Why Digital Transformation Debt is bad?
Contents
Transcript
Guest Introduction
Sharjeel: Welcome to this podcast, Demystifying Innovation by AgilePoint. I'm your host Sharjeel. The goal of this podcast is to reveal the best ideas that companies are using to become more agile and innovative in the enterprise world. We talk to the ones who are at the forefront of changing the way work gets done in medium to large companies.
We interview world-class thinkers at the cross section of business and IT. Every episode is packed with inspiration and action items that you can take and implement in your own enterprise environment.
Dr. Setrag Khoshafian is an author, innovator and a person who deeply understands the cross-section of digital transformation and Low-Code/No-Code in an enterprise context. This episode sheds light on the new book he has authored called “How to alleviate digital transformation debt post COVID 19”?
I wanted to talk to him because of an interesting concept he calls ‘Digital Transformation Debt’, and why companies and executives should take the debt seriously. It's time to listen and learn.
Sharjeel: Tell us about your background and your stint with Pega systems.
Dr. Setrag: I was fortunate in my background to have worked in two worlds. One is what is called Intelligent Database Management System (i-DBMS) and the other Intelligence Business Process Management System (i-BPMS). And, these are sort of two sides of the same coin.
I moved from Northern California to Boston and in Pega I had several roles everything from the direction of the product, to marketing and eventually became the chief evangelist. But I always kept my title and role as vice-president of Business Process Management (BPM). And I also introduce, and number of interesting, I would say enablers for BPM, which still the BPM market has not really endorsed as much as they should. One of them is Internet of Things and the other is Blockchain. So, I have done enormous amount of work in those areas.
Digital Transformation Debt
Sharjeel: What exactly is Digital Transformation Debt?
Dr. Setrag: Yeah, that's a great point. And I'm really glad you caught on to that, it’s the conclusion that brings it all together. So, going back to my background, I mean, many Fortune 2000 organizations, many of them at all levels, CIO, managers, developers, Data Scientists, I worked with all of them and I've seen this again, and again and again, so organizations, they know they have debt, they know they have to do something about it.
They have to change right. Productivity tools like your platform. They need it. But always within these organizations, there is typically attention and it's not balanced. On the one hand, you have the business saying, we need to move much faster. We're losing ground. You know, the competition is coming. We're being disrupted on the other hand. You have it saying, well, hold up. You know, so we have to be careful, there are security vulnerabilities. There's malware out there, you know, and, and there are all kinds of performance problems and you know, we need to do the benchmarking and the typical stuff.
Which sort of dovetails to a lot of what's happening in Low-Code No-Code is, a business, this is what we have to do, throw it off to, to IT. And the IT takes very, very long because they're typically maintenance IT, right. 80, 90% of their effort is keeping the lights on.
So often this analogy is used “to have new oil in the car while the car is driving and running. That's very, very difficult to do, but, enter the new generation, the younger generation Gen Z Gen Xs, and these enormous trends, toward innovation and entrepreneurship which we cannot ignore you know, many, by the way, incumbent large organizations are losing a lot of the brain trust, the younger generation.
They don't want to work there. They don't want to go corporate. There's a term. So you want to have innovation, minimum viable products (MVPs), do it quickly, come up with new ideas. You know, that's why the Low-Code No-Code world is exploding. I mean, I am known now an expert in that I've published a couple of articles in Venture Beat.
I have started a new series. You know, those are the two articles and then I'm continuing it in cognitive world. All aspects, there are all types of No-Code tools. It's very confusing, but there is a reason for that, right? They want to get innovation fast. They want to get ideas to reality fast, and they're not as scared of technology, but then you have the IT saying hold up. Be careful. There is security management. Let me give you a real example.
You can put a camera, an IoT camera, digital camera and go to productization rather quickly. All the components are there now, if you're not careful. Because I just was reading that a lot of these devices are being hacked.
If you're not careful and you don't put the effort, which takes time, so you do the innovation, maybe brand new types of digital camera, but you are not careful. You want to get things done fast, not right. You see that balanced done fast, not right. Then you'll introduce a lot of vulnerabilities and this has happened.
