Cognitive Computing and the True Cost of Disruption
Startups are known for their incredible innovation, very rightly so. There are many companies in Silicon Valley, Wall Street and the world over that have achieved incredible feats in face of incredible odds – no real investments, no customer relationships, no data to train on, no institutional knowledge, etc. Some of the best management strategy brains have pondered on why most enterprises don’t innovate at a similar pace. They either pay a premium for these startups or fall by the wayside.
Enterprises cannot afford innovation like a startup with acceptable risks, which is a lost opportunity. Cognitive computing is addressing that.
Turns out, innovation is a matter of financial risk management. Think of a super successful startup, and the amount invested to get it going. It is actually amazing how little achieves how much. However, that is just the tip of the iceberg. You cannot ignore other competitors’ costs – the investments behind the fallen players, the opportunity cost of their capable founders, the sweat equity that did not materialize or the customer value destroyed when their products or services did not impress.
Turns out, the marketplace awards the right ideas and nudges others out. In the process it creates incredible value but hides the true costs. However, lets say a corporate manager is tasked with achieving the same innovation with risks acceptable to an enterprise. The budget any sensible manager would come up with is not what it took for the super successful startup, but something comparable to what was invested in the entire market – the success stories and the forgotten ones.
Turns out, disruptive innovation is incredibly expensive. Most enterprises, very prudently, limit R&D to incremental ideas and would rather acquire such innovation. There are notable exceptions to this, but very few without billions of dollars in cash flow.
Enterprises have inherent advantages in terms of resources, relationships and data, which make innovation more productive.
This is such a lost opportunity. No business is built without trusted customer relationships – something startups work very hard on, and get to develop only over time. And most technologies today need huge amounts of data to train and develop. Two things enterprises have in abundance. If only enterprises could afford disruptive innovation, the quality and pace of innovation would be so much higher.
To make such innovation affordable is the true promise of cognitive computing. Technologies like Watson and Coseer are automating workflows, redefining customer experiences and changing the way business is done. Machines are beginning to deliver human-like services and automate human-like processes, which is making it easy for enteprises to test ideas, to adapt and to scale. The cost of delivering and testing a product is being slashed to a fraction, and budgets for disruptive innovation are beginning to make sense. With cognitive technology, enterprises can now leverage their resources, relationships and data to achieve scenarios like given below:
- Hospitals come up with personal preemptive care-plans for each patient, and administer it with a series of phone calls. On these calls someone patiently explains next steps, answers questions and calendars a follow up appointment. All this is done based on very specific precedents located worldwide.
- Banks anticipate every small and big need of each customer and call them with timely and sound advice about financial products. The decisions and pre-approvals are made not just on credit scores, but on a wholistic profile including spending and social behavior.
- Universities create customized courses for each student, creating modules and tests based on individual skill levels, weaknesses and strengths. The course content stays up to date with latest developments, publications and discoveries.
This is possible at various levels of budgets. Watson or similar technologies need the resources and the time necessary to train a super computer. Light footprint technologies like Coseer work on specific problems to deliver high accuracy in no time.
In either case, cognitive computing is bringing enteprises back to the game of disruptive innovation.