The cognitive advantage
1 like204 views
Early adopters of cognitive technologies are already gaining major competitive advantages through initiatives that improve customer engagement, productivity and efficiency, and business growth. A survey of over 600 cognitive decision-makers found that IT, data analytics, and customer service are common starting points for cognitive initiatives focused on product and service innovation and automation. While challenges remain around costs, security, and skills, collaboration between IT and business is driving cognitive adoption across industries.
The cognitive advantage
- 1. The cognitive advantage Insights from early adopters on driving business value © 2016www.ibm.com/cognitive/advantage-reports/
- 2. 2 The cognitive era is now Organizations are using cognitive technology to outthink the marketâ unlocking new digital intelligence from large volumes of data. The cognitive computing market is now on an exponential growth curve, expected to grow from $2.5 billion in 2014 to more than $12.5 billion by 2019. Within the next two years, it is expected that half of all consumers will interact with cognitive technology on a regular basis.
- 3. To understand how organizations are capitalizing on the potential of cognitive computing and to uncover emerging patterns of adoption, we surveyed more than 600 cognitive decision makers worldwide who already have or are planning cognitive initiatives. 3
- 4. 4 In this study, cognitive computing/artificial intelligence (AI) refers to computer-based, intelligent technologies that analyze data and interpret information to generate hypotheses, formulate possible answers to questions, or provide recommendations and predictions. These technologies learn and reason as a result of their interactions. We garnered insights from more than 600 cognitive decision makers worldwide, cross-industry, from IT to line of business, at various stages of cognitive adoption. Cognitive early adopters Advanced users | 22% of respondents Using 2 or more cognitive technologies for more than a year Beginners | 54% of respondents Using cognitive technologies for less than a year or using 1 technology for more than a year Planners | 24% of respondents Planning to adopt cognitive technologies within 2 years About the study 54% 24% 22%
- 5. 5 Organizations already gain major competitive advantage from their use of cognitive computing. They achieve a range of business outcomesâfrom customer engagement to productivity & efficiency and business growth.
- 6. 6 say cognitive computing is essential to digital transformation say adopting cognitive is very important to their organizationâs strategy and success Early adopters see cognitive computing as a key differentiator of users say outcomes from cognitive initiatives exceed their expectations 65% 58% 62%
- 7. They consider cognitive to be a key ingredient of their strategy to increase competitive advantage 7 50% of users say they already gain major competitive advantage from their cognitive initiatives 58% of early adopters regard cognitive computing as a âmust haveâ for organizations to remain competitive within the next few years
- 8. Patterns of adoption are emerging as organizations kickstart cognitive initiatives Functional patterns Functional areas of the business where cognitive initiatives are being used or planned Goal-based patterns Business-need or goal-based use-cases where cognitive initiatives are being used or planned Technology patterns Technologies currently being used or planned in cognitive initiatives 1 2 3
- 9. IT, Data Analytics and Customer Service are common entry points 9 Advanced Users Beginners Planners Already using Planning on using Already using Planning on using Planning on using 40% 41% 42% 44% 47% 48% 48% 50% 51% 59% 66% 48% 45% 41% 44% 35% 42% 43% 41% 38% 36% 23% Marketing Sales Communications/PR Product Development Human Resources Finance Corporate strategy & management Operations Customer Service Data Analytics IT 23% 23% 19% 16% 18% 25% 20% 24% 24% 37% 39% 47% 47% 46% 56% 47% 42% 52% 53% 48% 46% 47% 58% 48% 38% 47% 31% 34% 53% 60% 53% 69% 70% Functional patterns:1
- 10. 47% 46% 40% 42% 47% 47% 35% 38% 49% 40% 50% 34% 42% 41% 47% 51% 43% 44% 40% 43% 44% 38% 38% 39% 43% 40% 38% 38% 47% 40% 42% 38% 37% 40% 58% 57% 54% 60% 41% 49% 40% 35% 63% 41% 65% 44% 44% 43% 51% 57% 60% 10 Advanced Users Beginners Planners Already using Planning on using Already using Planning on using Planning on using 2 Product & service innovation and IT automation are common use cases Goal-based patterns: 60% 61% 62% 64% 65% 65% 65% 65% 66% 69% 70% 70% 70% 72% 73% 73% 77% 30% 34% 29% 24% 27% 25% 20% 24% 26% 20% 26% 21% 22% 19% 23% 20% 19% Security & compliance Customer service Customer behavior & sentiment analysis Sales & marketing optimization Asset management Personalized advice & recommendations Research & discovery Intelligent virtual assistants Cloud management Smart machines Performance & quality management Self-paced personalized learning Procurement & supply chain operations Decision support systems Business process automation IT automation Product & service innovation