You can Google and see how many, everything from cameras, monitoring babies to routers. You know, you might have a great router idea, who doesn’t need that but if you're not careful, you do it but not right, and you don't balance, and that's not easy to balance, right?
It's not easy to balance and apply that to every single web and mobile application. You want to do it fast. You want to do it balanced. That’s why the ‘Competency Center’, an empowered Competency Center has to do it. It's good to have this tension. I call it a tug of war. You have people on both sides with the right intention.
Say one of them pushing back. If you're two of us, the other is pushing back. If you're doing too slow and spending a lot of time, you want to do everything perfectly. So that's why I liked the MVP idea, but it needs to be balanced.
The Audience of Dr. Setrag's Book
Sharjeel: Who can really benefit from your book and the idea that digital transformation debt needs to be tackled?
Dr. Setrag: Yeah. Another great question, so it's interesting. I don't want to give a cliché answer, but let me set the context. The world has changed whatever level you are in an organization. So let's put them in three layers. You have the C Level, the CEO, CIO CTO, and CIO could be Chief Information Officer or Chief Innovation Officer. There also was at some point, even a Chief Process Officer.
So you have this C-level, CEOs and so forth. Then you have the mid-level managers and then the lowest level, the line employees, the world has changed in the sense that we cannot organizations cannot be a silo and focus on just one thing, whether you're a technology company or you are a fortune 2000 companies, there are trends that are coming.
And I start the book with cultural trends, right. And let me highlight so that I've not forgotten your question. To set the tone that there is virtualization trend, look how we're holding this. I mean, all the virtual meetings, but virtualization is also changing with the digital twin of people and devices, etc.
The Metaverse, I was in Miami last week, I attended a Decentral Miami Conference and the energy I saw was incredible. In fact, there are two communities I'm digressing a little bit, a little bit, but I want to relate it to the audience. There are two communities and I follow this very carefully where the energy and the enthusiasm to innovate, and come up and change the world really, it's more than innovation. They want to change the world. I heard the keynote of a CEO who is a billionaire now, and he still works and wants to change the world goes and lectures. There are two communities which are doing this one more than anyone else.
One is this Blockchain, Metaverse, the decentralization world community, and the other is the Low-Code No-Code community. It's very interesting. And recently I did some, I think tweets, let's say if these two worlds combine in the Web 3.0, I always remind the Blockchain community, not to forget Low-Code No-Code. So who is the audience?
The audience is everyone who needs to have a holistic view of this technology starting with culture. So more on the shoulders of the C-Level, and then ending up in the Competency Center that's more on the shoulders of the mid-level managers and in between are all these technologies, operational excellence, which is what BPM (Business Process Management) community has been touting.
Low-Code No-code we called it model driven. I remember doing a webinar on model driven development. I've written on that extensively. So, that's more sort of the lower level. They need to know all these, the hyper automation you know, the AI and Data Science, the citizen developer and the Citizen Data Scientists who are these, we are asking, who is the audience?
Well, who is the Citizen? The citizen developer, it's you and me, everybody we're coming in a world where everybody uses PowerPoint, Word, Excel, Zoom. We will be able to build new innovative applications, but then balance it. Remember it? We’ll go back to your question.
It's confusing. Where is it? Well, culture, C-Level, very important Competency Center, the Mid-Level managers, and then everybody, the citizen is in the middle of the book, I have Citizen Developer and Citizen Data Scientist. And if I may, the book comes in like paper bag, hardback, and also. There's an eBook version, Kindle, Google Books.
So I recommend people to get both the hardcover and the eBook because I spent a lot of time putting the references. So the book is really, I mean, you can finish in one sitting, you can read it all and have a very good idea of the trends and the technologies. It's not fluff, but it doesn't get lost. It's 200 pages with a lot of colorful illustrations, but then if you want to go deeper, Go and check the eBook version, every link within the text, as well as the reference is clickable.
