“Digital is the wires, but digital intelligence, or artificial intelligence as some people call it, is about much more than that,” Rometty told Fortune Editor-in-Chief Alan Murray at the Most Powerful Women Summit in Washington, D.C. “This next decade is about how you combine those and become a cognitive business.”

“It’s the dawn of a new era,” said Rometty.

There’s a vast amount of information out there, from the Internet to your computer hard drive, but nearly 80% of that information has been invisible to systems and computers until now, explained Rometty. For instance, while there may be millions of songs and movies digitally stored, a computer hasn’t known what’s inside those files before today’s technological innovations.

Artificial intelligence has been around for decades but it hasn’t been until recently that its power’s been unleashed. IBM’s (IBM) Watson is symbolic of this era and is able to demonstrate the power of digital intelligence, said Rometty. Systems can now understand, reason, and learn. See: Watson’s breath-taking performance on Jeopardy! in 2011 when it took down the gameshow’s top two contestants ever.

There’s still a long way to go before digital intelligence becomes the standard, but Rometty recommended five areas where a business can benefit now if it starts building a cognitive business:

1. Drive Deeper Engagement: Help clients behind the scene for better customer experience.
2. Scale Expertise: Companies spend lots of money training employees, this could be scaled more effectively.
3. Put Learning in Every Product: Build products that adapt to each consumer’s needs.
4. Change Operations: Streamline your supply chain to help margins.
5. Transform How You Do Discovery: From pharmaceuticals to financial industries, research will be the foundation of many many segments will work in the future.

“Instead of being disrupted, be the disrupter. I do it inside my own business,” said Rometty. “You will be the disrupter if you choose to do it.”