- 11. 47% 49% 74% 66% 73% 73% 76% 24% 28% 38% 34% 42% 48% 51% 44% 42% 47% 47% 45% 40% 35% 11 Advanced Users Beginners Planners Already using Planning on using Already using Planning on using Planning on using 3 A variety of capabilities are being used in cognitive initiatives Technology patterns: 58% 68% 75% 77% 79% 80% 84% 19% 21% 20% 15% 20% 15% 13% Intelligent robotics Social and emotional (affective) computing Natural language processing (NLP) Machine learning Knowledge representation and reasoning Pattern recognition Automated scheduling and planning
- 12. Users achieve a range of outcomes via their cognitive initiativesâcustomer engagement, productivity & efficiency, and business growth 12 Customer Engagement 49% Improved customer service 49% Personalized customer / user experience 43% Increased customer engagement 42% Enabled faster response to customer / market needs Productivity & Efficiency 49% Improved productivity & efficiency 46% Improved decision making & planning 46% Improved security & compliance, reduced risk 45% Reduced costs 42% Enhanced the learning experience Business Growth 42% Expanded ecosystem 41% Expanded business into new markets 39% Accelerated innovation of new products / services % achieving with cognitive
- 13. Top outcomes from cognitive initiatives vary by industry Finance 49% Increased market agility 46% Improved customer service 43% Increased customer engagement 43% Improved productivity & efficiency 42% Improved security & compliance, reduced risk Retail 56% Personalized customer / user experience 56% Increased customer engagement 56% Improved decision making & planning 56% Reduced costs 55% Improved customer service Health 66% Accelerated innovation of new products / services 66% Improved productivity & efficiency 64% Improved security & compliance, reduced risk 62% Reduced costs 59% Improved customer service Manufacturing 64% Improved decision making & planning 58% Improved productivity & efficiency 54% Improved security & compliance, reduced risk 52% Improved customer service 49% Enhanced the learning experience Government/Education 54% Personalized customer / user experience 50% Improved customer service 37% Improved decision making & planning 36% Improved productivity & efficiency 33% Increased customer engagement Professional Services 40% Reduced costs 36% Personalized customer/user experience 36% Improved customer service 36% Expanded ecosystem 34% Accelerated innovation of new products / services % achieving outcome with cognitive
- 14. Cognitive efforts are being driven both top-down and bottom-up 14 % citing as major driver 51% 48% 47% 47% 46% 35% Executive mandates Competitor actions Developer experimentation with cognitive Business user experimentation with cognitive External customer demand Personal use of cognitive
- 15. IT and Line of Business collaborate on cognitive decision making, with technology leaders serving as the primary advocates 15 Collaboration underpins cognitive initiatives Strongest advocates for cognitive initiatives % citing as strong advocate 45% 26% 29% 45% IT and LoB in collaboration 29% More LoB driven 26% More IT driven 43% Chief Technology Officer (CTO) 43% Chief Information Officer (CIO) 43% IT Management below C-level 27% Chief Data Officer (CDO) 25% LoB Management below C-level 23% CEO/President 16% Chief Marketing Officer (CMO)
- 16. 46% say that while their organization sees the value in cognitive computing, they struggle with a roadmap for adoption While these organizations view cognitive as essential, many still struggle with strategy and an adoption roadmap 16 Organizational approach to cognitive 7% 41% 40% 12% Comprehensive, company-wide strategy More tactical than strategic Developing broader strategy No strategy yet
- 17. Top adoption challenges include the cost of technology and security concerns 17 62% 57% 55% 54%54%Cost of technologies / solution development Security concerns Immature technologies and tools for implementing cognitive solutions Data issues (i.e., quality of data, integrating and converting data, volume of data) Insufficient skills Top five challenges in adopting cognitive computing
