IBM Cognitive Computing Results Here

IBM released the latest study on cognitive computing from its Institute of Business Value (IBV) and it brings a classic good news/bad news story line. The good news: professionals using cognitive computing are able to create and deliver the personalized, intuitive experiences customers demand. The bad news: cognitive computing could also be one of the most disruptive forces their organizations face. However you see the cognitive glass—half full or half empty—IBV calls cognitive computing “game-changing technology.”

ibm ibv info graphic

Cognitive could be the answer to marketers’ and sellers’ prayers or nightmares Still, it appears to the IBV researchers that Chief Marketing Officers (CMOs) and heads of sales are ready to take the gamble and make the cognitive leap. Nearly two-thirds of those surveyed believe their industries will be ready to adopt cognitive solutions by 2020.

The technology can quickly make sense of vast amounts of structured and unstructured data, including sounds and images, in ways similar to humans—by reasoning, learning, and interacting to improve accuracy overtime. Companies identified as outperformers report cognitive is already operational at their organizations, with 73 percent already collecting and analyzing external market data.

Many marketing and sales executives, IBV researchers report, expect their organizations’ cognitive spend to increase within the next three years. Today, 63 percent estimate that cognitive accounts for 5 percent or less of their organizations’ IT budgets, including 18 percent who say it constitutes zero. Of those, 5 percent say their cognitive budget will still be zero in three years. By then, 21 percent expect it to grow to 5 – 10 percent. Almost a quarter of outperformers say it could account for more than 20 percent of their IT spend.

Respondents have high expectations that this technology will pay off. Nearly a third say their organizations would need a 10 – 15 percent return to justify their investment. More than half expect their organizations to recover their cognitive investment within 2-4 years. Clearly they expect the payoff from cognitive insights to come fast.

Today’s big driver, IBV researchers found, is customer satisfaction. Meeting or exceeding customer expectations is a common buzzword of many managers. But practically speaking, the researchers continued, many of those surveyed say they aren’t sure their organizations are currently set up to make a successful transition. The study, conducted in cooperation with Oxford Economics, is based on a global survey with 525 CMOs.

Traditional analytics long provided data for businesses to draw insights. Cognitive analytics goes further, providing predictive outcomes that turn insights into forward-directed recommendations, which, hopefully, impact real business decisions.

But the results are not guaranteed. The IBV researchers found that it’s important that organizations not simply focus on their expectations of better marketing and sales results. Rather, they also need to take into account the efficiencies and cost savings they could potentially gain with cognitive solutions, particularly for sales prospecting and management, as well as the media and marketing spend. Additionally, cognitive computing’s ability to help companies improve their customer experience should be included in any company’s ROI calculations.

Many eager adopters, however, report being hampered by a number of challenges, according to the IBV report. CMOs, for instance, complain they lack the technology needed to implement cognitive solutions. Additionally, they don’t believe they have enough of the required skills and expertise. Others suggest data governance and data sharing policies present a barrier while CMOs worry about security and privacy implications.

Still others cite a more elemental concern:  a lack of executive support for cognitive computing and worry their organizational culture may not be a good fit for a cognitive solution. At first glance, this seems surprising, given their apparent faith in cognitive benefits and the anticipation their industries will be adopting cognitive as the new normal.

The IBV findings, however, reveal executives’ mixed emotions about what the change cognitive represents for their companies. Many say they are feeling overwhelmed by the challenge of adopting yet another new technology and processes. Some marketing teams are in the midst of their own digital transformations. The adoption of cognitive computing, however, can be integrated into their current digital strategy and the tools they are using today, if they have some key capabilities in place. To some, that might be a big if.

To ensure the best results, IBV suggests:

  • Make room for cognitive solutions in your businesses’ digital reinvention strategy from the start
  • Enhance employees’ business skills, not just their data analytics skills
  • Make cognitive a golden opportunity for collaboration, innovation, and closer alignment within the C-suite
  • Start small if necessary but do start, preferably now

Cognitive can applied in many ways in different areas of the business, potentially benefiting any of them. But until you try you can’t tell. The real risk, notes IBV, is waiting too long on the sidelines while the competition forges ahead. That’s a story you’ve heard before.

DancingDinosaur is Alan Radding, a veteran information technology analyst, writer, and ghost-writer. Please follow DancingDinosaur on Twitter, @mainframeblog. See more of his IT writing at and here.


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