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Transforming organisations from the inside out

Future-proofing businesses via the platform of Cognitive Enterprise

For the past decade, businesses have been preoccupied with Digital Transformation: a wave of change travelling at unprecedented speed and sweeping all in its path. But the time has not yet come for any CEO to rest on his or her laurels.

Not because a second wave is on its way. It is already here – and has the potential to drive greater change than anything we have seen to date. Today’s businesses stand on the cusp of a brave new world, witnessing one of those rare moments in the history of technology where the scale of its impact is big enough to transform the world of business.

The driver behind this is the pervasive availability of massive amounts of data, which we can access through new technologies. Businesses now have the power of the Internet of Things, of blockchain, 5G, Artificial Intelligence (AI) and machine learning. This is creating an explosion in the quantity, quality and diversity of the data they can access.

The majority of this data – 80% – is proprietary, meaning organisations have the opportunity to achieve things that were previously unthinkable through an unprecedented convergence of technological, social and regulatory forces.


IBM has coined the term Cognitive Enterprise to define this next-generation business model. At the heart of the concept is a shift from the “outside-in” approach of digital transformation to an “inside-out” exploitation of data through exponential technologies, delivered on open, hybrid and secure multicloud infrastructures. 

“At IBM, we see companies placing bets on the creation of business platforms to solidify competitive advantage and differentiation. These platforms must be massively digitally connected from the outside-in and fully cognitively enabled from the inside-out,” says Mark Foster, Senior Vice President of IBM Global Business Services.

​“Most organisations, though, are just beginning to prepare for the dramatic changes that will characterise the coming decade. Organisations are finding that the biggest barriers to progress are their own people and culture. They need different mindsets and skills to take advantage of new business capabilities.

“In the Cognitive Enterprise we see potential for huge value in both the short and long term, as well as substantive challenges.”

Proprietary platforms

The Cognitive Enterprise enables businesses, large and small, to take on the behemoth platforms such as Amazon at their own game. As companies around the world describe their strategies in terms of platforms, they are anchoring to the idea of a “stage” or “field of operation” – an area where a range of unique capabilities can be deployed and where the companies can seek to establish a control point over a range of value-creating activities.

In the Cognitive Enterprise we see potential for huge value in both the short and long term, as well as substantive challenges

These could be business platforms (which differentiate an organisation by combining data, unique workflows and expertise to drive competitive advantage), technology platforms (application and infrastructure that underpin workflows) or mass consumer platforms (such as Facebook, which often generate data or insights that can be leveraged by businesses as part of their value propositions).

The platform, however, is just one of IBM’s Seven Pillars – each making an equal contribution to the transition. This structure enables businesses to take the leap into the future with the security of a solid, reliable structure which will ease the process. And it is crucial to remember that humanity – the personal touch, human interaction and empathy – is a core factor in leveraging the potential of new technologies and AI. People are key.

“The professionals and experts who sit in our newly enhanced workflows need to apply even more experiential intimacy, creativity and empathy,” adds Foster. “This clarifies and communicates a clear company purpose. It anchors the underlying values which should still inform the core of these new business models.”

Seven Pillars

Seven essential actions lie at the heart of successful digital and cognitive transformations. Each carries equal importance, which is why the Garage, IBM’s centre for high-impact, client-centric innovation, is of such significance. The IBM Garage engages diverse, empowered teams that partner with companies to apply powerful technologies which quickly create and scale new ideas. This is Digital Darwinism in action: evolving businesses to their next chapter.

The IBM Garage engages diverse, empowered teams that partner with companies to apply powerful technologies which quickly create and scale new ideas

So, what are the Seven Pillars? Firstly, businesses create platforms to unleash Digital Darwinism, leveraging deep expertise and data synergies to seize expansion potential. Secondly, they must leverage the incumbent advantage in their proprietary data.

Next the architecture of the business is remodelled to drive the target operating model of the Cognitive Enterprise, followed by redesigning the company workflows around AI. Customer-facing workflows must be humanised, as well as automated, end to end.

Fifth on the list is agility, changing fast and implementing the DevOps (an agile relationship between development and IT operations) of business change. Alongside this businesses must reinvent their workforce to ignite talent – supporting rapid skills transfer and development.

Finally, and just as crucially, come the issues of trust and security, without which none of the above will mean anything. Security of the business platform will be critical to its trust and longevity.

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