Digital Transformation Debt: Is it holding you back? with Setrag Khoshafian - Author, Speaker, and Chief Scientist at Khosh Consulting

(Intro Narrator at 00:00:04) Hello, my friends. Today, Joel is talking to Setrag, the author of the book How to Alleviate Digital Transformation Debt Post-COVID-19. And they discuss why pursuit of technology must always be goal-focused, what the decentralized Web 3.0 will look like, and why Setrag believes every organization should be flattening its hierarchy. All of this right here, right now on the Modern CTO Podcast.

(Joel Beasley at 00:00:36) Here we go. This is the Modern CTO Podcast.

(Setrag at 00:00:48) My education—I did my PhD. In fact, I have a master's in mathematics and a master's and PhD in computer science. The computer science is from University of Wisconsin-Madison. And then after that, I joined a company called MCC, Microelectronics Computer Corporation in Texas, which was a research think tank—about 70% or more PhDs from all around the world, the top brains. So, you know, we would show up to work and say, "What can we innovate?"

(Setrag at 00:01:22) And there were branches in databases, advanced databases. I did a lot of work there—intelligent databases. I ended up joining after that Ashton-Tate. I don't know if you've heard of that name. It was the world's third largest software company at that time.

(Setrag at 00:01:43) And I invented their intelligent databases, intelligent SQL. I'm sure you've heard of SQL. And I used to be part of the ANSI SQL standardization committee. And then I started getting into document imaging, document management, workflow. I did a couple of founding ventures. I was the brain behind another successful company called Savvion, which in 2002 was the world's leader in BPM.

(Setrag at 00:02:13) And I was the acting CTO or the brain behind inventing, getting them into the business process management, business process automation. I did some other ventures for a year, and then Pega started having me as a consultant, and then they made me an offer. So, by the way, MCC was in Texas. I moved to Northern California, Silicon Valley, did some ventures, and then moved to Boston. And I was with Pega quite a few years, like 16 years or more.

(Setrag at 00:02:51) And I was the Vice President of BPM Technology and Chief Evangelist. I'm the author of 10 books, hundreds of articles. I have a TEDx talk. My latest book—I'm sure that's what we're interviewing on—is really accurate, although I kept it small, of this whole vision of digital transformation, especially the cultural transformation.

(Setrag at 00:03:17) My TEDx talk was on culture, by the way, that companies are undergoing. I've interacted with many CIOs, IT managers, business leaders. I'm recognized both in the intelligent database and the intelligent business process management world, which are like data and process. It's like data and the programming language—two sides of the same coin, bringing to the business, very much into blockchain, IoT, design thinking.

(Setrag at 00:03:51) I mean, the book covers it all in a very palatable way. And I've established Khosh Consulting, which really focuses on the content of the book. So that's very briefly on myself.

(Joel Beasley at 00:04:07) You're a busy guy. That's a lot of stuff. Congratulations. Now I'm curious. You said you were at Pegasystems—is that correct?

(Setrag at 00:04:16) Yeah, I was. For the past 18 months or more, it's been—

(Joel Beasley at 00:04:23) Did you know Don? Did you know Don over there?

(Setrag at 00:04:26) Don Schuerman? Yeah, I know him. Sure.

(Joel Beasley at 00:04:29) Oh, he's awesome. He's been on the show.

(Setrag at 00:04:31) Oh, okay.

(Joel Beasley at 00:04:31) I got to meet him a few years ago when we did an interview. Certain people stand out to me. And so when I saw Pegasystems, I was like, I really enjoyed that interview. I really enjoyed Don. It sounds like that company had a really great culture.

(Setrag at 00:04:45) Yeah, yeah. Very good, cutting edge. Cambridge—not so much Silicon Valley, but the Cambridge coast, which itself has a mini Silicon Valley in the East Coast. So, yeah, they're very much innovation.

(Setrag at 00:04:58) I've done a lot of innovations at Pega, not only meeting the needs of transformation through process automation, but pushing the company into areas such as Internet of Things and blockchain, which are, as well as artificial intelligence, all the design thinking. I've been also innovating on centers of excellence, competency centers. How do you balance innovation IT, fast IT, with maintenance IT? I'm an expert in that.

