The Rise of Web 3.0

Virtual experiences are transforming the workplace—and the classroom. Globally distributed employees can collaborate in the same space—and with real-time translations. Business students can tour a manufacturing hub without leaving their seats. Such immersive interactions are increasingly common thanks to the evolving digital playground known as Web 3.0, which uses new tech tools and platforms to bridge the gap between physical and virtual worlds.

Web 1.0 consisted of static websites providing information. Web 2.0 enabled collaborative, monetized, and user-generated content to be accessible anytime and anywhere. Now Web 3.0 amplifies the power of AI, immersive reality, machine learning, smart analytics, and blockchain to intelligently interact with the individual. The resulting capabilities encompass virtual reality (VR), augmented reality (AR), and digital twins. While VR provides a fully immersive, computer-generated environment, AR overlays digital information onto the real world. Digital twins are virtual replicas of physical entities used for simulation and analysis.

Regardless of which immersive technology is used, the same rules apply. Security in these virtual environments is paramount, requiring robust encryption and internal control vigilance against data breaches through hacking, phishing, or social engineering.

Unsurprisingly, these technologies are at various stages of maturity, according to Gartner's Hype Cycle. VR and AR have transitioned from the peak of inflated expectations to the trough of disillusionment and are now moving toward mainstream adoption. Digital twin technology is attracting growing interest and investment en route to reaching its potential.

Here’s how each tech is being applied in the business world:

• VR creates a completely virtual environment where users can interact through headsets and controllers. Users are transported into a different reality, providing an experience that is entirely digital. VR is commonly used in gaming, training simulations, and virtual tours, so users can explore and interact with the virtual environment as if they were physically present.

• AR enhances the user's perception of their physical surroundings, using devices like smartphones, tablets, or AR glasses to superimpose graphics, sounds, and other sensory enhancements onto the real environment. This tech can assist in tasks, offer information, or create interactive experiences. AR is also used in applications ranging from navigation and education to retail and maintenance support. Users see and interact with digital elements without losing sight of their physical surroundings.
• Digital twins represent digital models that are used for simulation, analysis, and monitoring purposes, so organizations can visualize and test scenarios in a risk-free virtual environment. Digital twins are connected to their real-world counterparts through sensors and data, allowing them to reflect real-time changes and provide insights into performance and potential issues. This technology is particularly valuable in industries such as manufacturing, healthcare, and urban planning, where digital twins can optimize processes, predict maintenance needs, and improve decision making by providing a comprehensive digital representation of physical assets.

Amid this broad range of immersive technology, spatial collaboration using virtual worlds is ready to explode. Forbes projects the immersive technology market will reach a value of $500 million by 2025, and PwC predicts that 24 million jobs worldwide will incorporate these technologies to enhance work tasks.

So let’s explore what Web 3.0 means for business, the accounting and finance industry, and education.

Business Applications of Immersive Tech

As the metaverse and supporting infrastructure evolves to allow people to have lifelike experiences in virtual environments, businesses are beginning to interact with services, customers, and employees to provide innovative virtual solutions across various sectors. These technologies offer substantial benefits in terms of efficiency, engagement, and competitive advantage, which is essential for businesses aiming to stay ahead in a rapidly evolving market. The application examples include:

