,edit,anddeploy3-Dcontentisoneoftheproblemsthatshouldbeaddressed”.Furthermore,theyarguethat“ARlackstandardstodescribeinformation,sharedata,supportinteractions,integratesystems,andswapcomponentsoralgorithms”. However, PwC (2016f) further states “As AR authoring tools evolve, the nature ofcontentthatisbestsuitedforARwillevolveaswellandwillleadtoafuturethatmergesthephysicalanddigital realities”.Another interestingaspect is thatGoldmanSachs (2016) see thatVR/ARtechnology will disrupt the Computer-aided manufacturing (CAM) and the Computer-aideddesign(CAD)market.

Section6.2,providesexamplesofspecificusecasesofARthatcouldbeusedwithintheindustry.

5.5.3INTERACTIONINAR

Interaction is the way the users interact within an AR experience and by definition, an ARexperienceincludesinteractionwiththephysicalworldandthevirtualworld.PwC(2016d)arguethatsinceARoverlaystherealitywithdigitalcontenttheinterfacesandinteractionmethodshavetobecomeoptimizedforhumansratherthancomputers,furtherbeingprobabilistic,whichmeansthat thesystemscoulduseprobability topredictwhat theuser’snext intentwillbe.However,since AR combines real- and virtual worlds it supports multiple types of interactions andinteraction that goes beyond the possibilities in the realworld (Craig, 2013; Tech Policy Lab,2015).

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Asdescribedinsection5.5.1.1,displayofinformationcouldbeofdifferentkindssuchasvisualoraudio, in the sameway interaction could be done inmultipleways. Examples are interactionthrough gesture and speech, but othermethods could also be used such as eye tracking andmotion tracking, furthermore these methods could be combined. However, in general, theinteraction possibilities in AR could be categorized into manipulation, navigation orcommunication (Craig, 2013). Manipulation refers to the user’s possibility to manipulate thevirtualworldinthesamemannerastherealworld,orusingaphysicaldevicesuchasatablet,ora virtual device such as virtual keyboards. Navigation refers to traveling and way finding.Travelingisdonebythesamewayasitisintherealworld,i.e.theuserismoving,andwayfindingdescribeswhereyouareandwhattodonext.Communicationreferstotheinteractionamongtheparticipantsfromboththereal-andvirtual-worldusingreal-worldcommunicationmethods,butalsocommunicationthatismediatedthroughtheARapplication,hencenotpossibleintherealworld. For instance, this couldbe live, real-time translationof theparticipant’sused language(ibid).

Themethodsusedforinteractionexperiencechallengesindifferentenvironment(Craig.2013).Workplacescouldbenoise,dirty,brightordark,hencethemethodsusedmustovercomethesechallenges.Gesturemightnotbeoptimalinabrightenvironmentorwheretheuserneedstohavehisorherhandsfreeandaudioorvoicecommandsmightnotbeoptimalinanoisyworkplace(ibid).PwC(2016a)furtherarguethatimprovingperformanceoftheinteractionareaisneededinorderforARtotakeoff.

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6.EMPIRICALFINDINGSThe following chapter provides the empirical findings related to the external environment,organizations,AR,andARuse-cases.Firstly,theinformationcollectedfromtheinterviewsandthepaneldebatesispresented.Secondly,informationcollectedfrombothprimaryandsecondarydatasources,butrelatedtospecificuse-cases,arepresented.

6.1FINDINGSFROMINTERVIEWSANDPANELDISCUSSIONS

This sectionprovides informationgathered fromthe interviewsand thepaneldiscussion.Thesectionpresentsfindingsregardingtheexternalenvironment,thecurrentstateofAR,thefuturestateofAR,companies’awarenessandknowledgeofAR,organizationaladoptionofAR,user’srequirements of AR, current and future AR usage and its value, technological limitations andconcernswithAR,andfinallyexisting3D-modelsandlimitations.

6.1.1EXTERNAENVIRONMENT

Manufacturingcompaniesnowadayshavetechnologyintegratedinoperationsandprocessestoagreater extent than before, and in order to survive companies have to go through thisdigitalization transformation. It was revealed that digital transformation is one of manychallengescompaniesexperiencestoday,especiallyelderlycompanies,whichhavenothaddigitalcontentintegratedfromtheverybeginning.Furthermore,trendsasservitizationandindustry4.0appear to affect companies' future plans and strategies. In addition, it was revealed thatmanufacturingcompaniescurrentlyexperiencegenerationalchanges.

Cost pressure forces companies to find new and smartways to do business and reduce cost.Severalcompaniesarenowadaysinvestigatingthepossibilitiesofremovingtheworkforcefromtheworkplaceinfavorforanautomatedworkplace,inpurposeofdecreasingcosts.Furthermore,thismightalsoexplainwhytheindustries,whoexperiencecost-pressure,oftenaretheindustriesstandingintheforefrontofadoptingnewtechnologies.However,manymanufacturingcompaniesareabitbehind,oratleastnotleadingintheadoptionofnewtechnology.Although,thisisnottrueforallindustriesandallcompanies,forexampletheautomotiveindustryisaheadofthecurveprobably due to the technology involved within their products. In addition, it appears thatyoungerorganizations,ingeneral,moreeasilyadoptnewtechnologies,furtheraremoreflexible.However,severaloftherespondentsbelievethatARwillbeaninterestingtechnologyinordertomanagecostbetter.

Nowadaystherearelesspossibilitiesforcompaniestodifferentiatethemselvesbyproductsinceevenmorecomplexproductsarebecomingcommodities.Thisseemstobeoneofthereasonsfortheemergenceoftheindustrytrendservitization.Bychangingthefocusfromsellingaproducttoinsteadfocusontheoutcomeitbecomesharderforcustomerstocomparedifferentofferings,forinstance by only evaluating a product based on lowest-price. Therefore, many companiescurrentlyaretryingtofigureoutwhatproblemsthecustomerwanttosolvewiththeirproductsandtherebyprovideasolutiontotheproblem,insteadofprovidingjustaproduct.However,someoftherespondentsbelieveitwillbemoredifficulttosellaservicesincemoreknowledgeaboutthecustomer'sproblemisneeded.

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Furthermore,servitizationseemstoentailmajorchangesinthecompany’sbusinessmodel.Itwasexplainedthatservitizationresultsinnewchallengesforbusinessesmainlyastheresponsibilityischanged.Forexample,theserviceproviderswillhavetheresponsibilityfortheoutcome,hencealsotheresponsibilityforthemaintenanceandserviceoftheasset,whichtheymightnothavehadbefore.Thisdoesalsoincorporatesystemchangesandmanycompanies,thataretryingtotransformtoserviceproviders,doesnothaveIT-systemsthatsupportthistransformationandtheydonotknowhowtohandlethisnewcomplexity.However,asforseveralothercompanies,ABB’sgreatestrevenuescomesfromservices.Therefore,itcouldbeagreatopportunitytoextendtheserviceofferings.However,asstatedabove,thisalsodependsoncurrentbusinessmodelsinceservice and maintenance could be performed by the supplier of the product, by the user orcustomer itself, orbyan independent serviceprovider. In summary,manyof the respondentsconsideredthatservitizationwillhavebigimpactonseveralindustries.

Anotherchallengerevealedwasthehighexpectationsfromcustomers.Nowadayscustomersdonotwanttoknoweverythingabouttheproduct,theyjustwantittoworkproperly.However,oneconsequenceofsellingserviceswillbehigherincitementtoproducehigh-qualityproductssincecompanies will strive to reduce the service andmaintenance of the product. In other words,serviceproviderswanttoprovideservicesinthemostefficientandeconomicalway.Therefore,asynergyeffectfromservitizationcouldbesustainabilityopportunitieswhichintheendmightleadtoamoresustainablesociety.

Revealed from the interviews were also the trend of Industry 4.0. However, some of therespondentsconsideredthatIndustry4.0isahype,anditappearsthatmanycompaniescurrentlyaretrying“to-just-do-something”inordertonotlagbehind.However,itstillappearsthatIndustry4.0willbeimportantforcompaniesinordertostaycompetitive,butitisalongwaytogoformanycompanies.

Regarding the generational changes, also expressed as aging workforce issue, several of therespondentsarguedthatitwilloccurinmanywesternindustriesandcompanies.Thisimpliesthatabigpartoftheworkersinancientmanufacturingcompanieswillretiretheupcomingyears,andtheyarecarryingalotofknow-howandknowledgethatcannoteasilybetransferred.Duetothecomplexityoftheprocessesitcantakedecadestolearnandunderstand,thereforetheknowledgeoftheseretiringworkersisveryvaluableforthecompany.Inaddition,thisnewgenerationhavebeen born into a more digital world and commonly they have higher expectations on thetechnologies at their workplaces. Therefore, several of the respondents consider thatmanufacturingcompaniesmust search for technologies that could serve this specificproblem,thatisderivedfromthegenerationalchangeandtheknowledgetransfer.

6.1.2THECURRENTSTATEOFAR

ThecurrentinterestofARamongstcompaniesappearstobehigh.Further,theinterestseemstobederivedfromadiversityofcompanies,whichrangesfromcarmanufacturerstoassetintensivemanufacturers, but also financial companies. For instance, ABB are very interested in the ARtechnologyandcurrentlytheyaretryingtoincorporateARintotheirbusiness,inordertoprovidebetter offerings to their customer. It seems that the increased interest of AR partly could beexplainedbytheincreasedinterestofVR.Furthermore,sinceseveraltechnologicalcomponents

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aresimilarinARandVR,thetechnologyimprovementsofVRhavealsoincreasedtheperformanceoftheARtechnology,hencealsoincreasedtheinterestofAR.

ThedevelopmentsandimprovementsofARhavebeenmovingmorerapidlyinthelastyears.Anexamplethatarosewasthatasolutioncosted1.5milliondollarstwentyyearsago,respective300000dollars forthesamesolutiontoday.ThecurrentARdevelopmentfocusappearedtobeonboth consumers and businesses, but these two stakeholders experience different needs anddemands. For instance, cost is not as critical for companies as for individuals. Furthermore,enterprisesrequiresolutionsthatservesaspecific issue,meanwhileconsumersratherrequireapplication alternatives. In addition, it was revealed the robustness and the reliability of thesystemismorecriticalforenterprises.

TheecosystemofARisfragmentedandthereareplayersneededwithinseveralkey-areas.Forinstance,companiesareinsomecasesforcedtodeveloptheirownimmersivetechnologies,sincetheyneedcustomizedsolutions.However,usuallythisisnotthesecompanies'mainbusinessandtherefore they should not be the developer of this technology, but rather the end-users.Christensenstated,“Peopledonotwanttodevelopthingsbythemselves,yestheycould,buttheyhave other things to do, it is more important for companies what comes to their bottom line.”.However,thesecustomizedARsolutionsresultinhigherinvestmentcostsforenterprises.

AnotherconcernrevealedbyseveraloftherespondentswerethesocialacceptanceofwearingAR-glasses. For instance, some years ago when Google Glass came, they were not sociallyacceptableforthemainstreamconsumerandthereforenotusedtotheextentpredictedbygoogle.In accordance, current AR hardware, for instance Microsoft HoloLens, appears as somethingpickedfromsciencefiction.However,thesocialacceptanceofwearabledevicesappearedtobehigherintheindustrycomparetotheconsumermarket.Anyhow,therespondentsbelievedthatthedeviceswillbecomesmallerandlessoutstanding,thereforeprobablyalsosociallyacceptableinbothmarketinthefuture.

6.1.3THEFUTURESTATEOFAR

SomepeoplebelievethatfromabusinesspointofviewARcouldbeconsideredasahype,butoneremainingquestion,revealedfromtheinterviews,concernedwhethertheAR-marketwillgrowfurtherornot.Therehavebeenpreviousexampleswhereahypewasnothingelse than justahype,forinstancetheVR-hypeintheninetieswhenthetechnologywasnotreadyyet.However,nowadays the AR technology seems to be ready and even if improvements are needed thetechnologyisgoodenoughtoworkwith.SeveraloftherespondentsbelievethatARisnotonlyahypeandthatitwillspurandcontinuouslyimproveintheupcomingyears.EdsbergerarguedthatARwillbecomeubiquitous,thereforeusedeverywhere.

ThepredictionofwhenARwillbecomemainstream,ifitwill,rangedbetweeneverythingfrom5to20years,butingeneralitwasdifficultamongsttherespondentstopredictthefutureofARandhowARwilldevelop.Although, someof therespondentsagreed thatARwillbecome thenextubiquitoustechnology,butnotbyincorporatingthetechnologyinasmartphone,butratherbythedevelopmentofHMD.Forinstance,thiswasrevealedbyThorvaldsson.Further,therespondentsbelievedthatthiswillhappenwhentheHMDbecomessmaller,whentheperformancebecomebetter,andwhenthedevicebecomeaffordableforconsumers.InthefuturethiscouldresultinHMDs that look like ordinary glasses. However, a comparison between the smartphone

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developmentandARdevelopmentwasdonebyseveraloftherespondentsandtheybelievedthatARwillexperiencethesameimprovements,hencebecomecheaper,smallerandtheformfactorwillchange.Edsbergergavetheexampleofthehugetechnological-andperformancedifferencesbetweenIPhone1andIPhone7,butisnotevenadecadebetweenthetworeleases.Inaddition,thepartnerfromSuperVenturesstatedthattheARtechnologymustcometothestatewhereitispossibletoplug-and-play.AnexamplewasgivenfromaconventwherethecompanyVuforiacouldbuilduptheircontentwithinthreeminutes,anditisthiskindoftoolsthatcurrentlyareneeded.

RegardingtheARecosystem,therespondentsconsidereditdifficulttopredicthowitwillevolve.For instance, the partner at Super Ventures compared the VR/AR ecosystem and said that ifAR/VR is going to be like the consolemarket there is not enough devices out there yet, andthereforeanapp-developermustdevelopforseveralplatformstobeaprofitabledevelopment.This isnotthecaseregardingsmartphones,whereit isenoughusersateachplatform,namelyAndroid or iOS. However, the vice president at DAQRI argued that companies within the ARecosystemmustcollaboratetobesuccessful.Therefore,hedoesnotbelievethatitwillbeonebigplayer in the future that owns everything, but rather a dozen of actors in every layer, and alandscape of different devices and application. Therefore, he believes that it still will befragmentedforalongtime,butthiswillprobablybechangedwithinfiveyears,accordingtohim.

6.1.4COMPANIES’AWARENESSANDKNOWLEDGEOFAR

ItwasfoundthatthetechnologyemergenceofARexperiencesafundamentalchangecomparedtoprevioustechnologyemergence.ThechiefsolutionsarchitectatSiemenssaidthatfifteenyearsago,whenhedevelopedsmartphone-applications,hewenttothecustomerandsaid,“thisisgoingtoimproveyourefficiency”andthecustomerresponded,“whatisasmart-phone?”.Nowadays,withAR/VR it is different and their customers are aheadof them, and it is the customerswho arepushingthem,accordingtohim.

FromthisresearchithasappearedthatmostcompaniesnowadaysareawareoftheARconcept.Forinstance,thevicepresidentatDAQRIhasexperiencethattheydonothavetoexplainwhatARisinthefirstmeetinganymore.However,theknowledgeofARdiffersamongcompanies.Somecompanies already have some sort of program, department or single role around VR/AR,meanwhileothershaveideasanduse-cases,andtheyknowwhattheywanttodo,buttheycannotbuilditsincetheylackin-housecompetenceorexperience.Finally,somecompaniesdonotknowtheirpurposeofincorporatingARintheirbusiness,buttheyareurgenttodosomethingwithAR.Oneoftheintervieweesstated,“companiesdonotknowwhattheywant,theyjustwanttobeapartoftheARevolution”,andanotherdescribedthattheircustomer’swantto“dosomethingcool”.

Severaloftheintervieweesdeclaredthatalotofvideo-clips,foundontheInternet,doesnotrevealtherealityortruthofAR’scurrentcapabilities.Asoneoftherespondentexpressed“thosevideoscouldratherbeclassifiedassciencefiction”.Forinstance,MicrosoftHoloLensdoesnothaveallthecapabilitiesand featurespresented in itspromotionvideo.Anotherexample is avideo-clipbyThyssenKrupp,wheremaintenanceofelevatorsisimprovedbyusingMicrosoftHoloLens,butthetechnologydoesnotworkaspresentedinthevideoanditisallmadeup.However,itstillmakessomecompanies to think “wow that is awesome,weneed that technology”,but itmightnotbepossible,oritcouldbetoocomplexorcostlytodeveloptheneededcontentandtheapplicationforit.

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Inaccordance,severaloftheintervieweeshaveexperiencedthattheircustomerssometimeshavetohighexpectationsofAR’scapabilities,whichcouldbeachallengesinceitsometimesresultsindisappointments from the customer's point of view. For instance, itwas explained that somepeoplethinkthateverythingwillbein3DwhenusingthedeviceandtheybelievethattheAR-devicebyitselfcreatesthecontentanddoesnotrealizethatalotofthecontenthavetobecreatedinadvance.Similarly,oneoftherespondentsexplainedthatfeaturesoftenhavetobecutoff,duetobudgetlimitationsbaseduponalackofknowledgeregardingthepre-workandcontentthathavetobemadeinadvance.

There is a need of bridging the knowledge-gap of theAR technology among incumbent firms,hence a need of AR-expertise among companies. Companies, who often have specific domainexpertisebutpoorknowledgeofAR,couldbesupportedbynicheintegrators.

6.1.5ORGANIZATIONALADOPTIONOFAR

TherelativeadvantagesofARhavetobeprovedandconfirmedbythetopmanagementinordertobeadopted,andoneoftherespondentsstatedthat“ARmustbemanagedcarefullyinthebottomline”. It seems important thatARsolvesacrucialproblem,otherwise theprojectwillbedownprioritized when other pains are of more concern to the organization. However, it is alwaysimportant that people in organizations understandwhy things change and the board have tounderstandhowtomakevalueofthetechnology.Forinstance,thevalueofbeinghands-freewiththeuseofAR-glasses.

ForanorganizationtoacquireorinitiateanAR-projectitwasarguedthatitisimportanttofindthe“entrepreneur”(apersonwithstronginterestofAR)intheorganization.However,someoftherespondentsarguedthatiftheAR-solutionproofsitsbenefitsitwillnotbeanyproblemforthemanagerstoconfirmtheAR-investment.Thechallengeisratherhowtoovercomeresistancewithintheorganization.Forinstance,duetoemployeesfearofbecomingunemployed,sinceifatechnology makes workers more efficient some people will naturally become unemployed.However,changemanagementisalwaysahugeconcernforprocesschanges,butasEdsbergerstated“historicallyithasneverbeenefficienttohinderatechnologicaldevelopmentsinceithasonlyledtodelaysintechnologyadoption”.

Furthermore,itwasdescribedthat,ifanemployeeisawareofthatheorshewillnotbeeducatedanymorewithintheorganization,butinsteadguidedbyanotherworker,itmightaffecthisorherwillingnesstostayinthecompany.Additionally,thereareconcernsregardinglosingknow-howandcompetence intheorganization,sincetheworkersdonothavetothinkthemselveswhilstperformingatask.Forinstance,byusageofsmart-workinstructionswheretheworkerisguidedthroughoutthetask.Furthermore,itwasrevealedthatdecreasedautonomousmightresultinlostinvolvement,stimulationandengagementfromtheemployees.Oneoftherespondentfearedthattheprideofbeinggoodatsomethingmightbelost,whenthecompetencelosesitsvalue.However,in contrast, the chief solutions architect at Siemens PLM argued that he has experienced thatworkersusuallywanttolearnnewtechnologies.Hegaveanexamplefromwhenthecomputeremergedattheworkplace,andstatedthattheworkerswantedtoknowhowtouseacomputersincetheysawthatitwouldhelptheminperformingtheirtasks.

However,thereisalsoaconcernregardingifthesupplierorthecustomershouldbetheinvestorofaninvestmentifbothpartiesgainfromit.Itcouldbecomeaconcern,forinstanceifAtlasCopco,

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whosupplymachinesandproductstoBoliden,orBolidenshouldtaketheinvestmentofAR,sincebothpartieswillgainfromit,sinceitcouldoptimizetheserviceandmaintenanceoftheasset.InthiscaseBoliden’sdowntimeisextremelyexpensiveandforAtlasCopcotherewillbeahugecosttoofferAR,forexampleremoteguidance,asdescribedinsection6.2,toalloftheircustomers,buttheywouldhaveabetterofferingthatmightdifferfromtheircompetitors.

6.1.6USER’SREQUIREMENTSOFAR

Currently,mostHMDsareheavyanduncomfortable,whichwerebroughtupasalimitationfromseveraloftherespondents.Duetothis,existingwearablescouldnotbeusedduringthewholeworkday.However,thedevicecouldstillbeusedforspecifictasksperformedthatareperformedinalimitedtime.Anyhow,theweight,comfortabilityandeasy-of-useaspectsofthehardware,wasconsideredasveryimportantforattractingusers.

Onesolutionrevealedwastointegratethedeviceintoahelmetthataworkeralreadyisusingforsafetyreasons.Thereby,theAR-glassescouldeasilybeflippedup-and-downinfrontoftheuser’sview,andtheAR-featurescouldtheneasilybeturnedonandoffifthetaskdoesnotrequireARallthetime.Itwasarguedthatwhenthesetypeofsolutionsorfeaturesareincorporated,ARwillbecometrulyuseful.

TherespondentsagreedthattheinteractionmethodsinARareoftenveryintuitiveandnaturalfor humans, and easy to learn. Itwas argued that even a good device isworthless if it is notpossibletointeractwithitinaconvenientway.Forinstance,withMicrosoftHoloLens,typingishardandtakesa long time.Furthermore, theergonomicaspectsof interactionbygesturewasquestioned.Itwasstatedthattheuseofgesturesawholeworkdayarenotergonomicanditwouldprobablycausebothbackandneckinjuries inthe longrun.Anotherconcernrevealedwasthedifficultiesofusingvoicerecognitioninanoisyenvironment.Additionally,thatnoteveryoneiscomfortablewithusing,forinstance,voicerecognitioninpublic.

Finally, the fact that it is possible to record or seewhat the user sees could be useful for anorganization, but froman individual perspective thismight infringehis or her privacy. Itwasarguedthatemployeesinanorganizationmightnotbecomfortableifothersknowandseewhatthey are doing all days. Furthermore, a research conducted by a PhD student at ChalmersUniversity of Technology showed that the user experiencedmore stress when guided by ARcomparedtootherinstructionmethods,butontheotherhandtheuserwasmoreefficient.

6.1.7CURRENTANDFUTUREARUSAGEANDITSVALUE

ThefounderofXmReality,stated"ARaimstoprovideanextendingandnewabilitytoseeandunderstand,andthusbeabletotakemoreaccurateandfasterdecisions",thereforethetechnologycouldbecometruly interestingfromabusinessperspective.The largestpotentialwithARalsodependsonthetimehorizonsincesomethingsarepossibletodeveloptodaymeanwhileothersarenot.However,accordingtothevicepresidentatDAQRIcurrentlyalmosteveryonefocusesonrevenue generatingopportunities rather than cost-savingopportunities inAR initiatives sinceeverypennyalready is squeezed formanymanufacturingcompanies.However, thepartneratSuperVenturesdisagreedandstated that theyhaveseenmanystartup-pitches regardingcostsavingandincreaseproductivityapplicationsinARinitiatives.ThepartneratPwCalsobelievesthatARprovidesgreatopportunitiesforcost-andcycle-timereductionandthechiefsolutions

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architect at Siemens PLM further explained that AR-intuitiveness in general should end up inreducedcost,orimprovedquality,orboth.However,thepartneratSuperVenturesdescribedthatthepitchesheseesmainlyfocusesonenterprisemanufacturing,whichhealsobelieveswillbeoneofthemostinterestingindustryareasforAR.Hedescribedthattheseideasoftenfocusoneitherhands-freesolutionsonthe factory floor,orsimulationandtraining.Furthermore,mostsolutionsarefinishedpilotsthatarereadytogointoproductionrollout(notethathereferstobothARandVR).