Digitation Transformation and LCNC
Sharjeel: Every now and then we have a lot of buzz around certain technologies and Gartner calls it the ‘Technology Hype Cycle’, where we have technologies moving from Technology Trigger to Peak of Inflated Expectations’ and so forth. For me, it started with BI and then Big Data, Internet of Things, and the noise moved around to Streaming Analytics, Real-time Analytics, and Event Streaming.
Sharjeel: And now we have Low-Code No-Code (LCNC). What does digital transformation has to do with Low-Code/No-Code?
Dr. Setrag: Oh, I loved your first two questions. I love this even more. It's really about empowerment. It goes back to the culture and the citizen there. People love impact. It's very simple people. Like sometimes, you know, I I've been in conferences where the CIO has word comp, complaining businesses, looking low using their credit card and going and buying software.
Because in this X-as-a-Software, as a service platform era, you can just have a CRM system in just a couple of clicks; you got a CRM system. There's a Salesforce, but there are the Zoom and other, there's an exposure to that. So people empowerment is at the core of it and of course the startups. So I often ask who is using Low-Code. I say startups love it because the founder can build an application.
Maybe it's just an MVP just, and if they use something like design thinking, or recently I got introduced recently, it's more than a year, design sprint, which is in five days you can have a Minimum Viable Product. Not to forget this culture, the need to get things fast, but to your first question, doing it right, doing it right with the security.
Sharjeel: You talk about companies postponing their digital transformation and how it equates to operating a cart with square wheels. What do you mean by that?
Dr. Setrag: Oh, yeah, absolutely. So as we know it, now let me come into it, but it also can happen any level, any organization, the marketing, the sales, the production, often are doing maintenance and they are very happy with their tools. And sometimes they know often they know they need to do things like refactoring or modernization.
By the way, there's still COBOL development you know, couple of months ago, I heard of LISP. Are you kidding me LISP, that somebody even mentioned, Barry's still four trends out there, you know? So your audience might not even have heard.
The first course I took and I taught eventually is for Fortran, so there are these legacies and there they are very familiar with it. They're comfortable with it. They spent decades in it, some of them, so they're not willing to change. That keeps accumulating, but that's not only them.
So the debt can happen if a company ignores Blockchain and decentralization that can happen at the marketing level, at the C-Level that can happen.
And it just keeps on accumulating at a marketing level. You're not leveraging AI tools you know, to know the sentiment, to do the sentiment analysis of your listing, enormous amount of technology in those areas. So that is accumulating every day. Whether we, the executives, mid-level managers or the employees, like it, it's accumulating.
So that's why you need a holistic approach. So there are sort of two aspects that in specific areas like IoT, like Blockchain, like operational excellence through Low-Code No-Code platforms for Citizen Data.
Many of these are in the early stages. So if you just take programming and look what there is out there, there are more than 10 million Java developers, right? The Low-Code community, and there are 10 million in the other language, C#, C-Plus, even see it's still very popular, but you, you don't have those numbers in Low-Code/No-Code yet.
Yeah. And I actually see you look at one other small point. There've been studies that usually when organizations deploy Low-Code No-Code; it's not one Low-Code No-Code platform. That's why I'm spending a lot of time articulating the various categories of Low-Code No-Code. And typically you might have a web application or an umbrella Low-Code No-Code or a Business Process Management application or No-Code, or a Database application Low-Code, but then you will have companion products.
For example, you might have another Low-code, which does maybe part of the AI and other Low-Code/No-Code, which does which automates the integration.
Or one, which is very specialized in mobile or one, which is specialized in Blockchain; so you will find patterns, not only the Low-Code/No-Code evolving in different categories and I'm doing a series of posts on the BPM and the Data Centric ones. The next one will be integration automation.
I'm also going to have patterns. What tools work best with others and compliment, like, if you take something like integration, typically a BPM platform Low-Code will have integration capabilities, but there are others which do it much better. Some of you might like to have both, right?
It's the same you had in traditional development; you had the BPM layer, for example, which spoke to the Enterprise Service Bus (ESB). Does BPM do integration? Yes. But you can also do it through the Enterprise Service Bus, which is a middleware that brokers. The same thing has happened with Blockchain.
