Podcast

Podcast: DX and AI failures: How NOT to be a casualty

July 18, 2022

Posted by: Barto Szkaradek

Between now and 2024 about 50% of all finance artificial intelligence (AI) projects are forecast to be delayed or cancelled.There’s no digital transformation (DX) playbook, so listen to the latest Trending Tech Podcast as experts Ash Finnegan of Conga and Perry Krug from Couchbase explain how the number of DX projects worldwide is rising fast yet far too many transformations have failed, been delayed or scaled back. It could be the most valuable 20 minutes you spend this year! JoinJeremy Cowan to learn how the best projects avoid going pear-shaped. And, in What The Tech, hear how one Microsoft retirement has got developers rejoicing!

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Jeremy Cowan  00:04

Hi and Welcome to the latest Trending Tech Podcast. I’m Jeremy Cowan, co-founder of the technology sites, www.IoT-now.com, The Evolving Enterprise and www.VanillaPlus.com, who are our joint sponsors today. It’s great to have you here for the latest, sometimes serious, sometimes light-hearted look at digital transformation for enterprises.

And today, it’s a pleasure to be joined on the pod by Perry Krug, director of Shared Services at Couchbase. Couchbase is described as the modern database for enterprise applications. So, as we tackle a topic that is literally mission-critical, Perry, welcome to the Trending Tech Podcast.

 

Perry Krug  00:51

Fantastic. Jeremy, thank you so much for having me on.

 

Jeremy Cowan  00:53

And I’m delighted we also have here Ash Finnegan, who is digital transformation officer at Conga. Conga delivers scalable revenue lifecycle management solutions – and I’ve been practicing saying that – to help companies, as they say, “crush operational complexity”. I really like that description, we should do more crushing of complexity. Ashley, it’s good to have you on the podcast, too.

Ash Finnegan   1:18

Hi, Jeremy. Yeah, it’s great to be here. Thank you for having me.

Jeremy Cowan  1:21

Well, first we’re going to look at the big picture on the tech scene, I want to look at two recent tech news stories that you’ve brought along. And then we’re going to discuss the problems and solutions for enterprises delivering digital transformations. And also, the difficulties for companies deploying artificial intelligence in revenue operations. And when all that’s covered, in our closing What The Tech section, we’ll probe a couple of stories that amused or amazed us. So, what have you spotted in the news lately, Perry? And where did you find it?

 

Perry Krug  01:56

Sure, Jeremy. So, we came across an article by McKinsey, the worldwide renowned consulting firm, looking back over the last couple of years, on the digital transformation that’s been going on for much longer than that, and really looking at what do businesses need to consider now? And also, where are some of the leaders having the most success. Entitled, Three new mandates for capturing a digital transformation’s full value by McKinsey. It came to no surprise, it’s good validation that something like 9 in 10 organisations have pursued a major digital transformation in the last two years, right?

We saw that happening, pre-pandemic, and it has accelerated dramatically because of some of the situations that the pandemic forced us into in terms of remote working and hybrid working, in terms of supporting consumers in services that they were no longer able to obtain in person. And it really forced some of the legacy organisations on the edges that were maybe not investing as heavily, or not being quite as bold, it really forced them – some would say kicking and screaming­ – into the digital age, because they just they had no other choice when the world shut down for two or more years in some cases.

 

Jeremy Cowan  03:27

Yeah, I thought that was a really interesting story, and I particularly was drawn to the focus on attracting and developing tech-savvy executives, and integrating them this kind of talent into the organisation. Because we all know what a nightmare it is at the moment to find and retain the right talent. So, I thought McKinsey were absolutely on the money with that aspect of it, because it’s a problem, not just in most technology-focused organisations, but in all organisations trying to deal with digital transformation.

 

Perry Krug  04:03

Yeah, absolutely. And the talent is hard to come by at all levels. But I think we’ve passed whatever inflection point it was that digital and tech is only for the digital and tech companies. It’s now a ubiquitous part of everybody’s consumer lifestyle, and really needs to be woven through nearly every layer of their organisation in order for them to remain competitive and respond to their market.

 

Jeremy Cowan  04:33

And what’s caught your eye in the news, Ash?

 

Ash Finnegan  04:36

One of the key things is around the new data strategy and how it aims to close digital divide between the NHS and social care. This really caught my eye because data is one of the biggest topics in every organisation right now. And when I look at normal enterprise businesses worrying and thinking about how to manage data and the things they need to do with data, a lot of it’s around business rules and processes. And this, I guess, for me really caught my attention because it’s talking around, obviously a lot more sensitive data, and a lot of where they’re trying to use data that could really drive people into a state of worry, but could also massively improve processes.

So, for me, it’s all around making people go along on that transformation journey that maybe do not work in the technology space. And the commitment, the NHS is making people to feel safe to want to share data, that systems and technologies moving in a way that can really protect people and enable them to scale and share information, which are very siloed across the NHS and social care.