Ithasappeared thatARhavegreatpotential tobringbusinessvalueand todeliveradditionalfeaturestocompanies’productofferings.However,a lotofcompaniesstrugglestounderstandwhatthecompellinguse-casesare,andthereforetheyarewaitingtoseewhatothersaredoing.However,oneoftherespondentsstated,“Itwillnotcomeaspecifickiller-case,butAR/VRwillbeusefulforallactorswhoarekillers”.ThespectrumofpotentialusageofARisbroad,henceitcanbeusedformanydifferentsituations.However,currentlyARisnotusedtoagreatextent,fewrealandimplementedARcasesactualexistsinamanufacturingcontext,furtherthereareverypoorusecasestoday.Currently,companiesareingeneralmainlyusingARtoimpressandshowthetechnologyonfairsetcetera.However,inthosecaseswhereARisusedtoday,itisoftenforsmallandveryspecificproblems,forinstancevisualizationofcomponentsforonesingleperson.

Oneof thecurrentmainconcernsregards the timeandcostofdevelopmentofAR,versus thereceivedbenefits.Oneoftheintervieweesstated,“Thepre-workofusingARshouldnotexceedthebenefits”. However, for themoment the received value is commonly too low compared to thedevelopmentcostduetotimeconsumingpreparatorywork.Furthermore,thespecificvaluewithARdependsonwhereandhowitisused.Alotofcompanieswanttodosomethingcool,butitwasarguedthatitisimportanttofinduse-caseswithhighrelativeadvantage,andnotonlyuse-casesthatseemscoolbutaretoocomplexorexpensivetoapply.However,mostARapplicationsaretechnicallypossibletodaybuttooexpensiveortimeconsumingtodevelop.TheseniormanageratOrbitalATKstated,“Youhavetohaveastorythatmakeyouprofitableintheend.Otherwisethetechnologyisonlycoolstuffs”.

AccordingtotheVicepresidentatDAQRIthereisasilverbullethuntingatthemomentwherecompanies want to take advantages from others works and pilots. However, ultimately thecompanies who have themost pains in the organization are the ones who will get the mostadvantagesfromanAR-investment.Itwasdescribedthatitispossibletoreplicateothers’use-case,but itdoesnot facilitate for the requiredorganizational change. In contrast to theabovereasoning,thepartneratSuperVenturesdonotbelievesthereisaspecificsilver-bulletcase.Hearguesthathehasbeenworkinginthesmartphoneindustryinmanyyearsandheexplainedthathe often got the question:What is the use-case for smart-phone or what is the killer app forsmartphone?Accordingtohimtherewasnotonekillerapplication,butrathertheInternetcouldbeconsideredasakillerfeature,andittookawhiletounderstandthattheInternetwasthelargestpotential.However,currentmarketprovideslimitedsolutionsthatonlysolvespains,butwhen,for exampleApple, releases thoseparticular smart-glasses “which everyonewant to buy”, thenthoseparticularapps,use-casesandideas,thatnooneevencouldimaginedof,willcometolife,accordingtohim.Similarly,severaloftheintervieweesarguedthatitwillbeAR-applicationsinthefuturethatwecouldnotevenimagineoftoday.Fromthepastitcouldbeseenthatseveralfunctionsandapplicationshavebeendevelopedthatnoonethoughtabout,eveniftheyworkedwithinthespecificarea.Forinstance,itwasstatedthat“Whenthecell-phonecame,therewereno

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onewhothoughtthatitcouldbeusedasacamera”,further“noonethoughtaboutUberbeforetheapplicationreleased”.However,currentlynooneknowsandtheremainingquestionis“whattheUberofsmart-glassesisgoingtobe?”.

ThevicepresidentatDAQRIconsideredthattherearemainlytwokeyareasregardingthemostpromisingnear-termapplicationsforAR.Firstly,werecostoferrorisveryhighbutthetaskisnotrepeatedveryoften.Hesaid,“Wheresomeonehavetohandle1000differentproceduresordifferentpiecesofequipmentanditisstillaburdenforsomeonewhohasbeendoingitfordecades”.Secondly,in areas where it is possible to make use of existing content and get things into practicalapplicationquickly.Furthermore,hesaidthatallcompaniesnowadayshave100ofthingstheycould do but there is a question of prioritization, and he considered there to be a lot ofopportunities. In addition, the partner at PwCmentioneddeveloping applications that rangedfromdesign,training,serviceandmaintenance,toimprovedoperationsafety.

6.1.8TECHNOLOGICALLIMITATIONSANDCONCERNSWITHAR

As described in section 5.5 there are mainly three different types of AR-systems, namelyGeospatialAR,2DARand3DAR.Fromtheinterviews,itwasfoundthatseveraloftherespondentsonly considered 3D AR and especially HMDs to have real business potential. Some of therespondents even considered that Geospatial AR and 2D AR should not been called AR. Forinstance,XmReality’sfounderreferredtotheseasflatscreens,andnotAR,whenhedescribedthefunctionalitieswith2DAR.Similarly, theglobalproductmanagerof softwareatABBRoboticsdescribedthattheydonotconsidertheuseofARbyflatscreenstobeaninterestingarea,sincemuchofthevaluecomesfromhavingthehandsfree,henceuseARbyHMD.Severaloftheotherrespondentsquestioned ifAR is therightmedium forvisualization in2D.Thiswasdue to theabovearguing,butalsosinceothertechnologiesmightbemoreefficienttouseinsomecases.Ingeneral,itwasarguedthatARisasuitabletechnologywhenthereisaneedofvisualizingin3D,butinothercasesothertechnologiesorsolutionsmightbemoresuitable.Forinstance,ARmightoutcompetethecomputerwithinmanyaspects,anexampleiscommunication,butforwritingitwillstillprobablybeabettermediumtousethecomputer.

SeverallimitationsregardingtheAR-hardwarehasbeenfoundanditwasarguedthatthesemustbesolvedinorderforARtobeadoptablebythemainstreammarket.Thechiefsolutionsarchitectat Siemens PLM gave an example fromMicrosoft HoloLens, and stated that 32-bit operatingsystem,2GBofRAM,and33degreesoffieldofviews,areallhugelimitationsinorderforSiemenstomeettheircustomersdemandedneeds.However,evenifthehardwarehassomewaytogo,andtheformfactormustimprove,severaloftherespondentsarecertainthatthedevicewillbecomebetterinthefuture.Itwasstatedthattheperfectdevicedoesnotexistyet.

Currentdevicesexperienceseveral limitations.Limitationsrevealedfromthe interviewswere;limitedfieldofview,batteryandcomputercapacity,synchronizationsofdevices,andconcernsrelated to the fact that current devices are single-use-devices. The limited field of view wasdescribedasahugelimitationforalotoftasks.Forexample,thislimitationoccurswhenthesizeofthehologramisbigandnearby,sincetheuserthenhastotilthisorherheadinordertoseethewhole hologram. Therefore, the hologrammust be centralized in the user’s field of view andcannotbeviewedintheperipheryduetothesmallsizeofthescreenordisplay.Although,itwasarguedthatusersseemtogetusedtoitquitequickly,butfirstitappearsasodd.Furthermore,the

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computercapacitywasdescribedashugelimitation.Thisispartlyrelatedtothelimitedbatterycapacity and the limitations in size and lifetime of the battery. Itwas described thatwith thecurrentbatterycapacity,aworkermightneedtorechargethebatteryseveraltimesaday,hencecarryingextrabattery.Similarly,smartphonesalsohavetoopoorbatterycapacitytoprocessthelargeamountofdataneededinAR.Regardingthesynchronizationofdevicesitwasrevealedthatitcouldbeproblematic,sincethedifferentusermighthavedifferentviews.Finally,itwasrevealedthatmostofthecurrentHMDdevicesaresingle-use-devices,whichmeansthattheyhavebeendeveloped to serve specific tasks. This partly depends on that the device is specified for thespecifictaskandthespecificenvironmentitaimstofunctionin.

OneofthebiggestchallengesforARregardstheinput.Forinstance,oneoftheintervieweeshasexperiencethatwhenthedevicesareused inanenvironmentwheretherearea lotofmovingobjects,forinstancepeople,thehologramstendtomovearound.Inaddition,itwasrevealedthata computer is smart, but it does not think as humans,which sometimes results in limitationsconcerning the input. For instance, there is current problems caused by different lightningconditions,whereitiseasyforahumantounderstandshadowscausedbylightningconditionsbutacomputermightmisinterpretashadowforadarkobject.

Inaccordancewithabovearguing,oneoftherespondentsdescribedthatacomputermightnotknowinwhatlevelsavisualizedobjectshouldbeseparated.Forinstance,ifthecomputerisgoingtovisualizethecomponentsinavehicle,itcouldbedonebyseparatingthebiggerpartssuchasengineandwheels,oritcouldbedoneinaverydetailedmannerbyseparatingeverythinginthevehicleincludingscrewsandnuts.Therefore,thismustbebuiltintotheapplication,whichcanacquirealotoftimeandeffort.

InternetconnectionisrequiredforalotofAR-applications.Itwasdescribedthatitispossibletoaccess Internet almost everywhere by the usage of satellite-phones. Although, the connectionfrom satellite-phone might be too poor for some AR-applications. Furthermore, the InternetconnectionmightalsobetoopoorforARincertainregionsandareas,evenifitisaccessiblebyothermethodsthansatellite-phones.However,Internetconnectivityundergroundandbelowthewatersurfacewillalwayscritical,andforusageofARinsuchenvironment,eitherimplementationofinternet-connectivity,orplaceatransmitteronabuoy,areneeded.Regardingthe4G-networkithasalsosomelimitationsconcerninglatencyandbandwidth,butwiththeentranceof5Gtheselimitationswouldprobablybelessofconcerns.

In addition, theremight be security or privacy concerns in relation to AR. For industrial useprivacyshouldnotbeaproblemwithin internaldevelopment if thedatagoes throughprivateservers, but if the organization store information in the cloud, with other words on externalservers,thenprivacymightbethreatened.

6.1.9EXISTING3D-MODELSANDLIMITATIONS

Manyorganizationshaveexisting3Dcontent,suchasCAD-files.TheseniormanageratOrbitalATKsaidthat,evenifcompaniescommonlyhave3Dcontentlibraries,thequestionandproblemishowtoquicklyandeasilygetthemintoAR.Heconsidereditextremelyimportanttosolvetheselimitations,otherwiseitistoomuchworktovisualizetheexisting3DmodelsinAR/VR.Current3D-filesareoftentoolargeorcomplexforefficientusageinARandthefilesusuallyhavetobeadjusted.Inaddition,existingCAD-modelshaveoftenbeenmadeforanotherpurposethanusage

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in AR. Therefore, these are in the wrong format and very detailed, which make them eitherincompatiblewithAR,ortheprocessingthemtoslowinAR.

Currently,thefilesmustprocessonebyoneanditisnotpossibletodisplayseveralfilesatthesametime.Onesolutioncouldbetocompressthefilesintosmallerones,butitwasrevealedthatthere is a lot of problems associatedwith converting these files into AR compatible formats.However,inthefuturetherewillprobablybeastandardwhere,forinstance,allsuppliersoffer3D-modelsthatareARcompatible.Therefore,thedataformatisakeyissue.

Fromoneinterview,itwasrevealedthatadevelopertool,thateasilycangetCAD-modelsintouse,isVuforia,whichisaplatformfordevelopmentofARcontent.AvideowasshownwhereaCADmodelofacoffeemachinewereconvertedtoanAR-friendlyformatinlessthanoneminute,andthen visualized via flat-AR. From this case, it was revealed that all components in the coffeemachineareseparateCADmodelsandthereforeavideo-clipcaneasilyberecordedinordertodemonstrate,forexample,howtoassemblethemachine.Akeyissueforcompaniesoftodayisthattheyspendbillionsofdollarsonprintinginstructionsindifferentlanguage,butwithavideocompaniesarenotdependentuponlanguages.

6.2USE-CASES ThissectiondescribesappropriateandpotentialARuse-casesandapplicationsthatcouldbeusedbyassetintensivemanufacturers.Thisfindingsinthissectionarebaseduponliteraturereviews,butalsouponfindingsfromtheinterviewsandpaneldiscussions.

Inaresearch,conductedbyPwCin2015,itwasshownthatthemostpopularVR/ARapplicationsamongmanufacturerswhere, productdesign anddevelopment, and safety andmanufacturingskillstraining,asvisualizedindiagram6.1(PwC,2016h).

Diagram6.1.VR/ARapplicationsusedbyUSManufacturers.Numberofrespondents:21.Source:PwCandZprymesurveyandanalysis,“2015DisruptiveManufacturingInnovationsSurvey,”conductedinNovember2015.

18,4

7,1

13,3

19,4

19,4

19,4

27,6

17,3

38,8

Q.Howisyourcompanyusingvirtualand/oraugmentedrealitytechnology?Pleaseselectallthatapply

Productdesignanddevelopment(38.8%)

Virtualassembly/improvedprocessdesign(17.3%)

Safetyandmanufacturingskillstraining(27.6%)

Maintenance,repairoroperationofequipment(19.4%)

Dataandinformationaccess(19.4%)

Remotecollaboration(19.4%)

Customerengagementandcommunications(13.3%)

Supplychaincollaboration/communications(7.1%)

Other(pleasespecify)(18.4%)

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6.2.1REMOTEGUIDANCE

RemoteguidancesolutionislikeaSkypecallbutwithanadditionalaugmentedlayerwhichcanfacilitateguidanceatdistance,oftenbytheuseofHMD.Theuser,forexamplethefieldtechnician,projectsaliveviewoftherequestedissuetoaremotecolleague.Theremotecolleaguecouldthenhelpandsupplythefieldtechnicianbysendingrelevantdata,instructionsorimagesthatfunctionasavirtualoraugmentedrepairmanual.

Inmanyindustries,forexampleserviceonshipsontheocean,apersonwillbesentouttotheship.Manytimesthispersondoesnothavealltheknowledgeand/orinformationneededtoservicetheasset, infactthis isausualsituation,andthepersonhavetocallbacktotheofficeandaskforadvice. Another, problematic and extremely costly situation is downtime for many heavyindustries.Similarly,inthiscaseitcouldbethatemployeeslackknowledgeforthemaintenanceofthebrokenmachineandtogetanexperttothefacilityquicklyiscriticalforthebusiness.ForsuchsituationsARcouldbeuseful,andthereforeremoteguidancehasstartedtogetattention.

In general, remote guidance devices have shown to be valuable for uncommonbut expensiveproblems, further itwas foundthatremoteguidancecouldbean interestingtechnology intheservitizationarea.Additionally,PwC(2016h)statedthatsomeoftheparticipantsintheresearchusedARforremotemaintenance,whichtheynamedremotecollaboration(19,4%),seediagram6.1. Additionally, almost all interviewees and respondent mentioned remote guidance as anapplicationwithhugepotential.Remoteguidancehelpstoreducethedistancebetweentheexpertand the locationwhere theproblemhasoccurred.Additionally, remoteguidancesupports theknowledgetransfer.Serviceorganizationscangainfromsuchsolutionssinceworkerscouldbeout in the fieldmeanwhileexperts couldguide fromdistance insteadof traveling toallplaceswheresupportisneeded.Thisenablingthepossibilityofhavinglowerskilledpersonsoutinthefield since experts could guide them. This in turn would mean that the needed number ofemployeesandskilledemployeeswoulddecrease.Although,aresearchcarriedoutfromChalmersUniversityofTechnologyhasshownthatworkersperformalittlebitfasterbutexperiencedmorestress,whenusingremoteguidancebyAR,comparedtootherinstructionalternatives.

Thereare,differentsolutionsofremoteguidancethatexistonthemarket,andtheSwedishstartupXmRealityisoneofthepioneersinthefield.Forinstance,inXmReality’stool,theremotecolleaguecanbedigitallypresentandhelptoguidethepersoninneedbothwithhandsandvoice,whichistheaugmentedlayerofdigitalcontentintheirsolution.VolvohasusedtheirsolutionwhentheyweresettingupafactoryinChina,andtheyexperiencedthatthesolutionreducedtravelcosts,accommodationcosts,andminimizedtherisksofthespecialistnotbeingavailableforquestionswhiletraveling.XmRealityhasfoundthatthemostobviousvaluewithremoteguidancefortheircustomersiscostsavingsintermsoftravelcosts.Additionally,XmRealityhasfoundthatsomeoftheir customers use their solution in order to incorporate AR in their service offerings, andtherebyusethesolutionasawaytochargeforservice.Customerstotheircustomersexpectedthattheycouldcallandgethelpanytime,butwithremoteguidanceitisinsteadpossibletosellremoteguidancehour.ThiswasanunexpecteduseareaforXmReality’sproduct.

XmRealityhaveexperiencedthatcompaniesexperienceapressuretodigitalizeandadoptnewtechnology, and that remote guidance is a way for these companies to do so. Therefore, it isimportantthatthetoolissimple,easytouse,andnotrequiresadvancedtrainingorintegrationwithothertechnology.Furthermore,theremoteguidancesolutionisandwillbeusedrarelyby

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theircustomers,onlywhensomethinggoeswrongandcannoteasilybesolved.Therefore, theabovestatedisevenmoreimportant.

ABB Robotics have started to investigate if they are going to use remote guidance in theirorganization.Aroundtheglobe,ABBhaveservicedepartments,whereit ispossibleforservicetechniciansandcustomerstocallforsupportandhelp.ABBRobotics’globalproductmanagerforsoftwareproductsconsideredthatitcouldbepowerfultouseARforsuchpurpose,andinaneartime-horizon.ABBdoesnotconsiderthetechnologytobethemostdifficultpart,butrathertheorganizationalchange,andthecreationandextensionofalltheservicecentersthatareneededinordertosupporttheserviceitentails.Employeesmustbepresentintherighttime-zone,speaktherightlanguage,andhaveknowledgeabouttheproduct.However,thisisalsothecasetoday,despitetheuseofremoteguidance,butthesamequickresponse isnotexpected.Additionally,manydevicesareneededforsuchanorganizationalchange,andthatisanexpensiveinvestment,butnotasexpensivecomparedtoproductiondowntime.

6.2.2DASHBOARDING

Dashboardingreferstovisualizationofgraphsandspecificmachinefeaturesinconnectiontothemachine. Deloitte (2016) gave the example of “deploying augmented interfaces that pair withconnected devices, sensing objects, and relational data can deliver task-specific information toworkersinthefieldincontextandondemand.Augmentedsolutionscanoverlayajetengine’sservicehours,componenttemperature,andservicepaneldetailsintoanaircraftmechanic’sfieldofvision”.

Inmanyorganizations,visualizationofdata isavailable inacontrolroomandtheonlywaytoaccessitistobepresentinthisroom.Additionally,someinformationcouldbeavailableinbinders,butthesemightnotbeupdated,furthernoteasilybrought.Insomesituations,itcouldbeusefultohavereal-timemetricsatacertainlocation.

Dashboarding, or rather visualization of dashboards, appeared to be requested by manycompaniesandcustomertotherespondents.Furthermore,itcouldbeaquitesimpleapplicationarea.However,someoftherespondentsalsoarguedthatthistypeofuseareadoesnotalwaysmakeuseofARcapabilities.Furthermore,theglobalproductmanagerforsoftwareproductsatABBRoboticsarguedthatiftheworkerwouldhavehisorherhandsfreeitcouldbringvalue,butif the dashboarding is provided by a flat device he does not believe that ARwill be the righttechnologyforthiskindofvisualization.However,thisisapossibleusageareaforflatAR.

Additionally, itwasfoundthatvisualizationofsensordata,andseeinginformationatacertainlocation, isof interest.OneexampleistocombineARwithIoT,whichwassomethingthatPTCdemonstrated with a bicycle that was equipped with sensors. The device used for thisdemonstrationwasatabletandwhenitwashelduptowardsabarcodeonthebicycle,realtimestatisticspoppedup.Forinstance,ifthisisappliedwhileoperatingheavymachineryoutinthefield, it is possible to get a real-time overview of which components that are in need ofreplacement.Another interestinguseareaofdashboards ismaintenance, repairorequipmentoperations,whichaccountedfor19,4%inPwC’sresearch,asseenindiagram6.1.

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6.2.3VISUALIZATIONOF3DMODELS

Visualizationof3D-modelsrefers toan interactiveandrealisticmanner. In the future, itcouldfurtherbedoneincombinationtothephysicalenvironment.

6.2.3.1DESIGNPHASE

Aconcernthatappearedfromseveraloftherespondentswerethatthedesignofanassetoftenisverycomplexandthatitisnoteasytocollaborateinabiggroupwithdifferentskillsandexpertise.Thedesigngroupoftenconsistofpeoplewithseveraldifferentbackgroundandexperience,forinstance electrician experts, aerodynamic experts, marketing employees and other types ofexperts,andthosepeoplerarelyhavethesameunderstandingandperceptionof3Ddata.Oneexamplerevealedfromtheinterviewsconcernedthedevelopmentofaerospace.Inthesecases,itis very valuable if modifications of parts can be reduced, since modifications might cost thecompanymillionsofextraSEKeachtime.Furthermore,itisverycommontodaythataredesignmightbeforcedjustbecauseofasimplisticmisunderstanding.Therefore,withthehelpfromARsuchmisunderstandingshopefullycanbereduced.

FromtheinterviewsandpaneldiscussionsitwasrevealedthatthebiggestneartimebenefitofARcouldbefoundinthedesignphase,intermsofvisualizationandproductdesign.Forinstance,the Innovation Manager at Volvo Group Truck Technology has been involved in a projectregardingvisualizationofCADmodelsbytheusageofARglasses.HebelievesthatARhashugepotentialtobringbusinessvalueforVolvointhetruck’sdesignphase.Moreover,intheresearchconducted by PwC in 2015 it was shown that the most popular VR/AR applications amongmanufacturers,visualizedindiagram6.1,whereproductdesignanddevelopment(PwC,2016h).

Duringtheinterviewsitwasfoundthattheproductdevelopmentoftenismoreeffectivewhilstthediscussionisarounda3Dobjectcomparedtoviewingsketches,ormodelsonaflatscreen.ThechiefsolutionsarchitectatSiemensPLM meantthattheircustomersalreadyareconvincedthatdisplayingvirtual3D,bytheusageofAR,increasestheunderstandingoftheobject,comparedtodisplaying it on a 2D screen.Additionally, PwC (2016h) found that somemanufacturerswereusingVR/ARtocreatevirtualprototypes,forexampleanengine,whichdesignersandengineerscouldwalkaroundandexperiencein3D.Theybelievethatthisrisespossibilitiestocuttingtheconsiderabletimeandexpenserequiredbydevelopingphysicalmodels.

6.2.3.2SALESPHASE

Visualizationof3Dprototypeshasahugepotential,alsointhesalesprocess.Aprobleminthesalesphaseisthatthecustomerisnotalwaysabletocaptureandunderstandalldetailsoftheacquiredobject,butafterimplementationitistoolateorcostlyforsystemchanges.Thedeliveringofsomethingthatnotfunctionsasthecustomeranticipated,couldresultinriskssuchascustomerdisappointments.

The global productmanager for softwareproducts atABBRobotics believes that the greatestbenefitofAR-visualizationisinthesalesphase.Thisisduetothecustomers’betterunderstandingofthesystem,andasaconsequenceABBisabletodeliverbettersolutions.Inaccordance,PwC(2016h)arguethatvirtualizationofavirtualproducts(beforeaphysicalprototypeiscreated),

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enablessharingproductswithcustomersinthetestingphase.Hence,creatingcloserrelationshipandbettercollaborationwithcustomers.

Inashorttimeperspectivecompaniescanmakeuseofexistingdigitalcontent.Forinstance,thisisthecaseforABBroboticswhoalreadyhavethedigitalcontentoftheirrobots,andforthemitisnotabigstep,oralargeinvestmenttovisualizetherobotinARorVR.Forexample,ABB’sproduct“RobotStudio”isusedinthesalesprocessinordertoshowthecustomeravirtualmodeloftherobot thathasnotyetbeenproduced.ABBalreadydothis today,butbyprojecting itona flatscreen on thewall. The next step could be to project the robot on the conference table, as ahologrambytheuseofAR.Theymeanthatthiswouldenhancethediscussionbetweenthemandtheircustomerregardinghowtherobotshouldfunctionforoptimaluse,hencealsoincreasethecustomersatisfaction.However,ABBRoboticshasnotdevelopedthisapplicationyet,butitisanupcomingproject.