- 18. Top adoption challenges vary by industry % citing this adoption challenge Finance 60% Cost of technologies / solution development 54% Security concerns 53% Immature technologies and tools for implementing cognitive 53% Fragmented efforts across our enterprise 53% Insufficient skills Retail 58% Immature technologies and tools for implementing cognitive 58% Cost of technologies / solution development 56% Security concerns 53% Insufficient skills 53% Data issues (i.e., quality of data, integrating and converting data, volume of data) Health 62% Cost of technologies / solution development 59% Difficulty justifying the investment 59% Security concerns 54% Insufficient skills 53% Immature technologies and tools for implementing cognitive Manufacturing 67% Immature technologies and tools for implementing cognitive 63% Cost of technologies / solution development 59% Data issues (i.e., quality of data, integrating and converting data, volume of data) 57% Fragmented efforts across our enterprise 57% Difficulty justifying the investment Government/Education 62% Insufficient skills 61% Security concerns 59% Cost of technologies / solution development 58% Difficulty protecting our organizationâs proprietary intellectual capital 57% Difficulty justifying the investment Professional Services 60% Cost of technologies / solution development 47% Data issues (i.e., quality of data, integrating and converting data, volume of data) 45% Immature technologies and tools for implementing cognitive 43% Security concerns 42% Difficulty protecting our organizationâs proprietary intellectual capital
- 19. Extensive skills gaps exist for software developers and cognitive experts, posing a challenge for cognitive projects 19 63% Computer Scientists (e.g. experts in cognitive computing/AI including machine learning, knowledge representation and other cognitive/AI techniques) 58% Software developers who code/implement cognitive applications and systems 57% Data experts (e.g., Data scientists, Data analysts) 58% Domain experts (Subject matter experts with skills and expertise to train cognitive systems) 53% IT professionals focused on infrastructure, cloud, networking, etc. % citing moderate-to-major skills gap
- 20. An ecosystem of experts, including technology and consulting companies, helps organizations with cognitive initiatives 20 To provide / build product components To influence IT directions/decisions To train staff 43% Consulting Companies External Developers Developer Communities Industry Analysts Clients AcademiaTechnology Companies 29% 34% 37% 30% 32% 36% 25% 30% 32% 20% 33% 35% 31% 27% 31% 25% 25% 26% 22% 29% % using partner for this activity
- 21. Cognitive early adopters take a holistic view of IT, with cloud, analytics and security enabling the cognitive era 21 9 in 10 say each of these will play an important role in their cognitive initiatives within 2 years: âą Cloud âą Big data & analytics âą Mobile âą Security 85% say Internet of Things will play an important role in their cognitive initiatives within 2 years
- 22. 22 Cloud-based services are preferred to access and use cognitive capabilities 55% Favor cloud-based services (cognition-as-a-service) over non-cloud 32% Have an equal mix of cloud and non-cloud 10% Favor non-cloud over cloud-based services Cloud is the primary platform of choice for these organizations to drive cognitive projects 55% 10% 32%
- 23. Both SaaS and PaaS are leveraged for developing and deploying cognitive initiatives 23 53% of users access cognitive technology via Software-as-a-Service 51% of users access cognitive technology via Platform-as-a-Service
- 24. Cognitive early adopters expect to make significant use of open source technology to support their cognitive initiatives 54% of cognitive early adopters already use or expect to make heavy use of open source technology to support cognitive initiatives 24 74% of developers expect to make heavy use of open source technology
- 25. Cognitive users rely on diverse types and sources of data for their initiatives Sources of data: 51% use internal company data 48% use external data 43% use shared industry data In future, over 90% plan to use all of these Kinds of data: 62% structured data vs. 38% unstructured data
- 26. 26 Cognitive early adopters are analytically mature organizations Analytical capabilities used within the organization Descriptive analytics (i.e., historic data, event data) Advanced analytics (predictive/prescriptive analytics i.e., sophisticated intelligence and modeling to recommend next steps or actions) 75%61% 28%
- 27. 27 Early adopters unlock insights by applying cognitive technology to untapped data 60% say cognitive computing is essential to tackling data challenges that conventional analytics cannot 53% say cognitive computing will unlock the hidden value of their organizationâs dark data
- 28. Chart your cognitive roadmap 28 Team for success Encourage your IT and business leaders to collaborate on the organizationâs cognitive initiatives. Enlist a team of cognitive, software development and data specialists to implement and manage cognitive pilots and supplement your in-house expertise through your ecosystem of partners. Advance your data strategy The success of your cognitive initiative will depend on the volume and quality of data at your disposal. Consider leveraging a diverse range of untapped data sources based on your business needâfrom structured to unstructured, and from internal to external sources. Choose your on-ramp Determine your starting point for cognitive by considering your organizationâs needs and capabilities. Target a use case with a strategic goal and data to support it. Will you pursue enterprise-wide transformation, or improve a specific business process?