 

Jeremy Cowan  05:50

For anyone who’s not listening in the UK, the NHS is the National Health Service, which is the UK’s a nationwide social care and health care scheme, and obviously has access to an extraordinary amount of data. But there are clearly sensitive aspects to sharing that data. So, it comes to a government level for discussion.

 

Ash Finnegan  06:17

Thank you, Jeremy. And yeah, I guess for me, it’s the kind that really caught my eye is that actually to see the government want to actually take on this challenge, and build up confidence with obviously people, but also within the systems, there has always been a gap with the NHS and the reputation that the public sector aren’t transforming as well as they should be. So, this focused approach and actually giving it not just around the data, but it’s how it’s shared, accessed and updated, and it’s gonna be a really interesting challenge for the government in areas where they have been proven to not be very successful.

 

Jeremy Cowan  06:55

Yeah, yeah, this could be enormously – well, it is not too strong to say it could be game-changing for the health service, in terms of the quality of care it could offer. But there will be, I’m sure an awful lot of political discussion to be had.

Ash Finnegan  07:11

Yeah.

Jeremy Cowan  07:13

Right. Let’s turn to the core of today’s podcast, which as I said before, is about the problems of digital transformations. I mean, we hear it all the time about the growing number and importance of enterprise digital transformations, I’m going to call those DX for short. For example, I learned the other day from Couchbase, that investments in DX are expected to increase by something like 50% year-on-year in the next 12 months, which is an extraordinary investment uptick. Yet it seems that transformations often have their difficulties, don’t they? Companies, of course, prefer the term challenges, but let’s call a spade a spade. Some of these are significant problems. Perry, on the one hand, we hear that DX investments are booming. But confusingly, we also hear that more than $4 million worth of waste is experienced every year, just in the UK on failed, delayed or scaled back projects. Why? Why is this?

 

Perry Krug  08:19

Well, I mean, I think it’s fair to say that as the exposure to DX increases, and we see that with the investment increasing and the range of organisations trying to take advantage of that, trying to follow in the footsteps of some of the leaders who have been doing it for years or in fact built their entire business around it. As that pyramid expands, there’s more opportunity for churn and more opportunity for mistakes or missteps along the way. You know, $4 million sounds like a large number but I think we’re always going to see some degree of, you know, either attrition or scale-back projects or challenges, as you tactfully put it, in each individual organisation going along. There’s no playbook. There’s no specific textbook that says if you do this in this way, it will result in that, there’s so many other factors. But that doesn’t change the real-world situation that organisations are being forced, and are taking opportunities to take their own digital transformations on board. And there’s still a large, a very large portion that are reaping rewards from it by doing it in the best ways that they can and focusing on the right areas for innovation.

 

Jeremy Cowan  09:41

Apparently in the past year, and I’m sorry if we’re stat-heavy today, but nearly four out of five enterprises have improved their end user experiences. So, speaking as a consumer, who I have to confess gets rather frustrated with enterprises who clearly haven’t tried using their own websites – and I’m looking at you, airlines and insurance companies – (Laughter) I’m encouraged to hear of these improvements. I mean, can you give me some hope here, Perry? Give me an example of an enterprise or a vertical that’s making this a priority area.

 

Perry Krug  10:17

Yeah, I think it’s the fact that you’re not pulling your hair out every single time you go online that’s indicative of the progress that we’re making. It makes those laggards stand out even more, and I completely agree with you and feel your pain, especially being at a company that that our bread and butter, what we focus on, is helping make those end-user experiences better. I go to some of these websites, banks especially, travel websites, and I can just see all the obvious areas for improvement. And I wonder why, as you said, these companies aren’t using their own websites. But in terms of hope, I think it’s maybe we don’t talk about all of the positives and all of the really nice experiences that we’re having, because they’ve just become ubiquitous in our, in our life. We bounce from Facebook to Instagram, to LinkedIn, to YouTube, to Netflix, and everything, by and large, just works. And we don’t, you know, we don’t notice it, so we don’t stand out. Then we drop on to, and I won’t name or shame some of the mortgage institutions that I’ve been dealing with lately, but we drop into their estate and the app looks different than the website does, you can only update one part of your profile over there, you have to print out, sign and post an application when you know, their competitors allow for all that to be done digitally and online.

So, we’re still in a massive change management world right now. We’re still in a massive period of churn where there are those laggards and those organisations that just haven’t quite figured out either that they need to do it, or maybe they figured out that they need you, but they just don’t know where to start. And it’s troubling, but they are quick to be disrupted, and are soon to be put out of business because, as you say, we as consumers, the power is in our hands to switch from one to another.