6.2.4SPATIALDESIGN

Visualizationof3Dprototypes couldbevaluable fordifferentpurposes, and severaluse-casesrelatedtovisualizationofreal-sizeobjectswasrevealed.Forexample,thereal-estateindustryiscurrentlyadoptingVRmainlytovisualizenewconstructionssuchasapartmentsforcustomers,whichhasshowedtobeofgreatvalue.Similaruse-casecouldbepossiblebyAR,andthisisalsoupcoming.Forinstance,ARcouldbeusedforvisualizationofvirtualbuildingsorbigmachinesinitsintendedlocation,andinreal-size.Currently,thisismainlyappliedasconsumerapplicationsvia smartphonesand tablets.Forexample, IKEAprovideanapplicationwhere it ispossible tofurniturethehouse.

BoldArchasexperiencedthatcompaniesfinditvaluabletovisualizethefactoryfloor,andhowitwouldlooklikeandfunctioninthefuture.Additionally,AREA(2017)describethatARcanbeusedto predict and analyze the optimal spatial layout. They consider the benefits to give a morerealisticvisualization,minimizetheriskofpoorlyoptimizeduseofspaceandquickerresponsetotheintendedchange.BothARandVRcouldbeusedasaplanningtoolforfactories,butbyARitcouldbedoneinrelationtothephysicalenvironment,meanwhilebyVRitcouldbedoneinanenvironmentthatdoesnotexistinthereality.

6.2.5VISUALIZATIONOFVIRTUALDATA

ARhastheabilitytoshowthingsintherealworldthatformerhavenotbeenpossibletosee.Thisisreferredtoasvirtualdata,andanexamplecouldbemotionpathsofamachine.Currently,someinformationisonlypresentedinadigitalenvironmentandnotreflectedinthereality.

Sometimes it could be of value to see this information andAR could beused to visualize thisinformation.Forinstance,ABBexplainedthatthemotionpathofarobotcouldbevisualizedinrelation to the physical robot. In the case of ABB, this information already exists in theirRobotStudio program, but currently it could only be seen in a computer. However, it wasexplainedthatbytheextensiontoAR,hologramscanbesynchronizedwiththerealityandtherebymergethedigitalcontent(holograms)withtherealworld(thephysicalobject).

However, there is a long way to go before this could be applicable. It was argued that theinformation must be digitized in an AR friendly format, the digital content must be able to

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synchronizeverypreciselywiththephysicalobject,andthecontentmustbeabletoattachtoamovingobject.Furthermore,sincethepurposewiththehologramistointeractwitharealobject,andtherealobjecthasasetsize,thehologrammustbeinreal-size.

6.2.6LOCALIZATION

Oneuse-area is localization andguidance in factories, to find specific objects orplaces. Inbigfactories,ithasappearedtobeproblematictofindtherightmachine,especiallyforsomeonewhohasnotbeeninthefactorybefore.Therefore,ARcouldbeagreattoolforguidanceandlocationtrackingofequipment.Thiscouldbeperformedbyshowingarrowstowardstherightdirection,orforinstance,bycoloringthesearchobjectinordertodistinguishitfromotherproducts.

Similarly,ARcouldbeusedforlocalizationoforguidancetowards“hiddenobjects”,forinstance,pipesinthewalls.Thisrequiresthattheunderlyingdata/sketchesreflectsthereality,butduringtheinterviewsitappearedthatthisisbarelythecase.Itwasdescribedthataplumbermightnotreportthechangesmadeandthereforethesketchesdonotalwaysreflectthereality.Similarly,changes ormodifications could have been done after the constructionwere finished, and notreportedinadvanced.Additionally,theoriginalsketchesmightexistonpapersandthenitisalotofworktodigitalizesuchdataandforoldbuildingetceteratheremightnotexistsketchesatall.

6.2.7WAREHOUSEPICKING

Warehousepickingreferstoguidancewithqualitycheckofthepickedobjects.

Inwarehousestoday,theworkisoftenperformedbytheuseofpaperstoviewwhattopick,andsometimeshand-scannersforqualitycontrol.Intheformercase,itcouldoccurqualityissuesinthepicking.Forthelattercase,qualityishigherbutattheexpenseofefficiency.

PwC(2016h)statedthatalogisticcompanyintheresearchusedARforWarehousepicking.Theyequippedthewarehouseworkerswithsmartglasses,whichreadbarcodesonthepackagesandgavedetailedcontentanddestination/origininformation.Forthelogisticcompanythisresultedinaproductivity increaseby25%,and thereforePwC find that this applicationareahashugepotential.However,fromtheinterviewsitwasrevealedthatitisacomplexandbiginvestmentforacompanyanditwilltakealotoftimetodevelopthesystem.Furthermore,itisevenmorecomplexasitalsoinvolvesprocesschangeintheorganization.

6.2.8SMARTWORKINSTRUCTIONS

PwC (2016h) describe smart work instructions as ”smart glasses that help track and guidecomplicated assembly processes to ensure that all parts are assembled in the right sequencewithoutthedowntimeofconsultingaclipboard,manualoreventablet”.

Formanycompaniestodaytheworkinstructionsareplacedinbinders,whichtheworkersdonotcheckregularly,andthereforeworkersdeveloptheirownwork-instructionsor"bestpractice",whichcouldresultinqualityproblemsandincorrectassembling.Furthermore,theseinstructionsarenotalwaysup-to-dateandemployeeshavedifferentversions.

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Thepurposeofusingsmartworkinstructionsistoincreasetheoverallqualitybyminimizesthedefectsandtherestructuringoftheasset.Similarly,AREA(2017)considersoneofthebenefitswithsmartworkinstructionstobereducedriskfordelayanderrorintheassembling.AnotherbenefitofusingARforinstructionscouldbetheopportunitytoalwayshavethecorrectandlatestupdatedwork instructions.Moreover, smartwork instructions also enable the possibilities toperformataskwhichtheworkerhasnotbeentrainedfor.

VolvoGroupConstructionEquipmentiscurrentlyintheupstartphaseofaprojectthatfocusonsmartworkinstructions,andthisisoneoftheprojectsintheirIndustry4.0initiative.Although,theyhavefoundimpedimentswiththiswayofworking.Firstly,therespondentconsideredtheformfactorofthedevicetobeproblematicandhewasskepticaliftheARdevicescouldbeusedeighthoursaday.Secondlytherespondentspeculatedinpossibleproblemsregardingtheknow-howandmotivationamongsttheemployees,whichmightdecreasewiththeuseofsmartworkinstructions.

6.2.9AUGMENTEDTRAINING

Augmentedtrainingreferstotrainingand/oreducationwithaugmentedobjectsinthephysicalenvironment.

To practice or perform training on the machines employees have to travel to the supplier'strainingfacility.Thecurrentalternativewouldbetoacquireanextramachinefortrainingortostoptheproductionanddothetrainingonexistingmachines.However,bothofthosealternativesareverycostlyduetoveryexpensivemachinesanddowntimes,andthebestsolutionnowadaysis therefore to travel to the suppliers training facility. Another example on situations wheretrainingisneededisforhandlingdangerousgoodsorperformcriticaltasks.

IthasappearedthatvirtualtraininghashugepotentialandcouldberealizedbytheuseofeitherVRorAR.Further,itseemstobeoneofthemostpromisingapplications.Although,VRiscurrentlymorecommonlyusedforvirtualtraining.InPwC’sresearch,asseenindiagram6.1,safetyandmanufacturing skills training (27,6%)was the secondmost popular usage of AR/VR amongstAmerican manufacturing companies. Deloitte (2016) consider that AR and VR will play animportantroleinretoolinghigh-costtrainingandsimulationofenvironments.

ThePHDresearcheratKTHarguedthatthelearningismoreefficientlyinVRandAR.ResearchesshowthatVR/ARtrainingincreasesthelearningrate,sincethehighestlearningratecomesfromvisual-interactive experiences and VR/AR has all three: visual, interactive and experience.Therefore,withtheuseofvirtualtrainingitispossibletolearnfaster,understandmore,andthequality of the information delivered will be higher. The researcher explained that she hasexperiencedthatpeoplefromotherresearchareascanlearnfasterandunderstandmoreifshevisualizeswhatsheisdoinginsteadofsendingthemalotoftextpages.Similarly,AREA(2017)considerthatwithARtrainingthelearningismorelikelytoberetainedbythetraineeandself-correctedduringworktaskperformance.

Anotherexampleoftraining,providedbyOrbitalATK,washandlingofrocketfuel,whichisaverydangerous task where training is needed. Currently this is performed by the use of emptycontainers.However,theydonotconsiderthisprocesstobeoptimalanditdoesnotreflectthereality.Therefore,theyarecurrentlyinvestigatingthepossibilityofperformingthetraininginVR.

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However, this training could also be performed in AR. In contrast to training with emptycontainers,differentscenarioscouldbevisualized,butcomparedtoVRitcouldbeperformedinthe actual environment. However, by the use of an immersivemedium, either AR or VR, it ispossibletoteachworkershowtohandlethefuelssafelyandefficientlywithinanenvironment,whichallowsformistakes.Additionally,workerscanunderstanddangeroussituationsbetterasitispossibletosimulatethesesituations.

6.2.10INTUITIVEINTERFACES

An intuitive interface iswhere changes or programming areperformed in the sameway as itwouldbeperformedintherealworld.

Nowadaysalotofmachinesrequirespecificcompetencetouseandserve.Companiesmightlackthein-houseexperience,anditcouldbeexpensivetoacquirethespecificcompetence.Especiallythisregardssmallcompanies.

ARopensupforpossibilitiestocreatenewtypeofinterfaces.ABBbelievethatnewinterfacescanbeuseful for theroboticmarketandevencreatenewmarket.Currently,robotsarestartingtobecomeinterestingevenforsmallercompanies,butasdescribed,smallercompaniesoftenlackthein-housecompetencetoworkwithrobots,anditisoftenexpensiveacquiretheexpertise.todoso.Forsuchcompaniesthethresholdhastobeloweredandtheyneedasimplerwaytoworkwith robots. AR could function as an intuitive user interface for managing robots, thereforefacilitate the robot usage. For instance, it was believed that for ABB Robotics this could be amassive opportunity in terms of AR usage. For ABB this could result in an increased roboticmarket,andforthecustomerthatpreviouslycouldnotusearobotitwouldmeanthattheynowcouldaffordone.However,thisapplicationarearequiresalotoftechnologicalimprovements.

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7.ANALYSIS;ADOPTIONOFAR Thefollowingchapterprovidesinsightsregardingfactorsaffectingacompany’sadoptiondecisionof the AR technology. This was analyzed by the use of three different perspectives: externalenvironment, technological, and organizational. These three perspectives provide differentknowledge and understanding of an adoption decision, but the three perspectives are alsointerrelatedwith each other. Therefore, the combination of these perspectives brings additionalinsights and values. Finally, this section aims to provide knowledge to answer the first researchquestion:

• Whataffect thewillingness toadoptAugmentedReality,positivelyornegatively, fromanexternalenvironmental-,technological-,andorganizationalperspective?

7.1.EXTERNALENVIRONMENTPERSPECTIVE

Theexternalenvironmentisoneofthreeaspectsthataffectsthetechnologicalinnovationdecisionmaking (Mansfield, 1968). As described in the theory, the external task environment elementrelatestothesurroundingcontextthefirmispresentin,suchasbusiness,industry,trendsandcompetition(Tornatzky&Fleischer,1990).Therefore,theseelementshavetobeconsideredintheinvestigationofwillingnesstoadoptAR.However,thefocuswillbeonthemergeoftherealandvirtualworld,andthetrendsServitizationandIndustry4.0.

As described in chapter 4, further found from the interviews in section 6.1.1, westernmanufacturersexperienceincreasedcompetition.Furthermore,companiesarenowadaysforcedtofindnewandsmartwaystoreducecostorincreaserevenue.Italsoappearedthatcompanies,who experience most competition, will be the companies who stand in the forefront of thetechnology adoption. This also goes in linewithMansfield (1968) arguing that a competitiveenvironmentstimulatesadoptionofinnovation.However,fromtheinterviewsitwasfoundthatmany manufacturing companies lag in their adoption of new technology and this was alsoconfirmedbyCambridge ServiceAlliance (2015) research. This new type of competition, thatmanufacturing companies currently are facing, might force them to adopt new technology,otherwise they will not survive in the high rivalry that exists amongst asset intensivemanufacturers.

7.1.1.CONVERGENCEOFTHEPHYSICALANDVIRTUALWORLDS

Asdescribedinsection4.1,thephysical-andvirtualworldshavepreviouslybeendiverging,butinrecentyearstheyhavestarttoconverge(PwC,2016b).Therefore,aneedfortechnologiesthatsupportthisnewmixedrealityhasemerged,andatechnologythathasthisabilitytomergethephysicalanddigitalworldwithaseamlessintegrationisAR(PwC,2016b;Kipper,2012;Deloitte,2016).Additionally,aneedforatechnologythatcouldsupportworkers’abilitytocontextualizethelargeamountofinformationthatisgatheredfromboththephysical-andvirtualworldhaveemerged,andbothPwC(2016b)andDeloitte(2016)arguethatARhavethisability.

Thesetwoabilities, toprovideaseamlessexperienceof themixedrealityandtocontextualizeinformation, have not really been requested in the same extent before since it has not been

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needed,furthernotpossiblebefore.Thesenewneedscreatenewmarketopportunities,aswillbediscussedinsection8.1.Fromanadoptionpointofviewtheconvergenceofthevirtual-andthephysicalworld could affect the adoption ofAR, sinceAR is defined as “Augmented reality is amediuminwhichdigital information isoverlaidonthephysicalworldthat is inbothspatialandtemporal registrationwith the physicalworld and that is interactive in real time” (Craig, 2013,p.36).

7.1.2INDUSTRY4.0

Oneemergingtrend,presentedinsection4.2,isIndustry4.0.AsstatedbyPwC(2016g)Industry4.0 refers to the digitalization, and integration, of all physical assets in the ecosystem andthroughout the whole value-chain. From the interviews it was found that manufacturingcompaniesnowadayshavetechnologyintegratedinoperationsandprocessestoagreaterextentthanbefore.ThisintegrationoftechnologyhighlycorrelateswithIndustry4.0,andcouldbeseenasthefirststepofachievetheaimofIndustry4.0.

Asstatedinsection4.2,Industry4.0aimstoobtaintotallycollaboratingentitiesthatexchangedataregardingtheirongoingprocesses,furtherthisdatacomesfromboththedigitalandphysicalworldandthecollaborationisfacilitatedbytheuseofdata-accessinganddataprocessingservicesprovidedontheInternet(Monostori,2014).Thiscapabilitiesandfeaturescouldbefacilitatedbyseveraldifferenttechnologies,andamongthoseisAR.Industry4.0isbasedupontheconvergenceoftherealandvirtualworld(Deloitte,2015),andARisatoolforvisualizingthis,thereforeARcouldhavegreatpotentialtobringvalue.Forinstance,theuseofARinIndustry4.0couldfacilitatethecommunicationandvisualizationofthismixedrealitysinceitenablesvisualizationofrealanddigital content simultaneously. This in turn could enrich the understanding of the company'ssystemsandprocesses, furtherfacilitatesthecommunicationamongassociatedparties.Hence,thisimpliesthatARcouldprovidegreatvalueinIndustry4.0byincreasingtheunderstandingofthesystemsandprocesses.

However, as stated before, AR is not the only technology associated with Industry 4.0. Forinstance,themergingoftherealanddigitalworldisbaseduponlinkingITwithmechanicalandelectroniccomponents(Deloitte,2015).Inotherwords,theunderlyinginfrastructureforIndustry4.0isbaseduponIoT,andwithouthavingthisproperlyintegratedinthebusinessthevalueofvisualizethemixedrealitydecreases,hencealsothevalueofAR.Furthermore,systemintegration,Bigdata,andCloudandcybersecurityarealltechnologiesorfeaturesthathavetobeconsideredin relation with AR. As described in the section 4.2, Industry 4.0 is dependent upon severaltechnologiesinordertoachievethefullpotentialofit.Therefore,inordertoobtainIndustry4.0characteristics, namely interoperability, information transparency, decentralization, real-timecapability, service orientation andmodularity (Gilchrist, 2016), not onlyARbut several othertechnologieshavetobeinplace.

AsseenIndustry4.0spurtheadoptionofnewtechnologies,andamongthoseAR.ThereisagreatvalueofadoptingARinordertofacilitatethecommunication,visualizationandunderstanding.However,thetechnologyisdependentonadoptionofothertechnologiesanditmightnotbeabletogainthefullpotentialofARbeforetheseothertechnologiesareinplacewithintheorganizationbutalsointhehorizontalandverticalvaluechain.

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7.1.3SERVITIZATION

As described in section 4.3, one of the emerging trends is Servitization, and it appeared thatservitizationwillhavebig impactonmany industries.This implies that the transition towardsservitizationwillhappenandthat isratheramatterof timeandthequestion ishowARcouldfacilitatethisprocess?

InthetransitiontowardsServitizationitisimportanttounderstandwhatproblemthecustomerwanttosolvewiththeproducts,andinsteadprovideasolutiontothatproblem.FromthefindingsitwasrevealedthatalotofmanufacturerscurrentlyaretryingtoincorporateservicesintheirofferingsandJagstedt(2016)describedthatthiscouldbedonebyeitheraddserviceupontheproductorbyintegrateproduct,serviceandknowledgeintheoffering.Inthefirstway,toaddserviceupontheproduct,Jagstedt(2016)gaveexamplesofservicesasrepair,maintenanceandtraining. These functions could all be supported by the usage of AR, for instance by remoteguidanceasdescribedinsection6.2.1.Additionally,itcouldbeseenthatremotecollaborationwasamongstthethirdmostpopularapplicationareaamongmanufacturersinUS,seediagram6.1insection6.2.Further,ARcouldsupporttraining,asdescribedinsection6.2.10,andthisapplicationareawasthesecondmostpopularamongUSmanufacturers,seediagram6.1insection6.2.

Regardingtheotherway,integrateproduct,serviceandknowledge,Jagstedt(2016)statedthatthefocusshouldbeonthecustomer’sprocesses,resultorusages.EveninthiscaseARcouldbeusedasafacilitator,buttheconnectionmightnotbeasclear,asinthefirstcase.However,inorderto direct the focus on the customer’s needs it is important with a clear understanding andcommunicationbetweentheparties,whichcouldbefacilitatedbytheusageofAR.Forinstance,ARcouldbeusedtovisualizetheprocessesandproductsin3D,asdescribedinsection6.2.3and6.2.4,hencefacilitatetheunderstandinganddecreasetheamountofmisinterpretationsamongtheparties. This type of application areawas also in the top amongmanufacturers inUS, seediagram6.1insection6.2.

Furthermore,asaconsequenceofusingAR,informationanddatacouldbecontinuouslycollectedfrom the real-worldmeanwhile an actual user is performing an actual task, due toAR’s inputabilities.Thisinformationcouldtherebybringinsightandknowledgeofthecustomer’sprocessesandusages,henceincreasethevalueoftheserviceoffering.CambridgeServiceAlliance(2015)furtherarguedthatthistypeofabilitieswillhavemajorinfluencesoninformationaccessinthefuture since it could provide “real-time efficient data access and, increasingly, context-awareanswers”(p.14).However,asargued insection5.5.1.2, this typeofdatacollectionmightariseconcernsregardingprivacyandlegislationinthefuture,butasdescribed,thistechnologyhastoimprovebeforeitwouldbepossible.

Ontheonehand,Baines&Lightfoot(2013)statedthatservitizationopensupforlongercontractswithlong-termrelationships,butontheotherhanditwasfoundthataservicewouldbemoredifficult to sell. However, both arguments are based upon the importance of having acomprehensiveunderstandingandknowledgeofthecustomer’sbusinessand,asdescribedabove,thiscouldbefacilitatedbytheuseofAR.Further,itwasarguedthatforABBthegreatestrevenuescomefromservices,whichfurtherenrichtheincitementofprovidegreatserviceofferingsbasedupongreatcustomerknowledge.

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However, one remaining question is whether AR is the most important technology in aservitizationcontextor if thereareother technologies thataremore important,orhave tobeintegratedbeforethecompanycouldmakeuseofAR.For instance,severalof therespondentsrevealed applications ideaswhere AR could be used for visualization of data but the supportinfrastructureforthiskindofapplicationisIoT,whichmeansthatIoThavetobeinplaceinorderfortheapplicationtofunction.Furthermore,itwasarguedthatmanyofthecompanies,thataretryingtotransformtosolutionproviders,donotknowhowtohandlethecomplexity.Thisisonemajor concern, and organizations have to find technologies to support the complexity ofintegratingthesenewwaysofdoingbusiness.InthiscaseARcouldnotbeconsideredasthemostcriticaltechnology,andingeneralitisimportantthatcompaniesunderstandwhatARcoulddoandwhatARcannotdo.

As described in chapter 4.3.1, there are several drivers for adoption of new technologies in aservitizationcontext.AsarguedaboveARcouldfacilitateseveralofthosedrivers.Forinstance,ARcouldgeneratenewrevenuesource, improvemaintenanceefficiencyandeffectivenessandimprove product performance, for instance by applications such as remote guidance and 3Dvisualization. Furthermore, and as argued before, AR could in the future also increase datagathering,whichwasoneofthedrivers,butthisrequirestechnologyimprovementsofAR.

However,CEMsstrugglestoidentifyrelevanttechnologiesandexperienceslowinternaladoptionof technologies (Cambridge Service Alliance, 2015). From the interviews itwas revealed thatmanycompanieswereinvestigatingalotofdifferenttechnologies,butfewhadprojectsthatwereupandrunningwhichincludedtheARtechnology.Furthermore,itwasfoundthatthereexistalotofdifferenttechnologiesthatacompanycouldinvestin,andonceagainthequestionisifARistherighttechnologytoinvestin.CambridgeServiceAlliance(2015)arguedthatthefocusamongstCEM is often on technologies that improve the product performance rather than increaserevenuesfromtheaftermarketbusiness.Wheninvestigatingthetechnologieslistedasimportantby Cambridge Service Alliance (2015), presented in table 4.2, it could be seen that AR couldsupportseveralofthosetechnologies,orratherthepurposethatareconsideredtobeperformedby the listed technologies. For instance, AR could support the technologies such as remotecommunicationanddashboarding.

ItcouldbeconcludedthatARcouldfacilitateservitizationsinceitprovidesfunctionalitiesthatcould support “increasingly offering fullermarket packages or “bundles” of customer-focusedcombinations of goods, services, support, self-service and knowledge” (Rada, 1988, p.314).However,itcouldfurtherbeseenthatservitizationprobablyspurthediffusionofAR,asforothertechnologies, since companies seem urgent to adopt new technologies. Therefore, AR couldsupportservitizationbutitisnotcriticalinaservitizationcontext,atleastnotfornow.

7.2ORGANIZATIONALPERSPECTIVE

The organization itself affect the technological innovation decision making (Tornatzky &Fleischer,1990).Firstofall,anorganization’sdecisionofadoptinganinnovationisaffectedbythesocial system.Secondly, thesectiondiscusseshowtheorganization'sknowledgeaffect theadoptionofAR.Thirdly,ananalysisofthepersuasionoftheARexperienceispresented.Lastly,ananalysisofhowtheinternalresourceandconditionsaffecttheorganization’swillingnesstoadoptARispresented.

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7.2.1THEMANUFACTURERS’SOCIALSYSTEM

Rogers(2003)considersthediffusionofaninnovationtobeinfluencedbythesocialstructureofthesocialsystem.Therefore,actorsinthemanufacturingcontextaffecteachotherintheadoptionofAR.Thesocialsystemconsistsoffivedifferenttypesofadopters;innovators,earlyadopters,earlymajority,latemajorityandlaggards(Rogers,2003).