(Joel Beasley at 00:05:36) One of the things that caught my eye—after I watched your TED Talk, I saw you had a book, and then you used some words in an interesting way I hadn't used them before. I'm super familiar with technical debt, right? But you kind of put something adjacent to that, and you're calling it digital transformation debt. And I wanted you to explain that to me.

(Setrag at 00:05:56) Oh, that's excellent. Yeah. I love it because, you know, if you look at technical debt, what's the premise, right? And that's so common. So let me start with that and take you to digital transformation. Just in case your audience—I mean, although they can search, and you're right, I introduced the term digital transformation debt, and I wrote a whole book about it. So that's how we're here. Yeah.

(Setrag at 00:06:17) It's like, you know, getting things done without paying the piper, so to say, paying the price. You know, do it quickly. You know, "I don't have time for this." So let's just—you know, there are technological trends, methodology trends, cultural transformative trends. So the main premise of technical debt is: I'm going to postpone. I know I have—okay, let's take a very—I'm going to get a little bit technical. And if I'm getting too much, Joel, please let me know.

(Setrag at 00:07:02) So, I mean, one of the areas, in fact I wrote a book about it, that I get very deep into is object orientation. As you know, it was a key paradigm for many, many years—still is. I mean, if you look at some of the popular languages, Java, C#, C++, even, it's creeping into JavaScript and many other modern languages as well. Well, if you look at that, there is sometimes—I'm just going to give you one example—you sometimes realize that your class structure or the overall structure of your code has problems, and you keep on postponing it and patching, right?

(Setrag at 00:07:45) I'm just giving you one example. I keep on postponing and patching. That could happen in other programming paradigms as well, like structured programming, like C, which is still popular. And you keep on postponing. You know you have to do it right, and you keep on postponing it. Well, you're accumulating debt. So that's the notion of technical—or there are new technological trends which allow you to do things much easier, much simpler. But you say, "I'm too busy. I mean, I have all this code I need to maintain."

(Setrag at 00:08:17) You know, we use this example. It's from sales. It's really cute. You know, these guys have a cart and they have square wheels, and they are really trying to push this cart. And somebody comes and says, "I have this round wheel I want to sell you." And they say, "No, we know how to do this. We're too busy. Go away."

(Setrag at 00:08:28) "We're not interested in round wheels." It makes their life much easier, but they are stuck with the way they've been doing it, and they keep on postponing. The debt accumulates. Now, that's high level what people mean—and you can check it. There are different opinions, et cetera, in terms of technical debt. Well, let's come to digital transformation debt.

(Setrag at 00:09:03) The world—I mean, this is not some catchy marketing term, but the world is really changing. And it's changing not only in terms of the explosion of technology. So digital transformation—each of the words has a lot of meaning, a lot of semantics. There are connotations, some explicit, some hidden connotations. One of them, of course, is the digital, that the digital world is changing everything from digitized business logic to artificial intelligence, which is—I mean, the one term you might hear is the data-centric organization.

(Setrag at 00:09:47) We're exploding—zettabytes and petabytes. I lost track. How many zeros are there, right? And how fast we're generating data, right? And also connected devices, exploding Internet of Things, connected homes. You know, I give this example, Joel. You know Best Buy, and there are other stores. Remember, go back five years, even ten years—how much was the shelf space for Internet of consumer things, right? Connected homes. Very little in the beginning, right?

(Setrag at 00:10:27) Now go there. And you know, I mean, you turn all around. It's all about the connected home, right? And the same thing in manufacturing, the same thing in healthcare. Healthcare—telehealth experimented an explosion during COVID-19, and it continues. So the digital is very important. I'm just touching upon it.

(Setrag at 00:10:54) But then there is the transformation, which in my opinion is even more important. People are not realizing that the culture—that's where the transformation comes in—is changing. And what are the trends in this change? The younger generation, Gen Z, Gen X, they're much more innovative. They want to be independent. They want to be entrepreneurs.

(Setrag at 00:11:20) So that cultural change, there's so many dimensions. Of course, virtualization—you can see big companies on the bandwagon, right, with Facebook renaming itself Meta, Microsoft Mesh, which is also interesting, by the way. They're all getting into this bandwagon. But that's only part of it, the virtualization.

