Digital Transformation and the Intelligent Enterprise

Stephen DeAngelis

October 24, 2016

“While 2016 is unlikely to provide robots that are able to sense, respond and adapt to people,” wrote Frank Palermo (@FrankPalermo) in January, “this year should be a game changer in terms of the adoption of AI and the emergence of the Intelligent Enterprise.”[1] Ten months on we have seen a lot of discussion about digital transformation; but, 2016 has not been the breakout year predicted by Palermo. One of the reasons digital transformation has so far failed to make a significant impact is that business leaders still aren’t sure what it means to become an intelligent (or cognitive) enterprise. James Bourne (@James_T_Bourne) reports that a study published by IFS concluded, “While the vast majority of enterprises are keen on pursuing a digital transformation strategy, two in five don’t know how to go about it. 86% of the almost 500 senior decision makers across a variety of industries including manufacturing, automotive and energy argued digital transformation would play a key role in their market, yet 40% do not have a strategy for it.”[2]

 

Defining what it means to become an intelligent enterprise is difficult because it means something different in each economic sector and for each company. Hence, an important first step in digital transformation is creating a vision for the future. David Weldon (@DWeldon646) reports a Gartner study concludes, “IT leaders [should] lead digital transformation efforts at their organizations, and that best starts with creating a vision for their own industry.”[3] The report also concluded, “More than 40 percent of enterprise revenue is expected to come from digital business by 2020. This is nearly double the percentage of 2015. But many organizations have yet to start a digital transformation effort.”

 

Cognitive Computing: The Brains of Digital Transformation

 

Many analysts believe that regardless of the industry sector in which a company operates cognitive computing is going to play a significant role. “Cognitive technology has been getting a lot of attention of late,” writes Shailendra Kumar, a partner and Asia Pacific distribution Leader for IBM Cognitive Solutions, “and it’s no wonder. Cognitive technology will soon impact practically everything, and it already provides glimpses of a future that we have probably not yet dreamt of.”[4] Palermo adds, “Cognitive computing will … become more and more accessible to the enterprise. This development is being fueled by big investments from major players such as IBM, Microsoft, Apple and Google, as well as an array of startups pushing the boundaries of cognitive computing.” Although there is no single approach to cognitive computing, I define cognitive computing as the combination of semantic intelligence (i.e., natural language processing and artificial intelligence) and computational intelligence (i.e., advanced mathematics). The Enterra Solutions® entry in the cognitive computing field is the Enterra Enterprise Cognitive System™ (ECS) — a system that can Sense, Think, Act, and Learn®.

 

Cognitive computing democratizes access to advanced analytics because users can interact with these intelligent systems using natural language. Because cognitive computing systems can gather and integrate both structured and unstructured data, they can help break down corporate information silos and provide a single version of “the truth” for decision makers (i.e., all departments draw from the same database). This capability alone can help companies with their digital transformation efforts and corporate alignment. Other benefits offered by cognitive computing systems include the ability to automate routine decisions, optimize processes, and provide business executives with actionable insights. In short, cognitive computing systems will be the brains of the intelligent enterprise.

 

The Internet of Things: The Central Nervous System of Digital Transformation

 

Just like the human body needs a central nervous system to transmit instructions from the brain, a company also needs a way to connect all parts of the enterprise to its cognitive computing system. That function is going to be assumed by the Internet of Things (IoT), which is primarily a machine-to-machine network. “The IoT,” writes Sue Marquette Poremba (@sueporemba), “is a driving force behind … digital disruption, providing a limitless opportunity to innovate and create disruptive technology services and products.”[5] She adds:

“Expect the IoT … to become an even more integral part of digital disruption as technology advances. There will be more sensors, more data collected, and increasingly smarter results based on all of this information. But while this presents unprecedented opportunity for enterprise use, there will remain the need to be aware and vigilant of this vast amount of information. Understanding how to manage the flow of data from the IoT is one of the challenges of digital disruption.”

The “smarter results” referred to by Poremba are not going to come from the IoT but from cognitive computing systems — as will the capability to “manage the flow of data from the IoT.” The term “Internet of Things” is a bit misleading. It implies the existence of single network providing machine-to-machine connectivity around the globe. In actuality, the IoT is a network-of-networks. How companies will implement and connect these networks remains to be seen.

 

Digital Processes: The Functional Appendages of Digital Transformation

 

Instructions from the brain, transmitted through the central nervous system, are carried out by various organs and appendages in the human body. In the intelligent enterprise business processes fulfill the same function. “It’s no secret,” writes Samuel Greengard (@samthewriter), “that digital processes are the key that unlocks competitive advantage and business success.”[6] A white paper by Redwood Software states some executives remain skeptical about process automation because it is often referred to as Robotic Process Automation (RPA). The term “robotic” conjures up images of mindless machines. It states, “Despite there still being a large contingent of detractors that believe that the rise of software robots in modern society is a threat to industry and our proven way of working, there are still a great many others that are optimistic about their future roles in the enterprise.”[6] In the white paper, Neil Kinson (@nkinson), Redwood’s Chief of Staff, tries to eliminate concerns about mindless machines taking over processes. He states, “When we talk about robotics, we are no longer talking about basic machines that replicate human activity, but an opportunity to re-imagine business processes and their interdependencies. We are no longer plugging in ‘dumb’ machines, but integrating smart technology with built-in understanding of the end-to-end process and best practice.” Whenever the adjective “smart” is introduced into a discussion, cognitive computing is generally the technology to which the term refers. That’s why, whenever cognitive computing is involved in process automation, I prefer the term Cognitive Process Automation™ (CPA) to Robotic Process Automation.

 

Summary

 

Greengard notes a report entitled “Accelerating the Pace and Impact of Digital Transformation,” from Harvard Business Review Analytic Services in association with the Genpact Research Institute, found “only 21 percent of companies are truly reaping the transformative value of digital.” He adds, “It also found that digital is a competitive weapon, but its impact is unevenly distributed; risk-adverse cultures are a bigger problem than the lack of technology prowess, budget or talent; and the necessary leadership, skills, vision and approach are often fragmented or immature. In this emerging space, leaders focus their efforts differently — homing in on interdependencies across organizational processes through metrics and other tools.” Amit Midha (@AmitAtDell), President of Dell EMC Commercial for Asia Pacific and Japan, insists, “To fully reap the benefits of the digital era, organizations need to adequately address the challenges and pressures that are part of this revolution.”[7] Cognitive computing systems can help meet many of the challenges companies encounter when undergoing digital transformation. Cognitive computing capabilities can provide the foundation upon which a comprehensive digitization strategy can be built. Every corner of an organization will find cognitive capabilities useful.

 

Footnotes
[1] Frank Palermo, “The Intelligent Enterprise: Will 2016 Be the Game Changer?CMS Wire, 15 January 2016.
[2] James Bourne, “Digital transformation key but strategy unclear, argues research,” Enterprise AppsTech, 11 July 2016.
[3] David Weldon, “Organizations Need Industry Vision for Digital Business Success,” Information Management, 6 June 2016.
[4] Shailendra Kumar, “Cognitive Retail: The Future Is Here,” Information Management, 30 June 2016.
[5] Sue Marquette Poremba, “The Digital Disruption Revolution,” IT Business Edge, 29 August 2016.
[6] “The Power of Robotics in Shared Services,” Redwood Software, 2016.
[7] Amit Midha, “Navigating a successful digital journey in the era of infinite possibilities,” Enterprise Innovation, 19 September 2016.