From Her to Watson, and What’s Next?

From Her to Watson, and What’s Next?
Her is a 2013 American science fiction romantic comedy-drama film written, directed, and produced by Spike Jonze. The film follows Theodore Twombly (Joaquin Phoenix), a man who develops a relationship with Samantha (Scarlett Johansson), an intelligent computer operating system personified through a female voice. Jonze conceived the idea in the early 2000s after reading an article about Cleverbot, a web application that uses an artificial intelligence algorithm to have conversations with humans. I spent an entire day with Watson last Tuesday along with my colleague Dan Latimore (should read his blog about it! http://bankingblog.celent.com/2014/10/08/spending-a-day-with-ibms-watson/) and I could not avoid the resemblance, though IBM’s Watson is much more focused on the business side of the machine/human interaction and collaboration. Watson is a learning system that scales human expertise by extending our abilities to perceive, reason, and relate:
  • Perceiving: Watson understands the world as we do; it interprets sensory input beyond traditional data. Understands natural language; reads manuals, social data, blogs, consumer reviews, etc.
  • Reasoning: Watson thinks through complex problems; it deepens our analysis and inspires creativity. Makes inferences, evaluates pros and cons, and finds relationships between terms and concepts
  • Relating: Watson understands how we communicate, and personalizes its interactions with each of us. Responds in natural language, personalizes the interaction and provides reasons
  • Learning: Watson learns from every interaction, scaling our ability to build experience. Trains with experts and improves with feedback.
Imagine that you can take your best employee, your best agent, your best underwriter, your best adviser, your best risk manager and teach Watson, so it could be then supporting any other employee, business partner or even a customer,  24/7 across your organization. It is the most closer to cloning I have seen lately, without the moral dilemmas.  What if, based in its huge computing capacity and the ability to crunch and interpret TB of data in a very short time-frame it could provide you with more hypothesis and evidence than any human being you can hire? Imagine how accuracy and timeliness could save lives, assess risks better, lower your costs, provide a better understanding of what is going on, even under different circumstances. Watson’s aim is to become the best adviser to your employees, customers and partners while doing their job by leveraging the power and strength of search, analytic and cognitive capabilities. There is a real opportunity here to:
  • Amplify human cognitive strengths
  • Enable a deeper level of reasoning
  • Make decision trade-offs with higher levels of confidence
  • Democratize experience and knowledge within your organization and value chain
Financial institutions around the world are already working with IBM to make Watson smarter, covering more use cases and more languages. IBM has already made available and continues to work on content and APIs business ready on the cloud to make it easier for its ecosystem and clients to embed Watson services in their applications. IBM is already working on having Watson available for Japanese, Spanish and Brazilian Portuguese natural language interaction, and we should be hearing soon some news regarding the 1st Watson Client Experience Center in Latin America, replicating the one IBM has just inaugurated in New York’s Silicon Alley. IBM plans to open these centers in Melbourne, Sao Paulo, Dublin, London and Singapore. IBM’s Watson has already come up with a book of recipes and while I think it is true that the best way to a man’s heart is through his stomach, I don’t expect to fall in love with an avatar powered by Watson as in Jonze’s Her (I am happily married, thank you). I would like though to see soon how it helps me decide what are the best investments given my risk aversion profile or which is the best type of insurance (and coverages) I need given my needs and concerns. I would certainly love to see how underwriting capabilities improve and processes become more accurate and efficient, hopefully expecting better results for me, for the financial services institutions and why not expect to see some savings passed along to consumers? Today Watson is here; what’s next?   IMG_1080IMG_1046