(Setrag at 00:11:47) It also has to do with flattening the organization, the entrepreneurial spirit. You know, people sometimes don't realize that when we talk about flattening organization, entrepreneurship, decentralization, connectivity—yes, there are technologies, but there are also cultural trends. And one very important aspect of that is something which, you know, there's even an organization for it, and that's servant leadership. The servant leadership has to come right from the top, right?

(Setrag at 00:12:28) Look at—you know, I always give the example. I bring pictures of org charts, right? The hierarchy, the top leader and the next level and the next level and the next level. And you have—I mean, what is happening with the busy bees, right? The people who are actually doing the work, and the top layers—often there is a very serious disconnect.

(Setrag at 00:12:45) In their board meetings, they might think everything is rosy. In reality, it's very, very different. That organization, the org chart, is being challenged by decentralization, and it needs servant leaders. Servant leaders are—it's the exact opposite of what you have in, you know, for lack of a better name, dictatorial, top-down, you know, type of leaders. Controlling leadership, right?

(Setrag at 00:13:22) "You do our bidding. I always surround myself with people who agree with me." I mean, you know this stuff, right? This is tradition. In the younger generation, there's an almost implicit, silent revolution happening against this. And there are certain areas—we can get into it, especially the low-code, no-code, and the blockchain area—where this is completely exploding. And what about the debt? The debt is that if you ignore this—and that's why I try in the book to be holistic, and, you know, I recommend people to get the eBook or Nook version.

(Setrag at 00:14:04) It's also on Google as well as the printed, because in the eBook version, I made sure you can click on the links if you want to go deeper. But the book is very easy to read. I try to make it holistic. And the debt is: you cannot ignore. You cannot ignore.

(Setrag at 00:14:22) So I start with culture, and then I end up with competency center. And we can go over some of the content if you like, Joel. But the debt is so critical. And, you know, every company should ask, "How can I disrupt myself?" Because if you don't ask that question, you will be disrupted. The world is changing in almost every domain.

(Setrag at 00:14:47) So that's my brief answer, Joel. I covered it a little bit in more detail than maybe you expected, but that's sort of a picture. Culture is very important for the debt, the technologies, the innovation, the methodologies, and the competency center, basically, which balances maintenance with innovation.

(Joel Beasley at 00:15:13) Well, actually, can I interrupt you here? Because you're doing a lot of good stuff, and then you're just moving on too fast. Okay? So, because I've got questions. It's like you're smart, and this is interesting for me.

(Joel Beasley at 00:15:26) We were talking about digital transformation debt, right? So has there been a way to measure it in the sense that if we look at technical debt, right, we can say people will often log while they're writing code that they're accumulating technical debt, and you can actually—some people have come up with ways you could go try to visualize it or see how much technical debt you're accumulating. Obviously, it's an abstract thing. And so, at first everyone was just accumulating it. Then people started trying to figure out ways to measure it.

(Joel Beasley at 00:15:56) Have you come up with any ways to measure this digital transformation debt? That's my first question. My second question is—and I'm just going to make a statement and you can correct me if I'm wrong—so I'm trying to better understand this. That next generation that's coming up, can I accumulate digital transformation debt by ignoring those trends? Is that one of the ways to accumulate it?

(Setrag at 00:16:21) Yes. I mean, let me touch upon both of these. And to make it very real for you and very practical, I'm going to take one of the areas that is in the book and which is one of the most important trends in digital transformation debt. And so let's go to your first question: Can you measure it?

(Setrag at 00:16:45) Yes. And there have been some independent studies. The area I want to pick is low-code, no-code. And there have been studies which—so imagine in the traditional technical debt, you might be staying in the confines of your IDEs and the programming languages. And so your primary thinking is, "How can I do this better?"

(Setrag at 00:17:11) More libraries, refactoring the class structure, et cetera. It's technical. Doing it, writing better code in your environments. In the digital transformation debt, number one, you're saying, "Okay, I'm going to move to a completely different paradigm, the low-code, especially the no-code paradigm." And people have measured that.

(Setrag at 00:17:35) Like for the same problem, they've said, "Give me your best in your traditional languages and your best in the low-code, no-code," and you see productivity gains and explosion through, like, minimum viable products much faster, sometimes in days, et cetera. And they've been objectively measured, and I have references of this in my book. So that's—I mean, just that's one area. I mean, you can take any of the areas. It's a great question because you want to measure.