You could have a middleware, blockchain, Low-Code, and then a BPM or a web, a local No-Code on top of it. So these patterns we're still in the beginning stages, early stages, will start to emerge.
Servant Leadership
Sharjeel: In the messy, real world of business, there's organizational politics, corporate policies, and lengthy approvals. How do companies start reducing this digital transformation debt and where to start?
Dr. Setrag: Yeah, it's an incredibly important question. What I'm going to tell you what I have seen work. In fact, the Financial Services is a good example because many of them have a lot of money. I mean, even if they save just a little bit, it's enormous, given the numbers. Healthcare is another one by the way, manufacturing of course, so what I've seen work is there are two aspects.
One is the addressing the core, the essence of your question, the politics, you know, we don't want to change, people resist change while I'm trying to. And the reason I wrote, one of the reasons I wrote this book is that might have worked in the past. It will not work anymore. Not only because of the digital.
Trends which are coming like Tsunami, but also the cultural trends, let people think why is Tesla so successful?
And one of the many reasons is that and you can go and check this that Musk implements things very quick. Sometimes he fails. He does it very quickly. I mean go check how quickly it took him to be such a large company, a company, and the wealth that he accumulated and the valuation.
He did it faster. Then what we could call Apple or others. So there's a reason for that. And that's cultural reason. It's conviction. It's the way you run. It's the way you treat your employees, etc. So this is going to be very, very important.
Center of Excellence
Sharjeel: Talk to us about the role of Center of Excellence in this context.
Dr. Setrag: Yeah. So there are the Central of Excellence in organization and I call it Digital Transformation Center of excellence. So, the Center of Excellence (CoE) has a maturity model. You know, a lot of these principles I'm mentioning have been around for decades. People just don't think they've changed. No they're symmetric.
Your model is still viable. You have to know where you're going. Otherwise you'll end up nowhere. So, Center of Excellence has a number of key elements in its charter.
One of them is governance. So it goes back to the first question. Are we choosing the right platform or the combination of the platforms? What is our organization's reference architecture? What is the cloud strategy? What are the Low-Code/No-Code platforms that I told you? A majority of successful deployments will have multiple Low-Code tools, not just one.
So there are a whole bunch of governance issues. Second is enablement, it's in the charter. The enablement means this Debt, Digital Transformation, so my recommendation will be to have a requirement that are people read the book, they are tested on it. You need to educate. A lot of the things we're talking about, as I told you, I talked to some people who think they are experts, and you know, they're investing in Low-Code.
I mentioned certain platforms. They have not heard of it. I don't blame them. This area is moving very, very fast. I myself have difficulty to get these two domains, Low-Code and Blockchain. So, that's another one education, education and enablement, but there's a balance. There's a balance between too much education on a platform versus which has each usually platforms have their own language, etc.
So, so you need to understand what is digital transformation, what is Low-Code/No-Code, Citizen Developers, Citizen Data Scientist is about, but then you need expertise in particular platforms. And, the third is I would say the methodology.
Methodology is the foundation. So today we have design thinking, which we didn't mention so far. I did mention design sprint, and in the book I do something very innovative and powerful. I've been working on this on the relationship between design thinking, MVP with Low-Code, you will see an illustration in the book.
That is the charter. One of the most important third pillars of the responsibility of the Center of Excellence,
Sharjeel: Who leads the Center of Excellence (CoE) and where do people come from? Do they come from IT? Do they come from business and what’s the composition of it?
Dr. Setrag: Yeah, that's a great question. Sometimes I get old school you know, who is running this?
You know, what are the examples? The answer is yes. I've seen it all.
Typically it's part of IT because you have governance issues, but you can have innovative business models. I would say the best solution. One thing we should be very careful is that I believe, and this is my vision that a lot of the distinctions and divisions between IT, Operations, and business are artificial.
I think they have to be obliterated. They should, especially with the younger generation, it's artificial. I don't believe in it. Now of course you need it but as the tools become more powerful, we are several years away from this.
