Investing in Technology: The Long-Term Financial Impact of ERP and IoT Investments Compared to AI – Info Lopare

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Investing in technology goes far beyond just following the hype, according to a new study. While AI technologies receive significant media attention, research shows that investments in ERP and IoT provide greater long-term financial impact, even though they may not receive as much media coverage as cloud and machine learning technologies.

An analysis conducted by Deloitte and MKT MediaStats reveals that public companies were increasingly mentioned in news related to AI technology during 2023. The launch of ChatGPT and Google Bard fueled the hype surrounding the “generative AI renaissance,” promising endless possibilities for early adopters.

Based on these media mentions, excitement about AI technology had a striking effect on the returns of shareholders when public companies announced new technology initiatives. Analysts discovered that financial services investing in AI achieved three-year returns that were 6% higher than market averages, while technology, media, and telecommunications companies achieved 12% higher three-year returns.

Similarly, data suggests that companies investing in AI outperform others in stock returns over eight quarters following the investment. As AI investments continue to rise, the advent of generative AI technology has generated hype that surpasses cloud narratives, with many calling it the next “iPhone moment.” This has a profound impact on both businesses and consumers, revolutionizing our way of life and interactions.

However, caution is advised. While cloud, machine learning, and broader AI continue to receive intense media coverage, their long-term stock returns seem overshadowed by another type of technology that is much less conspicuous.

Enterprise Resource Planning (ERP) is a type of software system that helps organizations automate and manage core business processes to achieve optimal results. According to Deloitte’s study, media interest in this technology remains low, with a quarterly average of less than 0.5% media coverage, compared to cloud and machine learning, both around 6%.

Nevertheless, the research indicates that the long-term stock returns from ERP are more significant than those from machine learning in the end. Over 12 quarters, stocks associated with ERP increased by 2%, while machine learning peaked at around 1.5% after six quarters. Similarly, investments in the Internet of Things (IoT) – encompassing electronics, communication, and computer engineering – receive less media attention, around 1% media coverage. However, they can also offer a 3% stock return over eight quarters.

In conclusion, Deloitte’s study emphasizes that the key to reaping maximum benefits from technological investments is to “be aware and aligned with the organization’s strategy in creating the future you envision,” rather than simply following the hype. Investments in AI must follow this model and be based on need rather than the fear of missing out in order to maximize their value.



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