(Setrag at 00:18:07) You just don't want to philosophize. But there is another aspect that sort of touches upon your second question. You can still keep your structure, your organization, and say, "Okay, instead of me doing Java or C# or C++, I'm going to move to one of the modern no-code, low-code platforms." And, you know, then you keep everything the same.

(Setrag at 00:18:38) And still, you know, business is communicating with IT: "These are the problems we'd like to solve," et cetera. Well, there is—here is where the transformation comes. Which is where it touches upon your question. What about you say, "Okay, I'm going to take another—I have servant leaders. I want to take things further. I want to empower citizens to do development." Who is a citizen?

(Setrag at 00:19:09) Here we are, you know, we're introducing yet another—what is citizen development? I'll tell you who is the citizen. You and me, we are citizens. Subject matter experts are citizens. Engineers, doctors, nurses, in any domain, they're citizens.

(Setrag at 00:19:23) Business experts, lawyers—they are all citizens. "This is crazy. I mean, now they're building applications?" Well, don't they use PowerPoint? Don't they use Excel spreadsheets?

(Setrag at 00:19:38) Don't they use Word or other productivity tools? Yes, they do. So especially with the newer, so it goes to the newer generation who is not afraid of technology. Why don't we transform our organizations and empower them? Yes, you still need the partnership with IT for security, reliability, cloud architecture, et cetera.

(Setrag at 00:20:04) I understand that. You've got to have Kubernetes, right? At least, you know, you've got to mention it a couple of times. Why don't we empower them since they know what they want, how to optimize the customer experience, et cetera, to become developers?

(Setrag at 00:20:22) So that's—

(Joel Beasley at 00:20:23) Because it's scary. It's scary. We don't know how to police it. We don't know the frameworks to manage it. It's like if we just let them start doing whatever they want with the data, we're going to end up with a bunch of rat's nest of data. Like, what's going to happen? And so, I mean, when you said afraid, I was like, oh, I haven't thought of it that way, but that makes perfect sense because people are afraid of new things, things they don't understand. And so when you get this whole generation that they're born—like my kids, I've got a four-year-old and a two-year-old—they just came into this universe where these magical screens existed that can search anything. And so they don't even think twice about it. They use it as an appendage essentially.

(Joel Beasley at 00:21:03) It's just like there's a tool and let's use it. But you're right. I've constantly heard—because I'm 33, 34. So I see the spectrum, right? And I find that there is a certain mindset and you can't predict it directly off of age because there's so many different people with so many different mindsets.

(Joel Beasley at 00:21:26) But I'd say people over the age of 30 are more likely to be scared of the technology than people under the age of 30 as of today.

(Setrag at 00:21:37) Spot on, Joel. And the illustration I was giving—I told you the book starts with culture, right? The vision, servant leadership, you know, flattening organization, decentralization, virtualization, the metaverse, all of this. But then it ends with competency center. And that's so important.

(Setrag at 00:21:58) What you're saying is critical. You're right. I mean, I'll give you an area. I mean, I'm an expert in process automation. If you create robotic processes, which are like software robots, and you just keep on multiplying—

(Setrag at 00:22:13) I heard of a case the other day, you know, they started having a lot of robots, but then they're spending more time building these robots. I mean, they didn't gain anything and maintaining these robots than the productivity you get from the robots. So technology without competency center and the empowerment and the financing of the competency center, which has the charter to balance innovation with best practices. If you don't do that, you will fail. You will fail if you ignore the technology and the cultural trends, and you will fail if you just jump into these, you know, new—we call it in the industry—new shiny balls.

(Setrag at 00:22:59) Right? There's IoT. I've got to have IoT. Or the new library. I've got to have a new tool. I've got to have it. Low-code, I've got to have. You just jump.

(Setrag at 00:23:07) Robotic automation, all these technologies. There's so many technologies. You know, blockchain is the same, et cetera. If you just run after those without balancing it with best practices and having a structure that is empowered and financed—everything from your design thinking methodology, which is a very well-defined approach, empathizing with the customer, et cetera, and all the iteration, you know, agile methodology, continuous improvement and innovation. If you don't have the governance of that and enabling your organization, training them, governing them, and empowering them, and then seeing, you know, failing fast and succeeding faster—all those mantras. There needs to be an organization that keeps the balance.