From amanufacturer's point of view, ARwill not be the core business, but rather a supportfunctionincurrentoperationsorsimilar.Thisimpliesthat,ingeneral,manufacturingcompanieswillprobablynotbetheinnovators.Although,ifamanufacturingcompanyhasalotofproblemsinternallyinthefactory,andifARisproventofacilitateintheoperations,thentheseorganizationpossiblycouldbetheinnovatorsofAR,evenifthisadoptinglevelinvolvesanunfinishedproductandhighrisk.Furthermore,asdescribedinsection6.1.2,therearemanufacturersthatdeveloptheirownsolutionsduetotheneedofcustomizedAR-solutions.However,asstated,thisisnottheircorebusiness,butinsuchcasestheactorsaretheinnovators.

ThemanufacturingcompaniesthataretakingaleadingpositionintheadoptionofARandfurthercommunicateandinfluenceotherstoadoptthetechnology,are,inaccordancetoRogers(2003),definedasearlyadopters.Rogers(2003)arguesthatearlyadoptersareimportantactorsinthesocialsysteminorderforatechnologytospreadandwillthereforebeimportantfortheadoptionofAR.AnexampleofanearlyadopterofARcouldbeABB,sincetheyhavebeenparticipatinginfairs where they demonstrated their future VR and AR plans, and thereby influenced others.Further,theseactorsareimportantfromacommunicationchannelperspective,whichisoneoftheimportantelementsfordiffusionofaninnovation(Rogers,2003).

However, derived from PwC’s (2016h) research it could be found that a majority of USmanufacturers in2015planned toadoptAR,butonlyabout10%wereadoptingARwhen theresearchwasconducted,asvisualizedindiagram5.1.Rogers(2003)considersthatearlyadopterstendtotaketheleadershiproleinthesocialsystemandaffectotherstoadaptthroughadvisingorbyprovidinginformationaboutthetechnologytoothers.Therefore,themanufacturerswhowereadoptingARandfurtherhavetheearlyadopters’characteristicscouldpotentiallyleadthewayofARwithinamanufacturingcontext.Additionally,andasdescribedbyMoore(1991),theseactorsarefurtherimportantsincetheirkeyroleistofundthedevelopmentoftheearlymarket.Thisimplicatesthatthecurrentchallengesandlimitationswiththetechnologywillbeaddressedby these actors, further these limitations must be solved before the early majority could bereachedduetootherneedscomparedtoearlyadopters,suchasaproventechnologywithoutanybugs(Moore,1991).

Fromtheempiricalfindings,itwasfoundthatmanyorganizationswantedtoadoptAR,buttheydidnotknowhowtouseit.Further,itwasrevealedthatmanycompaniesstruggletounderstandwhatthecompellinguse-casesareandthereforetheyarewaitingtoseewhatothersaredoing.Similarly, PwC’s (2016h) research amongst US Manufacturers shows that one fifth of thecompanies did not see any practical applications at the time, as visualized in diagram 5.2. Inaccordance, theearlymajorityhavecharacteristicssuchasa focusonprovenapplicationsandtheyliketogowiththemarketleaders(Moore,1991),andthereforethesemanufacturerscouldmostlikelybeclassifiedasearlymajority.

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Theearlymajorityexpectabugfreeproduct,adominantdesign,lowcostofownershipandtheyarenotrisktakers,furtherwantsverticalreferences(Moore,1991).Therefore,beforetheearlymajority even would consider adopting AR, the technology limitations have to be solved, astandardmustbesetandthecostofownershipmostdecrease,butaspredicted,theselimitationswillbecomeoflessconcerns,aswillbeanalyzedfurtherinsection7.3.Furthermore,therearechallengesassociatedwithhowtoreachtheearlymajority.Thesechallengesarethattheyinsistongoodreferencesfromtrustedcolleagues,andtheywanttohaveareferencesitewhichhavethesolution in production. (Moore, 1991). However, in order to provide those references somecompanieshavetobeadoptersofAR,andoneofthebiggestchallengesishowtogetthosefirstearly majority adopters, in other words, how to cross the chasm that occurs between earlyadopters and early majority. In accordance with the above arguing, and companies’ lack ofknowledgeofhowtogetvalueoutofAR,theimplicationisthattheearlymajorityhasnotbeenreachedyetinamanufacturingcontext.

However,asdescribedinsection5.5.1.2,thetechnologyisimproving.Furthermore,asdescribedinsection6.1,referencesarestartingtoaccrueandseveralcompanieshavestartedtoprovidecompellingusecaseswithindifferentindustries.Therefore,theimplicationisthattheARcouldbeonitswaytoreachtheearlymajority,andwhenthishappensthediffusionprocesswillkick-in.Inaccordance,PwC(2016h)believethatUSmanufacturersprobablywillexperienceaneedtoadoptARinordertocompeteinthefutureduetotheimprovementsthetechnologydemonstratewithinseveralareas,forinstanceproductivityandproductdevelopment.

Thenext stepwill be, how to attract the latemajority,whosekey role rather is to extend theproduct’s life cycle (Moore, 1991). These adopters also have other preferences andcharacteristics,suchasavoidanceofcompetitivedisadvantages,pricesensitivity,andaneedofcompletelypre-assembledsolutions.However,thisgroupofadoptersarealargepartofthetotalmarket, therefore important to attract lateron. InPwC’s (2016h) research amongstAmericanmanufacturerstherewere36%thatdidnotplantoadoptAR,asvisualizedindiagram5.1,andthoseactorscouldbeseenaslatemajority,andiflatemajoritywilladoptARthetechnologyhastoproveitsbenefitsandbecomecheaper.However,aswillbedescribedinsection7.3.2,thepriceswilldropwhenthereiseconomyofscale.Furthermore,bettersolutionandmoreadvantageswillhopefully be provenwhen use-cases emerge. Therefore, the latemajority adopters should bereachedaswell.

Thelastgroupinthesocialstructure,namelylaggards,arenotdescribedascustomers,buttheyratherretardthedevelopmentofhigh-techmarkets(Moore,1991).Furthermore,itisdescribedthattheseactorsdonotbelieveontheproductivity improvementarguments(ibid).Therefore,theywilltrytopreventtheadoptionofAR.

7.2.2ORGANIZATION’SAWARENESSANDKNOWLEDGE

Inordertoevenconsideradoptinganinnovation,knowledgeoftheinnovationiscrucial.Rogers(2003)arguesthataninnovationdecisionconsistsofsequentialactions,whereasthefirstactionis the knowledge stage. The knowledge phase is where the user becomes familiar with thetechnologyandstartstogainunderstandingofit.Therefore,thequestionis:howgoodknowledgeandunderstandingdoesorganizationshaveregardingAR?

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Fromtheinterviewsitisfoundthattherespondentshaveexperiencedanincreasedknowledgeamongmanufacturingcompaniesinrecentyears.Forinstance,thevicepresidentatDAQRIstatedtheydonothavetoexplainwhatARisinthefirstmeetinganymore.TheimplicationisthatevenifARisanoldphenomenon,asitcouldbetracedbacktothe60’s, it isfirstinrecentyearstheawarenesshas increased.Thiscouldbedueto that theARtechnologywheretooundevelopedbefore,andhadevenmoreconstraintsandlimitationscomparedtothetechnologynowadays.

Furthermore,asseeninsection5.2and5.1,thedefinitionofAR,andthedistinctionsbetweenARandMR,stillvaries(Foundry,2016).Additionally,sincethereisnoconsensusregardingthetermuseditmightresultinmisunderstandingandmiscommunicationsamongdifferentpartiessincethey are referring to different things. However, the fact that the term used, either AR orMR,dependsoncurrent trendsof immersive technologies (Foundry,2016), indicatesan increasedawareness ingeneral.Further, it couldbe seen that in recentyearsARhas reachedabroaderaudiencebyitsentranceintheconsumermarket,forinstancebythereleaseofthegamePokémonGOin2016.ThishavecreatedanadditionalcommunicationchannelthatspurtheawarenessofAR, and according Rogers (2013), communication channels are vital in the whole adoptionprocess. Furthermore, it could also lead to more efficient communication since people havesomethingsimpleandwell-knowntorefertowhileexplainingwhatARis.Theimplicationfromthe above reasoning is that companies, in general, have reachwhat Rogers (2003) defines asawareness-knowledge.

ComparedtoprevioustechnologydevelopmenttherespondentshaveexperiencedanincreasedawarenessofARamongtheircustomers.For instance, thechiefsolutionsarchitectatSiemensargued that fifteen years ago, when he developed smartphone-applications, he went to thecustomerandsaid,“thisisgoingtoimproveyourefficiency”andthecustomerresponded,“whatisasmart-phone?”,butthisisnotthecaseregardingAR,accordingtohim.Hestatedthatcustomersactuallyareaheadofthemandthatitisthecustomerswhoarepushingthem.Furthermore,itisrevealedthatalotofcompaniesaretryingtodosomethingrelatedtoARinordertobepartoftheARevolution.Consequently,thisimpliesthatmostcompaniespossessawareness-knowledgeasdescribedbyRogers(2003).

Furthermore,on theonehand, itwasrevealed thatcompaniesdonotalwaysknowwhat theywanttodo,buttheywanttodosomethingwithAR.Onetheotherhand,itwasfoundthatsomecompanies know what they want to do, they just cannot build it. These two argues arecontradictory, but it could also be a result of different possessed knowledge of AR. The firststatementimpliesthatthecustomerknowwhatARisbutnotwhatARcoulddo,henceawareness-knowledge(Rogers,2003),andthesecondstatementimpliesthatthecustomerknowwhatARisand what AR could do, hence these customers have reached the how-to-knowledge (Rogers,2003). However, in both cases the companies lack in-house experience or competence of ARdevelopment, therefore a lack of principles-knowledge, in other words how and why aninnovationwork.However,Rogers(2003)arguesthataninnovationcouldbeadoptedwithoutprinciples-knowledge,butitisnotfavorablefortheinnovationsinceitmightbemisused.

However,eveniftheknowledgeregardingARhasincreasedthenextquestionisiftheknowledgecorresponds to the reality, in otherwords if the companieshave the righthow-to-knowledge.From the interviews it was found that people sometimes have too high expectations of AR’scapabilities.Thoseexpectationsareoftenderivedfromvideo-clipsofARfoundontheInternet,whichdoesnot always reveal realisticARapplications today.For instance, this is the case for

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MicrosoftHoloLens’promotionvideoUnfortunately,manytimesitresultsinthatpeoplereceivefalse,orsciencefiction,pictureofwhatARcoulddoandwhat itcannotdo, further its leadstomisinterpretationsofAR’sactualfeatures.Forinstance,itwasrevealedthatsomepeopledoesnotrealizethatthecontenthavetobecreatedinadvance,theythoughtthatitwastheAR-devicepersethatcreatedthecontent,hencetheypossessthewronghow-to-knowledge(Rogers,2003).Insummary, these video-clips could spread the knowledge regarding the phenomena AR(awareness-knowledge)but itcouldalsoresult indisappointmentsof the technology(how-to-knowledge),whichfurthercanaffecttheadoptionofARnegatively.

Peoplewhohadarealisticunderstandingofthetechnologyknewthattheexpectationsweretoohigh for sales in2016 (VRSverige, 2016). This further implies that there is knowledgeof thephenomenaAR but the expectations of the technology are somehownot realistic. Further, anincorrectknowledgeofthetechnologyalsoresultsinanincorrectestimationregardingtime,costandscopeofanAR-project.Forinstance,itwasexplainedthatfeaturesoftenhavetobecutoffduetobudget limitationsbasedupona lackofknowledgeregardingthepre-workandcontentthat have to be made. Hence, it could result in further disappointments regarding AR.Contradictory,almostonefifthoftheUSmanufacturers,asvisualizedindiagram5.2,consideredcost, time and effort to be prohibitive for an AR adoption, which implies that their how-to-knowledgecouldberealistic.

7.2.3THEPERSUASIONOFANAREXPERIENCE

AR has great potential to bring business value by deliver additional features to a company'sproductoffering,whichindirectlycouldmeanrevenuegeneratingopportunities.Moreover,therehavealsobeenfoundthatcost-savings,productivityincreases,andqualityimprovements,couldbepossibleoutcomesofanARinvestment.Inaccordance,DamanpourandGopalakrishnan(1998)considerthatorganizationsmainlyadoptaninnovationwiththeobjectivetoincreaseprofitortoimproveoperationalprocesses.Therefore,inatechnologyadoptionprocessitisimportantthattheevaluatedARapplicationinsomehowproofsitsrelativeadvantage,otherwiseitwillnotbeconsideredoradopted.

Inthepersuasionphasethedecisionmakersinanorganizationshapestheattitudetowardstheinnovation (Rogers, 2003). How an individual is persuaded about the attributes; relativeadvantage, compatibility, complexity, trialability and observability, determines the potentialdecisionofatechnologyadoption.Thepersuasionderivesfromtheincorporateknowledgebytheindividuals, as seen in section7.2.2, and thesocial system, seeseen in section7.2.1.However,currentlytherearefewimplementedAR-casesandthereforethereisanuncertaintyregardingtheobservabilityandtrialability.Additionally,therelativeadvantageshavenotyetbeenprovenfor all industries and for all AR-cases. Finally, the perceived complexity depends on severaldifferentfactors,howeveringeneralitcouldbeconsideredhigh,aswillbeseeninsection7.3,andthereforetheuncertaintyishigh.

However,theuncertaintyregardingthetechnologycouldbereducedbyadvicesfromtrustedandclose colleagues, peers and friends, who often are seen asmore reliable and trusted sourcescomparedtooutsideexpertsandscientificevaluations(Rogers,2003).Therefore,inorderforARto take off, word of mouth is important, as will be discussed in section 7.3.2. As seen, the

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persuasionandbeliefsaboutARaffecttheadoptionofAR.However,itisfirstinthenextphasethedecisionwillbemade(Rogers,2003).

7.2.4THEINTERNALRESOURCESANDCONDITIONS

TornatzkyandFleischer’s(1990)arguedthattheorganization'sinternalresourceandconditionsarevital for theadoptionprocess. Ithasbeen found that theorganization’s internal resourcesaffectanARdecision.Theseinternalresourcesandconditionscouldbethefinancials,theexistingtechnologiesandassets,theknow-howintheorganization,andtheculture.

7.2.4.1FINANCIALIMPLICATIONS

ThebudgetforanARinvestmentiscriticalsinceitmightcompeteagainstothertechnologiesorothertypesofinvestmentsthatarecriticalandimportantfortheorganization.Zhuetal.(2003)believe that larger organizations often have sufficiently financial and human resources andthereforetheyhaveseveraladvantagesoversmallerorganizationsregardinginvestmentsofnewtechnologies.Furthermore,itisimportanttheinvestmentsolvesacrucialproblem,otherwisetheprojectwillbedownprioritizedbythemanagementwhenotherpainsareofmoreconcernstotheorganization.For instance, if a company’sproblem isexpressedbydecliningmarginsor ifsomeone’scareerisatstake,thenthesolutionforitwillbeprioritized.Inaccordance,PremkumarandRamamurthy(1995)arguethatmanagementsupportiscrucialinaninnovationadoption.Asseen from the above reasoning, the adoptionofAR in anorganizationdependson thebudgetaimedforit,whichfurtherdependsonhowcriticaltheproblemisfortheorganization.Therefore,theadoptionofARtoahighdegreedependsonifARistheappropriatetechnologyfortosolvethecriticalproblem.

Anotherfinancialaspectthathastobeconsideredregardstheinvestorofaspecificinvestment.Oneexamplethataroseduringtheinterviewsregardedifthesupplierorthecustomershouldbetheinvestorofaninvestmentwhenbothpartiesgainfromit.Forexample, ifAtlasCopco,whosupplyassetstoBoliden,orBolidenshouldtaketheinvestmentofAR,whenbothpartiesactualwillgainfromoptimizedserviceandmaintenanceofthisasset.InaccordancewithPowell(1990),thiscouldbeseenasacollectiveactionproblemsasall individualsinthenetwork,inthiscaseAtlasCopcoandBoliden,wouldbenefitfromacertainaction,buttheassociatedcostofachievingthebenefitmakesitimplausibleforoneindividualtoundertakethewholeinvestment.Therefore,anintegratedeffort,fromseveralactors,mightberequiredinordertoadoptAR,andasseenthiscouldbeanimpedimentfortheARadoption.

7.2.4.2EXISTINGTECHNOLOGYANDASSETSIMPLICATIONS

IftheuseofARiscompatiblewithexistingtechnologyandassets,orevenbetter,ifitincreasesthevalueofthose,ARwillmoreeasilybeadopted.Inaccordance,TornatzkyandFleischer(1990)arguethat thecostofadopting thenewtechnologywillbesignificantlyreduced if theexistingequipment in the organization is aligned with the new technology. AR could providefunctionalities to existing technologies, hence increase the performance of these technologies.Therefore, in such cases, AR will more easily be adopted. Similarly, the value of AR couldhypotheticallyincreaseifARiscombinedwithothercomponentsandtechnologies,asanalysedinsection7.1.2andsection7.1.3.Forinstance,theincorporationofIoTincreasestheamountof

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digitalinformationavailable,andthereforeitincreasesthepossibleusageofAR,hencealsothevalueofAR.

Manufacturingcompaniesarelagging,oratleastnotleadingintheadoptionofnewtechnology(CambridgeServiceAlliance,2015).Therefore,thisimpliesthattheyalsolagintheadoptionofAR,whichfurtherappearedfromtheinterviews.However,thesecompaniesmightnotexperienceanurgentneedforsuchatechnologyiftheyalsolagintheiradoptionoftechnologiesthatcouldbesupportedbyAR.

7.2.4.3KNOW-HOWIMPLICATIONS

Theknow-howinanorganizationisanimportantintangibleinternalresource(Mijinyawa,2008).ARcouldbebothcompetenceenhanceorcompetencedestroyingdependingonthespecificusage,butinmostusage,itcouldbeconsideredascompetenceenhancingduetoitsabilitytoincreasetheunderstandingof a systemorprocess. Furthermore, sinceARnot always requires specificsystemschangestheorganizationcouldcontinuedoingthings inthesamewaysasbefore,butwithanenhancementofAR.

Asseendescribedinsection6.2,ARcouldbeusedforworkinstructionsandtraining.Forsmartworkinstructions,itappearedconcernsregardingemployees’motivationwhentheydonothaveto think themselves meanwhile guided by an AR tool. In such case, the know-howwould bedigitalized. Thereby, the competence might be lost amongst the individuals and ratherincorporatedinthetechnology.However,theknow-howwouldstillbeintheorganization,furtheritwillprobablybecompatiblewithexistingknowledgesinceitjustisanotherwaytovisualizethework instructions thatpreviouslybeenplaced inbinders.Similarly,butregarding training,ARmakes it possible to perform training differently and therefore it could be considered ascompetenceenhancing.Furthermore,traininginARcouldbeevenmorecompetenceenhancing,comparedtocurrenttrainingmethods,sinceitisavisual-interactiveexperience.Additionally,ifAR isused in the rightway it couldalsoenhance thecompetencebycompetence transfer, forinstancebytheuseofremoteguidance.

However,additionallyknow-howmustbeincorporatedintheorganizationinordertouseAR.AnARinvestmentmayrequireprocesschangesanditrevealedthatchangemanagementisalwaysahugeconcernforprocesschanges.However,sinceARrather iscompetenceenhancing, furthersupportstheinternalresourcesinmanyaspects,itcouldfacilitateadoptionofARingeneral.

7.2.4.4CULTURALIMPLICATIONS

Asdescribedpreviously,manyorganizationsare lagging intheadoptionofnewtechnology. Inaccordance,PwC(2016h)foundthatnotevenoneoutoftenUSManufacturerswereadoptingARin2015.However,thisdoesnotregardallcompanies.Onereasoncouldbethatcompanieshavedifferent size, managerial hierarchical structure, formalization, and centralization degree. Inaccordance,ChauandTam(1997)arguethattheseaspectsaffecttheadoptionofnewtechnology.In addition, it was revealed that younger organizations, in general, more easily adopt newtechnologies, further small organization are usuallymore flexible. This could be explained bydifferences in formalization,mindsets,normsorvaluesbetween largerandsmallercompaniesbutalsoinbetweenindustriesingeneral.

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Rogers(2003)arguethataninnovationhavetobecompatiblewithcurrentvaluesandnormsinanorganizationinordertobeadopted.Forinstance,if it issociallyunacceptedtowearHMDs,thenitwillaffecttheadoptionofARnegatively.FromtheinterviewstheexampleofGoogleglassesarose,whichneverbecamesociallyacceptableandthereforenotusedtotheextentpredictedbygoogle. However, from an industrial perspective, the interviewees believed that the socialacceptanceofwearabledevicesarehigh.Furthermore,inamanufacturingcontextworkersareoften forced towear safety equipment and therefore aHMD, for instanceMicrosoftHoloLens,could be socially accepted, even if the device look alike a science fiction device. From thisperspectivetheimplicationisthatthesocialacceptanceofARwillnotpreventtheadoptionofit.Anyhow,therespondentbelievesthatthedeviceswillbecomesmallerandlessoutstanding.

Moreover, itwasrevealedthat it is importanttofindthe“entrepreneur”intheorganizationinorderforanorganizationtoadoptanewtechnology.Similarly,Mijinyawa(2008)arguesthatITemployees with sufficient competence and engagement could affect management bydemonstrating the benefits of a new technology. Furthermore, management support plays acrucialroleandiftheydonotsupporttheadoptiontheywillbeanimpedimentfortherealizationof the innovation (Premkumar & Ramamurthy, 1995). Therefore, the entrepreneur in theorganizationcould functionasanearlyadopterandtakea leadershiproleandaffectadoptionthroughadvisingandproviding informationabout the technology to the topmanagement,butalsototheorganization.Forinstance,therecouldbeaculturalresistanceamongemployeesdueto fear of unemployment, which the entrepreneur could help to overcome. As seen, informalinstitutions are not permanent by nature, and could therefore be changed over time. Inaccordance,Rogers(2003)arguesthattimeisoneoftheelementsimportanttoconsideringinanadoption process. For instance,when time goes by, an “entrepreneur”within an organizationcould change an unfavorable standpoint towards an innovation to a favorable standpoint.Therefore,theimplicationisthattheentrepreneurwillplayakeyroleintheadoptionofAR.

7.3TECHNOLOGICALPERSPECTIVE

Aspresentedindiagram5.2,onethirdoftheUSManufacturers,whohavenotadoptedAR,didnotbelievedthatthetechnologyisreadyfor“prime-time”(PwC,2016h).TheimplicationisthatfromatechnologicalperspectiveARhastoimproveinordertobeadoptableeverywherebyeveryone.InaccordancewithTornatzky&Fleischer(1990)andRogers(2003),thedevelopmentoftheAR-market, the AR-industry landscape, and the AR-technology development, intrinsically affect atechnologicalinnovationdecisionmaking.Therefore,thissectionprovidesananalysisofeachofthesefactorsandhowtheyaffectthedevelopmentandthewillingnesstoadoptAR.

7.3.1DISRUPTIVEORSUSTAININGTECHNOLOGY

Derivedfromboththeliterature-andempiricalfindingsitseemstobeahugeinterestforARandnotably it seems to exist a lot of business potential for the immersive technology. It furtherappearsthattheconsumermarketcouldplayakeyroleforthefurtherdevelopmentofAR,andfromaconsumercontexttheforecastseemspromisingaswell.

Christensen (1997) describes that a disruptive technology is a technology that initiallyunderperformsthedominantonesbutatsomepointintimeittakesovertheestablishedmarket.Inaccordance,AR,andespecially,HMDsunderperformswithinseveralareasandtherearemany

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aspectsthathavetobeinplacefortherealization.Forinstance,GoldmanSachs(2016)argue“Weviewtheuserexperience, technologyconstrains, thedevelopmentofcontentandapplication,andpriceaskeyhurdlestoadoption”(p.4).However,thesetechnologicallimitationswillbeanalyzedinsection7.3.3.Additionally, theecosystemiscurrentlyfragmented,whichwillbeanalyzedinsection7.3.2.However,theselimitationsimplythatHMDscouldbecomeadisruptivetechnologysinceitnowadaysunderperformsboththesmartphoneandPC.

