05/01/2023

1Why you should care about the Cognitive Enterprise… Explained through a business case

LUIS CARRASCO-CORTESIBM COGNITIVE PROCESS TRANSFORMATION LEADER, CANADA AND CARIBBEAN.ALL OPINIONS ARE MY OWN

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2Let’s explain through an example

We will analyze two companies “A” and “B”Business case will be their supply chain

management functionOutcome will be the effectiveness of their

inventory management, sales and cash flow

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3Let’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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4Company 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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5Company 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 webAs such they are state of the art as of October 6, 2015

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6Company 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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7Company 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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8Company 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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9Company 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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10So, 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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11Watson: 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