(Setrag at 00:24:04) So the answer is you're absolutely right. You start with culture. You look at all these digital technologies and methodologies and transformation, but then the book ends with competency center. That's where you succeed, and that's very important.

(Joel Beasley at 00:24:20) I like it. It's funny because, you know, while let's say a person a generation or two ahead of me would be scared of technology and I'm sitting over here like, oh, you're scared of technology? You shouldn't be. But I'm scared of giving them RPA-type tools and what they're going to do. And then the next generation's going to grow up in that one. And they're like, what? You're scared of that? You're scared of empowering these people? And it's funny how that works, right? I want to know what value streams are.

(Setrag at 00:24:46) Yeah. So what are value streams? That's great. And it's more pervasive than one would realize. So part of the problem—and now we're going into that world—is that there are many, many terms which have very close semantics, and I might differ from other colleagues.

(Setrag at 00:25:09) And I am a thought leader myself. And I take these synonymously. For me, a value stream is—and another term, by the way, and I will highlight this because I want to mention something very important—is value chain. I use value stream and value chain synonymously. Okay?

(Setrag at 00:25:30) It has a beginning. It has an end, right? It's a stream. It has a beginning and it has an end.

(Setrag at 00:25:37) Think of a stream as a source, and it ends up in the ocean. That's a stream. And in between, it goes through many things. One way to think about it is it goes through states, right?

(Setrag at 00:25:52) You know, I applied for an account, and then the next step is my background is checking if I'm in a bad people list. Let's say it's a bank. And then the account is made available, and I send the email or the text of where the account is, and then I have to go and establish my password and my ID and the two-factor authentication, et cetera. It's a stream. You do that stream, your account is open.

(Setrag at 00:26:23) You can use it. That's the simplest example, and we do this almost on a daily basis, right? Everywhere. So it's a stream.

(Setrag at 00:26:30) Some of it is automatic. Some of it might need humans to approve, right? It might take a few days. There are clearings. It might talk to my systems of record in the back, might even talk to third parties via APIs—always good stuff—but it has a beginning and an end. And here's the thing: it provides value. In this case, my account is open. That provides a lot of value for me and a lot of value for, for example, the financial organization. And if you look at any organization, it's really an aggregate of value streams or value chains.

(Setrag at 00:27:10) Other terms: process, workflow. Take them as synonyms. Beginning, end, right? And then orchestration of a lot of activities and tasks. And usually, if you're in continuous improvement, you might have upper limits, lower limits. You want to avoid waste. There you go into Six Sigma and Lean types of principles. I also like value chain for the following reason. A stream or a chain, a value chain—and this is so important—if your listeners forget most of what we're saying, please remember this.

(Setrag at 00:27:51) Your organization is a collection of value streams or value chains, and each one of these is as strong as the weakest link. Let me repeat that. A stream or a chain, a stream or a chain is as strong as the weakest link. What does that mean? And how does this deal with digital transformation?

(Setrag at 00:28:13) One word I haven't used so far, which is so important, is silo. Silo. If you look at inefficiencies within an organization, let alone between organizations, you immediately run into the silo problem. That is, we experience this all the time. You call in or you access the web, maybe there is a bot there helping you, and then they cannot solve your problem. They have to escalate it.

(Setrag at 00:28:49) You gave the credentials. You have to give the credentials again. I've had it happen to me several times. Every time, give the credentials. That's an example of a siloed organization, right?

(Setrag at 00:29:00) And there are so many examples. There are organizations which are selling on different channels, and the price depends on the channel you go to, right? Whether you're calling them or doing the web because they're siloed. They've used different apps. There's so many examples of siloed. You know, they didn't know your address was not updated. All these—you know, you didn't get—you had a dispute. You didn't get compensated for it, et cetera. These are all examples of silos.

(Setrag at 00:29:32) The organization. Why? Because we encourage it. Go back to that org chart. We reward people to stay in their silos.

(Setrag at 00:29:41) A value stream or a value chain goes across the organization. Now think about it, Joel. It goes across the organization. A process goes across the organization. You start one place. You might get legal involved, financial involved, IT involved. Each one of them has their kingdom, and they love their kingdom. And they have their own people, and they're in their silos. So here is why transformation is so important. An organization is an aggregate of value streams or value chains, processes, workflows, whatever you want to call them.