ARasasystemcouldbeseenasbothadisruptivetechnologywiththepotentialtocreatenewmarkets,andasustainabletechnologyduetoitsabilitytogiveincreasedperformanceofexistingservicesorproducts(Christensen,1997).Further,asdescribedinsection4.1,thephysical-andvirtualworldshavestarted toconverge (PwC,2016b).Thishave led toaneedofanewvaluepropositions,whichisatechnologythatsupportthisnewmixedreality,furthersupportworkers’abilitytocontextualizethelargeamountofinformationthatisgatheredfromboththephysical-andvirtual,andARhavethisability(PwC2016b;Deloitte2016).ThesevaluepropositionscouldbeprovidedfromtheARsystemperseeanditdoesnotmatterwhattypeofdevicethatperformthetask.

However,fromthefindingsithasbeenrevealedthatit isnotonlyARintrinsicallythathasthegreatestpotential,butrathertheHMD.AllfindingspredictthatHMDswillbecomeasubiquitousasthesmartphoneandthereforebeusedinaperson'severydaylife.Hence,theissueconcernsifHMDswillbecomethenextcomputerplatform,or if itwill fall intooblivion.TheHMDdeviceshaveseveraladditionalvaluepropositions,theycouldhandlethe3DARsystems,givetheuserafullyimmersiveexperience,butalsoprovidesthepossibilitiesofbeinghands-free.Thehands-freecharacteristics makes it possible for the user to perform task and use the AR-devicesimultaneously. Especially from an industry perspective this is beneficial since a lot of taskrequires instructionsorother information inorder foraworkertoperformhisorher task. Inaccordance,Christensenetal.(2002)considerthatadisruptivetechnologyoftenoffersadifferentvalue proposition then existing technologies. Furthermore, they argue that a disruptivetechnologyhasfeaturesthatarevaluabletosomeofthecustomersinthemainstreammarketbutatthesametimethesedisruptivetechnologiesareoftenunattractivetocurrentcustomerbasesinceitunderperforms.Asdescribedabove,ARviaHMDsseemstoaddseveraladditionalvaluepropositionscomparedtoARviathesmartphone,furtheritprovidesfeaturesthatarevaluabletosomecustomersbutnotall.InaccordancewithChristensenetal(2002),thisimpliesthatHMDscouldbecomeadisruptivetechnology.

Currently,neitherthesmartphonenortheHMDistechnologicallygoodenoughtorunalltypesofapplications and systems. Although, the smartphone is decades ahead in the technologicaldevelopmentcomparedtoHMD,butHMDscouldtakeadvantagesfromseveralofthecomponentsinthesmartphone.Furthermore,thedevelopmentofcomponentsforVR,whichisanothertypeofHMD,couldspurthedevelopmentofHMD,sinceARandVRaregoingtowardseachother(VRSverige,2016).However,therearestillseveralotherconcernsthantechnicalthatalsohavetobesolvedforHMD,forinstancesmartphoneandtabletcurrentlyhavealargercustomerbaseandarecheaper.SinceboththetechnologicalaspectsandtheecosystemisnotinplaceforHMDs,itisalsomorenaturalthatARfirstlywillbedevelopedfromthesmartphoneandtabletmarket.

However, when the HMD becomes good enough, and if it becomesmainstream to have suchdevices,thenitwouldbringextravaluetoprovidetheapplicationonaHMDplatforminstead.InaccordancewithChristensenetal.(2002),itcouldbethatthesmartphonewillbecometheover

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performingtechnologyinthefuture,asvisualizedinfigure7.1.Thesmartphonepersecouldbeconsideredasasustainabletechnologythatbecomesbetterandbetter,andinthefuture,itmightovershoot.Thedisruptive innovation,HMD, areofferinganothervaluepropositionand if, andwhen, it becomes good enough itwill probably take over the existingmarket. In accordance,Goldman Sachs (2016) argue that AR have the potential to create new markets and disruptexistingonce.

Figure7.1AnillustrationofthefuturescenarioofwhenHMDdisruptsthesmartphonemarket.

7.3.2THEARNETWORKANDTHEFUTUREDEVELOPMENT

As seen in section 5.4, the AR industry landscape, from a broad spectrum, consists of theinfrastructure,platformsandtools,andapplicationsandcontent.Theplayersthatarerequiredfortheecosystemtofunctioncanbecomparedwiththesmartphone’secosystem,sinceithastheplatform structure. In accordance with Powell (1990) all actors in the AR-ecosystem aredependentandinterdependentuponeachother.Further,IansitiandRichards(2006)arguethatwithin industries it is the firm's integratedeffort that isnecessary inorder tobring customervalue.ThismeansthattheARecosystemwillnotbebetterthantheweakestplayersperformance.However,withinthedifferentlandscapeareas,forexampleHMDproducers,theseproducersarecompetitors,andstandardbattlesareongoingwithinthedifferentareas.Further,itwasrevealedthatitisimpossibletosayhowtheecosystemwilllooklikeinthefuture.

Despite the low sales-figures of VR and AR headsets in 2016 several companies, for exampleFacebook,expandedtheirinvestmentsintheirdevelopmentofbothARandVR.Forexample,MarcZuckerbergsaidattheirF8conferencein2017thatARistheessentialpartoftheirlong-termplan.In general, there are currently mainly already established players, within for examplesmartphone,PCandsocialmedia,thatareleadingthewayoftheARdevelopment,asdescribedinsection5.4.ThisimpliesthattheseactorsbelieveintheAR-technology,andinaccordancewithKamath and Liker (1994), these dominant actors could influence other actors to adopt atechnology,hencespurtheadoptionofAR.

Additionally,accordingtoGoldmanSachs(2016)itwastheindustrythatspurredtheadoptionofPC,meanwhile consumers spurred the adoption of the smartphone. However, for HMDs theyargue that the demand comes from both the consumers, industry and even government. Forexample,thisimpliesthatevenifittakeslongertimetoattractdevelopersofcontentforbusiness

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purpose,theconsumermarketstillspurthedevelopmentofthedevices,consequentlybusinessesusageofARwillgainfromit.However,asdescribedintheempiricalfindingsthesetwomarketsexperience different needs and demands. On the one hand, consumers are much more pricesensitivethancompaniesingeneral,butontheotherhandcompaniesrequirethattechnologyismuch more reliable and robust. Additionally, consumers want to have a lot of differentapplicationsandcontent,meanwhilebusinessratherwanttosolveaspecifickeyissuewithAR.This implies that different types of devices, systems and use areas will be developed for thedifferentinterestgroups.

Asderivedfromtheliteratureandempiricalfinding,thedevelopmentofARisgoingfast,muchfasterthanforprevioustechnologicaldevelopments.Itisrevealedthattherearealotofproductdevelopmentandalotofcompaniesareinvolved.InaccordancewithUtterback’s(1994)theoryregarding the technology life cycle, it can be revealed that HMDs currently should be in thebeginningofthefluidphase,asseeninfigure7.2.Thisphaseischaracterizedbyahighrateofproductinnovationandlowrateofprocessinnovation(Utterback,1994),whichseemstobethecurrentstatefortheARmarket.Furthermore,thenumbersofAR-actorsanddifferentproductsarecontinuously increasing.Similarly,Sandström(2016)arguesthatnewtechnologiesusuallycreateuncertainty,experimentationsandentranceofnewfirms,andKlepper(1996)arguesthatit is characterized bymany different proposed product. This goes in linewith PwC’s (2016a)reasoning regarding AR’s technology ecosystem is highly fragmented and today there is nodominant design presented on the market. Further, PwC (2016a) consider that there are nostandardswhen it comes to hardwareplatforms, operating systems, anddata formats.Hence,before HMDs potentially will become mainstream a standard battle could be considered asnecessary since standards it in the end reduces uncertainty (Klepper, 1996). Anderson andTushman (1990) consider that the length of this phase is related to both the amount of newknowledgeassociatedwith the innovation,and if theexisting technologyhas tobeabandonedsince existing firms probably will defend the old technology. As AR mainly is a supportingtechnologyitisdoesnotrequirealotofnewknowledge,furthertheoldtechnologydoesnothaveto be defended. Therefore, the implication could be that the length of this phasewill becomerelativelyshort.Consequently,fromthisviewpointthetransitionalphasewillbeenteredquicker.

Thefluidphaseisassociatedwithuncertaintyandexperimentation(Klepper,1996;Sandström,2016).Relatedtotheuncertaintiestheempiricalfindingsrevealedthatitseemstobeawaitinggame amongst different actors. For example, Goldman Sachs (2016) believe that there is achicken-and-egg issue related to the development of application and content, and enterprisesinvestment in the hardware. Enterprises are hesitant to invest in AR-hardware without ARapplications,anddevelopersarehesitanttocreateappsandcontentwithoutAR-hardware.Thiscouldfurtherberelatedtotheinterdependencyissues,whichreferstothefactthattheoutcomeisbeyondone's control since theactor isonlyapart ina larger system(Powell,1990;Adner,2006). Contradictory, it has been found from the interviews that companies are urgent to dosomethingwithAR,whichincludesinvestmentsinthetechnology,butmostofthemdonotknowwhat theywant to do.However, if drawing the parallelwith the reasoning regarding the hugdifferences in performance between IPhone 1 and IPhone 7, it could be that customers andenterpriseswaittoinvestinHMDsuntiltheproductincreasesinperformance.ThiswaitinggameiscriticalfortheAR’sdevelopment,henceaffectingtheadoptionnegatively.

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WhenandifstandardsforAR,regardinghardware,platforms,contentandapplication,willstarttocrystallizetheamountofproductinnovationwilldecreaseandinsteadtheamountofprocessinnovation will start to increase, in accordance with Utterback’s (1994) technology lifecycletheory,HMDswillthenenterthetransitionalphase.Klepper(1996)arguesthatwhenanindustrystandard emerges, a dominantdesign emerges and thenumberof producers andnewentriesdecreases.

Finally,thespecificphase,whichisthefinalphaseinthetechnologylifecycle,ischaracterizedbystabilizationofproductandprocessinnovation(Utterback,1994).Utterback(1994)arguesthatinsteadoffocusingonprocessandproductinnovationfirmstypicallyfocusoncost,volumeandcapacity.Therefore,willbefirstlyinthisstage,witheconomyofscale,thepriceoftheHMDscouldbereducedsignificantly,furtheritisfirstlythenHMDcouldbecomemainstream.

Figure7.2.AvisualizationofthecurrentstateofHMDsinthetechnologicallifecycle.

7.3.3THEAREXPERIENCEANDASSOCIATEDCOMPONENTS

From the findings is has been revealed that an AR-experience currently possess severallimitationsthatarederivedfromallincludedelements,thatis;application,content,technology,interaction, the physical environment, and the participant. Further the AR-technology, whichconsists of input device, computer, display and sensors, experience several limitations. TheperformanceandsuccessofeachoftheseelementswillaffecttheARadoption.

7.3.3.1TECHNOLOGYECOSYSTEM

As described in section 5.5, the technology ecosystem consists of different components andtechnologies that are interdependent of each other. In the case of AR, as for several othertechnologies,thetechnologyecosystemcouldbeviewedfromdifferentperspectives,asvisualizedinfigure7.3.Firstly,ARconsistsofthetechnologyecosystemofsensors,computer,display,andaninputdevice.Secondly,thissystemispartofalargerecosystemconsistingofthetechnology,contentandapplication(butalsointeraction,participantandphysicalenvironment).Thirdly,the

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ARexperienceisincludedinalargersystemconsistingofothertechnologies,forinstanceIoTandBig Data. As seen this is a quite complex system, where the technologies have differentrelationshipsandroles,whichisalsodescribedbyAdomaviciusetal.(2006).

Figure7.3.Threedifferentviewpointofthetechnologyecosystems

AdnerandKapoor(2016)arguethattherealizedperformanceofthetechnologyecosystemandthe perception of it can be hindered by the components in the ecosystem. Therefore, allcomponentsareimportantforthesystemtofunction,andinaccordancewiththeabovereasoningitappliesforallofthelevelspresentedinfigure7.3.However,Adomaviciusetal.(2006)argued“Inpractice,however,amanageris interestedintheanalysisofaspecificsetoftechnologiesinaspecificcontext”(p.3).Therefore,ananalysisofspecificuse-caseswillbepresentedinchapter8.

Similarly, with the above reasoning, AR could have different roles in a technology system;component role, product and application role, and support and infrastructure role. AR’scomponent role could be described as when it is part of a larger system and the system isdependentonARto function.For instance, thiscouldbethecase inIndustry4.0 inthe future,dependingonhowARisused.AR’sproductandapplicationrolecouldbedescribedasitstand-alone-value, for instance by remote guidance as described in 6.2.1. Finally, AR’s support andinfrastructurerolecouldbedescribedaswhenit isusedasasupporttool, for instanceby3-Dvisualizationofprototypes.Thespecificroleandthespecificcontextwhereitissupposedtobeusedaffecttherequirements,theinterdependence,andthereceivedvalueofAR.Therefore,itisdifficulttoevaluatethetechnologyexclusively,furtherAR’sroleinaspecificcontextwillaffectthewillingnesstoadoptAR.

7.3.3.2THESTATEOFCURRENTDEVICES

Asdescribedinsection5.5,thereareseveraldifferentdevicesthatcanbeusedasaninputdevice,suchasmobiles,tablets,andHMDs.However,asrevealedfromtheinterviews,furtherdescribedinsection7.3.1,themostinterestingAR-deviceisHMDduetoitsabilityofhandle3D-AR,provideamoreimmersiveexperience,andbeingahands-freetool.

However, HMD experiences constraints. Firstly, several of the respondents were concernedregardingthesize,weightanduncomfortabilityofthesedevices.Secondly,mostofthecurrentHMDaresingle-use-devices,whichmeansthat theyaimtoserveaspecificapplicationor task.Thirdly,thistypeofdeviceisquitenovel,thereforeithasnotexperiencethesameimprovements,asforexamplethesmartphonehas.Further,thisalsomeansthatsomeofthecomponentsthatareunique forHMD,havenotgone through thesamedevelopmentas thecomponent in themoremainstreamdevices.Consequently, theHMDisalsomoreexpensivethanothermobiledevicesandthetechnologyis lessdeveloped.GoldmanSachs(2016)arguethat it isthesecomponentsthatcurrentlyalsodrivethepricesupfor3D-ARdevicesbut,thepricesofthesewillexperience

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similarcostreductioncurveassmartphonesandPCs,henceapricereductionby5-10%annually.However, even if the technology in smartphones and tablets is more mature, the relativeadvantagesdecreaseduetothelackofadditionalvaluepropositions.

Additionally,oneconcernrevealedwasthelimitedfieldofview,andthisconcernseemstomainlyberelatedtoHMD.However,itwasconsideredthattheusergetusedtoitquitequickly.Anyhow,thisconcernhastobeaddressinordertoincreasetheperceivedadvantageswithAR,butlargerfield of view also have some negative consequences. PwC (2016f) argued that the experience“dependsonafewkeyopticalcharacteristics:eyebox(relatestoheadfreedom),fieldofview,andimagequality.Ideally,eachshouldbeaslargeaspossible.However,increasinganyofthemleadstobiggeropticalcomponents,greatersize,moreweight,discomfort,andhighercost”.Therefore,itisa trade-off, and the implication is that a solution to one factormight affect the other factorsnegatively. However, all of those have to be considered in order for AR to be adoptable foreveryoneeverywhere.Further,thelimitedfieldofview,isalsoalimitationwithsmartphoneandtablet.Thiswasnotbroughtupequallyoftenduringtheinterviews,andonereasoncouldbethatpeopleareusedtothesizeofthesedisplays,andthereforedoesnotexpectanythingelse,henceperceivedasgoodenough.

ItwasrevealedthatseveraloftherespondentsdidnotconsideredthedevicegoodenoughforalltypeofAR,andasseeninsection5.5.1.2,thesekindofmobileAR,whetheritisHMD,smartphone,oratablet,stillexperienceslimitations.Forinstance,limitationsconcernedcomputational-andgraphicalcapacities,wherethecomputationalcapacityishighlyrelatedtotheamountofcontentpossibletoprocessandstoreatagivenmoment(Craig,2013), furtherahighercomputationalcapacity would require better battery capacity. Additionally, the battery affect the mobility(GoldmanSachs,2016),aswillbeseeninchapter8mobilityisveryimportantformanyoftheARuse-cases.Currently,small-sizebatterieshavetopoorlifetimeandifthelife-timeisextendedthesizebecometoolargeortoomanyrechargesofthebatteryisneeded.Additionally,Craig(2013)also brought up concerns regarding device interoperability, and this might be even moreundevelopedforHMDsinceitisamorenoveldevice.

Asseeninsection2.5.1.2,atechnology’srateofadoptionaffectsbyseveraldifferentattributes.TherelativeadvantagesofHMDcouldbeconsideredashighercomparedtootherdevicesduetoits additional value propositions. However, since the HMD-device is novel and expensivecomparedtootherdevicesithassomedrawbacks.Forinstance,companieshavetoacquirethedevicewhichisnotthecaseforsmartphonesandtablets,sincemostpeoplealreadyownsone.ThismeansthatthetrialabilityislowerforaHMDcomparedtootherdevices.Furthermore,thecomplexityandcompatibilitywithexistingtechnologyisalsohigherforotherdevicescomparedtoHMDsinceitcouldbeassimpleasdownloadinganapplication.SinceHMDsaresingle-used-devices, it makes the device less compatible with new use areas and new applications, andtherefore higher barriers to acquire such a device. Additionally, the user has likely used asmartphoneortabletbefore,butmostunlikelyaHMD,whichalsoaffectthecomplexity.However,regarding compatibility of values, past experience and needs, there should not be any largerdifferences,andthisisduetothesimilarfunctionalitiesofthedevicesanditisratheranewwaytovisualizethings.Finally,theobservabilitydependenceontheactualuseofitandingeneraltheobservabilityisratheraffectedbythespecificusecontext,ratherthanthedeviceperse.

However,severaloftherespondentsarguedthatthedevicewillbecomebetterinthefutureandsimilarly, this was revealed from Goldman Sachs (2016) and PwC (2016). It was stated that

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current devices have several limitations that is critical in order tomeet customers’ demands.Therefore, the hardware still has some way to go in order for AR to become adopted bymanufacturingcompanies.

7.3.3.3INRELATIONTOTHEPHYSICALWORLD-3D-CAPABILITIES

AnARexperiencetakesplaceinthephysicalworld,thereforetheARexperiencealsohastobeexperienceinthreedimensionsinreal-timeanditisthe3Dcapabilitiesthatmakesthispossible.However,oneofthemainconcerns,revealedfromthefindings,regardstheinput,hencealsothe3D-capabilities.The3D-capabilitiesseemstobeoneofthemaintechnicalconcerns.

The fact that an AR-experience takes place in real-time and in relation to our physicalworldprovidesnewchallengesthathavenotbeenexperiencedbefore.Consequently,priortechnologyhaslimitationsandimpedimentsforusageinAR.Forinstance,ARrequiresthatsensing,tracking,orientation, interaction,modeling, anddisplaying, allmusthappen in threedimensionsand inreal-time (PwC, 2016a). If only one of those abilities are inferior it will affect thewhole AR-experience,asarguedbyAdnerandKapoor(2016)therealizedperformanceofthetechnologyecosystemcanbehinderedbythecomponentsintheecosystem.Therefore,allofthoseabilitiesareequallyimportantfortherelativeadvantages,whichaffecttheadoptabilityofaninnovation,asdescribedbyRogers(2003).

Someofthe3D-capabilitiesinARaremorematurethanothers.Forinstance,PwC(2016f)arguethatthetechnologyusedforgatheringofvisualandaudialinformationissophisticated,matureandcapableofprovidinghighquality.Theexplanationforthiscouldbethesetechnologiespriorapplication areas, such as filming,which aremature areas that have improved by decades ofdevelopments. Therefore, the associated components are alsomoremature. Furthermore, 3Ddisplaysareverygoodandareexpectedtobecomeevenbetter(PwC,2016c),similarlywiththeabovearguing,3Ddisplaysarealsoincludedinothermorematuretechnologies.

PwC(2016c)arguedthatoneofthekeychallengeswith3D-capabilitiesaretoidentifythelocationandorientation,furthertoprovidetherightcontentattherightplace,andtheprogressofthesearestronglyrelatedwith theprogressof3D-capabilities.Thiswas furtheralso foundfromtheinterviews.Forinstance,itwasdescribedthatwhenthedeviceisusedinanenvironmentwheretherearealotofmovingobjects,forinstancepeople,thehologramstendtomovearound.Theimplication is that improvements are needed regarding 3D perception, 3D mapping, and 3Ddisplaying.

Asdescribedinsection5.5,itisimportantthatthephysicalandvirtualmatchpreciselyandchangeaccordingtotheuser’smovementtomaketheexperienceseamless.Therefore,itisalsoimportantthatthe3D-filescanbeprocessedandhandledinanefficientmanner.Inaccordance,PwC(2016a)and Goldman Sachs (2016) argued that processing and displaying of 3D-content have to beimproved.SinceallofthoselimitationspreventadoptionoftheinnovationAR,inaccordancewithRogers(2003)arguingregardinginnovationattributes,theyhavetobeaddressedinorderfortheadoptionofARtotakeoff.

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7.3.3.4CONTENT,CONTENTAUTHORING,ANDAPPLICATION

Asdescribedinsection5.5.2,contentisthekeyelementwithinAR(Craig,2013).Asrevealedintheempiricalfindingsitisimportantthatthetechnologycomestothestatewhereitispossibletoplug-and-play.However,ARhasawaytogobeforethisispossible,andcurrentlysomeofthemainconcernsregardsthecontentandthetime-consumingprocessofcreatingcontent.

Asstatedintheempiricalfindingsitisimportantthattherelationshipbetweencostandbenefithave tobeconsideredand“Thepre-workofusingARshouldnotexceedthebenefits”.However,currently this is the case, and content authoring is one of themain concerns revealed by therespondents.Similarly,PwC(2016f)andCraig(2013)argue thatauthoringmethodsandtoolsused today are complex, require expertise, and in order to create high-quality and accuratecontent,higheffortisneeded.Consequently,therelativeadvantagesofusingARbecomeslower,similarlytheAR-systemisperceivedascomplextouse,andbothfactorsaffecttheadoptionofARnegatively.Inaccordance,PwC(2016f)stated,“authoringmethodstodayarecomplex,fragmentedacrossmediatypes,andnotwellintegrated…ForARtotakeoff,theabilitytorapidlycreate,manage,edit,anddeploy3-Dcontentisoneoftheproblemsthatshouldbeaddressed”.

However,evenifthereareseveralconcernsregardingcontentandcontentauthoringitcouldbeseenthatthereareseveralupcomingcompanieswhoaretryingtosolvethisspecificproblem.Oneof those isVuforiawhoprovidesasoftwarewhere it issimple toconvert files intoAR-format,furthertheirsolutionisperceivedaseasytouse.AnothersuchdevelopmentplatformsarealsoUnity.However,theenteringofthesekindofsolutions,whereascontentauthoringbecomeeasier,implies that the time spend on development of content will decrease. Therefore, the relativeadvantages,thetrialability,hencealsoobservabilitywillincreaseandtheperceivedcomplexitydecrease,whichinaccordancewithRogers(2003)theorywillfacilitatetheadoptionofAR.

However,contentauthoringiseasierandsimplerforgeospatialARsystemsand2DARsystems.Thesedoesnotrequirethesamecomplexitybothregardingtheinputandtheoutput.PwC(2016f)argues that regarding authoringmethods for geospatial AR systems and 2D AR systems it islargelyamatterofcontentdevelopmentandnottheauthoringperse.Therefore,thesesystemscouldprovidehigherrelativeadvantagesandlowercomplexabilitycomparedto3D-ARsystemscurrently.Hence,alsoincreasetheadoptionrateofAR,whilstauthoringmethodsfor3Dsystemsareimproved.