Those will be if not obliterated, they will mesh together. So the best organization is to have representation from both business and IT, but with empowerment and, and financing. My vision of it is that you need a Chief Center of Excellence (CoE) Officer. It becomes its own and whose responsibility and charter is to grow across the silos and try to melt those silos.
So companies have, if they're serious about alleviating debt, these three pillars, I mentioned. The, the governors, the enablement and methodology, these are not trivial things. This is what will help you do continuous improvement and continuous innovation, not just continuous improvement.
There are silos on product lines, right? Different types of, you know, there is a mortgage financial, there's a mortgage product line and there is a banking product line, etc. So there are these product lines silos.
They might have their own vice presidents, right? So there are structural silos like business ideas. But there are product line silos. So it's a complete mess. So you need this empowered organization that goes across, but again, with a maturity roadmap, very specific like level one, this is what a maturity level one.
That's what we're going to do. Level two. That's what we're going to do and say, and then should be held accountable to achieving these objectives.
Value Streams
Sharjeel: What are the value streams? And why do you think it's important to start from the value streams?
Dr. Setrag: Let's define what a value stream is. It's a very important term. And my approach is there are a lot of terms out there that in my opinion and another, not everybody agrees even in academia and in different industries, but they are basically synonyms value stream.
And other one is value chain and 200 terms. I use these more or less honestly and perhaps a characterization of value stream and definitely about a stream about a chain. And I remind I’ll come back to why I'm mentioning value chain. He said he goes through state. Like the customer. So let's take the account opening. The customer came to the site through marketing that's one state, the customer did some investigation and other state the customer you know opened, went to the form and open the account. That's another state that account is being the customer information is being processed.
It enabled opening of the account. That's another state. And then now the last state is the account is open. There are other states like the customer go and browse products. That's a state transition, right? And there could be multiple workflows.
You might, I mean, we didn't touch upon it. Use Robotic Automation for this, AI for this, you know, one of the analysts has introduced the term ‘Hyper Automation’. You know, you're automating as much as possible. So you’re having these types of, you know, value stream as a state transition. And I mentioned in other synonyms of value chain, the reason I like that Value Chain is because of the statement.
The chain is as strong as the weakest link. True. And that is so important. It goes back to the silos in the hierarchical organization because I gave you the states. And often more often than we can imagine, even within the same department or different departments. Different organizations have responsibility of specific states or parts or chunks or chains within the value stream or the value chain.
But if the, you have weaknesses, which whole chain, the stream is going to suffer and compromise. Very few people understand this. In fact, I'll give you an example where we're all suffering. The whole world is suffering because of this problem and that is ‘Supply Chain’.
That’s a nightmare. And I mean, we have supply chain problems within organizations. Think about the same silos. Talk about silos. This is not silo department. This is silos of companies, even countries, even continents. That's like ‘silos on steroids’. So as I look at the reality, look what we're facing today.
It is impacting people's lives, impacting the food supply chain, the manufacturing, Silicon Chips, you name it, furniture, construction. Everybody is suffering, it's the same problem. Take that and map it onto an organization. So it's a straight stream or a chain. It's a process.
In fact, the supply chain is even more complicated because they're, and I've written extensively about this, by the way. There are multiple tiers. It's not just one tier. You have the supplier of the supplier of the supplier. So from the raw material, so it's compounded and then there is the transportation, the shipping, etc.
So you'll have similar problems within organizations. So if you have weaknesses and there's no ‘Center of Excellence’, governing and observing, where are the weaknesses? The entire chain, the entire value stream whatsoever, so it's a process. It's a workflow. And as a company, any organization, even a country is an aggregate of that extremes and value chains.
You'll have managements that extremes you'll have mission critical value streams, and you have support value stream like HR, help desk is a typical example of support value stream, mission critical account opening for customers. Marketing or manufacturing the goods.
Sharjeel: What inspires you and what are you looking forward to and what are you really energetic about that you keep working towards that?
Dr. Setrag: I'm seeing this energy in two domains as I mentioned and, and I will throw a third underneath one of them and these two domains is the Low-Code/No-Code domain, especially empowering Citizen Developers and Citizen Data Scientists, Citizen Data Scientists, by the way is much less mature, much less mature than Citizen Developers, it’s potential for data centric organization is great.