(Setrag at 00:30:16) Yet the organization is hierarchical, right? So the business, what they do, goes across, but how they have organized themselves is hierarchical. That's the problem. That's why decentralization and servant leadership are so important. So—

(Joel Beasley at 00:30:34) Can you have a horizontal hierarchy?

(Setrag at 00:30:37) Well, okay. Great question. That's why flattening is very important, and people are experimenting with alternative organizational structures. In fact, if you think about it, blockchain with the decentralized autonomous organization—I mean, Vitalik Buterin has a semi-official white paper on this. I advise people to check it out, and I touch upon it, and I have other material.

(Setrag at 00:31:09) I touch upon it in the book. It's very much dealing with this. I'll give you one example, Joel, where we are paying an enormous price as individuals, as businesses, as countries, and that's supply chain. I mean, think about it. We talked about silos within an organization.

(Setrag at 00:31:29) So think about intra-silos. Now think about silos between organizations, even between countries and continents, right? It's much worse. And we're seeing that.

(Setrag at 00:31:43) I mean, in a sense, an organization—you know, their value streams are little supply chains within the organization. You know, they're customers of each other. And supply chain usually involves multiple tiers. It's not just one tier. And anytime you have a weakness—why are we seeing this? It might be a weakness in transportation. You see, this is exactly the example of a chain is as strong as the weakest link. What is happening between organizations and countries or businesses, it's happening within organizations. So the decentralized autonomous organization—still, we're at the infancy. We need to pay attention.

(Setrag at 00:32:27) I believe the transformation—every company should think about doing a DAO themselves. Flattening their organization, empowering their people, bringing up the innovation in them, especially the younger generation, and, you know, creating a very innovative center of excellence. That's the short answer to that. It's difficult.

(Joel Beasley at 00:32:49) All right. I like it. I like it. But, you know what? You touched on something that I really got passionate about in my own thoughts, right? When COVID happened and we started looking at how centralized everything was. And meanwhile, we're growing up in an age where everything's becoming decentralized in technology and I'm sitting there and I'm like, man, they can't see that these cost benefits of centralizing the supply chain—I'm sure there's some cost savings, but it's far outweighed by the cost of a central failure. Because the cost of a central failure is catastrophic. But if you decentralize it, it just costs a little bit more. Yeah.

(Joel Beasley at 00:33:29) That's—I don't know. It blew my mind to think of all the things that we rely—are you in the United States?

(Setrag at 00:33:34) Yes. Yes. Okay. Yeah.

(Joel Beasley at 00:33:36) So you're currently living in the United States. And to think about how dependent we are on the most common medications that are produced—we don't even have a facility here that can produce them. And, well, I know that a lot of that's changing through startups and through government funding and whatnot. And that's one thing where I'd be glad to spend money. Where's that bill? Okay.

(Joel Beasley at 00:33:58) We get it. Yeah. There's a lot of things that we need to work on as a society, but where's the bill to be like, hey, so we're going to build these facilities so if, you know, something happens, we don't all die?

(Setrag at 00:34:09) Yeah. Absolutely. Absolutely. You touched on medication is one. Chips is another, right?

(Joel Beasley at 00:34:16) Chips?

(Setrag at 00:34:17) Yeah. Food. Foods are—you know, there are studies which show that, you know, and I might be conservative, 30% of food is spoiled. I mean, we have countries—oh, go ahead. Go ahead.

(Joel Beasley at 00:34:31) Yeah. I think it's way more than that. Like, I watched some documentary a few years ago and they showed—it was on the waste in Las Vegas because they, like, waste so much food. And then they started working with, like, some farms. But even when they take the excess food and work with the farms, there's still, like, a massive amount of waste.

(Setrag at 00:34:51) Absolutely. Yeah. And it's a big problem. We will face supply chain challenges for years. It might even be decades.

(Setrag at 00:35:01) But the good news is the infrastructure through, especially through blockchain—I mean, people—I'm sure. I mean, I keep on coming to that because there is something called Web 3, right? And I touch upon this. This is very important. So we're still very much in the Web 2 world, right? And we're conducting e-commerce over the web. Web 3 is going to be different.