 

Jeremy Cowan  12:27

Yeah, yeah, I was struggling with an airport parking site yesterday, trying to find the difference between registering and logging in. Because they asked me to do both through the same click. But when you went through, there was only one option, and I wasn’t the right person. I hadn’t qualified. So, it was incredibly frustrating.

Now, I guess the pandemic, I mean, to look on the positive side, the pandemic has pushed us all, and I include my company in this, to transform digitally. And we’ve been pushed hard with it, with enterprises seizing DX opportunities, that probably wouldn’t even have seemed possible in 2019. And the obvious factors include starting hybrid working and migrating to the cloud. And yet we’ve done so much of that successfully. So, I shouldn’t be churlish and overlook what has been achieved. Are there any other factors, Perry that have been important that you’d want to mention, like switching to 5G private networks or edge compute or something I haven’t mentioned?

 

Perry Krug  13:33

Yeah. No, I mean, I agree with all of that, Jeremy. I would re-highlight or re-focus on the consumer changes that have happened over the pandemic. And those are really what are driving businesses to enact these changes and deliver, either for their employees, for the workforce, or for their markets. You know, the tech industry was once a young person’s game and all of these organisations who served different communities that were not as technologically focused have just become so in the last two years, right. They haven’t had a choice. In order to keep the businesses keep doing their business and consumers keep consuming. Everybody has had to become much more aware of the role that technology plays in our lives. And I think that has ripped the covers off of some of these areas that have been less well served and are struggling or focusing on catching up.

 

Jeremy Cowan  14:35

Yeah, I think people have got away with it for a number of years. And there’s an old saying about when the tide goes out you can see who’s been swimming naked.

Perry Krug  14:44

(Laughter) Exactly.

 

Jeremy Cowan  14:45

Thanks, Perry. That’s been really helpful. Turning to you Ash, Conga tells us that between now and 2024, roughly 50% of all finance artificial intelligence (AI) projects will be delayed or cancelled. When I read that I was pretty shocked. So, I guess we’ve got about 15 minutes left to try and save an awful lot of projects globally from going pear-shaped. Gartner is predicting that half of all finance projects will be cancelled. That’s a shocking statistic. Why is this affecting AI so badly?

 

Ash Finnegan  15:19

I think it is because AI is a big trend. And a lot of times what happens with trends, the world feels they need to be doing it. A lot of the time, a lot of organisations are not ready. You know, especially when you go to AI, you’ve got the upfront infrastructure, you need the talent in your business, because it takes a lot of work. You need to continuously monitor it and stay on top of it. And organisations are simply not ready. But the biggest failing point is all around the current data structures. AI is only as good as the data it’s looking at. And many organisations need to get a handle on the data, where it is, understand how much processes they can automate, how many systems they can get integrated, to be able to drive that real, real intelligence.

So, organisations need to get a handle on their data, but also get a handle on what are they trying to learn? You know, what are the data sets and what is going to provide the information, it’s going to help them drive business decisions using AI. So, it’s kind of their cart before the horse. When it comes to AI, they should be very much focused on, you know, data ingestion and handling, getting a clear data architecture, looking at the flow of data from multiple systems, from multiple teams to multiple processes, get the alignment, get the understanding. Then start to look at some basic standard machine learning algorithms, train teams up, get them used to using them, and then look to the remediation stage.

Well, now you know, what are you gonna do? So, they’re the three stages of an AI project. The majority of businesses are on step one, which is getting a handle of that data.

Jeremy Cowan  17:00

So, is the use of business process outsourcing for AI rising significantly? And if so, how much is it increasing? And why?

 

Ash Finnegan  17:08

I think a lot of it is trying to get the handle on the data. You know, people are looking for that expertise. Like we said, there’s either lack of bandwidth or lack of talent in the organisation that have that true understanding. And you need to do that kind of business process automation, you need to be getting a handle on it, visibility. So, a lot of times what organisations will do, if they don’t have it internally, will outsource it to experts that can give them that advice and structure that they need to put them on the right path. So yeah, it’s something that they need the expertise and might not have within their business.

 

Jeremy Cowan  17:44

Yeah. So, should finance leaders spend time adapting their revenue operations transformation by assessing their current digital maturity? Is that getting a handle, as you say? Do people really think that automation will solve their problems? Or are they being a bit naive?

 

Ash Finnegan  18:06

No, I do think an assessment is really, really important, but not just around Process Automation. When we do a transformation assessment, we do it around a kind of 5-step framework. What we want to do is get a handle on understanding of the data set. So, there’s an assessment framework around creating the unified data model. So, we understand where all the systems are, we understand what the data is, how it moves, how it’s kind of organised within the business to understand that level of maturity within an organisation.

