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Colleagues test out virtual reality VR headsets

AR and VR: Are these innovations enhancing or disrupting your business?

We live in an age where the digital transformation of business is having a profound effect on the way we work, consume, access services, and how businesses operate.1 In fact, by enabling new businesses models, technology is even affecting entire markets – for instance, brands like Uber, Netflix, Airbnb have disrupted their industries and changed the way we think about taxis, TV, and accommodation.2

Those are extreme examples, and not every use of new technologies will have such a dramatic effect. There are, however, a number of emerging technologies today that have the potential to enhance your business – for instance by enabling innovative new products and services, or by creating more efficient ways of working.

Two such technologies are Virtual Reality (VR) and Augmented Reality (AR), and the question is, will these technologies enhance or disrupt your business?

First of all, it is important to understand what they are and how they are already being used to drive innovation and efficiency in the real world.

What are Virtual Reality and Augmented Reality?

Virtual reality is essentially a computer-generated environment that can be explored and interacted with, usually via a specially designed VR headset. It is probably best known for its applications in gaming, where VR heads allow users to explore virtual worlds as part of their game play,3 but is increasingly being used in business and commercial applications.

Augmented reality, meanwhile, is the layering of computer-generated content over real-world environments. For instance AR lets you aim your smartphone camera at an object, landscape or building, and see additional information in that same view – usually in the form of text, graphics or audio.4 Perhaps the best known example of AR is Google Glass, essentially smart glasses that add a layer of digital information over the real-world view5 – but, again, AR is increasingly now being used in business settings.

AR and VR: Real world business applications

This is not just theory. Both AR and VR are already being used in a wide variety of businesses settings, including:

  • Automotive engineers and designers are using VR to experiment with the look and build of a vehicle before commissioning expensive prototypes, which is saving the industry millions every year.6
  • In HR, both VR and AR are being used to efficiently deliver highly effective, immersive staff training while VR is used in recruitment to give potential recruits a ‘real world’ feel for the working environment.7
  • In healthcare, VR is being used to help surgeons prepare for complex surgery as well as in treating conditions like PTSD.6
  • Retailers are increasingly using both VR and AR to enhance the shopping experience, particularly online – for instance using AR to enable ‘virtual changing rooms’.6
  • Manufacturers are using AR enabled devices overlaying technical information on real world views to guide employees through complex workflows more efficiently and to enable maintenance engineers to quickly identify and repair machinery or equipment.8

Those are just a few examples, but as interest in these technologies grows, many experts agree that both VR and AR hold huge potential to drive efficiency and innovation – and ultimately change the way businesses operate.9

VR and AR: Enablers or disruptors?

It seems, then, that these technologies could prove to be significant business enablers in future, as new applications are identified and their use becomes more widespread. As the examples above demonstrate, both have the potential to create new business models, new ways of working, innovative products and services, and real efficiencies. However, seizing these opportunities is not as simple as just buying VR or AR technologies. Making the most of them requires real thought about how they will be used, by whom, why they will use them, and what the benefits will be.10

On the other hand, failure to keep pace could see businesses left behind – just as Blockbuster eventually went bust after Netflix came along and disrupted the video rental market. The risk is that your business will be left behind if competitors are first to adapt AR or VR in ways that enable innovation, better service, or lower costs that traditional ways of working cannot match.10

In short, whether AR and VR will enable your business or disrupt it comes down to when and how they are applied - not just in your own business, but by competitors and in the wider market. That does not mean you should rush to adopt these technologies, but that they should be part of long term planning and embedding in thinking around innovation – and that it is crucial to be aware what is happening in the wider market to avoid being left behind.11

VR, AR and technology risks

More often than not, new technology brings new risks, and AR and VR are no different.

Perhaps the most pressing risk is related to intellectual property (IP), which related both to licencing AR or VR technology and any the use of content within it. With that in mind, businesses involved in developing content for AR and VR need to think carefully about protecting the IP associated with content they develop, and mitigating the risks that come with having third party content.

That could include ensuring licences are in place to cover use of third party imagery, characters, music and other AR or VR content as well as addressing the IP rights attached to user generated content in terms of service – paying particular attention to the use of trade-marks or copyright material, where IP infringements are rarely black and white.

Data privacy is another important risk to consider, since AR and VR technologies typically process large amounts of personal data - including users’ identity information, appearance, body-tracking data, location, communications, and other behaviour. Given that many AR and VR technologies require this data to function, there is a risk an application will fall foul of GDPR, unless it can be proved that the application will function as normal without access to this data.

Then comes cyber risk and security, which is a serious consideration because AR and VR applications often require access to a variety data from sensors, including video, audio, and GPS, and may make use of users’ other devices and social media accounts. As a result, a cyber incident like a hack or data breach can pose significant risks – for instance the disruption and cost of dealing with a data breach.

In fact, the Kaspersky security lab points out that both AR and VR can open new doors for hackers to gain access to a business’s computer systems, which increases the risk from viruses and a wide range of cyberattacks – from social engineering and ransomware to denial-of-service attacks.12

All of these cyber risks can have serious consequences if the worst should happen – from disruption, loss of revenue, fines and remediation costs to reputational damage. That means any business thinking about adopting AR or VR technology should also think seriously about these risks and how to mitigate them, including taking a close look at cyber insurance, which can help to minimise the damage if cybercriminals strike.

In summary, the potential benefits of AR and VR are significant, but when it comes to choices around which AR or VR technologies to adopt or develop and how to use them, those benefits must be weighed against the risks.

For more information

You can find out more about the cyber insurance protection available from Marsh Commercial, or if you want more general guidance around AR and VR risks, find a local Marsh expert for help and advice.


1. https://www.silicon.co.uk/workspace/disruptors-how-businesses-are-using-technology-to-radically-change-383191
12. https://www.kaspersky.com/resource-center/threats/security-and-privacy-risks-of-ar-and-vr