(Setrag at 00:35:29) And there are different angles where people have approached Web 3.0. One of them is the semantic net, which really did not happen, but still it's implicit in it. Ontologies and really the meaning of the connectivity, the hypermedia connectivity, more semantics with AI and other knowledge models. But there are other components, and one of the components in the infrastructure is blockchain, which is really—I mean, distributed ledger, which is replicated, et cetera. But then as you go higher, you get into areas like augmented reality and virtual reality, which, you know, many large companies like Facebook and Microsoft are coming at it top down.

(Setrag at 00:36:23) They need to—the architecture structure has to change with blockchain in the bottom. You have AR, VR, and the interactions at a higher level. The world is moving in that direction, but very, very slow. So if blockchain becomes—and there are examples, including in food, where you can leverage blockchain for supply chain—it's ideal.

(Setrag at 00:36:48) It's made for that because you can have all these third parties go and find out where things are. It doesn't necessarily mean it solves it, but at least you are aware. Many times today, we're not aware. Believe me, there are people who are using paper and signature and, you know, it's like you have very advanced countries, and then you might pass through ports and other places. We've seen—there's so many examples you can search, you know, like some ship can close the Suez Canal. What happens? And there are people in a port—I'm just going to give an example—who don't want to be vaccinated, and they're not working. So what happens there? And you keep accumulating both.

(Setrag at 00:37:30) I mean, there are—and you might have very advanced countries with a lot of automation, but the value chain is not healthy. It's like a river coming down, and there are these narrow paths, and it's choking everything. So that has to be de-cluttered. That has to be solved.

(Setrag at 00:37:49) And, of course, it's not an all-in-all answer. But if we start moving, it's a small one—say, like a maturity model—towards decentralizing our world, our companies, our governments, everything has to be decentralized, and then we permeate this decentralized autonomous organization involving different parties. That is down the pipe, so to say, but it's an inevitable trend.

(Joel Beasley at 00:38:17) I'm glad that you mentioned the port thing because my father-in-law has been a UPS driver for thirty years. He drives the semi trucks. And so we were all talking about this. And did you know that at the ports, there are countries that have fully autonomous ports or they're very close to fully autonomous ports? And then ours in America are ridiculously manual because the unions that protect the workers' jobs don't let the new technology come in.

(Joel Beasley at 00:38:48) I was blown away by that. I was like, that's not very American. Like, we need, that's the recipe to fall behind.

(Setrag at 00:38:56) Yeah. Yeah. Absolutely. That's so important. Yeah.

(Joel Beasley at 00:39:03) You said something earlier when I was, when you were talking about flattening the organization, that's a hard sell, right? But I was thinking an easier sell would be extract a value chain out of the organization and then have a flattened value chain with one specific thing so you could get used to it and have experience with it. Because asking a company that's older or old enough to have a decent hierarchy to just flatten, they can't do that overnight.

(Setrag at 00:39:38) Absolutely. Absolutely. Yes. And I like what you're saying. And the way I put that, and I've done workshops, is to think big, think digital, but start small.

(Setrag at 00:39:50) So what you're touching upon is start small. Find the value stream or value chain with the greatest value, but not too difficult. So that's another thing I've seen, Joel, that people get excited about the technology and the vision, and they bite more than they can chew. An example of that is many of the SOA service-oriented architecture initiatives failed. Right?

(Setrag at 00:40:19) A lot of, by the way, a lot of digital transformation initiatives fail. Probably majority fail because they're not willing, A, they're not willing to change. B, they are willing to change, but they want to change everything suddenly. It doesn't work that way. So your point is very well taken.

(Joel Beasley at 00:40:39) I want to get your thoughts on, and you might not study this area, but recently I've got some people I follow online, and they started talking about NFTs. And I was like, okay. And so I Googled what it was and I was like, got it. I understand. And then I started seeing them make a lot of money with NFTs.

(Joel Beasley at 00:40:59) And I was dismissive of it. I was like, okay. But then I thought, I was talking with my wife this morning actually about it. And I said, you know what? I think it's equally as crazy that people will pay $20 million for a painting.

(Joel Beasley at 00:41:16) Because my brain just doesn't process it because I am not that market. Right? I'm utilitarian. I need to be able to use it. So the idea that you could use this NFT technology to just do that with any object, I mean, it doesn't sound that crazy.

(Setrag at 00:41:31) Yeah. Not at all. I mean, I'm not an expert. I dabble with it. In fact, one of my sons is an expert in it.

