Company B implements a cognitive business model using IBM's Watson APIs. This allows it to analyze unstructured data like human sentiment and the impacts of events to better predict demand fluctuations. With this deeper understanding, Company B's supply chain management is more effective than Company A's, which only uses structured data. As a result, Company B gains market share over Company A by reducing inventory risks and more closely matching sales to demand. The document argues that cognitive systems can provide companies with competitive advantages through more nuanced analysis of human behaviors and external influences on business.

1. Why you should care about the
Cognitive Enterprise… Explained
through a business case
LUIS CARRASCO-CORTES
IBM COGNITIVE PROCESS TRANSFORMATION LEADER, CANADA AND CARIBBEAN.
ALL OPINIONS ARE MY OWN
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2. Let’s explain through an example
We will analyze two companies “A” and “B”
Business case will be their supply chain management
function
Outcome will be the effectiveness of their inventory
management, sales and cash flow
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3. Let’s explain through an example
Both companies are pursuing the identical
customer set
Therefore, any market share gain by one of
them is a direct loss for the other.
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4. Company A = Non Cognitive Business
Model
Has millions (or billions) of data points in their internal
systems to create forecasting models
Has analytical systems that allow it to get insight from
the data
They can even make predictive assessments
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5. Company A = Non Cognitive Business
Model
They are completely plugged into the Internet and
have access to all external data
They transact business digitally through mobile and
web
As such they are state of the art as of October 6,
2015
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6. Company B = A Cognitive Business
Model
Company “B” is the same size as “A” and targets the
same customers
B has all the IT capabilities of “A”
But “B” also uses cognitive capabilities powered by
the Watson Computer through its cloud based API’s
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7. Company B = A Cognitive Business
Model
As a result, B’s supply chain can also measure:
 Human sentiment: How people “feel”
 Human personality analysis
 Understand the “tone” in writing to extract sentiment
 Can understand the impact of major events such as economic shocks, politics or
weather…
 And much more…
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8. Company B = A Cognitive Business
Model
With this deeper understanding of human
behaviour and the impact of events
Company B can add a level of nuance to their
supply chain management, which is impossible
to achieve today
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9. Company B = A Cognitive Business
Model
 Every area of Company B is impacted by Watson, for example:
 Marketing can ask deep questions in natural language conversationally and get answers they can
immediately understand to create enhanced outcomes with clients
 Research, Engineering & Design can create products that are deeply relevant to their clients and
more unique
 Manufacturing: The very products that are created can have cognitive capabilities so they learn and
improve with time and experience
 The list is endless…
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10. So, which company wins? A or B?
 This is not theory, this is real:
 Company B can see peaks and valleys in demand that are
invisible to A, and the variance can be massive
 This translates into a large and short term competitive
disruption of A’s business, since they both target the same
customers
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11. Watson: What are the key attributes of
a Cognitive System?
 They understand unstructured data, through sensing and interaction;
 They reason about this data by generating hypotheses, considering,
arguments, and recommendations; and
 They learn from training by experts, from every interaction, and from
continually ingesting data.
 In fact, they never stop learning.
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12. This is the very beginning of a transformative journey for all of us.
As I learn more, I will share more.
Thank you
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