Revolutions occur when people are dissatisfied with the status quo and rise up to change things or when disruptive technologies emerge that force change on the existing system. The latter revolutions are often called industrial revolutions. The new way of doing things often causes chaos and creative destruction as old businesses are replaced by new ones. According to Lora Cecere (@lcecere), founder and CEO of Supply Chain Insights, both dissatisfaction and disruptive technologies are currently in play. Cecere asserts business leaders should be dissatisfied with the current state of things and believes new technologies can help their companies transform into digital enterprises. Why should business leaders be dissatisfied? She explains, “American productivity from the Third Industrial Revolution stalled in 2004.”[1] What can be done? “To break the current cycle,” she writes, “there needs to be a conscious choice to take off the handcuffs and eliminate the barriers for process innovation. Maximizing the value from new technology innovation requires questioning the status quo.”

Trends Driving Digital Enterprise Transformation and Industrial Revolution

“Today, the industry is abuzz with the promise of a fourth industrial revolution often called the digital revolution,” writes Cecere. “It takes many forms: uberization of assets, hands-free processes, the effective production and delivery of the each, the change in business processes to sense at the edge and move data at the speed of business using Internet of Things, the disintermediation of banking using cryptocurrency and blockchain. It is not one technology. The excitement stems from the use of multiple technologies — 3D printing, autonomous vehicles, blockchain, cognitive computing, internet of things (IoT), mining of unstructured data forms, new forms of sensors, robotics, open source analytics, wearables — to transform business processes.” Many of those technologies have been characterized as “disruptive” on their own. When so many disruptive technologies emerge at the same time, there is little wonder revolution is in the air. That’s not a bad thing. Cecere notes, “There are numerous opportunities: redefinition of channel strategies, service models, replenishment, and digital manufacturing.”

Although the need to transform and join the revolution may seem apparent to most analysts, some companies have been slow to act. When Penny Delgadillo Valencia, Senior Vice President of Global Audience and Strategic Partner Marketing at SAP, interviewed Dr. Craig Brown, a technology expert, entrepreneur, and author, he suggested confusion was part of the problem. “I see a disconnect with my customers about machine learning and AI,” he told Valencia. “Some customers are much further along the implementation process than others. Many of my clients see data as valuable, but they treat it as a liability that needs to be managed, rather than an asset. They need to see use cases of when these technologies brought value to businesses in order for them to visualize how it can impact their company.”[2] It’s easy to understand why some business leaders are confused. Business leaders often fail to see the benefits of new technologies until someone else proves their worth. When those technologies are primarily located in the information technology sector, seeing the benefits can be difficult. Unfortunately, business leaders don’t have a great deal of time to sort things out. Rob van Egmond, Chief Executive Officer at Quintiq, explains, “Digitalization is changing the game in many industries.”[3] He adds, “[Digitalization] introduces new opportunities for profit gains, but it also presents additional layers of complexity. You know that complexity can’t be avoided — it’s a natural byproduct of business growth. But here’s what you may not know: Complexity isn’t just to be managed or contended with. It’s something that you can control. When you stop struggling to cope with complexity and master it instead, great things start to happen in your organization as a whole.”

Cognitive Computing and the Digital Enterprise

Cognitive computing platforms can help deal with complexity and are great launching pads for digital transformation. Cognitive computing platforms can collect and analyze both structured and unstructured data to provide actionable insights for business leaders across an organization. They can be used to control processes, detect anomalies, and make autonomous decisions. And according to Jason Nathan, group Managing Director for data at Dunnhumby, business leaders don’t have much time to act. He told participants at a recent event, “Organizations who haven’t put into place a sequence of events and talent to become data driven are effectively sinking or sunk.”[4] Cecere suggests this could be a problem. Why? “Today there are 3X more laggards than innovators.” Boston Consulting Group analysts Stuart Scantlebury, Jeanne Ross, and Wolfgang Bauriedel asked the following questions of business leaders:[5]

• How does a company go about designing itself to become more digital?
• What particular management practices facilitate digital redesign?
• Which dimensions of a company’s operating model need to change in order to succeed digitally?

They found: “Since the beginning of the current millennium, most of the successful companies we studied had already gone through some form of major business transformation, typically redesigning their internal operating models. They had pulled numerous activities from business units and local offices and had placed these activities in new shared-service organizations.” One of the benefits of a cognitive computing platform is that it can integrate data providing consistent access (i.e., a shared view of data) to decision makers across an enterprise. Scantlebury, Ross, and Bauriedel went on to note, “[Digital enterprises] use new digital technologies in two ways, often simultaneously. First, they bake digital technologies into their products and services. … Second, interactions involving customers, employees, business partners, suppliers, investors, and regulators, are increasingly digital. … Indeed, the companies we studied made explicit design changes in five separate dimensions of their businesses: customer experience, product and service offerings, ecosystems, control and alignment mechanisms, and ways of working.” Cognitive computing platforms can help in each of these areas. The BCG analysts conclude:

“Digital businesses are heavily dependent on software to facilitate seamless end-to-end experiences; store, process, and analyze data; and bring new products and services to market. As a result, companies need to be designed with the same kind of detailed attention to component interaction that is applied in complex-system design. … The design of a digital organization starts with a digital business strategy. Because digital technologies offer a constant stream of new opportunities, the best digital strategies provide a clear direction while remaining responsive to shifting circumstances and prospects. As a result, digital strategies tend to be more visionary than traditional business strategies.”

Because cognitive computing platforms use natural language processing, they democratize access to data and insights across the enterprise. Because they learn as they work, cognitive computing platforms are agile and adaptable (i.e., they remain responsive to shifting circumstances).

Summary

Cecere dares business leaders to “challenge traditional paradigms and take the plunge to redefine the possible.” Sriyani Rao (@SocialYani), Social media marketing manager for Quintiq, adds, “Agility has never been more important in the digital age, where things can change at a moment’s notice and customers expect fast turnarounds. From our experience, we see that agile companies have a clear advantage over the competition, able to offer higher service levels while keeping inventory levels lower. The key to agility is to have the right information at your fingertips and adjust your operations where necessary.”[6] Cognitive computing platforms can help your company remain agile, have access to an integrated database, and deal intelligently with complex issues. Today’s business leaders need to be data-informed, insight-driven, and visionary. It’s time to join the revolution.

Footnotes
[1] Lora Cecere, “The Talk Business Leaders Need to Have To Drive A Digital Transformation,” Forbes, 4 July 2017.
[2] Penny Delgadillo Valencia, “Three Digital Transformation Megatrends, Insights from Dr. Craig Brown,” SAP News Center, 21 June 2017.
[3] Rob van Egmond, “Stop Struggling and Master Complexity Instead,” Supply Chain 24/7, 4 July 2017.
[4] Stuart Sumner, “‘Firms who aren’t moving towards being data driven are either sunk or sinking,’ says Dunnhumby,” Computing, 21 June 2017.
[5] Stuart Scantlebury, Jeanne Ross, and Wolfgang Bauriedel, “Designing Digital Organizations,” bcg.perspectives, 5 December 2016.
[6] Sriyani Rao, “How to Master Visibility, Data Analytics & Agility,” Supply Chain 24/7, 5 July 2017.