We are about to take a detour from the traditional ways of using computers to solve problems. Tomorrow’s market leaders will be the companies able to leverage their unique knowledge, intellectual property, and data mining skills to create products that understand context, predict outcomes, and continue to learn from vast amounts of information collected daily.
Today’s corporate computers are designed to give business leaders precise information about operations such as sales, customer support, supply chain, and the like. These systems were built with a rigid set of processes and assumptions about the information managers require. But the advent of data analytics has exposed their limitations. Companies increasingly see the value in having the flexibility to view relationships and patterns across data captured in a variety of forms including text, images, and even digital sensors.
That’s what Big Data is all about, and it’s changing our view of the value of information. It’s also providing a hint at what’s next: the ability to analyze oceans of data in context with related information and expertise. In computer science circles, this approach is known as Cognitive Computing. It is the underlying technology that allows a search engine such as Google’s (GOOG) to anticipate what you mean by the question you ask. Unlike traditional systems, cognitive computing systems learn from how they’re used and adjust their rules and results on the fly. (Cognitive Computing is the commercialization of AI–artificial intelligence—technologies, which took such a beating in the 1980s that no one uses that terminology. In those days, the over-hyped technology wasn’t mature enough for what businesses wanted to do.)
You’ve already seen this concept in action—on TV. It’s how IBM’s Watson System was able to beat Jeopardy! champion Ken Jennings. Having proven the concept, IBM (IBM) is bringing the technology to the real world, but it’s bypassing the traditional packaged software model. The software is created in collaboration with subject matter experts (read customers), hosted on powerful computers, and delivered to users as a service, via an app.
The commercialization of cognitive computing will require a new digital ecosystem. Rather than team up with software companies, IBM is collaborating with customers in everything from health care, financial services, and energy. Wellpoint (WLP) and New York’s Memorial Sloan-Kettering Cancer Center are creating Watson apps that will answer cancer diagnosis and treatment questions from doctors, researchers, and insurance companies. A second Watson service used by at least 10 companies helps call center workers provide better-informed answers.
More commercial solutions are coming, not just from IBM. Companies like Google, Apple (APPL), and Facebook (FB) already use cognitive computing behind the scenes in products like Siri and search engines.
What does this mean for business leaders? There’s a place for the traditional static programs, but imagine the advantages of custom software that can leverage proprietary knowledge and continue to learn? Companies gain because they can base business decisions on information that is often in the minds of experts but rarely in digital form. Consumers benefit because corporate services will get smarter and can be tailored to specific issues, rather than offering generic solutions that hardly address the source of a problem.
We are in the early stages in the evolution of this technology. There is a substantial investment of time, money, and resources needed to make this style of computing commonplace. That’s why now is the time to start challenging your executive team to rethink the business value of software that powers your enterprise.