Data Initiation Helps Define Digitization in Insurance

Data Initiation Helps Define Digitization in Insurance
My colleague Karen Monks and I have published a report on digital transformation in insurance recently. The main objective of this report was to identify differences in terms of digital transformation in insurance between different continents. However we have quickly noticed that the term “digitization” can generate confusion in insurance professionals’ mind. Celent defines digital transformation as the strategy of transferring as many manual tasks as possible into digital activities. This strategy can be achieved through different ways, including:
  • Process automation.
  • Selling products online.
  • Leveraging mobile devices and mobile technologies in general.
  • Dematerialization of documents and communication materials.
In addition, we believe that data gathering through all sorts of tools, and therefore data management and analytics, play an important role in digital transformation efforts. This been said I personally think there is a priority insurers should define when embarking in digital transformation initiatives. First of all I recommend them to set up a basic constraint as the corner stone of their digitization initiatives portfolio prioritization: data must be entered into their information system only once (not two, three times but only once). With this in mind they should reexamine all their core processes and find out where data leading to the same information is entered more than once. When this analysis is done they can start defining initiatives that will reduce these repetitive tasks. You’ll be surprised to see how this simple principle can generate drastic improvements to processes and drive higher automation, efficiency, etc. When doing this, I also advise insurers to question whether the unique initial data entry into their information system can be done differently. With this advice I am trying to get them think of what I call the second wave of digitization. Indeed, to me digital transformation initiatives nowadays assume that human action is the initial generator of new data within an information system. However with the Internet of Things concept that my colleague Donald Light explained in two reports recently (here and here), insurers can also automate the initial data entry by leveraging connected objects. No need for human action any longer then! To me there is a digitization sequencing insurers need to respect between these two phases. Indeed I think it is easier to generate value from the Internet of Things concept if an insurer has already well thought how to minimize repetitive tasks consisting in entering new data within their information system. Therefore I do think that insurers who have already done a great job at minimizing these tasks initiated by human action and who have an appetite to leverage the Internet of Things will be the leading insurers going forward.  

A Value Roadmap: Don’t implement a new core system without it

A Value Roadmap: Don’t implement a new core system without it
I’m sometimes asked, “What is the worst error an insurer undergoing replacement of its core solutions can make? And how can that pratfall be avoided?” There are a lot of candidates for this honor: for example poor governance, inadequate project management, underestimating the complexity of data conversion and or integration, incomplete knowledge transfer—the list goes on and on. My nominee is: Failure to define and follow a Value Roadmap as part of the implementation and near term post implementation process. Conceptually, a Value Roadmap identifies the specific types and sources of value which the new system will provide. If the insurer has already developed a good business case for the new core system, the Value Roadmap will address many of the cost reduction and revenue enhancement elements of that business case. In addition, the Value Roadmap will place these benefits on a timeline which could start (to a limited degree) during implementation, and definitely starts when the new system goes live. If the insurer does not have a reasonably complete business case for the new system (and yes that does happen); the Value Roadmap allows senior management (C-Suite and/or the Technology Governance structure) to: **  Document for future ROI and performance analyses the business and competitive rationale for the project **  Provide guidance for the remaining implementation period **  Focus on realizing value through new offerings, processes, and organizational structures Note: an earlier version of this blog appeared on the Insurance Technology Association website.

Is that a computer on your wrist?

Is that a computer on your wrist?
Just a follow-on to Donald Light’s post about the newly annouced iWatch. I’m very curious to see if Apple can again legitimize a new market segment. They didn’t invent the wearable watch, but they have introduced a modestly attractive watch and have a market impact that is impressive. As a part of Celent’s Life and Health team, I see so many uses for the information that could be provided by a solid entrant in the market. I have personally been watching the space for awhile. There are many entrants in the space — Samsung alone has introduced four watches in the last year. I am also a true geek and love new toys. But I don’t own a wearable yet. My fundamental problem is that none of them are really very good watches. They fail every test I have, particularly the size test. I am old school and like watches, but I lean more towards a small, thin Skagen. Even the smallest of wearables, to me, would be like strapping an iPad to your arm and calling it jewelry. We are starting to see some innovation here. The Moto 360 is beautiful, but still huge. Let’s hope Moore’s law kicks into the space soon and we see a sleek, attractive, useful product. Maybe it is the iWatch. We’ll see.

Watch out. Apple with Mayo is heading your way

Watch out. Apple with Mayo is heading your way
Hmmm . . . That combination is pretty tasty in a Waldorf salad, but it’s a bit hard to think of other recipes that do appeal. The Apple Watch is very attractive—one analyst hoped it would be stylish enough to wear to the Oscars. (I’ll let everyone know what I decide to do next year). But from a healthcare and health insurance Internet of Things perspective, questions still remain. Early information is that the Apple Watch’s biomonitoring functions are pretty modest: pulse and movement (and distance?). Did anyone say fitness band? Somehow “killer app” doesn’t sound quite right in this context, but that is the real question in terms of making people with serious medical conditions (or serious medical vulnerabilities) want to buy the Apple Watch. In roughly ascending order of technical and ergonomic challenges—temperature, blood pressure, glucose levels, blood chemistry of all different types, urine analysis, and (why not?) genome-driven personalized medicine—are off in the future, in some cases well beyond the horizon for a wearable (time telling, messaging, location-revealing) device. Meanwhile there is always next year’s Oscars. btw: about the Mayo:  https://www.apple.com/pr/library/2014/06/02Apple-Releases-iOS-8-SDK-With-Over-4-000-New-APIs.html