How can corporates differentiate to create competitive advantage in the digital era?

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How can corporates differentiate to create competitive advantage in the digital era?

Initially published on 8 Sep, 2017 04:47 pm

Over 60 years the Information Technology (IT) industry has transformed organisations by automating tasks. Starting with simple mathematical operations, IT has now evolved to highly complex algorithms that, for example, can compute and predict national demand for utility consumption every few minutes. One by-product of this automation is the creation of digital data. What we do with this will be the story of the IT industry in the future. This ability to use data to model and ultimately predict any aspect of our work and daily life promises to fuel the next era of innovation.


The internet and its adoption have also changed the world in a way that was not obvious twenty years ago. It didn't just create a network of computers, it connected people from across the globe. Collaboration became easier and accelerated the development of ideas and new technologies within and across sectors. Just in the last ten years, we have seen a sea-change in how technology is embedded in our everyday lives. It now seems natural and acceptable that your fridge can automatically place orders to replenish the exact groceries you have used and that your running shoes can generate data to give you a real-time view of your performance – and even gamify this experience by competing with a friend who may be living 5,000 miles away.

All of this is possible through data; we are all consuming and generating enormous amount of it. So much so that each of us are creating 2.5 quintillion bytes of data every day (equivalent to 10 million Blu-ray discs). 90% of the data that exists in the world today has been created in just the last two years. Our ability to store and process structured data at scale is becoming commoditised; however, 80% of the data we create is unstructured - coming from a variety of sources such as photos, videos, logs, reports and social media posts. And, whilst our computers can save these as files, they have no idea what's in them.

Data is fuelling new industries too. A developer with a new idea can build a prototype within days – the infrastructure, tools and any data needed to realise the idea are available on the Cloud. Differentiation often comes from how varied data-sets are combined to create value for the consumer. These value-driven experiences are changing customer expectations and their interactions with brands. The most recent best experience from one brand soon becomes the lowest expectation from another brand that may be in a different sector altogether.
"An organisation with a culture of innovation, collaboration and true customer focus will be able to maintain differentiation."
"Organisations should start on their journey by exploring how cognitive systems can uncover the value hidden in their data. it will help them disrupt new markets or innovate within."
To meet these ever-increasing customer demands, corporations are embarking on "digital" journeys. Regardless of the specific project, the purpose is to use digital technologies to provide richer, smoother user experience by moving meaningful data around quickly, reducing inefficiencies and participating in value-driven ecosystems. We see these in digital platforms such as Uber and Airbnb that bring together the consumers and providers of services.

Whilst any two organisations may look the same in their digital capabilities, the real differentiation is in their execution. An organisation with a culture of innovation, collaboration and true customer focus will be able to maintain differentiation and identity in the digital world as they do in the physical world. The winners will use their digital capabilities to draw digital intelligence and transform to become cognitive businesses. To do this, organisations are now able to apply Artificial Intelligence (AI) to draw insights from structured and unstructured data.

AI is a collective term used for capabilities such as natural language processing, deep-learning, neural networks, vision and more. These capabilities support ingestion of structured and unstructured data. A system with these capabilities can learn the meaning of data and add to a constantly evolving corpus of knowledge. It can generate hypotheses and points-of-views. These insights will help organisations truly understand and even predict their customers' needs and personalise services.

Unlike digital systems that are programmed, cognitive systems are taught. They learn, develop a neural network of knowledge and ultimately become experts in a field. Imagine the world's best oncologist teaching a cognitive system how to detect cancer, identify treatment options and have an emotionally intelligent conversation. Cognitive systems have unlimited capacity to learn, remember and recall information and 'join the dots' to draw conclusions.

It may appear science-fiction but cognitive capabilities such as the one just described are already becoming an integral part of our lives and the wider society. We are using personal assistants embedded in our smartphones and chatbots to find information quickly and to perform tasks. Users no longer need to remember commands – they can simply speak or chat with the system as they would to another person – in natural language - and the system can understand the intent behind a question regardless of how it's phrased. At work, experts in healthcare and advisers in the financial services sector are receiving evidence-based advice on diagnosis or financial advice, in real-time, that they can use with the clients. These expert systems are augmenting human intelligence by doing the heavy lifting of handling and processing huge amounts of data and drawing insights which humans cannot do at scale.

Organisations can no longer look to their competitors to decide what to do next. Innovation and reinvention is key to existence in this rapidly changing world. Anticipating and delivering customers' needs with agility and pace is vital. Organisations should start on their journey by exploring how cognitive systems can uncover the value hidden in their data; it will help them disrupt new markets or innovate within.

Digital is a pre-requisite and a journey, it is not the destination. Creating magical experiences that consumers will pay for is the end game.
Bharat Bhushan
Industry Technical Leader for Banking and Financial Markets at IBM UK
Bharat Bhushan is the Industry Technical Leader for Banking and Financial Markets at IBM UK. He leads the charge in helping his clients leverage digital and cognitive technologies to transform by creating engaging platforms and streamlining business operations. He drives the innovation agenda in the industry and is a champion of open technology, customer experience and security. He has twenty years of rich and hands-on experience in the IT industry.
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