The Cognitive Enterprise (1 of 4)

Aug 1, 2020

This four part series will describe each part of what is termed "The Cognitive Enterprise".

  1. The Cognitive Enterprise (1 of 4)
  2. Market Making Business Platforms (2 of 4)
  3. Intelligent Workflows (3 of 4)
  4. Enterprise Experience and Humanity (4 of 4)

The digital journeys over the past decade are now cognitive journeys driven by the maturity of AI, blockchain, automation, Internet of Things (IoT), 5G, edge computing and other exponential technologies (Exponential technology is: (1) In each period it doubles in capability or performance (2) The price-performance of the technology makes it possible to solve today's business problems in ways that were not previously possible.) As these capabilities are applied at scale, they increasingly result in changes to the core of the organisation.

A cognitive enterprise has  a culture of agile innovation driven by an ecosystem of business platforms. They run on an open and secure hybrid multi-cloud infrastructure and use intelligent enterprise workflows.

This has allowed the incumbents, the traditional insurers, to compete with the digital disruptors and leverage their in-built scale, data, skills, and channel power (the ability of an insurer to alter or modify the behavior of the distribution channel, due to its relatively strong position in the market).

There are three components underpinning this :

  1. Market-making Business Platforms leverage data to reinvent competitiveness and create new market opportunities, often straddling organisation and industry boundaries.
  2. Intelligent Workflows mix end-to-end and front to-back processes with exponential technologies to deliver exceptional outcomes and differentiation.
  3. Enterprise Experience and Humanity recognises that any new business platform will only succeed if it embeds a compelling experience for customers, employees, and partners, while nurturing the human-technology partnership.

Introducing the Cognitive Enterprise

Business platforms must be digitally connected from the outside-in (the demand for digital services) and fully cognitively enabled from the inside-out (new outcomes, AI, blockchain, automation).

Becoming digital is not the destination of organisations. Instead, it is a stage in the transformation into a Cognitive Enterprise. That journey starts with data and the technologies that extract its full value, then inform intelligent, differentiating workflows. The data will generate contextual insights that improve processes and allow employees to make better and more timely decisions - also referred to as becoming a Data Driven Company.

But people are important, and upgrading employee skills are vital to building competitive advantage.

A platform-centric business model
Platform centric model

Defining the Cognitive Enterprise

Imagine the Cognitive Enterprise as composed of multiple business platforms. One or more of them acts as the core for primary platform(s), creating business differentiation. From a strategic perspective, these primary platforms will:

  • Be the new instantiation of the strategy of an organisation
  • Act as a “North Star” for change programs and investment priorities to help navigate from legacy capabilities to the future
  • Form the basis of and act as critical connective tissue with other ecosystem partners and networks
  • Continuously learn and keep getting smarter over time through AI and machine learning.

Organisations will also leverage secondary or supporting platforms. For example, decision and back-office processes, as well as underlying technology suites, may be used to partner with other industry players or third parties.

In turn, the business platforms, intelligent workflows, exponential technologies, and data are supported by next-generation applications. These applications offer solutions made possible by an open, secure, and hybrid multi-cloud infrastructure. Each of these capability layers is wrapped in an agile, skills-based culture that fosters new ways of working and drives new employee experiences.

The layers of the Cognitive Enterprise

Capability layers of the cognitive enterprise

  • A culture of agile innovation - A culture of agile innovation embraces new skills and ways of working, while empowering the employee. In the Cognitive Enterprise, agile teams span organisational boundaries - between business and IT, as well as support functions. They are empowered to make decisions by the data and insights generated along intelligent workflows. Leaders "let go" by establishing a skills culture, one in which employees are motivated to learn and take on new roles.
  • Powered by an ecosystem of business platforms - An economy remade by platforms has been emerging for more than a decade. Some platforms already occupy winner-take-most status. Business platforms create new advantage, then evolve and scale those capabilities over time. Cognitive Enterprises can gain competitive advantage with a business platform composed of proprietary workflows, leveraging new technology platforms for speed and mass consumer platforms for ecosystem connectivity. Read more about 'ecosystems'. 
  • Activated by Intelligent Workflows - Cognitive Enterprises operating on business platforms are often focused on being the very best in one core area, whether that’s a customer-facing experience or an aspect of their supply chains. Intelligent workflows deliver data to humans (IOT, 5G, Automation, and AI) who make more effective and timely decisions. By automating routine activities, they free up employees to take on more complex decisions, bigger tasks, and new roles.
  • Made possible with exponential technologies - The emergence of new technologies, applied in combination, have the potential to transform all activities. Whether it is AI,automation, IoT, blockchain, 5G, or others, these technologies are maturing to the point where they can be deployed and exploited at scale. What successful transformations often have in common is that they have made their customers the center of gravity. From there, they identify novel workflows and opportunities to apply exponential technologies in concert, and describe themselves as customer centric.
  • Fueled by data - About 80% (IBM, 2019) of the world’s data is behind the firewalls of organisations. As they take advantage of new technologies (for example, sensors and videos), the data they hold grows exponentially. Incumbent organisations have also extracted data in abundance from activities in both online and physical domains. Most organisations have big data but draw too little insight and value from it. The inability to collect, select and present this data impacts decision making, as well as in inability to tap into new sources of data and to acquire and share data with ecosystem partners.
  • Using next-generation applications - The digital architecture of the modern enterprise isn’t equipped for the openness and flexibility that business platforms require. Accidental architecture and legacy systems lock in outmoded processes and workflows, and growth can no longer be sustained. Elegant experiences that customers anticipate exert new pressures on the application architecture and can be hard to integrate into legacy systems. The next generation of systems will act as a backbone for Cognitive Enterprises. Their workflows will use external and internal data and exponential technologies to integrate traditional processes. For example, by augmenting the financial journal entry process in legacy ERP with intelligent robotic process automation (RPA), companies can automate the collection, extraction, and validation of financial data from emails and other sources.
  • On an open and secure hybrid multi-cloud infrastructure - Intelligent workflows span multiple processes and business functions, and thus will include many different applications. Front-office applications, such as customer inquiries (checking order status, for example), make up a large portion of what has gone to public cloud. Mission-critical, security dependent applications, such as customer databases, transaction processing, finance and accounting, supply chain, and manufacturing are, in many cases, better suited to private cloud - or a mixture of public, private, and traditional IT. In order to build intelligent workflows, applications housed in different cloud environments will need to be orchestrated for seamless interaction and business agility. With open, hybrid multi-cloud, organisations can run applications in the environments best aligned with security, regulatory, and governance, with access to data given on a permission basis. 

There are nine Action Areas which are seen as critical to making progress towards being cognitive:

  • 1) Market-making Business Platforms
    • Double down on "Big Bets"
    • Create a new business blueprint
    • Orchestrate compelling change
  • 2) Intelligent Workflows
    • Embed exponential technologies
    • Drive value from data
    • Deploy through hybrid multi-cloud
  • 3) Enterprise Experience and Humanity
    • Elevate human-technology partnerships
    • Cultivate smart leadership, skills, and culture
    • Perform with purposeful agility

Becoming a Cognitive Enterprise involves risk and orgnisations strive for certainty and de-risking of the journey. Balancing agility and flexibility with near certain outcomes is at the heart of success.

Read more:

Market Making Business Platforms (2 of 4)

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