From the interviews it was revealed that current 3D-files are often too large or complex forefficientusage inARand theyusuallyhave tobeadjusted. Similarly, (PwC,2016f)and (Craig,2013)arguedthat3Dcontentisverydataintensive.Therespondentsrevealedseveraldifferentsolutions,forinstance,tocompressorconvertthefilesorprocessingfilesonebyone.However,thesesolutionsaffecttheAR-experiencenegativelysinceiteitheraffectthequality,orrequirealotofextraeffortfromtheuser.Forinstance,thereisalotofproblemofconvertingfilesanditistimeconsuming.

Inaddition, itwasrevealed thateven iforganizationmighthavea large3D-files library, theseexisting3D-modelshavebeenmadeforotherpurposethanusageinAR.However,theimplicationis that the future 3D-files will be AR-friendly, since they have been created with AR inconsideration,andPwC(2016f)furtherstates“AsARauthoringtoolsevolve,thenatureofcontentthatisbestsuitedforARwillevolve”.Inaccordance,itwasrevealedthatinthefuturetherewill

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probablybeastandardwhereallsuppliersoffer3D-modelsthatareARcompatible.However,thecompatibilitycouldbeperceivedashighsincethecompaniesmightalreadyhave3D-files,butasargueditismorecomplexedinreality,andthecurrentcompatibilitywithexistingtechnologyisquitelowforcontent.Therefore,thetrialabilityalsodecreases,sinceitrequiresalotofefforttodevelopcontent,whichinturnnaturallyaffecttheobservabilitysincefewsolutionsaredevelopedandobservable.

Anotherconcernisthatcompaniesoftendoesnotalwaysunderstandthecomplexibilityandtimeconsumingofcontentdevelopment.Forinstancesomepeoplethoughtthateverythingwillbein3DwhenusingthedeviceandtheybelievethattheAR-devicepersecreatesthecontentanddoesnotrealizethatalotofcontenthavetobecreatedinadvance.Further,acomputerissmart,buttasksthatmightbesimpleforahumancouldbeverycomplexforacomputer,asdescribedinsection6.1.This leadstothat featuresoftenhavetobecutoffduetobudget limitationsbaseduponalackofknowledgeregardingthepre-workandcontentthathavetobemade.Consequently,theperceivedvalueandtherelativeadvantagesdecrease,hencealsothewillingnessofadoptingAR,inaccordancewiththeTAMandIDTmodel.

The AR application is the computer program, which interacts with the different technologycomponents (Craig, 2013). Therefore, theuser experienced valueof usingAR comes from thespecific application in combinationwith the hardware abilities. A specific application sets therequirementsonthetechnologicalcomponentsinthedevice.However,sincethetechnologyforARislimitedtodayitfurtherdeterminewhattypeofapplicationsthatcouldbedeveloped.Craig(2013)arguesthattheARtechnologyisnotyetfullydevelopedandthereforefutureapplicationsmightbeabletodothingsthatarenotpossibletoday.Thisisfurtheranalyzedinchapter8.

7.3.3.5INTERACTION

Asdescribedinsection5.5.3interactionisthewaytheusersinteractwiththephysicalworldandthevirtualworld.Thecurrentmethodsusedforinteractionaremainlygestureandspeech,butothermethodscouldalsobeusedsuchaseye-trackingandmotion-tracking(Craig,2013).Thesemethodsarenaturallymoreundeveloped,comparedtotheusageofkeyboardsandmice,duetomorenovelcharacter.Therefore, therearealsocurrentlyseveralchallengesrelatedtocurrentintegrationmethodsinAR.

Oneconcernregardstheefficiencyofusingspecificinteractionmethodsfordifferenttypesoftask,forinstancewritingisnotoptimalinAR,similarlygestureisnotefficientiftheuserneedstohavehisorherhandsfree,asdescribedinsection6.1.Furthermore,themethodscouldbelimitedbytheenvironmentsinceitcouldbenoise,dirty,brightordark,andforinstance,gesturemightnotbeoptimalinabrightenvironmentandaudioorvoicecommandsmightnotbeoptimalinanoisyworkplace(Craig,2013).Additionally,asrevealedintheempiricalfindings,thechallengesalsoconcerntheuser’sexperience,forinstanceergonomicconcernsandthecomfortabilityofusingspecificinteractionmethods,forinstancevoicerecognitioninpublic.

Theselimitationsaffecttheuser’sperceivedusefulness,andperceivedeasyofused,negatively,hence also the adoption of AR, as described in the TAM model. Additionally, the relativeadvantagesofARdecreaseandthecomplexibilityofARincreases,whichalsoaffecttheadoptionofARnegatively,asdescribed in the IDTmodel.Asseen, these limitationscurrentlyaffect the

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adoption negatively, therefore they have to be solved. Similarly, PwC (2016a) argue thatimprovingperformanceoftheinteractionareaisneededinorderforARtotakeoff.

However,sinceARoverlaystherealitywithdigitalcontenttheinterfacesandinteractionmethodshave to becomeoptimized for humans rather than computers (PwC, 2016d).As seen, currentmethodsaremoreintuitiveandnaturalforhumanscomparedtoothermethodssuchasusageofkeyboardsandmice,hencealsoeasiertolearn.Therefore,theimplicationisthatwhenthecurrentchallenges and limitations are solved the factors mentioned above, relative advantages,complexibility,andperceivedeasytouse,willinsteadbepositivelyaffectedbytheinteractionsmethods,hence spur theadoption.Additionally, sinceARcombines real- andvirtualworlds itsupportsmultipletypesofinteractions,andinteractionthatgoesbeyondthepossibilitiesintherealworld(Craig,2013;TechPolicyLab,2015).Therefore,ARmighthavetheabilitytoformnewtypesofinteractionmethods,forinstancereal-timetranslationoftheparticipant’susedlanguage(Craig,2013).Further,PwC(2016d)arguesthattheinteractionmethodsshouldbeprobabilistic.WhenthesetypesofabilitiesoccurtherelativeadvantagesofAR,andtheperceivedusefulnessofAR,will increase even further. Hence, increase the adoption rate, in accordancewith the IDTmodelandtheTAMmodel.

7.3.3.6INDIVIDUALORUSERFACTORS

FromtheinterviewsitwasfoundthatcurrentHMDsareheavyanduncomfortable,thereforeitcould not be used during the whole workday. Additionally, as described previously, theinteractionmethodsmightnotbeergonomicallycorrect,andsociallyacceptable.However, theweight,comfortabilityandeasy-of-useofthehardwareisveryimportantinordertoattractuserssincetheAR-devicewillotherwisenotbeusedbytheemployee.Inaccordance,theTAMmodeladdressauser’sperceivedusefulnessandperceivedeaseofusewhichwillaffecttheuser’sactualsystemuse. In order forworkers touseAR, the technologymustbeperceived as easeof use,thereforeithastobecomfortableandlight.However,thisalsodependsonthespecificuse-areas,sincethesefactorsmightbeoflessconcernsifthedeviceisusedforspecifictasksperformedinlimitedtime.

OnesolutioncouldbetointegrateHMDsintoahelmetthatworkersalreadyuseforsafetyreasons.BythistheAR-abilityorAR-screencouldeasilybeflippedup-and-downinfrontoftheuser’sview.For instance, DAQRI currently is a hardware and software company that develop such AR-solutions.However, thedevelopmentofARpoints towardsboth lighterandmorecomfortabledevices and from a long-term perspective several of the respondents believed AR will beintegratedinordinaryglasses.Asaconclusion,fromtheuserspointofviewthedeviceistodayalimitation for adoption, butwith the right technological development suchproblems could beerased.

7.3.3.7THEPHYSICALENVIRONMENTANDNETWORKCONNECTIVITY

Therearesometechnicalimpedimentsrelatedtothespecificenvironmentwherethetechnologyisaimedtobeused.Asdescribedinsection5.5.1.2,theenvironmentmightaffectthetechnicalcomponentsinamannerthattheydonotworkcorrectly(Craig,2013).Thesecouldbecausedbyhumidity,dirty,noise,temperatureetcetera,butalsobyotherelementssuchassunlightwhereasavoidanceofreflectionofthesunmustbeaddressed.ThesefactorsaffectthepossibleusageofAR, hence also the perceived usefulness, as described in the TAM model, and its relative

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advantages, as described in the IDT model. In accordance, this might affect organizations’adoptiondecision,especiallywithinindustrieswhichexperiencetheseenvironmentlimitations,suchasnoiseanddirt.Further,therespondentswereconcernedthatcurrentdevicesaresingle-use-devices,andtheseenvironmentalfactorsareoneofthereasonsforthesingle-use-devices.Inotherwords,thedevicesarenotgoodenoughtooperateeverywhere,hencealimitationwhichaffecttheadoptionofAR,butasconcludedinmanyotheraspectsitdependsontheuse-case.

SincetheAR-experiencetakesplacein-real-time,inthereal-world-environment,solidnetworkconnection isoftenneeded, especially if theprocessor is availableby the Internet.On theonehand, itwasarguedthatnetworkconnection is toopoor incertainregionsandareas.One theotherhand,iswasarguedthatitispossibletoaccesstheInternetalmosteverywherebytheuseofsatellite-phones.However,eveniftheInternetisaccessibleitmightbethattheconnectionistoopoor,but itdependson thespecificuse-areaand its specific requirements.Therefore, thismight be a limitation in some cases but not all, hence it is important to consider where theapplicationissupposedtobeused,furtheritsrequirementofInternetconnection.Consequently,thiscouldaffecttherelativeadvantages,butasargueditmightdependonthespecificusecase.However,withtheentranceof5GtheInternetcapacityisexpectedtogetbetter,thereforemoredataintensiveapplicationcouldbepossible.

7.3.3.8PRIVACYANDLEGALFACTORS

Theseinputandoutputability,makesitpossibletoconstantlycollectdatafromtheenvironmentwheretheAR-experiencetakesplace,furthercollectinformationregardingtheperformanceofaspecifictask.Forinstance,whenandhowitwasperformedandbywhom.Thiscouldbebeneficialwithinregulatedindustries,forinstancethedrugindustry.Similarly,CambridgeServiceAlliance(2015)arguedthatthistypeofabilitieswillhavemajorinfluencesoninformationaccessinthefuture since it could provide “real-time efficient data access and, increasingly, context-awareanswers”(p.14).Therefore,theinput-andoutput-abilitycouldspurtheadoptionofAR.

However,thesetypesofabilitiesalsoprovideconcerns.Itwasarguedthatoneconcerncouldbethatemployeesinanorganizationdonotwantotherstoknowandseewhattheyaredoingalldays. Further, the question regarding the social accepted of trackingwas revealed during theinterviews.Therefore, this ability couldbean impediment for adoption.Furthermore, it couldaffecttheuser’sperceivedusefulnessasdescribedintheTAM-model,duetotheuncomfortabilityofbeingobserved.

Thereareissuesconcernsprivacyinpublic,butalsoinfringementsofintellectualpropertyandthe right to record in public (Tech Policy Lab, 2015). Furthermore, provision of incorrectinformationorinformationthatcouldbeusedunlawfulorunethicallyinthedecision-making.InthefuturetheremightberestrictionsorlawsthatprohibittheusageofARatcertainplacesorinpublic.SuchalawcouldhavemajorimpactonpossibleusageofAR,hencepreventtheadoptionof AR. These concerns are related to governmental regulations, as described in the TOEframework.

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7.4SUMMARYOFTHEEXTERNALENVIRONMENT-,ORGANIZATIONAL,ANDTECHNOLOGICALPERSPECTIVES

ThetrendsIndustry4.0andServitizationhaveshowntospurtheadoptionofARamongstassetintensivemanufacturers. In a servitization contextAR couldprovidenewor extended serviceofferings to customer, and in Industry 4.0 AR could facilitates for obtain the aim of totallycollaboratingentities.However,AR intrinsically isnot critical for anyof the trends. Further itcouldbeseenthatinaservitizationcontextitcouldbeeasiertomakevalueofARasastand-alonecomponent compared to Industry4.0,whereAR ismoredependenton the implementationofothertechnologies.Additionally,fewincumbentfirmshaveincorporatedusefultechnologiesforthe business transformation. These firms, who lag in their technological adoption, will alsoexperiencealowerneedforatechnologythatsupportamixedrealitycontext.

ThesocialsystemaffecttheadoptionofARinamanufacturingcontext.EarlyadopterswillplayakeyroleaseducatorsandleadthewayfortheadoptionofAR.Theearlymajoritywillfirstadoptwhenthetechnologyisreliableandrobust,andcompellinguse-casescanbeseen.

It is shown that the awareness-knowledge regarding AR have been reached by mostmanufacturing companies. However, the know-how-knowledge differ between companies,furthersomehavereceivedafalseknow-how-knowledgewhichmightleadtodisappointments.AwarenessofAR is importantwhen consideringan investment, and therefore thisknowledgecould facilitate for the adoptionofAR.However, thedisappointments of the technology couldfurtherspurthewaitinggameandtherebyaffecttheadoptionofARnegatively.

ARhasshowntobringbusinessvaluessuchasnewrevenuestreams,costsavingsopportunities,productivityincreaseandqualityassurance,butthishastobedemonstratedtotheorganizationthatevaluatestheAR-application,andtrustedreferencesisofimportance.Itisinthepersuasionphasethatthedecisionmakergetsapositiveornegativeattituderegardingthetechnology.Thepersuasion depends on the knowledge of the innovation, the social system and the degree ofuncertaintythatoccursregardingtheinnovation.Therefore,theprovenrelativeadvantageandtheattitudetowardsARwillaffecttheadoptiondecisionofthetechnology.

The internal resources in the organization; the budget aimed for the investment, if AR iscompatiblewithexistingtechnologyandassets,iftheknow-howisenhancedordestroyed,andtheorganization'scultureregardingadoptionofnewtechnology,affectthewillingnesstoadoptAR.Ifthebudgetislarge,themoreadvancedapplicationscanbeacquired.IfARiscompatiblewithexistingtechnologyandassets,thevalueofboththeARinvestmentandtheexistingtechnologyandassetswillincrease,however,ARhasalsoastandalonevalue.Iftheknow-howisenhanceditismorelikelythatARwillbeadoptedandlastly,ifthecultureisopenmindedandacceptsnewtechnologies,thenitismorelikelythatARwillbeadopted.

AR, irrespectivelydevice,has theability tomerge the realandphysicalworld.However,HMDprovidesadditionalvaluepropositions,namelyamoreimmersiveexperience,themanagementof3D-ARsystems,andishands-freeability.However,theHMDtechnologyis lessdevelopedthanthesmartphone.However,sincethesmartphonehasanestablishedcustomerbasethisimpliesthatARfirstwillbedevelopedforthesmartphonebutwhentheHMDbecomesgoodenough,it

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willprobablytakeovertheexistingsmartphonemarket.TheimplicationisthatAR,bytheuseofHMD,hasthepotentialtobecomeoneofthenextdisruptiveinnovations.

Thecurrentmarketisfragmented,thereisnostandardsneitherregardingdevice,platform,norto describe information. Additionally, new actors are continuously entering the AR industrylandscape.ThisindicatesthatARisintheearlystageofthetechnologylifecycle.Furthermore,allactors in the AR ecosystem are independent of each other and the spread of AR is thereforedependentonthecontributiontothedevelopmentforthewholeecosystem.Duetothesecurrentuncertainties,companiesalsoexperienceuncertaintiesregardinganAR-investment.

There are several limitations related to an AR experience,which prevent the adoption of AR.Furthermore, the elements of an AR experience are interdependent and to increase theperformanceofthewholeexperienceseveralimprovementsareneeded.However,asdescribedAR could have different roles, and depending on the specific usage and context differentconstraintsandinterdependenciesarethemostcriticalonesfortheadoptionofAR.

Currently,themostcriticalelementsarethedevice,the3Dcapabilities,interactionmethods,andcontent and content authoring. There is also limited battery- and computer capacity, andcurrently,thetechnologicalconcernspreventtheadoptiontoalargeextent,butallofthoseareexpectedtoimproveinanearbyfuture.

Deviceconstraintsconcernlimiteddeviceinteroperability,mobility,battery-andcomputationalcapacity, limited-field-of-view, and the single-use-devices issue. Additionally, there areenvironmentaldevicelimitations,andlegalandprivacyconcernsregardingtheinputandoutputcapabilities.Therearealsosomeconstraintsthatconcernthespecificinput-deviceused.ConcernsrelatedtoHMDspecificallyaresize,weightanduncomfortability,andinaddition,HMDsaremoreexpensivecomparedtosmartphonesortablets.

However,whentheselimitationshavebeensolved,someofthosehaveeffectsontheadoptioninareversedmanner.The3Dcapabilitiescouldopenup fornewbusinessopportunitiesandtheinteractionmethodsareintuitiveandeasy-to-learn,hencetheseabilitieswillspurtheadoptionwhen they have improved. Additionally, if the device becomes smaller, more comfortable,andmoremobile,itcouldbeusedforlongerperiodoftimeandhencealsospurtheadoptionofdifferentuse-cases,andtherebyalsoARingeneral.

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8.ANALYSIS;POTENTIALUSE-CASESOFAR

Thefollowingchapterprovidesinsightsregardingspecificuse-casesofAR,andthepotentialofause-case depends on the context, the environment, the specific usage, and the time horizon. Inaccordance,thisalsoaffectsthespecificapplicationandtherelativeadvantagesofit.Thissectionaimstoanswerthesecondresearchquestion:

• WhattypeofAR-applicationscouldbeuseful inanasset intensivemanufacturingcontextandaretheseapplicabletodayorratherinthefuture?

8.1REQUIREMENTSFORTHESPECIFICUSE-CASES

The value andpotential of a specificARuse-case varies.As described in section6.2,mostARapplications are actually possible to develop, but the pre-workwould be too costly and time-consumingandthereforeexceedthebenefitsoftheusage.Furthermore,itmightnotbepossibletoprovideaseamlessexperiencedue topoorcomputationalcapacityandpoordeveloped3D-capabilities. Furthermore, different context, environments, and usage have differentrequirements,hencethemostcriticalconcernsorlimitationswilldiffer.

In figure 8.1 the use-cases, described in section 6.2, have been categorized by how technicaladvanced they are estimated to be. The technical requirements depend mainly on therequirementsof the content, hence indirect on the content authoring, and the3D-capabilities.However,someoftheuse-casescouldbeappliedineasierormoreadvancedmanner,asvisualizedinfigure8.1.

Content 3D-Capabilities Interactivity

RemoteGuidance

3D-models

Dashboarding

SpatialDesign

Warehousepicking

Smart-workinstruction

Virtualdata

AugmentedTraining

Intuitiveinterface

Localization

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ContentRequirements Low Visualizationofinformation(notmodels) Medium Visualizationofsinglemodels(specificpartorproduct) High Visualizationofseveralmodels(severalpartsorproducts) VeryHigh Visualizationof“everything”(manypartsandproducts,e.g.inafactory) 3D-CapabilitiesRequirements Low Display3D-models Medium Display3D-modelsinrelationtoanobject High Display3D-modelsinrelationtoaphysicalenvironment VeryHigh Display3D-modelsinrelationtomovingobjects InteractivityRequirements Low Displaystaticmodelindifferentsize Medium Displayactionmodel(Anactiongivesapredefinedresult) High Displaylayermodel(Moreactionpossibilitiesinseverallevels) VeryHigh Displaymodifiablemodel(Changesinmodelresultinchangesinrealworld)

Figure8.1.Thisfigureshowforeachapplicationwhatthelowestrequirementsareforthethreemostcriticaltechnicalareas forAR.Thecolor to the left is the lowest requirement for theapplication to function in itssimplestformthatstillprovidevalue.Alladditionalcolorstotherightindicatestheadditionalvaluethatcanbeofvaluewhenthetechnologyadvanceforthatspecificapplication.

8.2SPECIFICUSE-CASESOFAR

Thissectionprovidesanalysisofthetendifferentuse-casesofAR.Thisisdonebyevaluatingtheuse-casesfromRogers(2003)adoptionfactors,incombinationwiththeanalysisintheprevioussection.Furthermore,thissectionprovidesinsightofnecessaryimprovementsofARthathastobeinplaceforsuchapplicationstofunction.

8.2.1REMOTEGUIDANCE

Remoteguidance isoneof theneartimeapplications,sincethecurrentAR-technology isgoodenoughforthisusage.ThepreferreddeviceforremoteguidanceshouldbeHMD,duetothevalueof being hands-free. The device should only be used in shorter periods of time, in criticalsituations,when service is requested. If theproblem is critical enough the current single-use-device’sfeaturesandbenefitsexceedsthecostsandrisksofinvestment,andtherebyprovidehighrelativeadvantage.

Thedevice’sweightandcomfortabilitywillnotbealimitationforremoteguidance,sinceitonlywillbeusedduringashortperiodoftime.Similarly,thelimitedfieldofviewwillnotbeandthelimited battery capacity is good enough for shorter and specific usage in critical situation.Additionally, if thedevice isgoing tobeused fora longerperiodof time, thecarryingofextrabatteriesshouldnotbealargerconcerniftheproblemsolvedbyremoteguidanceservesiscriticalenough.

Thereisnoneedtocreatecontentinadvance,thismeansthattheapplicationdoesnothavetobecustomized for thespecificcustomer.Therefore, itcouldeasilybeuseddirectlybycompanies.

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Furthermore,all3Dcapabilitiesofremoteguidancedependonhowtheapplicationtechnicallyisconstructedintermsofbothhardwareandsoftware,andthesynchronizationofthose.However,remoteguidancedoesnothavetobetechnicallyadvancedwithabilitieslikesynchronizecontentwithrealityandothercriticallimitations.Therefore,thesecapabilitiesarenotcriticallimitationforusageinremoteguidance.Although,thiscouldbecomeinterestinginthefuture,butrightnowtheapplicationisgoodenoughforitspurpose.

However, thespecificenvironmentwhere thedevicewillbeusedcouldbecritical.Firstly, thedeviceoperationalabilitymustnotbeaffectedbyenvironmental factors,suchasnoiseordirt.Secondly, remoteguidance requires Internet connectivity for communicationwith someoneatanotherlocation.However,remoteguidancedoesnotrequirehighdatatransferring.Ithasbeenrevealed that at all locations over ground should not be a problem for this type of real-timestreaming,butundergroundandbelowthewatersurfacetheconnectivityiscritical.However,ingeneralforremoteguidance,Internetconnectivityshouldnotcritical.

Theformeranalysisfoundthathowcompatibletheorganization’sexistingtechnologyandassetsarewiththeinnovation,inthiscaseremoteguidance,willaffecttheadoptionofthesolution.Forremoteguidance,atleastfornow,thesolutiondoesnothavetobeintegratedinothertechnologyorassetsand therefore it couldmoreeasilybeadopted.However, in the future,whenremoteguidancewilldevelopfurther,serviceworkviaremoteguidancecouldbestoredinsomesortofdatabaseorERPsystem,inordertoprovideaviewofprevioustasks,customerjoborineducationpurpose.Therefore,whenthisispossible,remoteguidancecouldcreateadditionalvaluebythecombinationofexistingsystemsandAR.

Fromtheservitizationanalysis,aspresentedinsection7.1.3,itcouldbeseenthatservitizationspurtheadoptionofAR.Remoteguidanceisgoodenoughtousetodayanditcouldfacilitateforservice andmaintenance of an asset. In accordance, Jagstedt (2016) argue that a first step ofbecomingaserviceprovidercouldbetoaddserviceupontheproduct,forexamplebyofferingservicesasrepair,maintenanceandtraining.Asdescribed,remoteguidancecouldbeusedtoofferserviceandmaintenanceandtherefore,theservitizationcontextspurtheadoptionandmakeuseof remote guidance. Additionally, as seen in table 4.1, remote communicationwas one of thetechnologiesrequestedbycompaniesinaservitizationcontext.

A remote guidance solution is andwill beused rarely, onlywhen something goeswrong, andcannoteasilybesolvedwithoutexpertise.Remoteguidancecouldbeeasytouseandunderstand,furtheritdoesnotrequireanyintegrationwithothertechnologies.Therefore,thecomplexityofthesolutionislow,whichimpliesthatitiseasytoadoptandincorporatetheapplicationintheorganization.Furthermore,thetrialabilityofaremoteguidanceishigh,comparedtootheruse-cases,sinceexistingsolutionsareavailable,anditdoesnotrequireanyextensiveinstallationinorder to test the solution. Similarly, references of remote guidance are available, for instanceXmReality’scustomers,whocouldprovidecustomerreviews.Therefore,theobservabilitycouldbe considered as high. A summary of the innovation attributes, from a remote guidanceperspective,couldbefoundintable8.1.