(Setrag at 00:41:39) His name is Shahan. He has a very exciting podcast, On with Shahan. And I've done an interview on my book on it, and he has interviews with a lot of the blockchain and cryptocurrency leaders. You're absolutely right. I mean, you're spot on in terms of, but it's in a digital world, and NFT is a bit richer than that because you have a lot of flexibility.

(Setrag at 00:42:04) You can have the, it's first of all, non-fungible. It's a unique asset if you like. So it's not, and you have the ownership and the proof of that. But then you can also associate that with a physical, like a painting. You can have the digital and the original ownership of that digital as well as the physical if you'd like to.

(Setrag at 00:42:27) So there are many, many flexibilities. It's a new way of creating value. My son was telling me about these monkeys, images of monkeys, and the new model that when you own these, and then they use the monkey in, for example, an ad or a movie, et cetera, you get royalties on that, which is a very different way of, I mean, it's revolutionizing the way we store value, we share value, we exchange value, and we create wealth. It sort of dovetails from the blockchain and the cryptocurrency world, which I like to call better Web 3.0, really. I mean, we have to think about this.

(Setrag at 00:43:15) Otherwise, it becomes strange. So think about this. The NFT is an application of it because underneath you have blockchain technology. Web 3.0 is the new architectural paradigm, and it's in its infancy. It's just starting.

(Setrag at 00:43:31) And although, I mean, there are a lot of tools, you have a lot of material about it. And as I said, many of the big companies are coming at it from the more exciting augmented reality, virtual reality world, immersive sort of the meta world. But really underneath you, for to make this all work, you need blockchain and NFTs are very exciting application of that.

(Joel Beasley at 00:43:58) We're coming up on time here, so I'm very curious. How do you make money?

(Setrag at 00:44:05) Are you talking for me? Or?

(Joel Beasley at 00:44:07) Yeah. Yeah. Like, I mean, you've got books. Do you primarily make your money from speaking gigs, workshops, consulting, just you're selling your books? How do you make money?

(Setrag at 00:44:18) Yeah. So at this stage in my career, total transparency, I don't need to. I don't need, and it's more like I like it. Yes. I do consulting, you know, book.

(Setrag at 00:44:32) Probably, it will cost me more than, and I'm teaching these courses, but that's not why I do it, and which is very important. And also I have other channels, you know, I have investments and so on, including in cryptocurrency. But that's, you know, money is important, but it should not be the motivation. I like to do, like, I immensely enjoy this. You can call me anytime, you know, and I like to have fun.

(Setrag at 00:45:00) I mean, life is too short and enjoy. And I realize people have to make money, but that's important. It's important to have a more holistic approach. Life is not just about work and money. I know a lot of people who have money and they're miserable.

(Setrag at 00:45:21) It's like, that's not the measure. I like to have fun. So for me, it's almost like not even an issue, but I do understand. And I'm available. I mean, I like to help organizations in this transformative.

(Setrag at 00:45:35) It's almost like a, I've been working. I mean, you heard my TEDx talk. I touched upon culture in the TEDx talk, and I've been doing this for several years. And in many ways, business process automation is really cultural change. It touches upon, we have so much waste, Joel.

(Setrag at 00:45:53) It's painful. The amount of waste that exist in companies, in government, and especially the poorer people are paying enormous price for that because people are inefficient. So that motivates me. Anything that improves efficiency, operational excellence, that's another term of it. It touches upon Lean and Six Sigma.

(Setrag at 00:46:20) That motivates me. So short term, yes, I do consulting. I do teaching, you know, but I choose what I want to consult, who I want to consult. And I have other investments, and I've done well, so I don't really need to worry about that.

(Joel Beasley at 00:46:39) Excellent. Yeah. So people should buy the book. It's Digital Transformation Debt. Is that the name of the book?

(Setrag at 00:46:45) Yes. How to Alleviate Digital Transformation Debt, Especially Post-COVID-19 Because the World Has Changed.

(Joel Beasley at 00:46:54) Thank you so much for listening. And if you found this episode useful, please share it with a friend or colleague who you think would get value from it. And if you have topics that you would like to hear discussed on the podcast, either add me on LinkedIn or send me an email, [email protected]. Every time I get an email or LinkedIn message, it absolutely makes my day and inspires me to keep going.