So I'm seeing this energy and these two worlds are in silos. They're siloed, and so what motivates me is how both in terms of vision and digital transformation, that book touches upon it. I'm already thinking of a version two.
It touches upon it. And I would like to be part of that revolution. I like to help that revolution of bringing the decentralization with Blockchain is not just technology. I mean, if you look at Blockchain, it is a very boring technology. I mean ledgers, right? You're keeping ledgers copies of ledgers, in different databases and you're, you know, so the validating them that's the simplified version of it.
That's basically blockchain. What can be more boring than ledgers? I mean, I told one time in an interview that we’ve seen ledgers most in mafia movies, right? To find that content, they have the ledger. So it's a very boring technology, but people do not understand or do not appreciate the cultural ramification of really making entrepreneurs out of everybody.
This combination with Low-Code/No-Code and the infrastructure where it can be decentralized and, you know, a term we haven't even mentioned is Decentralized Autonomous Organizations (DAO). And, Blockchain enables that, the Vitalec Group has a semi-official white paper on it.
I've written on DAOs. You can search my name and DAOs. DAOs are, I believe, the future. Here, you're saying you're empowering the shareholders. You might have thousands of dollars by the way. And you might have robots that will participate in the DAO.
Right, which is saying let's change, let's rethink an organization. Let's say it's a public company a year ago, you'll go and elect the board and everything is paper but DAO will obliterate that structure, we’ll have a decentralized autonomous company. You're asking me obliteration between business and IT and operations while it's happening at an organizational level here.
Here’s a concept and technology, it's not from me. I raise my hat to them, but it’s a vision that the Blockchain organization, the Blockchain community came up with and you know, ‘Smart Contracts’, yes there are problems and the gas price is too high. I know all of that, but those are being addressed.
Bring that with Low-Code/No-Code, right, and the Low-Code/No-Code community, I'm simplifying, it has not understood decentralization, and I'm oversimplifying it. But, they have not. The Blockchain community have not understood Low-Code/No-Code, if the two come together that energizes, its revolution.
Advice for Executives
Sharjeel: Great. Now that was wonderful unpacking of some complex stuff out there. So what message do you leave to that executive who is stuck in a billion dollar company, or in a $500 million company? How do they approach this?
Dr. Setrag: Yeah. Please be bold and disrupt yourself. Think like, think like a startup, Look at history, the Fortune 500s, the listed companies on Fortune 500. Why they keep on changing it? This is not an option anymore. And also please do not ignore the new generation.
They are sick and tired of corporate. So, here is an opportunity. I mean, start with the book. You know, I'm not trying to sell that, I hardly make any money out it. Start with the book. You know, I'm here to help, be bold, be visionary, alleviate the debt, and think about how we can disrupt ourselves. Empower your people and try to, another term which goes with all of these, try to flatten the organization.
And perhaps most importantly, and I touch upon it in the book, be bold to become a servant. You know, it's a servant leadership organization. Greenleaf has put it, which turns the pyramid upside down where the CEO becomes a servant, an enabler, and somebody who empowers. I believe the future is for Servant Leaders.
It's not easy. This is, you know, a silo we have created not only between organizations, but between the higher levels and the lower levels within the organization that has to change and servant leader can address that. If you treat your employees the right way, empower them, bring the entrepreneurial spirit in them, you know, give them tools like Low-Code/No-Code, like your company's platform, you will benefit the bottom line with that. So it needs boldness to become Servant Leaders.
Sharjeel: Great. I think that's a very powerful message that you are leaving them with, and we'll definitely get in touch with you again.
Dr. Setrag: Excellent. I enjoyed it immensely, great questions. I wish you the best with your Low-Code/No-Code platform. AgilePoint is on the cusp of it, sky's the limit and so you have an enormous opportunity. I wish you the best.
Dr. Setrag Khoshafian
Digital Transformation
Expert
Sharjeel Sohaib
Demand Gen & Content Strategy
Consultant, AgilePoint
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