The next stage will be how many processes might be happening away from systems such as sending out documents. A lot of the time parts of those processes get done in Outlook, people generate them, and there’s no visibility all the time. So how much of those processes are within the system? Then we look at automation. And that’s where we look at the processes and the people in a lot of detail. Then we look at integration, it’s great to fix one department and get their data right and make sure they’re in the system with all their documents and their automated processes. But revenue lifecycle management is all about the connection of the creating the connected customer experience across multiple systems and teams. So, integration is really key on their level of maturity, on how well data is moving across different systems that they already have in place. And then we do the assessment around intelligence. What do they have today? Where do they want to get to?

So, by breaking down an assessment into kind of stages and assessing different levels of maturity, because some people are more mature at different stages. It’s really important to do the assessment to be able to get a handle on the size of the project, and then look at a crawl, walk, run. What’s realistic on data configuration? What’s realistic on all your document management and systemising everything, process automation, integration and that and have a five step strategy that’s taking you to that unified data model that makes AI more of a reality.

 

Jeremy Cowan  17:44

I think that’s really helpful. Five steps will be something that I’m sure we can all refer to now, Ash, thank you.

We’ve reached the What The Tech section of the pod. And after a fairly serious discussion, let’s just look for a moment at what in the world of tech has amazed or amused us lately? Ash, perhaps you’d go first, what amazing tech news have you seen?

 

Ash Finnegan  20:32

I guess the one that amused me the most was getting people back to work by using plants, which I thought was really, really strange. Yeah, you know, I see so many organisations trying to get people back in and food used to be the key driver to get people kind of motivated. (Laughter).

 

Jeremy Cowan  20:49

It works with me.

 

Ash Finnegan  20:51

Yeah, exactly. You know, so I do think a lot of people after COVID are kind of conscious of being out and about and getting fit and healthy again. But I thought plants was quite a strange one. I don’t know. It’s something that would get me into the office, but it seems to be working for some.

 

Jeremy Cowan  21:05

So that story was on Wired.co.uk. I think the headline is, Employers are luring workers back to the office with plants (https://www.wired.co.uk/article/office-plants-hybrid-working ). We’ll put links to all of these stories in the transcript. So, anybody who wants to read them for themselves, they can find it. Like you, I loved that. It shows a slight change of expectation and motivation. Perry, what’s been in the news that made you smile?

 

Perry Krug  21:30

Well, smile, not so much. Amazing. But I hope we’ve all seen that Microsoft has decided to sunset, put out to pasture their renowned Internet Explorer after 27 years. I think it was amazing, first of all, that it’s been 27 years. I can remember back, very, very lightly a time before Internet Explorer. But it just seems that those 27 years have gone very quickly. But I could almost hear the chorus of developers rejoicing that they no longer needed to support older versions of Internet Explorer. (Laughter) I know certainly some of my close colleagues have dealt with that in the past years.

 

Jeremy Cowan  22:18

Yeah, this was a story in many places, but I saw it on bbc.co.ukMicrosoft retires Internet Explorer after 27 years. (https://www.bbc.com/news/technology-61810403 ) I daren’t even ask for my tech colleagues’ opinion on that, but I’m sure relief will be in there somewhere.

 

Perry Krug      22:34

Indeed.

 

Jeremy Cowan  22:35

Well, I want to thank you both for sparing time to chat. It’s been great to have you both on the podcast. Let me say a big thank you, first to Ashley Finnegan of Conga. It’s been great to have you here, Ash.

 

Ash Finnegan  22:47

Thank you!

 

Jeremy Cowan  22:48

And how can people reach you for more information, what’s the best way to contact you?

 

Ash Finnegan  22:53

One of the best ways to contact me is obviously on LinkedIn. I have a profile there under Ash Finnegan, digital transformation officer, Conga. That’s heavily where I engage with many people, or go to the Conga website and contact any of the Conga team. I’m the only digital transformation officer, so it is quite easy for businesses to reach out and connect.

 

Jeremy Cowan  23:12

That’s great. And our thanks also, to Perry Krug of Couchbase. It’s been a real pleasure to have you join us, Perry.

 

Perry Krug  23:19

My pleasure, Jeremy, thank you for having me.

 

Jeremy Cowan  23:21

And where can people find you?

 

Perry Krug  23:23

Yeah, like Ash I’m all over LinkedIn. I’m also just very simply Perry@couchbase.com . So, I welcome you to reach out.

 

Jeremy Cowan  23:32

Well, of course, thank you too to our audience around the world. Don’t forget, you can subscribe to the Trending Tech Podcast wherever you found us today. And although it may not seem a big deal to anyone else, it would mean the world to us if you could give us a 5 Star rating and leave a review. It helps new listeners find us to join our growing global audience. Many thanks if you can.

So, until next time, keep safe. Keep checking www.IoT-Now.com , www.TheEE.ai and www.VanillaPlus.com where you’ll find more tech news, plus videos, top level interviews, event reviews and much, much more. And join us again soon for another Trending Tech Podcast looking at enterprise digital transformations. Bye for now.