The Impact of the Cognitive Eraon Finance

Robert ChurchyardExecutive Partner - Oracle Leader Europe IBM Global Business Services

The impact of the Cognitive Era on Finance & Supply ChainRob Churchyard | Executive Partner - Oracle Leader Europe

1 February 2017

Approaching the cognitive edge

• Big data has been called “the new natural resource”

• The sheer quantity of data can create significant challenges – particularly for the analytics team within the finance department

• As the growth of data and speed of business outpace the capacities of finance analytics, new capabilities are needed

• The experiences of high-performing finance teams provide insights into emerging opportunities to leverage the next evolution in performance management – the cognitive advantage

Source: IBM Institute for Business Value, “New CFO horizons: The dawn of cognitive performance analytics”, August 2016

• Based on our study conducted in 2016 in order to explore CFOs perspective regarding cognitive computing and its power to transform organisations:

New CFO horizons

Source: IBM Institute for Business Value, “New CFO horizons: The dawn of cognitive performance analytics”, August 2016

• 74% of CFOs name revenue growth as their top enterprise objective

• CFOs from outperforming organisations synthesize internal and external data sources 153% more frequently than their peers

• 60% more CFOs from outperforming organisations plan to invest in cognitive computing in the near term

Cognitive opportunity: The analytics path to cognitive

Cognitive computing represents a new paradigm in finance that:

Source: IBM Institute for Business Value, “New CFO horizons: The dawn of cognitive performance analytics”, August 2016

Watson allows digital disruption of the physical world

by accelerating advances in

technologyand transforming every part of business

Advanced analytics

Creating new products

and business models

Improve operations and

lower costs

Driving engagement and

customer experience

Pervasive connectivity

Embedded sensors

Cloud computing

Product Lifecycle

Management

IBM & Oracle

Transformation through

Cognitive

Direct to Consumer SolutionVersion 1.0

Pre Launch of Oracle’s “Adaptive Intelligence”

Direct to Consumer example: the USA market

Source: Ship Compliant/Wines and Vines Direct to Consumer Shipping Report

Domestic & International

Wine Producer

WholesalersRetailers / On

Premise

ConsumersDirect to consumer 10.0% of sales

($3.8 BB)

Wholesaler distribution 90.0% of sales

($37.6 BB)

Transformation through cognitive

Platform

Winery Solution

Facilities

Management

Asset Performance

Connected

Environment

Work

Management

Health & Safety

Operations

Product

Manufacturing Quality

Cognitive has the power to transform the following areas:

• Growth Acceleration

• Predictive Analytics

• Operational Efficiency

• Business Model Enablement

• Customer Engagement

Email List

Oracle ERP Data

IBM Watson Data

Census

Oracle ERP & Watson

DataMachine Learning Model Insights

Recommended Customer Strategy

Identify Ratio of each type of customer in each

census tract

Understand where customers

shop for the wine

Apply seasonality based on weather to influence

color of wines shipped

Check for upcoming events in neighborhood to

influence volumes shipped

Use historic shipment data as baseline

EventsRetail Sales

Weather

Use customer demographics to

optimize product mix by brand in any

given location at any given time

Identify customer segments and habits

as they change and produce wines that

will appeal to these segments

Optimize product mix for each customer

segment by location by combining

census and retail data points

Use weather data to ensure that

customers are receiving the products

they want at the time of year they want

them

Product Data

Customer Data

Know the customer

Oracle ERP & Watson Data

Oracle ERP Data

IBM Watson Data

Oracle ERP & Watson Data Machine Learning Model Insights

Recommended Market Strategy

Know the market

Compliance Data

Product Blend Data

Sales Data

Market Price

Data

Regulatory

Changes

Social Media

Sentiment

Competitive

Data

Identify blends that are popular in the market

Take into account real time social

media trends

Remain up to date on regulatory information so that

you may explore all markets opportunities at any

given time

Discover what customers are

saying about your brands in real

time

Use historic product

mix data as a baseline Combine blend data with Chef Watson

capabilities to create new blends in the

market

Price items competitively with

wholesalers and retailers in near real time

Prevent regulatory violations by gaining

quick insight into changing regulatory

requirements and labeling requirements

Influence target demographics on

social media by catering brand message to untapped markets

Oracle ERP Data

IBM Watson Data

Oracle ERP & Watson Data Machine Learning Model Insights

Recommended SCM Strategies

Know your business

Sales Data Inventory Data

Financial Data

Agriculture

Business

Intelligence

Commodities

Capacity

Increase capacity by optimizing blend

management processes and reducing

wasted materials

Use business intelligence on up and

coming wineries that are meeting market

demands to prepare for mergers and

acquisitions

Create tighter track and trace functionality

from end to end so that product visibility

not lost in transit

Use supply inventory data to better

forecast demand in order to reduce over

production of finished goods

Identify up and coming

companies that may be

prime candidates for

acquisition

Expedite the blend

management process by

gaining intelligence into

ingredient manufacturing

Increase capacity by streamlining supply chain

processes

Use supply chain data as

baseline

Create real time solutions that allow for better

management of orders and inventory

Cognitive is the destination

Source: IBM Institute for Business Value, “New CFO horizons: The dawn of cognitive performance analytics”, August 2016

Based on our survey:

73% of CFOsbelieve cognitive will play a disruptive role in industries

42% of CFOsbelieve cognitive will critically impact the future of their organizations

Outperformers intend to invest 60% more in cognitive in the near term, versus others

The way forward