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Table8.1.Asummaryoftheadoptionattributesrelatedtoremoteguidance.

Factor Explanation

Relativeadvantage

• Hands-free• Facilitateforserviceandmaintenance• Costsavingpotential.E.g.reducedowntimeand/ortravelcosts• Reducedistance• Knowledgetransfer

Supplier • Awaytochargeforservice

Compatibility • DoesnothavetobeintegratedinothertechnologySupplier

• Couldrequireorganizationalchangeandtherebynotconsistentwithexistingvaluesandpastexperience.

• expertsonaservicecenter• servicetechniciansoutinthefield

Customer • Consistentwithcurrentoperations,justfacilitatetasksthatisalreadyperformed

todayandratheracollaborationandcommunicationtool

Complexity • Easytounderstandanduse

Trialability • Easytotest,duetoexistingsolutionsandnoneedforintegration

Observability • Customerreviewsarevisibletoothers.Thereareexistingusecases

8.2.1.2HOWREMOTEGUIDANCEWILLBEUSEDANDBYWHOM

As seen in the analysis there are organizational factors that affect the adoption of an ARapplicationandtherelativeadvantageoftheapplication.Firstofall,itdependsonwhattypeoforganizationthataregoingtouseremoteguidance.Ingeneral,itcouldbesaidthatitcouldeitherbe a company that are selling complex and asset intensive equipment that are searching forserviceoptions,oritcouldbeanorganizationthataimtouseremoteguidanceinternally.

Forthefirsttypeofuser,theserviceproviders,XmReality’sfounderarguedthatsomecustomersinvest in remote guidance solutions in order to charge for service, and thereby generate newrevenuestreams.Further,itwasfoundthatremoteguidancecanreducetravelcostsforworkerswithinserviceandmaintenance.Forserviceproviders,thebudgetdedicatedtotheinvestmentratherdetermineshowmanyremoteguidancetools thatwillbeboughtorsubscribed.AnAR-device is expensive devices today, even for companies, and many devices are needed for anorganizationalchange,butnotasexpensivecomparedtocustomer’sproductiondowntime.

Asdescribed in theanalysis insection7.1.3,going towardbeingaserviceprovidercouldbeabusinessmodelissue,andthereforeitisratherastrategicdecision.TheglobalproductmanagerforsoftwareproductsatABBRoboticsconsidersthatthetechnologyisnotthehardestpart,butrathertheorganizationalchangeandthecreationandextensionofalltheservicecentersneededto support the service it entails.He considers it tobe a challenge tohave employeeswhoareavailablefortherighttimezone,speakstherightlanguage,andknowalltheproducts.Despiteusageofremoteguidance,theexpertiseisstillneeded,whichmeansthattheknow-howofhowtoserviceandmaintaintheassetsarestill,orprobablyevenmore, important.However, forsuchhugeorganizationalchange,organizationalresistancehastobetakenintoconsideration,itcouldbeachallengeifemployeesseemtobeagainstthechangesinceitisagainstthenormsandvalues.

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For the other type of user, companies who want to use remote guidance internally, remoteguidancewouldratherbeasupportingtoolforcommunicationandcollaboration.Forexample,Volvo used it as a toolwhile theywere setting up a factory in China. For Volvo, the solutionreducedtravelcosts,accommodationcostsandminimizedtherisksofunavailablespecialistwhiletraveling.Therefore, one advantagewith remote guidance is reduceddistance andknowledgetransfer. This implies that remote guidance offer some advantages compared to existingcommunicationtools,suchasmobilephoneorskype,sincetheguidercouldaugmentadditionalinformationandfeaturestotheuser.ThosearethetechnologiesARsupersedes.

8.2.2DASHBOARDING

Derivedfromtheempirical findings,dashboardingrefer tovisualizationofgraphsandspecificmachinefeaturesinconnectiontothemachinebytheuseofAR.Itwasfoundthatthiscouldbeaquite simple application area which is possible to develop today, and requested by manycompanies.Thevalueofdashboardingistheaccesstotherightinformationattherightplaceandattherighttime.Forexample,aservicetechnicianismaintainingamachineandcaninreal-timeviewtheeffectofmaintenancebythemetricsvisualizedinhisfieldofview.Asseenintable4.1,dashboardingwasalsooneofthetechnologiesrequestedbycompaniesinaservitizationcontext.

Roger(2003)arguesthataninnovation’sadoptionratedependsonitsrelativeadvantageoverthe idea it supersedes, and thereby dashboarding could be comparedwith reaching the sameinformationinotherways.Forinstance,theinformationcouldbevisualizedinthecontrolroomandtheemployeehavetobepresentintheroomtoaccesstheinformation.However, it isstillvaluable to have an overview of all measurements in one place, but the extra value withdashboarding is that the employees can get real-time metrics in relation to the machines orsimilar.

Visualization of information requires that there is underlying infrastructure in place,independentlyiftheinformationisgoingtobevisualizedinthecontrolroomorbyanARdevice.Therefore,what could be visualized depends onwhat's beenmeasured. In relation to Rogers(2003) thismeans thatARhas to be compatiblewith existing technology in the organization,which can decrease the adoption rate of dashboarding via AR. In relation to Industry 4.0,dashboardinggoesinlinewithtotallyintegratedentities,sinceitisawaytovisualizesensordata.Further,manycompaniesalreadyhavesensordata,andthereforetheunderlyingtechnologyisalreadyinplace,itjusthastobeconnectedtothecloudtomakevalueofitandtobevisualizedinanARsolution.IoTbyitself isalsoacurrenttrend,andthereforemuchofthisworkisalreadyupcomingorinplace,whichindicatesthatthecompatibilityisnotacriticalaspectfortheadoptionofdashboardingviaAR.Inlinewiththereasoninginsection7.2.4.3,dashboardingisjustasupporttoolforoperationandtherebycompetenceenhancing,andshouldthereforebecompatiblewithexistingnormsandorganizationalculture.

However,someoftherespondentsarguedthatthistypeofuseareadoesnotalwaysmakeuseofAR’s capabilities and therefore it is questioning if AR is the right medium for this type ofapplication.Metricscouldforinstanceinsteadbevisualizedviaanapplicationonatablet,itdoesnotnecessarilyhavetobeperformedbyAR.However,asarguedbefore,muchofAR’svalueisthatishands-freewhichalsoappliestodashboarding.

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Dependentontherequestedcomplexityofdashboardingtherewillbedifferentrequirementsonthetechnology.Forinstance,ifitonlywillvisualizeinformation,itispossibletodayonexistingdevices,suchassmartphonesandtablets,butatrackerorbarcodeisthenrequiredinordertoknowwhat information tovisualize.Although, thevalueofbeinghands-freewillnotapply forsmartphonesortablets. Ifa3D-ARsysteminstead isrequired,currentsmartphonescannotbeused,andthenitisrathertheupcomingsmartphonesorHMDsthatcanbeused.AnexamplecouldbethatARisgoingtovisualizewhatbussesthatneedtochangebrakepadsbycolorthemred.ThiswillonlybepossiblewiththemoreadvancedtypeofAR-systems.

Moreover,dashboardingisauseareathatcanproceedinmanydirections,andthereforeitcouldbe of great value to test this type of application in an organization by the use of existingsmartphoneandtablets,sinceitthendoesnotrequirealotofinvestment.ThiswiththeargumentofbeingpreparedforupcomingvaluesofwhatcouldbepossiblewhenbetterAR-devicesenterthemarket.DashboardingbysmartphonewillprobablyemergeintheupcomingyearsduetotheIoTtrend,thelowtechnicaladvancementofthistypeofapplication,andduetocuriositytotestARin-house.Asummaryoftheinnovationattributes,fromadashboardingperspective,couldbefoundintable8.2.

Table8.2.Asummaryoftheadoptionattributesrelatedtodashboarding.

Factor Explanation

Relativeadvantage • Accesstherightinformationattherightplaceandattherighttime• Hands-free

Compatibility • Underlyingtechnologytoaccessdatahastobeinplace• Hastobecompatiblewithexistingsensors/IoT

Complexity • Couldbetime-consumingtointegratewithexistingsensors/IoTorothertechnology

Trialability • Noteasytotestbeforeimplementationinthespecificorganization

Observability • Existinguse-casesofthisapplicationtoday

8.2.3VISUALIZATIONOF3DMODELS

ARcouldbeusedinordertovisualize3Dmodels.Sincethisabilitycouldbeusedfordifferentpurposeprovidingdifferentbusinessvalue,theanalysisisdividedintodesignphase,salesphase,but also visualization of real-size objects. A summary of the innovation attributes, from avisualizationof3Dmodelsperspective,couldbefoundintable8.3.

8.2.3.1DESIGNPHASE

From the interviews and panel discussions it was revealed that one of the biggest near timebenefitsofARforassetintensivemanufacturerscouldbefoundinthedesignphase,intermsofvisualizationandproductdesign.Aconcernthatappearedwasthatthedesignofanassetoftenisverycomplexandcollaboration isnoteasy ina largegroupofpeoplewithdifferentskillsandexpertise,sincetheyrarelyhavethesameunderstandingandperceptionof3Ddata.However,misunderstandingsarecostly,andcost-savingsareoneopportunitybyusingARforvisualizationof3Dmodels.Furthermore,itwasfoundthattheproductdevelopmentismoreeffectivewhilst

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thediscussionisarounda3Dobjectcomparedtoviewsketches,ormodelsonaflatscreen,hencetheunderstandingincreases.

Visualizationof 3Dprototypes inAR is possible today, andmany companieshave existing3Dcontent,suchasCAD-modelsorothertypesofvisualdata.ItcouldbecomplicatedtogetthefilesintoAR,butitispossible.However,thereareseveralupcomingtoolsforeasierconversionoffiles.InthedesignphasetheuseofARviaHMDcouldprovideamorecompellingunderstandingofanobject,hencefacilitatethecommunicationaroundit.Forsomedevices,itispossibleforseveralusers toshareanARexperience.Thismakes itpossible foreveryone toviewthesamevirtualobjectsimultaneously,andincomparisonwithVRtheparticipantsareabletoseeeachother’sfacialexpression,whichcouldbeanimportantaspect.Thismeansthattheusercancollaborateandcommunicate inawaythat isuniqueforAR,andthereforehavenotbeenpossiblebefore.Although,thesynchronizationofdevicescouldbeproblematic.

Itcouldbetimeconsumingandpossiblycomplextodotheuploadinginthedevice.Furthermore,objecthastobeuploadedonebyoneinARandthismeansthatthedeviceonlycouldprocessthefilesolely,andthereforeobjectscannotbecomparedbesideeachother.Alloftheaboveissuesincrease the complexity of an AR experience, which can prevent the adoption of such an ARapplication.However, ifthetechnologicaldevelopmentcontinuesastodayitwillbecomemoreusableinthefuture.Inthefutureitmightbepossibletoquicklysendmodelstoeachotherinthedevelopment team and ask questions, and thereby even further prevent misunderstandings.Additionally, in the future, people from different places in theworld could gather around anobject,seeeachotherasavatarsthatalsohavethesamefacialexpressionsasintherealworld.Although,forsuchfeaturesinAR,manyissueshavetobesolved.

8.2.3.2SALESPHASE

Ifthereexistdigitalcontentoftheassetthatwillbesold,itwasrevealedthatARcanbeausefultool in thesalesphase.Thiscouldenhance themutualunderstandingregardinghowtheassetshouldfunctionforoptimaluse,whichinturncouldresultinhighercustomersatisfaction.AsinthecaseforABBRobotics,theproductisnowadaysdigitallypresented,butona2Dscreen.WithAR,thenextstepcouldbetoprojecttheproductontheconferencetableasahologram.However,thesamelimitationsapplyinthesalesphaseasinthedesignphase.Inthesalesphase,itcouldbeargued that it is more critical that the device function appropriately since it could affect thecustomer’sexperienceofthecompanyandthesalesmeeting.

8.2.3.3REAL-SIZEOBJECTS

Visualizationof3Dprototypescouldbeespeciallyvaluablewhenmodelsshouldbevisualizedinrealsizeattheirintendedlocation.Manyindustriescouldgetuseofthisfeature,forexamplerealestatecouldvisualizetheirbuildingsatitsintendedlocation,orinafactoryanewmachinecouldbevisualizedwhereitissupposedtostand.However,currentlythisismainlyappliedasconsumerapplicationsviasmartphonesandtablets.Today,thisisdonebyusingtrackers,andthereforethe3D-capabilities are not critical for this usage. However, this usage will become even morewidespreadandvaluablewhen the3D-capabilitieshave improved, since theobject thencouldmatchmorepreciselytothephysicalenvironment.Additionally,evenifiscurrentlyispossibletovisualizebigobjects,buttheheadmustbetiltedanditwouldbehardtounderstandtheobjectbetter,thereforethefieldofviewiscurrentlyalimitation.Moreover,currentlyHMDsarelimited

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to in-house usage, which further limits the usages of visualization of 3D content. Therefore,visualizationofreal-sizeisnotasbeneficialtoday.

Table8.3.Asummaryoftheadoptionattributesrelatedtovisualizationof3Dmodels.

Factor Explanation

Relativeadvantage

• Facilitateforcollaborationandcommunication• Facilitateforagreaterunderstanding• Canuseexistingdigitalcontent

DesignPhase• Visualizevirtualprototypesandtherebycuttingtimeandexpensesrequiredto

developphysicalmodels• Costsavingsduetofasterdesigncycles

SalesPhase • Bettercustomerrelationbybettercustomerunderstanding

Realsizeobjects • Realsizevisualizationattheintendedlocation

Compatibility • Doesnothavetobeintegratedwithexistingtechnology• Compatiblewithexistingdevelopmentworkandsalesprocedures• Reuseofexisting3D-files

Complexity • Couldbecomplextoconverttheexisting3DfilestoARfiles• Couldbecomplextouploadthefiles• Couldbecomplexwiththesynchronizationofdevices

Trialability HMD• Couldbetestedatfairsorinsalesmeetingsbutadeviceisneededandthecontent

mustbeconvertedtoAR-friendlyformatSmartphoneandtables

• Sameforthesedevices,butitisamoreavailabledevice

Observability HMD• Thereexistsuse-casestoday

Smartphoneandtablets

• BytheuseofsmartphoneandtabletstherearemanyexistingcasesforvisualizationofamodelorobjectinAR

8.2.4SPATIALDESIGN

Fromtheempiricalfindings, itemergedthatcompaniesfinditvaluabletovisualizethefactoryfloorandhowitwouldlooklikeandfunctioninthefuture,whichbothARandVRcanbeusedfor.Therefore,ARcanbeusedasaplanningtoolforfactories.TherelativeadvantageofusingARisthatitcouldbringamorerealisticvisualization,minimizetheriskofpoorlyoptimizeduseofspaceandquickerresponsetotheintendedchange.

ThistypeofapplicationrequirethattheARdeviceareabletoscanthephysicalenvironmentandprovidecontentinrelationtothisenvironment,forexampleamachineatitsintendedlocation.Therefore,theobjecthastobeinreal-size,thisinordertoprovidebetterunderstanding.Thisuse-case requires development of the 3D-capabilities, furthermore the same limitations regardingreal-sizeobject,asdescribedinsection8.2.3.3,alsoappliesforthisuse-case.Additionally,alotofcontentisrequired.However,dependingonthespecificcase,theaccuracyrequirementsdiffers.

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Asummaryoftheinnovationattributes,fromaspatialdesignperspective,couldbefoundintable8.4.

Table8.4Asummaryoftheadoptionattributesrelatedtospatialdesign.

Factor Explanation

Relativeadvantage

• Morerealisticvisualization• Minimizetheriskofpoorlyoptimizeduseofspace• Quickerresponsetotheintendedchange

Compatibility • Donothavetobecompatiblewithexistingtechnology

Complexity • Thisistechnicallyadvancedanditrequirestheabilitytoscanthephysicalenvironmentandprovidecontentinrelationtothat,thereforethe3Dcapabilitieshavetoimprove.

• Alotofcontentisrequired

Trialability • Cannotbetestedwithoutthespecificcontentinthespecificenvironment

Observability • Currentlyalackofexistinguse-cases

8.2.5VISUALIZATIONOFVIRTUALDATA

ARhastheabilitytoshowthingsintherealworldthatcurrentlyonlycanbeshowninthevirtualworld. From the interviews, there arose example such as virtualmotion paths from a robot’smovement.Insuchcase,hologramscouldbesynchronizedwiththerealityandtherebymergethedigital content (holograms) with the real world (the physical object). Therefore, the relativeadvantageistovisualizeinvisiblethingsandthiscannotbecomparedtoanythingelse,sincethisisanewability.However,theusageofsuchabilityshouldbeusefulinthefuture.

Fromatechnicalpointofview,thereisalongwaytogoinorderforthisabilitytobeapplicable.Firstly,theinformationmustbedigitizedinanARfriendlyformat.Secondly,thedigitalcontentmustbeabletosynchronizeverypreciselywiththephysicalobject.Thirdly,thecontentmustbeabletoattachtoamovingobject.Currently,thetechnologyisnotaccurateenoughtoplacethehologramtogetherwithamovingphysicalobject,and the3D-capabilitiesbutalsomanyothertechnicalaspectshastoimprove.Asummaryoftheinnovationattributes,fromavisualizationofvirtualdataperspective,couldbefoundintable8.5.

Table8.5.Asummaryoftheadoptionattributesrelatedtovisualizationofvirtualdata.

Factor Explanation

Relativeadvantage

• Visualizethingsintherealworldthatpreviouslyonlyhasbeenpossibletovisualizeinthevirtualworld

• Synchronizationofthedigitalcontentwiththereality

Compatibility • Hastobecompatiblewiththeentityandthedatathataregoingtobevisualized

Complexity • Thedigitalcontentmustbeabletosynchronizeverypreciselywiththephysicalobject,furtherthecontentmustbeabletoattachtoamovingobject,whichisnotpossibletoday

Trialability • Cannotbetestedbeforeapplicationswiththisabilityaredeveloped

Observability • Nouses-casesexiststoday

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8.2.6LOCALIZATION Oneuse-caseofARwouldbeguidanceinfactories,forexampletofindtherightmachineortofindobjectsthatarehiddenbehindawall.Forthefirstexample,therelativeadvantageofARwouldbeaugmented guidance and it could be compared to a personal guidance. The extra value ofaugmentedguidanceisthatthepersonguidedisnotdependentuponanotherpersonknowledge.Technically,thisrequiresthatthedeviceknowswherethesearchedobjectislocalizedandwheretheuserislocalized,andbythistheapplicationcouldprovideinformationonhowtogetthere.Anordinary GPS-system, such as Google Maps, does not yet have data or maps for indoorenvironment. In comparison, localization by AR could be provided by scanning the physicalenvironmentandinrelationtothatlocalizethedirectiontowardstheobject.Ifthereareexistingdataormapsthesecouldbereused,butthenitisimportantthatthedataisup-to-date,otherwiseitisuseless.

Forguidancebyscanningoftheroom,contentisstillneededbutbyscanningtheroomchangescouldbeconsideredevenifthecontenthasnotbeenupdated.Forthesecondusage,guidancebypre-createdmaps,itisacombinationofalotofcontentand3D-capabilitiesinordertoorientateand locate the object and the user. For this usage, the application requires less 3D-capabilityimprovementsbutinsteadmorecontent.Forboth,itisacombinationofalotofcontentand3D-capabilitiesinordertoorientateandlocatetheobjectandtheuser.Therefore,bothoftheseareashavetoimprove.However,forusagebaseduponreal-timescanningoftheroomevenbetter3D-capabilitiesareneeded.

Inadditiontoonlyguidingtheuser,theapplicationcouldalso“light-up”ormarkthesearchobjectintheuser’sfieldofview.Forinstance,iftherearealotofsimilarmachinesorobjectsthesearchedonecouldbecoloredbyAR inorder todistinguish it fromtherest.Thisapplicationmightnotrequire predefined content, but still 3D-capabilities, especially distance or depth sensing, incombinationwithsensordata.

Furthermore, as stated above, the usage could also provide localization of hidden objects, forexamplevisualizationsofpipesinthewallsinafactory.Amoreadvancedformofthiscouldbetoprovideawholemapofthehiddenobjects,forinstanceallpipes,electronicsandcables,thatareplacebehindthewalls.Fromamaintenanceperspectivethiscouldbeofhighvalue,sinceitcouldprovideinformationoftheexactpositionofanobjectinrelationtootherobjects.However,fromtheinterviewsitemergedthatthisrequiresthattheunderlyingdata/sketchesreflectsthereality,butthatisbarelythecase.Therefore,suchapplicationisonlyvaluableiftheunderlyingdataiscorrect,andup-to-date,anditmightnotbebeneficialtoconvertalloriginalsketchestodigitalcontentsinceitcurrentlywouldbeverycostlyandtimeconsuming.However,fornewobjectsandbuildingsitcouldbevaluabletoprovidethiskindofdatainanAR-friendlyformat.Furthermore,ifthedevicecouldscantheenvironmentandincorporatethisdatainasystem,thenthisuse-areacould become truly valuable since the data would reflect the reality. Although, this sets highrequirementsonthedevelopmentofthe3D-capabilities.

Ingeneral,allofthoselocalizationusagesrequiresimprovementsofthetechnology.Asummaryoftheinnovationattributes,fromalocalizationperspective,couldbefoundintable8.6.

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Table8.6.Asummaryoftheadoptionattributesrelatedtolocalization.

Factor Explanation

Relativeadvantage

• Localizationandvisualizationofobjects(unhiddenandhidden)• Time-savings• Notdependentuponanotherperson'sknowledgeortime

Compatibility • Needunderlyingdata,andcouldthereforehavetobecompatiblewithexistingsystems

Complexity • Thedevicehastobeawareofthephysicalenvironmentandprovideguidanceandcontentinrelationtothat

• Digitalcontenthastoreflecttherealityandconstantlybeupdated

Trialability • Cannotbetestedwithoutthespecificcontentinthespecificenvironment

Observability • Lackofuse-cases

8.2.7WAREHOUSEPICKING

Asdescribedintheempiricalfindings,warehousepickingbytheuseofARdevicescanresultinproductivityincrease,andthereforeitisseentohaveahugepotential.WarehousepickingviaAR,functionasaqualitychecksinceitcouldscanthebarcodeandtellifitistherightproductspicked.Dependingonhowthistypeofapplicationisdevelopeditcouldforexamplevisualizetheorder,howmanypackages that are going to be picked at each place, visualize the optimal route forpickingandsoforth.However,muchofthestatedfeaturesdependsonothertechnologythanAR,andthereforecouldrequirecompatibilitywithexistingornewtechnology.

Therelativeadvantage,asdescribedastheideaitsupersedesbyRogers(2003),isthatworkerscanhavetheirhandsfreewhileperformingthework,butalsogettherightinformationattherighttime in their field of view. Currently, orders are often on papers, or a scanning device in theworker'shandsisbeingused.

Currently,butdependingonhowtheapplicationisbuild,thisistechnicallypossible,sincethereis noneed for advancedAR systems toperform such typesof application.The limitations arerather that thiswillbeahuge investment foracompanyand itwill take timetodevelopsuchsystem. AR is just a device to visualize what the system generates. Further, it involvesorganizationalandprocesschanges,whichisoftencritical.Therefore,thecompatibilitywiththeculture and norms is also critical, further the complexity could be considered as high. Thoseaspectsindicatethattheadoptionofsuchapplicationwillbelimited.However,companiesthatgothroughsuchchangecouldachieveacompetitiveadvantageoverothersduetohigherefficiencyandhigherqualityofthedelivering.

Evenifitistechnicallypossibletoday,theformfactorofHMDslimitstheusabilitysinceitcannotbeworn foreighthoursaday.However, since there isnoneed fora technicallyadvancedARsystems, lighter technologies likeGoogle-glasses and similarmightbe goodenough.However,whentheformfactorimproves,thistypeofusagewillprobablybeofgreatvalueforwarehousepicking.Asummaryoftheinnovationattributes,fromawarehousepickingperspective,couldbefoundintable8.7.