• Manufacturing: Improve efficiency and reduce risk from the product design and development stages through maintenance and repairs. Mercedes-Benz uses AR tools to support remote mechanics and technicians dealing with complex repairs. BMW has equipped workers in inventory identification with AR glasses that reduce inventory identification time and improve accuracy.
• Healthcare: Improve outcomes and rehabilitation. The U.S. Department of Veterans Affairs Office of Healthcare Innovation and Learning uses immersive technology to improve the patient experience in all 50 states, American Samoa, Guam, and Puerto Rico. It provides promising opportunities for therapy, such as post-traumatic stress disorder. The VA is also leveraging the technology to train its clinicians and staff.
• Customer support: Enable more realistic interactions, bridging the gap between online and physical sales or services. For instance, L’Oréal’s Style My Hair app gives virtual makeovers to consumers so they can try out different hair dyes to help them choose the color that looks best. Such tools can accelerate consumer action. A PwC evaluation identified a 40% reduction in the decision-making time when using immersive technologies for product demonstrations.
• Meeting and collaborations: Create better connections with employees and stakeholders by enhancing rapport through body language and presence. VR can transform remote meetings into more personal, immersive experiences, with avatars that allow participants to see the whole person. It also helps the bottom line: Capgemini Research Institute estimates a 45% cost savings for businesses through the reduction of traditional travel for meetings.
• Training and development: Provide experiential training modules, crucial for upskilling employees by replicating the complexities of auditing, financial analysis, decision-making processes, client interactions, and even soft skills. ExxonMobil uses a VR helmet to simulate safety training in a virtual environment. Companies that use immersive training options can reduce their training time by 30%, reports Deloitte.
• Workplace environment: Create distraction-free workplaces for remote workers to enhance productivity. Meta is using Infinite Office for virtual office spaces that even transfer physical keyboards into virtual workspaces.

Early adopters of immersive technologies differentiate themselves in the market by offering unique, engaging experiences that attract and retain customers. Immersive technologies allow for more accurate visualization of products, better communication, and more personalized interactions. Innovative training materials lead to higher employee retention rates and a more skilled workforce that is better equipped to handle a rapidly changing business landscape. Streamlining processes can lead to significant cost savings and efficiency gains, as well as faster time-to-market for new products and services. By adopting these technologies, businesses can improve their operations, provide better customer experiences, and position themselves for long-term success in a digital-driven world.

Accounting Application of Immersive Technology

Immersive technologies streamline various accounting processes, reducing manual effort and potential errors. By providing more interactive and engaging services, accountants can strengthen client relationships and improve client satisfaction. Simulated real-world environments offer practice scenarios to prepare for complex technical tasks. Here’s how immersive technologies are being explored in the accounting and finance profession:

• Immersive mobility: Transport employees and customers to a virtual world. Deloitte’s VR-driven service offers virtual tours, onboarding, and training—all designed to reduce financial and environmental relocation costs. This can also enhance onboarding by introducing new employees to the company’s office layout and protocols in an engaging setting.
• Compliance and process optimization: Enable streamlining of compliance and compensation processes, enhancing efficiency across jurisdictions. Deloitte is exploring the use of immersive tech in individual and payroll tax compliance, as well as compensation processes.
• Audit functions: Allow auditors to overlay digital models within physical environments, making the audit process more adaptable and thorough. Auditors can use AR glasses to view digital process models and data overlays while inspecting physical inventory or reviewing internal controls. Users can leave virtual notes for review of specific elements.
• Digital twins: Use virtual replicas of physical assets or processes for planning or analysis. Accountants can simulate various scenarios and predict outcomes in a risk-free space to encourage more informed decision making. This tool helps in resource planning, budgeting, and forecasting—and provides valuable insights into a company’s future performance and potential risks.
• Continuing professional education: Create realistic learning experiences. Accounting organizations are exploring immersive realities for innovative CPE learning opportunities.

Immersive Reality in the Accounting Classroom

As the use of immersive technologies expands in the business and finance world, it only makes sense that they also become part of the classroom experience. These technologies enhance learning and engagement, prepare students for modern workplaces, foster critical thinking and problem solving, facilitate collaborative learning, encourage innovative teaching methods, and promote continuous learning and adaptability. Despite some educator resistance to new technologies, the benefits of adoption far outweigh the costs, so it’s essential to prepare students to use these tools in their future careers.

Students and educators can use immersive technologies to better understand and retain complex concepts. Many students already have a head start by using immersive technology in their personal lives. Plus, these technologies provide meaningful ways of augmenting traditional education. The goal: simulate the ways business and accounting professionals use these technologies by introducing them in an educational setting. You can do this by transferring educational resources that you already use into an immersive tool:

