IBM’s CEO, Ginni Rometty declared this week that we are in
the “Cognitive Era”. According to IBM’s
release, we are in a new era of technology, a new era of business, a new era of
thinking. What does this all mean? How
can we apply it?
To give some context to the cognitive era we have to look at
the business computer “eras” that have come before this. The “Tabulation Era” was the first. Calculating and accounting for all of the transactions
that occurred were used by super computers to keep track of the
statistics. Issuing inventory was kept
in a ledger, and then the data was entered into the GL systems for tracing and
accounting.
The second era came with the advances in technology to
automate processes, or the “Automation Era”.
Think of computer programming and the programs that combined multiple
functions together. ERP systems combined
operations processes such as inventory issuance with accounting systems
eliminating the need for multiple processes in order to record the transactions. The system is “rules based” and rigid based
on what was programmed.
That brings us to what is being described as the “Cognitive
Era”. Dictionary.com defines “Cognitive”
as “relating to the mental processes of perception, memory, judgment and
reasoning”. So the “cognitive era” in
our example means that the systems will use all of the information available to
manage the supply chain of inventory as it is required based on cognition. The difference here is that the computer “learns”
the system, and makes decisions based on what it concludes, much like a human
does.
So, what does this mean for the new era? According to IBM, 80% of all data is
invisible to computers. The data they
are referring to is “unstructured data”, which are paragraphs of text. The other 20% has been the subject of what
they call “big data”, a term used for all of the massive amounts of data that
is being created every time we turn on our smart phones, post a tweet on Twitter,
or enter a credit card number for a purchase on Amazon.com. Decisions across the globe are made every second
based on analytics arising from the 20% of structured data that’s
analyzed. Combine these decision paths
with the 80% of structured data into a system that “thinks” and you’ll get
better outcomes to very difficult problems.
I was recently given a powerful example of the combination
of structured and unstructured data in decision making that will change how
quickly a company can respond to changing product demands. In
this scenario, a marketer searches keyword terms (unstructured data) on a
popular upcoming kid’s movie across all social media. The keywords are analyzed by the system in a
cognitive fashion for the most popular terms associated with the original
terms. That is, the system “thinks ahead”
for the marketer using all of the unstructured data at its disposal. It also refines and learns patters in the
data to come up with new techniques in understanding that is being searched
for. The unstructured data is combined with
sales data, location information and demographics (structured data) to
determine where the product is most needed, by whom, and when. Data is transformed cognitively into actionable
information, in just a few clicks.
The real difference here from a typical program is that the
learning piece is added to the equation.
For computers to think and learn patterns from data is not new, in my
opinion. What is trans formative into
this new area is the cognitive system to process all of the data, structured
and unstructured, at the velocity and volumes that are being created
today. It’s not just making a decision on
the available data that makes this era so unique. It’s making decisions using ALL of the data.
I once was fortunate enough to have lunch with several
others with Steve Mills, Executive Vice President, IBM Software and Systems
back in 2011. He was asked a question by
one of the people attending, “How do we know what data to capture?” His answer,
in light of this cognitive era was poignant 4 years ago. “All of it” he answered.
I think he was right.
