Originally published at Medium, October 13, 2016
Nancy Pearson, VP Marketing, IBM Cognitive Business and Susanne Hupfer, Senior Consultant, IBM
We’re reaching the point where simply being a digital business won’t be enough to sustain competitive advantage.
A new IBM global study of cognitive early adopters reveals nearly six in ten view AI / cognitive computing as a “must have” for organizations to remain competitive within the next few years.
Digital businesses have been disrupting virtually every industry in the past several years, fundamentally transforming how they engage with customers and markets. Data is both the fuel and the product of digital transformation. By 2020, about 1.7 megabytes of information will be created every second for every person on Earth. While digital data represents a vast opportunity, its velocity, diversity, and complexity presents a major challenge. In fact, an estimated 99.5 percent of that digital data is never analyzed.
To keep a competitive edge, organizations will need to maximize the insights?—?the “digital intelligence”?—?they create from the vast data flows being generated by the digital revolution.
Cognitive computing is rapidly emerging as a transformational technology that complements digital business, helps unlock the value in digital data, and augments human intelligence and decision making. Cognitive systems can rapidly ingest and analyze large volumes of structured and unstructured data, generate hypotheses, formulate potential answers to questions, and provide recommendations or predictions that experts can include in the decision-making process.
Six in ten early adopters regard cognitive computing as essential to digital transformation, according to the IBM study, which surveyed more than 600 organizations worldwide who are actively engaged in or planning cognitive initiatives.
The cognitive advantage
Forward-thinking organizations are using cognitive technologies to continually learn, adapt and outpace the competition. They’re achieving significant business benefits from their cognitive adoption. Half of the organizations with cognitive initiatives underway report they’ve already gained major competitive advantage from their efforts, and 62 percent say outcomes exceed their expectations.
Here are three fundamental ways users are driving business advantage through their cognitive projects:
1) Improved customer engagement
A top outcome of cognitive computing is improved customer service, with about half of users reporting this result. Cognitive technologies can empower human agents with more timely and accurate information. Cognitive-enabled virtual agents can interact with customers in natural language, answer questions, propose solutions, and improve their knowledge over time.
Nearly half of users also say that they’re personalizing customer and user experiences with cognitive technologies, for example by providing customers with targeted recommendations and offers.
An example of this is the recent partnership between Thomas Jefferson University Hospital and IBM Watson on a project to place cognitive-powered 2-way speaker systems in hospital rooms so patients can have easy access to information and services (such as the heating system for rooms) in between doctor visits.
2) Improved operations
Cognitive systems can improve an organization’s ability to analyze and interpret data and leverage collective knowledge, which can lead to both efficiency and decision-making benefits. Nearly half of users report productivity and efficiency gains with cognitive, ranking it another top outcome.
Forty-six percent of users report that cognitive computing helps their organization improve decision making and planning. An equal number say they’re improving security and compliance and reducing risk through their initiatives.
One company that is using cognitive systems to improve its operations is Woodside Energy. It has created a cognitive application to uncover the “tribal knowledge” of generations of engineers, presenting this information via iPads to current decision-makers on offshore platforms.
3) Business growth
Cognitive users are also targeting outcomes that grow their business. About 4 in 10 say that cognitive is helping them expand their business into new markets, and an equal number report expanding their ecosystems, for example giving partners and developers access to new services.
Cognitive computing is also helping organizations accelerate innovation of new products and services. As cognitive adoption matures, it’s likely that these growth-oriented goals will take center stage.
You can see an example of driving business growth in how Performance Bicycle uses cognitive-based personalization to target new niche segments such as female enthusiast cyclists.
Addressing growing pains
As with any new technology, challenges arise. Forty-six percent of early adopters say they struggle with a roadmap for adoption. Only 7 percent have a comprehensive, company-wide strategy for cognitive computing, but 41 percent are in the process of developing a broader strategy.
Top challenges to cognitive adoption include cost, security and immaturity of the technology. Early adopters also report issues around data, including integration, conversion and the management of volume and quality.
A skills shortage rounds out the top challenges. About six in ten early adopters report moderate-to-significant skill gaps in roles critical to cognitive, including computer scientists with expertise in cognitive techniques, software developers and domain experts. To address this shortage, early adopters turn to a broad ecosystem of experts to provide IT direction, training, and product development assistance.
If you want to get started on your own cognitive journey, take the assessment now.