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Table8.7.Asummaryoftheadoptionattributesrelatedtowarehousepicking.

Factor Explanation

Relativeadvantage

• Productivityincrease• ImprovequalityofdeliveryduetoqualitycheckbytheARsystem• Therightinformationattherighttimeintheworker'sfieldofview• Hands-freevalue(HMD)

Compatibility • Mightnotbecompatiblewiththeorganizationalculturesinceitrequiresorganizationalandprocesschanges

• Requireintegrationwithcurrentornewtechnologies/systems

Complexity • Timeconsumingandcostlytodevelopsuchsystems• ComplextointegratewithARdevices

Trialability • Noteasytotestbeforeimplementationinthespecificorganization

Observability • Lackofexistinguse-cases

8.2.8SMARTWORKINSTRUCTIONS

PwC (2016h) describes smart work instruction as ”smart glasses that help track and guidecomplicated assembly processes to ensure that all parts are assembled in the right sequencewithoutthedowntimeofconsultingaclipboard,manualoreventablet”.Furthermore,smartworkinstructionscanbeusedforlessrepetitivetasks,suchasreappearanceofaspecificmachine.Forsuchtasks,itcouldbeevenmorevaluablewithguidedinstructionsespeciallyiftheyarecriticalforoperationstofunction,sincetheyarenotrepeatedveryoftenanditiseasytoforgethowtoperformthem.

Roger(2003)considersthataninnovation’sadoptionratedependsonitsrelativeadvantageovertheideaitsupersedes,andthereforesmartworkinstructionscouldbecomparedwiththesamework instructions that in many companies are placed in binders today. However, from theinterviewsitarosethatworkersdonotusuallyusethosebinders,andinsteadtheydeveloptheirown“bestpractice”instruction,whichcouldresultinqualityproblemsandincorrectassembling.Furthermore,thosebindersmightnotbeupdated,whichmanytimescanbeacriticalproblem,especiallyfornewworkers.Ifsmartworkinstructionscansolvesuchcriticalissuesbyguidance,thenitwillsupersedethecurrentidea.Otherrelativeadvantagesarethepossibilitiesforeveryoneto have the same updatedwork instructions, further improved overall quality byminimizingdefectsandreconstructingofanasset.Moreover,itopensupforpossibilitiestoperformnewtasksthattheworkershavenotbeentrainedfor.Anadditionalaspectisthatsmartworkinstructionscouldbeasolutionto”theageingworkforce”issue.Ifitispossibletodigitalizetheknow-how,theknowledge could stay in the organization instead of disappearing with retiring work force.Furtheritcouldbeusedfortrainingofnewemployees.

SmartworkinstructionrequiresthattheworkinstructionsaredigitalizedandthatthetheyareinAR-friendlyformat.Thiswillprobablybeacostlyandtime-consumingwork.Thefactthatthereis no current AR-format standard, couldmake it risky to create content today, since it couldbecome useless when a standard emerges. Furthermore, when changes in an operation arerequiredtheworkinstructionshavetobeupdateddigitallywhichwillbeevenmoreimportantsinceemployeesconstantlywillhaveitintheirfieldofview.Although,thisalsohavetobedone

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bycurrentsystemsbutwithARtheinstructionsdonothavetobeupdatedmanually.However,withsmartworkinstructionsinARthepersonthatnormallyisupdatingtheinstructionsneedtoacquireARknowledge,orthecompetencehastobeboughtin.

Dependingoniftheworkinstructionsaregoingtobeasimplechecklistintheworker'sfieldofview,orif it isgoingtobeaguidanceandqualitycheckwhilstthetaskisperformed,differentcomplexityofAR’scapabilitiesisrequired.Forthefirstcase,theapplicationispossibletoday,alsofromatechnologicalperspective,however,itcouldbediscussedifARistherightsystemforthis.Inthe lattercasetheapplicationrequiresamorecomplexsoftware,morecontent,andamoreadvancedhardware.Forthismoreadvancedapplication,the3Dcapabilitiesarecurrentlylimitingthe full potential for smart work instructions. Furthermore, as considered in the interviews,workers cannotwear thedevices eighthoursadaydue to the form factor.Therefore,both totechnology and the form factor are currently limiting themore advanced formof smartworkinstructions, and it will probably not be a good solution nowadays for asset intensivemanufacturers. A summary of the innovation attributes, from a smart work instructionperspective,couldbefoundintable8.8.

From an organizational perspective, smart work instructions will probably not requireorganizationalchange,sinceARratherprovidessupportfunctionalityforexistingtasks,butwithpotentialforincreasedoverallquality.Eventhough,resistancetochangedoesalwayshavetobeconsidered, since this application might not be compatible with existing norms in theorganization. Further, thiswillmost likely require integrationwith existing technology in theorganization, at least systemswhere thework instructionswill be stored.However,when theworkinstructionsbecomedigitalizedtherequirementsofworkers’specificknowledgeofatasksbecome less important. Therefore, it is important to consider how this will affect a worker’smotivation.FromanIndustry4.0perspectivesmartworkinstructioncouldbeseenasonesteptowardstotallycollaboratingentities.Assaidbefore,Industry4.0referstothedigitalization,andintegration, of all physical assets in the ecosystem and throughout the whole value-chain.Therefore,Industry4.0shouldalsorefertointegrationofinstructionsandnotjustentitiesandtechnology. From a servitization perspective, while selling a machine, producers couldincorporatecontentforARintheirofferings.Forexample,howtorepairthemachine.

Table8.8.Asummaryoftheadoptionattributesrelatedtosmartworkinstructions.

Factor Explanation

Relativeadvantage • Improveoverallqualitybyminimizedefectsandrestructuringoftheasset.• Workerscouldalwayshavethecorrectandlatestupdatedversion• Possibilitiestoperformtasksthatworkershavenotbeentrainedfor• Knowledgewillstayintheorganizationandeasilytransferred

Compatibility • Mightnotbecompatiblewiththenormswithinthesocialsystem• Requireintegrationincurrenttechnologyorsystems

Complexity • Time-consumingandcostlytocreatethecontent• Time-consumingtointegratewithexistingtechnology• Requiredtoalwayshaveupdatedwork-instructions,andcompetenceforthis

Trialability • Noteasytotestbeforeimplementationinthespecificorganization

Observability • Lackofexistinguse-cases

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8.2.9AUGMENTEDTRAINING

Inmanyothersectorsaugmentedtraininghasalreadystartedtoemerge,forexampleinmedicinewhereitispossibletoexplorethehumanbody.Thisisalsopossibletoapplyinmanufacturingenvironment,asthereisahugeneedtoperformaugmentedtraininginordertobothreducecostfortrainingormaketrainingmoreaccessible.Furthermore,fromtheinterviewsitemergedthataugmented training can be suitable for practice on dangerous tasks or situations. ThosepossibilitiesarerelativeadvantagesoftraininginARsincethoseopportunitiesiswhatsupersedestraditional training. Furthermore, it is proven that training ismore efficient inAR, since suchtrainingincreasesthelearningrate.Researcheshaveshowedthatthehighestlearningratecomesfrom visual-interactive experiences and training in AR has all three. Moreover, by performtraininginaugmentedenvironmentsitispossibletomakemistakeswithoutrealconsequencesandthesimulationscouldberepeatedmanytimes.

Insteadof travel to the suppliers training facility, the supplier couldoffer augmented trainingpackages either in AR or VR, which further could make it possible to generate new revenuestreamsforthesupplier.Whatmediumthat ismostsuitabledependsonwhattypeoftrainingbeingrequested. Ifdrawingparallels toservitization,augmentedtrainingcouldbecomeanewtypeofserviceoffering.ThisgoesinlinewithJagstedt's(2016)arguingofaddingtrainingasaservice,butitcouldalsobetakenastepfurtherbyofferingaugmentedtrainingasaservice.

One example of training couldbewith interactivemodels,which couldbemodel that has theabilitytobeseparateintodifferentlayers,inordertounderstandforexamplethefunctionoftheengineormachinebetter.Thisistechnicallypossibletoday,butasdiscussedinsection6.1.8,acomputerisnotintelligentenoughandalllayersmustbepre-programmedandthereforeitisatime-consumingapplicationtodevelop.Asfortheotherapplicationsmentionedinthissection,itiscurrentlyarisktodevelopcontentsinceitlateroncanemergeotherstandards,andthenthecontent developed will become useless. However, augmented training could be developed inmany other ways, and therefore it is hard to consider what will be required and not from atechnicalpointofview.Itdependsifexistingcontentwillbeused,ifitwillbeinteractivemodels,iftheenvironmentwillbemapped,andifsituation-specificinformationwillappear.Therefore,the complexity of training could vary from everything between high and low.However, sincetraining isasimulatedenvironment insomeway, itwillprobablynothavetobe integrated inexistingtechnology,andthereforeitwillnothavetobecompatiblewithexistingtechnology.Iflookingatthefuture,manufacturingcompaniescouldhaveavirtualtraininglibrary,thatmakesiteasier,moreaccessible,andlesscostlytoperformtrainingandeducateemployees.Asforsmartwork instructions, augmented training could be a way to keep know-how digitally in theorganization,andthereforebeonesolutiontotheagingworkforce.Asummaryoftheinnovationattributes,fromanaugmentedtrainingperspective,couldbefoundintable8.9.

Table8.9.Asummaryoftheadoptionattributesrelatedtoaugmentedtraining.

Factor Explanation

Relativeadvantage

• Reducecostfortraining• Maketraining/educationmoreaccessible• Possibilitiestodopracticeindangerousenvironmentsorperformdangeroustasks

withoutrealworldconsequences• Thetrainingcouldberepeated• Higherlearningrate

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Compatibility • Sinceitiscompetenceenhancingitshouldbecompatiblewiththeorganizationalcultureandnorms

• Doesnotrequireintegrationofcurrenttechnologiesorsystems

Complexity • Time-consumingandcostlytocreatethecontent

Trialability • Noteasytotestbeforetheapplicationforthespecificorganizationisdeveloped

Observability • Thereexistsuse-casesofthisapplicationtoday

8.2.10INTUITIVEINTERFACES AR opens up for possibilities to create new type of interfaces that aremore intuitive for thehumans. From the interviews itwas found that new interfaces could create newmarkets, forexampleintherobotarea.Newinterfacescouldloweranorganization'srequiredcompetenceofowningarobot,andthereforerobotscouldbecomeavailableforsmallerorganizationsaswell.

However, technicallythis iscurrentlynotpossible.Firstofall,underlyingsystemshastobe inplace and react on the action performed in AR. Secondly, the device must be able to scanmovementsandmapthatasinputforthesystem.Inthefuture,thiswillbecomepossibleandbringmany new opportunities, currently it is complex and not compatible with existing systems.Further, this will change human habits, and therefore it could take longer time to becomecommonplace.Asummaryofthe innovationattributes, fromanintuitive interfaceperspective,couldbefoundintable8.10.

Table8.10.Asummaryoftheadoptionattributesrelatedtointuitiveinterfaces.

Factor Explanation

Relativeadvantage

• Intuitive,andthereforeeasiertolearnanduse• Lowertherequiredexpertise

Compatibility • Thishastobecompatiblewithcurrentandnewsystems,butalsowiththeentitiesthatarebeingprogrammed

Complexity • Theunderlyingsystemshastobeinplaceandreactontheaction.• Thedevicemustbeabletoscanmovementsandmapthatasinputforthesystem

Trialability • Noteasytotestbeforetheapplicationisdevelopedforthespecificorganization

Observability • Noexistinguse-casesexisttoday

8.3INSIGHTSOFCURRENTANDFUTUREPOSSIBILITIESWITHAR

It has been found that there are several aspects that affect an adoption decision from an ARinvestment.Firstly,itdependsonthecompetitiveexternalenvironmentandcurrenttrendswithintheindustry,whichisdiscussedinchaptersection7.1.Secondly,itdependsontheorganization'sknowledgeaboutthetechnology,thesocialsystem,theattitudetowardsthetechnologyandhowwelltheinternalresourcesinanorganizationarealignedwithAR,whichisdiscussedinsection7.2.Thirdly,itdependsonthetechnologicalaspects,whichisdiscussedinsection7.3.Finally,itdependsuponthespecificuse-caseandhowsuitableitisfortheissueitaimstosolveorfacilitate,whichisdiscussedinsection8.2.

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Theconvergesofthephysicalandvirtualworldincreasesthecommunicationpossibilitiesandtheamountofavailableinformation,andasarguedARhasthepossibilitiestocontextualizeit.Deloitte(2016)predictthatARhavethepossibilitytochangehowthebusinessandtheemployeesintheorganization share information and take decisions. Furthermore, PwC (2016b) stated, “peoplelookatoperationsfromacombinedviewofdigitalandphysicaloperations”.Ingeneral,itcouldalsobeseenthatalldiscusseduse-casesinsection8.2.regardseithercommunication,visualizationorboth.Therefore,itcouldbeconcludedthatARisacommunicationandvisualizationtool,furtherAR’smainvalueistoincreasedunderstandingandfacilitatecollaboration.

8.3.1INSIGHTSFROMASHORT-TERMPERSPECTIVE

Thefocusinshorttime-horizonshouldbeonapplicationswhereAR’scurrentlimitationsarenotcritical, andwhere theapplication solves a criticalproblemandprovideshighbusinessvalue.Therefore,neartimeusageshouldfocusesonthefollowing:

Firstly,neartimeusageshouldfocusonreuseofexistingcontent.Manycompaniesalreadyhaveexisting 3D content, such as CAD-models or other types of visual data, which with somemodificationscouldbeused.However,theproblemisthattheexistingtoolsforcompressingormodifying3DcontentintoAR-friendly3Dcontentarenotsophisticated,furtherthefilesmustbeprocessedone-by-one.Therefore,thisusageshouldstillbeforsingleoccasionsandmodels,andtheperceivedvalueofthevisualizationmustexceedthepre-workofmodifications.Furthermore,there isariskof that theemergingstandardofARdoesnotmatch thedevelopedcontentandthereforeitwillbecomeuselessinthefuture.However,itisapossibilitytomakeuseofexistingcontentandgetthingsintopracticalapplicationquickly,thereforeitcouldbeagreatopportunitywithin several areas in order to increase understanding and facilitate for communication andcollaboration.

Secondly,neartimeuse-casesshouldfocusonspecificshort-timeusageapplications.Currently,itisnotpossibletousetheHMDsforalongerperiodoftimessinceitisheavyanduncomfortable,furthertabletsandsmartphones,donotofferthehands-freepossibility.However,therecouldstillbeofvaluetovisualizevirtualcontentinshort-termtasks,especiallyincriticalsituationswherecostoferrorisveryhigh,andwherethetaskisnotrepeatedveryoften.

Thirdly,neartimeusageofARshouldfocusonlowrequirementsofthe3D-capabilities.Currently,mostofthe3D-capabilitiesareimmatureregardingintegrationofvirtualcontentinrelationtoreal environment and objects. Therefore, usage should focus on applications where it is lessimportant to provide virtual content in correlation with the real world in an accurate andseamlesslymanner. Inotherwords,where it is important that therightcontent isat therightplace.Thisespeciallyregardsmovingobjects.

Asvisualizedinfigure8.2,thebusinessvalueandtechnologicalrequirementsinrelationtothecurrentstateof thesecomponentshavebeenconsidered inorder toprovide insightregardingshort-termfocus.Baseduponthisweconsidertheuse-areasinthetopleftsquaretobethemostpromisingneartimeapplications,sincetheycanberealizedtodayandsolvescriticalconcerns.Asseeninthefiguretheseapplicationsare:Remoteguidance,visualizationof3Dprototypes,andsimplerformsoftrainingandspatialdesign.Furthermore,dashboardingalsoprovidesbusinessvalue, but it is lower compared to the previous. However, dashboarding could also be aninterestingAR-initiativefromashort-termperspective.

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Figure8.2.Visualizationofthedifferentuse-casesinrelationtobusinesspotential,technicalrequirements,theneedofintegrationwithothercomponents(e.g.IoT),andtheintendedtimethedevicewillbeused.

8.3.2INSIGHTFROMALONG-TERMPERSPECTIVE

The improvements of the device and the technical capabilities, described in figure 8.2, incombinationwiththebusinesspotentialscouldprovidearoadmapforthefutureadoptionofthedifferentARuse-cases.

Firstly,webelievethatthesolutionswhichcouldprovideasimplesolutiontoacriticalproblemwill be the first application adopted. The simpler an application is, the easier it will be toimplement.Additionally,someuse-areasrequiresalargersupportinfrastructure,suchasIoTandsensors, and depending on the organization’s availability of these support technology, theperceived simplicity and compatibility will differ. However, through the technologyimprovements,bothregardingARandothersupporttechnologies,theperceivedsimplicitywillincrease.Therefore,theimplicationisthatingeneralitistheurgencytosolveacriticalproblemthatwillaffecttheadoptiondecisionofARmostly.

Secondly,webelievethatthefirstlimitationsolvedwillbetheavailabilityofARcontent,duetothe entrance of several actors facilitating for content authoring. Therefore, applications thatrequiremorecontent,butwheretheimprovementsofotherlimitationsarenotcriticalinorder

Thecolorrepresentstherequirementsof integrationwithother components.The contour, represent the requiredtimeforthespecificusagewhichaffectthepossible size and comfortability ofthedevice.

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to function,will emerge. For instance, thiswill spur the opportunities for visualization of 3Dobject.

Thirdly,improvementsofthedevicewillbecomemoreusable,andtherebyitwillbepossibletousethedeviceforlongertasks,orevenawholework-day.Theseimprovementsregardboththeformfactor,thecomputerandbatterycapacity,themobility,andthelimitedfieldofview.Thiswillbringopportunitiesfordevelopmentofuse-casessuchasspatialdesign,warehousepickingandsmartworkinstructions.

Finally, we believe that the 3D-capabilities will become good enough to incorporate in theseimproveddevices.Theimproved3Dcapabilitieswillmakeitpossibletoexperienceaseamlessmixtureofthereal-andvirtualenvironment.Additionally,the3D-capabilitiesisingeneralwhatdefinesAR,andthereforethegreatestpotentialwithARcouldonlybeexperiencedwhenthesecapabilities,incombinationwithimprovementsoftheotherlimitation,areinplace.Therebythiswillincreasethepossibleusageevenfurtherandspurtheadoptionoftheremainingapplications;whicharelocalization,virtualdata,andintuitiveinterfaces.

Naturally, the adoption of the different use-cases depends on the improvements of the abovestated concerns. Therefore,when the different use-caseswill be adopted could bemapped inrelationtothesethreeaspects.Visualizedinfigure8.3isourevaluationofwhen,andinwhichorder,thedifferentuse-caseswillbeadopted.Moreover,asseeninthefigure,augmentedtrainingwillbecomeadoptedmorecontinuously,butindifferentformsandconstellations,duetoitshighbusinesspotentialbutstilllowrequirementsregardingaseamlessexperience.

Figure8.3.Visualizationof our valuationof thedifferentpotentialusageofAR in in termsof contentandcontentauthoring,3Dcapabilitiesandshort-termorlong-termusage.

The contour symbolizes long-term usageandthedashedcontoursymbolizedthatitcould be either short term or long termdependingontheusage.

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9.CONCLUSION Thefollowingchapteraimstobothanswerresearchquestionsandtoachievethepurposeof thisthesis.Theinformationpresentedbelowisasummaryoftheanalysis.

Thefirstresearchquestionwas:

• Whataffect thewillingness toadoptAugmentedReality,positivelyornegatively, fromanexternalenvironmental-,technological-,andorganizationalperspective?

Insummary,allperspectivesaffecttheadoptionofanARinvestmentrespectively,buttowhatextentdependsmainlyupontheorganizationwhoisconsideringthetechnology.Firstly,fromtheexternal environmental perspective it was concluded that the competitive environment, theconvergenceofthevirtualandrealworld,andthetrendsServitizationandIndustry4.0spurtheadoptionofAR.Itwasfoundthatsomeuse-casesofARcouldprovidefunctionalitiesthatsupporta servitization context. In an Industry 4.0 context, AR facilitate to achieve the aim of totallycollaboratingentities.

From the organizational perspective, it was concluded that organizations have differentintentionswithatechnologyinvestment.ItisimportantthatinvestmentsinARprovestoenhancetheorganization’scompetitiveadvantageandprovidesbusinessvaluesuchaseithernewrevenuestreams,costsavingopportunities,productivityincreasesorqualityimprovements.Theoutcomeof an AR investment further depends on the specific use-case of it, in combination withtechnologicalabilitiesandlimitations,andtheorganization’sinternalresources.AllthesethingstogetheraffecttheadoptionofAR.

Further,theearlyadoptersinthemanufacturingcontextwillplayakeyroleaseducatorsandleadthewayfortheadoptionofAR.TheknowledgeregardingARisakeyissue,sincetheexpectationsoftenaretoohighonthetechnologyanditsabilities,whichcurrentlyaffectstheadoptionofARnegatively.

Fromatechnologicalperspective,ARhastheabilitytomergetherealandphysicalworld.ItwasconcludedthatARfirstlywillbedevelopedforthesmartphone,butwhenthetechnologyofHMDsimprovesitisAR,bytheuseofHMD,thatpotentiallywillbecomethenextdisruptiveinnovations,sinceitprovidesadditionalvaluepropositions.

The current AR-market is fragmented, and there are no standards neither regarding device,platform, nor to describe information. This creates uncertainties regarding an AR-adoption.However,ARseemstobeintheearlystageofthetechnologylifecycle,andtheimplicationisthatstandardswillemerge.

TherearecurrentlyseverallimitationsrelatedtoanARexperiencethatpreventtheadoptionofAR,butdependingonthespecificusageandcontexttheconstraints,interdependencies,andvalueofARwilldiffer.Themostcriticalelementsare: thedevice, the3Dcapabilities, the interactionmethods, and the content and content authoring. Additionally, there are legal and privacyconcernsregardingtheinputandoutputcapabilities.Thetechnologicallimitationsareexpected

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toimproveinanearbyfutureandwhentheselimitationshavebeensolved,someofthosepriorlimitationswillinsteadfacilitateadoption.

Thesecondresearchquestionwas:

• WhattypeofAR-applicationscouldbeuseful inanasset intensivemanufacturingcontextandaretheseapplicabletodayorratherinthefuture?

Tendifferentuse-caseswerefoundvaluableforassetintensivemanufacturers.Acommonthemefor all use-cases is that AR is a communication and/or visualization tool, and it enhance theunderstanding,andfacilitateforcollaboration.

The focus in a short time-horizon was concluded to be on applications where AR’s currentlimitationsarenot critical andwhere it ispossible reuseexisting content, andalsowhere theapplicationsolvesacriticalproblem,aswellasprovidinghighbusinessvalue.Suchapplicationsareremoteguidance,visualizationof3Dmodels,anddashboarding.Thoseareapplicabletodayduetotheirlowtechnicalrequirements, lowneedofcontent,andlowrequirementsofthe3D-capabilities.Furthermore,augmentedtrainingisanear-timeuse-caseduetoitshighpotentialofgenerating business value, but still relatively low requirements of providing a seamlessexperience.

The device constraints, in combinationwith increased availability of content,will be the nextsolved impediments.When thedevice’s limitations, suchas the form factor, thecomputerandbatterycapacity, themobility,andthe limited fieldofview,aresolvedthenextupcominguse-caseswillbespatialdesign,warehousepickingandsmartworkinstructions.Thisismainlyduetotheirrequirementsofbetterfieldofvieworabilitytousethedevicesforlongtermtasks.

Finally,theimplicationisthatthe3D-capabilitieswillbethetechnicallimitationthatwilltakethelongesttosolve,anditisthiscapabilitythatmakesitpossibletoexperienceaseamlessmixtureoftherealandvirtualenvironment.Theuse-casesthatrequirethisabilityismainlylocalization,virtual data and intuitive interfaces. Therefore, those applications will be the less near-timeapplications,buttheyarestillpredictedtodeliverhighbusinesspotential.

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