Corporate technologists and executives have taken a page from the playbook of big-name tech companies, viewing emerging technology in terms of moon shots. They’re making multimillion- or billion-dollar investments that they hope will usher in the next lucrative business model—or, at the very least, stave off disruption. These blockbuster stakes have intensified over the past few years, along with the pace of innovation and an expanding array of technology options.

Although it’s true that a single new technology occasionally disrupts the enterprise, as the Web did in 1996 and smartphones did in 2007, our experience shows that companies create value more often by combining technologies, processes, and business models in innovative ways.

Business leaders are often well-versed in the most popular technologies, but it’s easy for them to overlook the lesser-known ones that truly drive differentiation. For example, executives may be familiar with cloud but know little about the possibilities around context-aware computing. Or they may fail to see how a new technology can solve an old problem, such as the way that the use of drones in logistics is reinventing pickup and delivery.

Big-bet investments can be shortsighted because transformative technologies are rarely a magic bullet. Almost every game-changer requires enablers. Machine learning, for example, depends upon data analytics, predictive modeling, and integration architecture. Powerful combinations like that are what we think of as emerging-technology building blocks.

The goal for company leaders is to identify building blocks that can be configured in new ways to support future business strategies. Moving from a big-bet mindset to a building-block one enables companies to take a more practical, less risky approach to investing in emerging technologies.

Clearing Emerging Technology Hurdles

Executives acknowledge how crucial it is to get emerging technology right: 71 percent of those participating in our 2015 Global Digital IQ Survey  view evaluating such technologies as important. And they believe they are doing a pretty good job at it, with the majority rating their skills as “highly developed” or “quite developed.” They also let technology dictate business strategy, typically evaluating an array of technologies that might affect their business performance. That approach might sound sensible at first, but it often amounts to chasing a bright, shiny object.

Take artificial intelligence, for example. Saying your organization will begin to employ machine learning within its stack is easy, but implementing it is incredibly challenging. Which technology should you procure? Who will implement it and how will it scale? How will you secure the talent to execute these plans? Do you have the necessary foundational technologies in place? By the time you answer those answers, will the puck have moved? Emerging technology constantly changes: a nascent development today could be a mature or obsolete solution tomorrow.

A better approach to prioritizing emerging technology is to take a step back and focus on its ability to meet a business need. This is what we refer to as its business relevance. Consider how any given solution could redefine industry norms, help you meet an organizational objective, or even power a specific use case.

It’s important to reframe the technology in terms of business impact. For example, if you’re evaluating sensor technology as a data collection tool, don’t focus on the Internet of Things. Instead, ask: Where are we using sampled data, history, or educated guesses to estimate something—prices, volume, sales, and so on—where live data could do a better job? Then devise experiments using sensors to collect information on products, locations, individuals, and other key areas.

Admittedly, at many companies, assessing business relevance may be easier said than done. The person responsible for identifying and exploring emerging technologies—often the CTO or CIO—may be less than ideally connected to the company’s business strategy. And the task of evaluating emerging technology may not be a dedicated pursuit. In fact, less than one-third of companies have a dedicated innovation or lab group, according to the 2015 Global Digital IQ Survey, and about the same number tackle emerging tech through ad hoc teams.

The informal approach to assessment can be a real barrier to realizing an emerging technology’s promise. Isolated pet projects rarely end up in the company’s overall strategy and technology road map. Without visibility—and a well-conceived plan with milestones backing it up—leadership can easily lose sight of the technology’s potential impact.

Another barrier is that organizations tend to focus too narrowly in trying to find and explore emerging technologies. Our research reveals that most companies look to familiar sources—vendors, customers, and third-party analysts—to identify new applications for such technologies in their organizations. Yet what is important to these sources may not be what’s critical for your enterprise. Analysts, for example, are often primarily concerned with technical viability, or how likely it is that a product will become mainstream, rather than with business relevance.

Shifting to a Business-Relevant Approach: Real-World Results

Our work with enterprises, including oil and gas companies and insurance and pharmaceutical firms shows how taking a deliberate and strategic approach to emerging technology can pay off. The most successful organizations took a broad look at products and trends, then zeroed in on those most relevant to their strategies before following a concrete timeline of measured experiments, metrics, and milestones.

We worked with a global health-care company to define a five-year technology strategy. Company leaders wanted to know which emerging technologies would have the greatest impact on their businesses between now and 2020. In the past, the company would have run this as an IT project, led by the CIO and carried out by the technology department heads. Those involved would have talked with vendors and analysts, attended conferences, and dug into research to choose the most promising prospects for exploration and experimentation.

This time around, however, the CIO embarked on a more rigorous process with a broader stakeholder group. She engaged the leadership team, business-unit leaders and analysts, and outside experts to identify the trends affecting the health-care industry, such as industry consolidation, the rise of value-based care, and the growing use of analytics to harness patient data and improve diagnoses and outcomes. The team also considered strategic questions such as: How do we deliver cost-effective care with the highest levels of patient satisfaction? What can we anticipate from direct or indirect competitors? How will our business model change in light of new regulations?

As crucial as this qualitative assessment was, the team also looked at quantitative data to reduce the risk of picking the wrong technologies. For each of the more than 300 technologies that PwC tracks in our Emerging Technology Labs—aided by advanced data analytics—we analyze nine attributes across technical viability and business relevance. After considerable discussion and analysis, the company narrowed its list to 68 next-generation technologies and processes.

On its own, the list of possibilities offered limited value. The team still needed to identify how the technologies and processes could be used together to unlock new ways of working and doing business. Further analysis and refinement led to defining five thematic building blocks. These combinations of technologies, processes, and business models were then characterized in business terms, such as “use data to better anticipate and understand patient needs.” Then the team developed use cases for these building blocks, such as how to “enhance drug-compliance safety behavior” and “improve the patient experience through multichannel marketing.”

This last step was crucial. It forced business leaders to think beyond buzzwords and consider practical business outcomes. It required them to spell out the underlying architecture, processes, and technical descriptions that enabled each use case. These clear, tangible links to business value informed how the CIO would integrate the building blocks into the company’s strategy and technology road map. It also offered a glimpse of the evolving role of the CIO in an industry that’s heavily investing in IT, in which a market-facing leader is essential to bringing the art of the possible to the leadership table.

Drawing a Road Map to Value: Best Practices

All companies should begin rethinking how they view and pursue emerging technologies. Here are four best practices to help you get started.

1. Scan and stay current. Emerging technology advances rapidly and it takes effort to navigate the tsunami of information. Be disciplined in your approach to keeping up. Consider underused research sources such as the academic, open-source, venture-capital, maker, and crowdfunding communities.

2. Reframe your big bets. Take stock of your company’s major emerging technology initiatives. Look beyond the marquee technologies, such as drones, and define what else needs to be in place to reach fruition. Which other technologies, processes, or skills are required? How can you leverage these building blocks for other use cases? How can some larger bets be reframed into smaller, iterative experiments so that bad ideas can be eliminated earlier and more ideas can be explored?

3. Consider business relevance. Technical viability is crucial, but it’s only one side of the coin. When evaluating whether to pursue a technology, think about how it could meet a specific business need or solve an existing problem. Don’t just rely on internal or external opinions; use relevant data to inform your analysis.

4. Think and talk in business terms. Finally, articulate your emerging technology efforts as you would a business case. Use precise language that your board or shareholders will find compelling. Specifically describe what value—customer impact, cost savings, and so on—the technology will make possible.

Chris Curran (@cbcurran) is chief technologist at PwC.

Daniel Eckert (@deckert) is managing director, emerging technology at PwC.

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