• Virtual tours: Offer virtual accounting tours to enhance learning beyond the classroom. Google Tour Creator converts video tours into immersive tours through partnerships with employers and stakeholders. A great beginning is to leverage the 360-degree tours many companies have made available online. These videos can be enhanced with narration or text captioning to draw students’ attention to key elements of the tour.
• Remote class presentations: Create interactive presentations to engage remote learners, either by the educator or the students. Figment AR uses animated characters and portals for storytelling.
• Remote attendance: Facilitate real-time remote attendance with a sense of accountability by leaning into the concept of participants observing “the whole self” avatar.
• Personalized learning: Tailor learning experiences to individual needs to ignite a passion for learning. Catchy Words AR creates vocabulary games and works well for accessibility requirements.
• Innovative modules: Develop immersive modules that encourage experimentation and innovation. The AR tool Just a Line can help draw models, while QuiverVision can visualize a product in the planning phase. 
• Study rooms: Let students create a virtual study room in a distraction-free environment that supports learning, by blocking social media, delaying email communication, and playing appropriate background sounds for short, designated periods of time.
• Smart glasses: Overlay projects or other assessments with technical course principles to better replicate professional reality of access to real-time information.

Graduates who are familiar with VR, AR, and digital twins will gain a competitive edge in the job market. By integrating immersive technologies into the curriculum, educational institutions can ensure that students are well versed in the tools and techniques they need to be successful. For example, university libraries can be a valued partner in the acquisition and set up of a VR/AR classroom. In fact, many university libraries already have invested in the technology and are eager for academics to integrate them into courses.

However, while this technological evolution is exciting for the accounting industry and students, it’s vital to point out that the metaverse presents new ethical challenges, such as increased risks of sexual harassment and money laundering. Legal frameworks on privacy and security lag behind technological advancements, necessitating mindful policies that consider social norms. Periodic physical oversight of this tech remains essential to maintain ethical and audit standards.

Immersive Reality in Accounting Academic Research

Immersive technology offers accounting academics powerful tools to enhance their research capabilities. By leveraging VR, AR, and digital twins, researchers can create realistic simulations, enhance data visualization, study the impact of technology on the profession, collaborate remotely, conduct predictive analysis, and explore ethical and behavioral dimensions of accounting. These technologies not only open new avenues for research but also improve the quality and impact of accounting academic work. Here are some examples:

• Simulations: Create controlled, simulated environments where researchers can conduct experiments and observe behaviors under various conditions without real world constraints. VR allows researchers to replicate real-world fraud investigations and then observe human behavior and decision-making. AR is used to observe how an auditor performs when real-time augmented inventory or controls data is delivered through smart glasses during the audit. These methods also allow for remote collaboration labs for experiments.
• Visualizations: Create three-dimensional models for analysis. VR allows forensic accountants to touch fraudulent data points. AR can overlay dashboards with real-time information to improve presentation findings.
• Predictive analytics: Develop virtual replicas of processes/organizations to evaluate the impact of different management decisions, economic conditions, or regulatory changes. Digital twins allow for testing and analysis of various scenarios.
• Emerging technology: Study the impact of immersive technology on the profession and stakeholders. VR can be used to study the effectiveness of traditional methods vs. immersive methods on audit quality, efficiency, or accuracy. The use of VR can also be used to study the impact of traditional vs. immersive methods on stakeholder satisfaction, trust, and communication.
• Ethics: Study ethical dilemmas so students can develop into ethical stewards of emerging technology. Ethical dilemmas can be created in realistic scenarios where participants are observed and analyzed to provide behavioral insight. Also, since ethical standards are nascent in this area, research outcomes could be leveraged to make recommendations for ethical standards and professional codes of conduct.

An Immersive Imperative

Web 3.0 immersive technologies, like artificial intelligence, are designed to support accounting and finance professionals—not replace them. They will transform the accounting field, offering new ways to enhance efficiency, improve client interactions, and provide innovative learning and development opportunities. These emerging technologies automate manual, repetitive tasks, making it crucial for management accountants to develop the advanced skills needed to leverage these tools for analysis, analytics, compliance, and consulting. Accountants will also support and advise clients operating in these spaces. And educators will need to update their curricula so accounting students are well versed in the tech tools and techniques they need to be successful. Embracing these technologies will position accounting and finance professionals, educators, and students to be at the forefront of this digital revolution, driving progress and innovation across the profession.