Introduction
Extended Reality (XR), a popular term combining Virtual Reality (VR), Augmented Reality (AR) and Mixed Reality (MR) is emerging as a game-changer in industries like construction, manufacturing, and packaging, but understanding its return on investment (ROI) remains a challenge. You are here because you are curious about how your organization can benefit from this technology trend. To shed light on this, during the Augmented Enterprise Summit in Dallas, I had the pleasure of speaking with Adenike Adeoye, an expert in XR Strategy and Implementation to delve into the cost-benefit analysis of XR proof of concepts (POCs), measuring ROI through engagement, and addressing user experience concerns in challenging environments.
Exploring the potential of XR for organizational fit can be an expensive endeavor with a huge upfront capital investment or funding. In this insightful conversation, Nike shared her thoughts on how organizations can approach XR deployment with a balanced perspective, helping decision-makers move beyond the hype to achieve tangible results.
Cost-Benefit Analysis of XR Proof of Concept
Hassan: Nike, thanks for joining us. Let’s start with the cost-benefit analysis of XR proof of concept (POC). You mentioned that the cost of an XR POC goes beyond just purchasing headsets. What steps do you take to ensure all costs—like cloud hosting, security, and content creation—are accounted for, and how do you balance these costs against a potential ROI?
Nike Adeoye: When starting a POC, it’s important to set expectations from the beginning. A proof of concept is not the same as scaling—it’s about testing the viability of a solution. No one should expect an immediate ROI on a POC because it’s an investment in determining whether further investment is worthwhile.One of the common misconceptions is that buying the headset solves the problem. The headset is just the delivery medium—the real value is in the software and content that you’re deploying through it. So, when accounting for costs, you’re not only considering the headset but also the content development, cloud infrastructure, security, and any technical expertise required to implement the solution.
You want to start small with a POC. Identify the smallest piece of the technology that can offer maximum value, which gives you a manageable scope. The challenge often comes from vendors who try to sell you the entire package. You have to resist that and focus on the specific part that will provide the greatest return during the POC phase.
Hassan: That makes sense, especially in terms of starting small and focusing on a piece that proves the concept rather than expecting the full system to be in place from the start.
Nike: Precisely. You can also leverage existing devices like mobile phones to run simplified versions of the XR content. It might not provide the full immersive experience, but it could be enough to demonstrate value without the full commitment of the XR stack.
Measuring Engagement as an ROI Metric
Hassan: You mentioned that “cool doesn’t have an ROI,” which is such an interesting statement. Since financial ROI may be hard to quantify with XR, how do you suggest organizations measure engagement as a critical ROI metric?
Nike: It’s true—just because something is new or exciting doesn’t mean it’s valuable. When financial ROI is difficult to quantify, engagement becomes a critical metric. One effective way to measure this is to turn qualitative data into quantitative insights.
For example, if you’re rolling out an XR training program, you could conduct surveys before and after the implementation. You use a Likert scale or similar measurement to gauge users’ knowledge, engagement, or satisfaction levels before they experience the XR solution. Afterward, you repeat the survey, and by comparing the results, you can quantify improvements in engagement, knowledge retention, or even job satisfaction.
The trick is to create assumptions for your metrics that are consistent before and after implementation. That way, when you show the data to decision-makers, you’re giving them measurable, quantifiable proof of the technology’s impact.
Hassan: That’s an interesting approach—turning qualitative responses into a quantitative value that executives can understand. It also allows for a concrete before-and-after comparison, which adds weight to the argument for XR adoption.
Nike: Exactly. You need to align the metrics on both ends to ensure that you’re measuring the same things across the board.
Addressing User Experience in Physically Demanding Environments
Hassan: One challenge often mentioned with XR is its complexity in physically demanding environments, such as construction or manufacturing. How do you address concerns from workers in these settings to ensure that XR doesn’t become an additional burden?
Nike: This is a real challenge and one of the reasons why XR hasn’t yet been fully integrated in certain environments. In industries like construction, workers are already dealing with multiple physical tasks, and wearing a bulky headset can feel like an added burden.
To address this, it’s critical to choose the right XR hardware for the environment. For example, in more physically demanding settings, a lightweight, less intrusive device like smart glasses may be a better fit than a full VR headset. Workers are often already wearing PPE, so adding a large headset could be overwhelming. Something smaller and more agile that they can easily pull on or off—like smart glasses—may be more suitable.
Hassan: I’ve seen that firsthand. In a VR construction lab experiment, I had participants wear a headset while performing physically demanding tasks. After about 20 minutes, you could visibly see their stress levels increase. Even though they were in a virtual world, the physical exertion was very real.
Nike: Absolutely. Even in virtual environments, the physical effects are real. This is why people who use VR for fitness workouts can sweat and feel physically exhausted despite not lifting any real weights. The technology replicates the demands of real-world activities, which can be beneficial or challenging depending on how it’s used.
Key Takeaways
The conversation with Nike Adeoye highlighted several important considerations for organizations exploring XR:
- Manage Expectations for POC: A POC is about testing viability, not achieving immediate ROI. Focus on small, valuable parts of the technology and ensure all costs—hardware, software, and technical expertise—are accounted for.
- Engagement as an ROI Metric: When financial ROI is elusive, engagement can be measured through before-and-after surveys, turning qualitative data into measurable outcomes.
- User Experience in Demanding Environments: Choosing the right hardware is critical. Lightweight, less intrusive devices like smart glasses are more suitable for physically demanding settings, where traditional headsets may feel cumbersome.
Conclusion
The journey toward XR adoption involves navigating both technical and human challenges, from cost-benefit analysis to ensuring positive user experiences in tough environments. By focusing on engagement as a key metric and choosing the right tools for the job, organizations can make informed decisions about integrating XR into their workflows.
If you’re interested in learning more about how XR can transform your industry, or if you’d like to discuss how your organization can start its XR journey, feel free to reach out!