- 29. APPENDIX 29
- 30. Cognitive users already gain major competitive advantage and business results 30 65% of cognitive early adopters say adopting cognitive is very important to their organizationâs strategy and success 58% of cognitive early adopters say cognitive computing is essential to digital transformation 50% of cognitive users say they already gain major competitive advantage from their cognitive initiatives Patterns of adoption are emerging among advanced cognitive users Cognitive early adopters take a holistic view of IT: 9 of 10 say cloud, analytics, mobile and security will each play an important role in cognitive initiatives within 2 years 53% say cognitive computing will unlock the hidden value of their organizationâs dark data While IT and LoB collaborate on cognitive decision making, technology leaders are the key advocates EXECUTIVESUMMARY 1. Functional patterns âą IT âą Data Analytics 2. Goal-based patterns âą Product and service innovation âą IT Automation 3. Technology patterns âą Automated scheduling and planning âą Pattern recognition Cognitive users achieve a range of outcomes via their cognitive initiatives: Customer Engagement 49% Improved customer service Productivity & Efficiency 49% Improved productivity & efficiency Business Growth 42% Expanded ecosystem
- 31. About the study respondents 31 Geography 33% 17% 16% 14% 10% 10% United States China India Japan Germany United Kingdom Finance Retail Healthcare Manufacturing Government/ Education Professional Services Other 24% 10% 11% 22% 9% 10% 14%Industry To smooth possible geographic distortions, responses were weighted based on an IBM assessment of each countryâs total IT spend. 40% 10% 10% 16% 24% Respondents by role Line of business Manager Non Manager C-Level Corporate Executive Director 55% 45% Organization Size 100-999 employees 46% 54% 1,000+ employees IT respondents
- 32. 32 MD Anderson Cancer Center (Healthcare) Solution that aggregates large volumes of unstructured patient data from a variety of sources, enabling clinicians and researchers to run analytics in near-real time to identify patterns and gain important insights. The Chinese University of Hong Kong (Healthcare) Cloud-based solution that enables research teams to accelerate their exploration of large, complex cancer data sets and identification of cancer trends. Baylor College of Medicine (Education) Cognitive technology is used to accelerate medical research by analyzing over 300,000 articles automatically, looking for key words and phrases that indicate correlations among studies. Guiding Eyes (Education) Solution that advances the art and science of raising guide dogs by analyzing structured and unstructured data to discover genetic, health, temperament and environmental factors that correlate with success. Alpha Modus (Financial Markets) Cloud-based solution that can analyze large volumes of unstructured and natural language data from financial services industry sources, including stock exchanges, social media, and other market indicators, making it easy to explore new ideas and turn them into practical investment applications. WayBlazer (Travel & Transportation) Travel application and APIs that use analyze unstructured social media content from thousands of sites and deliver personalized recommendations to travelers who issue natural-language questions. Honest Cafe (Retail) Analytics are used to explore vending machine transactions, payments and weather data, find correlations, and uncover patterns in customer behavior. Pon Holdings (Automotive, Industrial Products) Solution that extracts and analyzes unstructured data from millions of web pages, using the insights to generate leads for sales and marketing departments and also to improve pricing. Cognitive client stories
- 33. Lead Analysts: Susanne Hupfer Susanne_Hupfer@us.ibm.com Cynthya Peranandam cynthya@us.ibm.com Contributors: Lindsey Reichelt, lreichelt@us.ibm.com Ellen Cornillon, ellencor@us.ibm.com Brandon Buckner, bsbuckne@us.ibm.com ibm.com/cognitive/advantage-reports © Copyright IBM Corporation 2016 IBM Corporation New Orchard Road Armonk, NY 10504 Produced in the United States of America 2016 IBM, the IBM logo and ibm.com are trademarks of International Business Machines Corporation in the United States, other countries or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol (Âź or TM), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. Other product, company or service names may be trademarks or service marks of others. A current list of IBM trademarks is available on the web at âCopyright and trademark informationâ at ibm.com/legal/copytrade.shtml This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. THE INFORMATION IN THIS DOCUMENT IS PROVIDED âAS ISâ WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED,INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTYOR CONDITION OF NON- INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided