Digital Transformation in the Cognitive Business Era

November 10, 2015 § Leave a comment

by Russell Hargraves and Sumit Patel

Nothing is more difficult to undertake, more perilous to conduct or more uncertain in its outcome, than to take the lead in introducing a new order of things. For the innovator has for enemies all those who have done well under the old and lukewarm defenders amongst those who may do well under the new. Niccolo Machiavelli (1523)

The world is entering into a new era of computing that will enable the digital transformation of society and business based on the advancement and personalization of cognitive computing. Cognitive computing systems learn and interact naturally with people to extend what either a human or machine could do on their own. Cognitive systems like IBM Watson are redefining society, business and human interaction in the increasingly pervasive digital economy by helping everyone and everything make better decisions.

Today, the world is being rewritten in software code igniting the explosion of big data enabled by apps, mobile devices, social networks and the internet of things (IoT) ushering in the new Cognitive era. The cloud and the emergence of the industrial hybrid cloud are the platforms on which the new digital builders, developers, business professionals, governments and individuals are reimagining everything from education, banking, retail, healthcare, transportation and beyond as seen in the figure below.
Variety of devices in the Internet of Things (IoT)

A key differentiator of this cognitive era will be the use of unstructured data in the form of images, conversations, and free form text to create insights at a scale never seen before. Data which was previously “invisible to computers” will now be used by systems such as Watson to truly understand, reason, and learn providing a new field for innovation and meaningful assistance to users. In this regard, cognitive systems will provide the means to maintain expertise in some industries which is a large area of wasted costs. “In the US, businesses spent $156 billion on employee training in 2011; yet it is estimated that 90% of new skills are lost within a year.” As one brief example of how these systems will be providing assistance, consider that cognitive abilities allowed a Watson powered service to analyze over 70,000 scientific articles to identify a key protein related to many cancers within a few weeks; “this level of discovery has typically taken the entire life sciences industry seven years to accomplish.”

As this example illustrates, cognitive machines will be enabling the users they work with and 78% of business and IT executives believe that employees will be managed alongside intelligent machines in the future. This will require fundamental changes in the culture of most businesses, but the correct foundation can be built with a holistic look at the value these capabilities can provide and planning the correct strategy. Technology should not prohibit these discussions which is why the ability to access these capabilities through hosted APIs is an important factor.

The ability to offer computing infrastructure with choice and consistency for cloud services that include public, private and industrial hybrid provides customers with the adaptability and optimization required to facilitate diverse workloads like cognitive in this new era of business. The combination of security, reliability, availability and scalability aligned with a commitment to DevOps powered by Bluemix and the Watson Developer Cloud – currently offering digital builders 28 APIs with plans to reach 50 Watson APIs in 2016, is setting the standard in the Cognitive Era. Some of these specific Watson APIs are listed below and span a variety of capabilities from tone analyzer to face detection.
Bluemix APIs by category
Today, like never before, we are witnessing dynamic shifts in business strategy enabled by apps, mobile, social and the internet of things (IoT). These digital transformations are creating extraordinary opportunities for consumers, companies, industries and countries throughout the world. Below, we have included a variety of samples from industries embracing the Internet of Things, Cloud and Cognitive Computing. It’s clear, we are embarking on something truly life changing as we enter the Cognitive Business Era.

Currently, it’s estimated the market for wearable electronic devices, along with apps and services for sports fitness and personal health, is worth $1.6 billion worldwide. This market category is expected to rise to $5 billion in 2016 with companies incorporating sensors into sportswear, casual apparel, shoes, balls, clubs, goggles and helmets. Collecting and analyzing all this exogenous data from intelligent personal devices and accessories presents a huge opportunity for IBM and its partners to leverage Cloud, Big Data, Watson and Watson Health for the development of Cognitive Coaches and Watson Personalized Services. One prominent sportswear company is currently interacting with 120 million users. Their users logged 100 million unique workouts entries in January of 2015 alone, making them uniquely positioned to transform the new digital consumer, athlete, and team sport categories.

Additionally, as the average wearable device starts to incorporate approximately three times the number of sensors in 2019 compared to today, even more data will be generated. Besides sportswear and athletics, it is very likely that this data will be leveraged in augmented reality and virtual reality applications by understanding how users move. Consider that one of the largest hurdles in these technologies is how users may start to feel motion sickness. It is very likely that future applications will be able to monitor wearable data to understand how a user moves and modify an application in real time to better match the graphics to a user. In these Cognitive Era examples, we will begin to see companies introduce real-time pattern-of-performance (PoP) services for individuals powered by next generation Apps developed on IBM Bluemix with IBM Watson APIs.

The impact of these applications will be the transformation of how individual healthcare is viewed from the prospective of larger enterprises and insurance companies. With sensor data linked to cognitive capabilities, it is possible to imagine users interacting with an application to understand how their physical actions impact their behavior. For example, users may be suggested to modify sleeping habits to maximize productivity at work or make changes in caloric intake to decrease stress. Unlike other use cases where data is being used to facilitate decisions, it is interesting to see how data will be used in these types of settings to increase the power of the human element. This is possible when cloud based technologies allow sensor data to be easily brought into a developer environment where cognitive APIs can interact with data and issue recommendations via multiple channels.
The Internet of Things and Pattern of Life (PoL) Analytics are currently transforming weather preparedness. Hurricane season in the Atlantic began on June 1st and ends November 30th. Recently, across South Carolina the flooding from Hurricane Joaquin was devastating creating great loss across the state. Preparedness is critical for individuals and businesses, the combination of the Internet of Things, Pattern of Life (POL) Analytics and Cognitive Computing is enabling our communities to begin establishing a better state of readiness by predicting each individuals “Thing’s” past behavior, determine its current behavior, and its future behavior providing a time sensitive environment for personal decisioning. Historically, pattern-of-life analytics have been focused on an individual’s behavior commonly used by law enforcement organizations to uncover criminal patterns. While this certainly has its place in our global society, each individual also has a growing list of IoT enabled “Thing’s” that have a unique pattern-of-life from a Home Generator (important in a Hurricane) Dishwasher, Cable TV Box, Heater, Air Conditioning, and Refrigerators to name just a few. The growth of connected “Thing’s” from “less than 1% […] in 2014 to 51% in 2020” will also enable the added benefit of sharing pattern of life data to neighborhoods and cities helping shape conversation policies related to water and electricity. Some electric companies today are already using real time demand data to notify users to moderate usage during peak hours, but connected “Thing’s” will be able to do this proactively and automatically. Having real-time product awareness will help us proactively identify, and prioritize our “Thing’s” more efficiently enabling a safer and better quality of life in the Cognitive Era.

Micro weather patterns using Analytics

Related to weather, the use of internet of things sensors is also helping companies in the retail and consumer goods space correlate demand of various products to weather changes in real time. This enables vendors to better meet their customers’ needs by offering the right products at the correct time. In this cognitive era, businesses will be able to analyze the weather down to a store level as seen in the image above to forecast foot traffic and develop various scenarios to help managers with demand planning which avoids costly stock out situations and decreases unnecessary inventory costs; costs which leads to the estimated $30 billion that is wasted each year due to poor supply chain coordination. Retailers will also be able to create personalized offers by understanding how customers change their habits on warm or cool days (i.e. Customer A is more likely to stay at home when it’s warm, retailer can offer various incentives to shop online). These changes will introduce greater predictability into downstream demand enabling a more efficient supply chain and promoting environmental sustainability.

In healthcare and life sciences, tens of millions of Americans currently live with medical devices implanted in their bodies. Over the next two years, healthcare data will grow 99%, and 88% of all healthcare data will be unstructured. This data is coming from electronic medical records, test results, medical images, video, patient sensors, bedside devices and implants. The FDA is establishing a unique device identification system to identify medical devices through their distribution and use. When fully implemented, devices will include a unique device identifier (UDI) in human and machine readable form. The (UDI) system will improve patient safety, modernize device post market surveillance, and facilitate medical device innovation. The goal is to improve the identification of medical devices by making it possible to rapidly and definitively identify a device and key attributes that affect its safe and effective use. This will facilitate a more accurate reporting of adverse events (AEs) by making it easier to pinpoint the device at issue enabling better patient engagement. Early intervention is important inside and outside the hospital. It’s estimated that 50% to 75% of all sports-related concussions are “missed.” The long term effects of multiple concussions are currently being studied by researchers around the globe. The Internet of Things (IoT) is helping to reduce the estimated 1.6 million to 3.8 million concussions that occur in sports like football, basketball, baseball, ice hockey and soccer each year. The exciting news is sensor technology embedded in helmets now has the ability to track and measure the impact and severity of head injuries. Sensor and Helmet manufacturers are quick to point out that their products don’t diagnose concussions or any other injury. They however say, their devices and helmets do give coaches and trainers additional criteria that can help in determining whether a player should come out of a game or seek immediate medical attention. This represents a positive first step as fewer than 10% of sports related concussions involve a loss of consciousness (e.g, blacking out, seeing stars, etc.). It estimated that 5-10% of all athletes will experience a concussion in any given sports season with 78% of concussions occurring during games (as opposed to practice). With over 1,093,234 young men playing high school football in 2015 and countless young women and men playing soccer, ice hockey, baseball, and basketball it’s clear that Cloud, IoT and Cognitive based technologies have a tremendous opportunity to improve player safety.

In closing, we thought it was important to include a more festive example of the Cognitive Business Era. Oktoberfest is the world’s largest Volksfest (beer festival and traveling fun fair). With more than 6 million people from around the world attending the event every year and large quantities of Oktoberfest Beer consumed, an estimated 7.7 million liters are served during the 16 day festival. The Internet of Things, Big Data and Cloud Computing have the ability to transform everything from lighting, sanitation, energy, and most importantly beer delivery. IoT enabled bracelets with localization information can also improve crowd management improving security creating the best “Oktoberfest” experience for everyone. We also understand some brilliant inventors have developed beer tables and coasters that utilize sensors to track the number of beer mug lifts and fill levels alerting waiters just in time (JIT) for the next (IoT) beverage. Cognitively speaking Cheers!

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