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6 Ways to Build for Digital Change

04/04/2015 10:25 am ET | Updated Jun 04, 2015

30 years ago, Alan Trefler had the idea that it should be possible to enable organizations to do a better job of engaging with their clients by making it possible for business and IT to be able to interact differently. It was this inspiration that led Trefler to bootstrap Pegasystems. Fast forward to 2015 and the issue of the relationship between business and IT and the connection with the customer is as contemporary as any issue in enterprise software today, yet so few organizations have been able to do a really good job of having the business work effectively together or connecting with their clients across the entire customer lifecycle.

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Alan Trefler, CEO of Pegasystems

Trefler believes that by changing the fundamental way that business and IT work together, organizations can bring a culture of responsiveness and customer engagement to the very way the company works. Known globally as a Business Process Management (BPM) platform, Pegasystems is focusing the company towards Customer Relationship Management (CRM) and other strategic applications. "We really see what we do as much more than just managing business processes, but bringing together processes, case management, analytics, customer interaction and self-service by creating a model of how the institution wants to deal with its customers and from that model our system writes the code," says Trefler.

As CEO of Pega, a $600 million company with over 3,000 staff, Trefler is responsible for shepherding this transformation as he guides, mentors and services his customers in how they can approach digital transformation to create real compelling value for their customers. Here is his advice on how organizations can position themselves to succeed in the digital world.

6 Ways to Build for Digital Change

1. Build for multiple channels
In a "mobile-first world" Trefler says that Pega's vision of the future of customer service, CRM and business process is having a brain in the organization that can reach into each channel - mobile, the website, the contact center and the physical branch location if one exists - and create a model for the business that doesn't get mired in a quick fix, single channel solution. He says that the whole idea of going mobile first is really only ideal if all or most of what you are doing is on the mobile device, like Uber for example. But if you are a business that operates across multiple channels, going mobile first runs the strong risk of building logic, rules and processes into that mobile channel that are then going to intrinsically either diverge from the rest of your business or put enormous cost pressures on your business as you go and have to re-implement it in multiple places.

Trefler is not the first to warn against mobile-first strategies, and after having had their flirtation with trying to whip together some mobile apps, Trefler says that he is seeing a lot of companies finding that their satisfaction scores are not improving in the way they want and they are actually just beginning to see that what's going to empower them in the future is to develop the skills and capabilities to interact with customers across all of these channels with equal strength. "I think understanding how important that is, is a key part of beginning this journey correctly," Trefler says.

2. Get the business and IT to work together in a completely different way
"I think the business and IT relationship changing has got to be a first principle to making this all work properly," says Trefler. It can't be business just running off and buying stuff because they are frustrated with IT. It can't be IT continuing to have the lists of yes you can have this in 2021. It's got to be that the business needs to be able to take more empowered roles in being able to actually help construct the real software. "And what that does, is actually keeps the business and IT folks on the same page, and puts all the smart minds to work," says Trefler.

The problem for many companies is that they know they want to do something, but they are stumped with figuring out exactly what to do and who should do it. According to Trefler, the solution is to get business and IT to work together in a completely different way. He criticizes the whole process by which business defines what they want and then gets it done in software, which is so critical in running businesses these days, as staggeringly and agonizingly manual: "Those computer systems in the mobile device, in the front office or any place in the organization, on the web, those are all written in garbage code that has nothing to do with and is unconnected to the business requirements. The dialogue about what's getting built can happen at a higher level of metaphors than programming languages in machines and random specs in documents."

To have agility, Trefler says it's the conjunction of understanding that you need to have seamless service experiences that go across channels and that you need to change the very way that business and IT work together so it's not all about translating things into the programming language of the machine.

3. Don't rush to a quick fix
In lots of enterprises, Pega is seeing what Trefler describes as almost panic reactions to stuff speeding up but them not knowing how to deal with it. His advice in dealing with all of this massive change is "don't panic". Instead of rushing into inadequate solutions and quick fixes that aren't going to get you there, Trefler suggests that business buyers in the enterprise take a step back and ask themselves what's going to really make them have strategic business outcomes and how it's going to work across all their channels.

As a chess master turned global chief executive, Trefler sees a connection between how he thinks about business strategy and chess. He says that the thought process of a strong player falls into three phases. The first phase is pattern recognition, the second phase is the more detailed analysis and the final phase is sitting back and trying to figure out what has been missed. "I think by being able to put together those three phases, a chess player is able to both be effective in how they make decisions and also prevent against risks and uncertainties. That is very much how I think about business. You want to be strategic, you want to see the patterns and you want to be open to new patterns. You want to use that to focus your analysis and then you always want to question what pre-existing biases may be present. What are the things you might have done last time that are influencing you and may no longer be appropriate? And it's that sort of check step that I think is really critical in both business and chess," says Trefler.

4. Treat digital like electricity
Because digital is going to underlie the entire future of businesses and be central to how businesses work, Trefler says that digital has got to be percolated throughout the entire organization, it's got to touch everything. To hire a CDO or not to hire CDO is not the question. Business operations and the IT organization need to be completely committed to working together hand-in-hand on the digital agenda if they want to be a part of a successful business.

Trefler thinks that the worst part of not having the business understand the technology better, is that they don't know what to ask for. In his book, Build for Change, Trefler draws an analogy of what it would be like if you wanted to either build a house or make a massive addition and you had never been to Home Depot. You would just have to imagine would be easy and what would be hard, and you would end up asking for lots of things that were really complicated and expensive. On the other hand, if you had walked through Home Depot before, you've seen things like French doors and bay windows and you could have a really intelligent conversation with your architect, and they may push back but suddenly, you're talking about things being off-the-shelf in a place where that's adequate or actually even better.

"That's what has to happen for organizations to get digital. The business people need to understand what's possible, what's easy, what's expensive - and what's not. And like any other good business person, that will influence how they engage with the rest of the organization," says Trefler.

5. Have the ability to execute
While Trefler thinks that executives definitely need to appreciate the role of data, he thinks that when it comes to change, it's less about data science and more about the ability to execute. He says there are three things: data, judgement and the ability to execute. Data is about what happened, judgement is the insight that builds on that data and enables you to take the context provided by data and form good decisions and the ability to execute is being able to bring the process to the fore. Trefler says that being able to execute is the most important of the three and in the human metaphor it's the muscle: "Just having smart brains but not being able to execute, is no better than just being all muscle and having no brains. I think even more than data science, which is part of our product line, it's important to have that build for change muscle, so you can use your insights to try something and have it execute across your entire business."

6. Be intellectually curious
To stay ahead of digital disruption, Trefler advises that organizations be open to input from all different sources. With the world so wonderfully connected it's easier to see what competitors are doing, what potential new entrants are doing and what your clients are doing with technology. Trefler thinks that organizations need to explicitly go out there and seek opportunities to try new stuff in addition to trying to have a culture of innovation that is central to the company. At Pega, they do a hack-a-thons where they challenge their engineers and project management teams to come up with ideas that they may not normally fund. Out of these they end up getting a lot of innovative ideas that they actually do try.

They also try to work with academic communities, such as MIT, to get ideas, as well as staying open to looking at companies and acquiring them when they make sense. These activities keep them constantly exposed to seeing lots of stuff, which Trefler sees as an important part of knowing what else is going on out there and meeting some of the right people to help you think fresh.

You can watch the full interview with Alan Trefler here. Please join me and Michael Krigsman every Friday at 3PM EST as we host CXOTalk - connecting with thought leaders and innovative executives who are pushing the boundaries within their companies and their fields.