 From Las Vegas, it's theCUBE, covering InterConnect 2017. Brought to you by IBM. Okay, welcome back everyone. We're live here in Las Vegas for IBM InterConnect 2017. It's theCUBE coverage of their cloud and big data event, Watson Analytics, and IoT cloud. It's theCUBE coverage for three days. A lot of great interviews. I'm John Furrier, my co is Dave Vellante, our next guest is Scott Francis, an entrepreneur, CEO, co-founder of BP3. Welcome to theCUBE. Thank you, glad to be here. Great to have an entrepreneur on because you've been in your business, you co-founded it, built it from the ground up. Right. Hundreds of employees, now over 100 employees. Right. IBM partner, great story. Yeah, we started with just two of us, 10 years ago, and we'll have our 10th anniversary in May this year, so. Congratulations. So take us through the state of the art. I mean, go back 10 years ago, you actually provisioned your own servers. You actually had the load, routers, and networking gear. I'd say a tax of at least 100K in just gear, and then you got the ISP, HR, all that stuff. Right, well, the economics have totally changed, right? For us and for our customers, and I think the main benefit is you can get to business value so much faster now, and spend less money that's sort of wasted, spend, right? So take a minute to talk about what you guys do, and what your role is here, and then I want to get into some of the things that are changing the marketplace that people with seizing opportunities are around, certainly around process and new innovations. So give us a quick update on who you guys are, and your role here today. Yeah, so our focus is on business process and decision management, and our experience is that it is foundational technology and foundational aspect to almost everything you're hearing going on, right? Whether it's blockchain or cognitive, or moving to the cloud, what are the key considerations? How does it impact my business process? How does it impact my operations? How does it impact my decisions? So we feel like in our space, we're right at the sweet spot of what all of our customers are worried about, and when we hear them talk about blockchain, we know we've got a process problem we've got to address. When we hear them talk about moving to the cloud, we better address all of the halo applications around that application that's moving to the cloud, make sure they're all addressed and part of the new business process. It's interesting, the whole decoupling of existing systems models is really kind of what I see as the macro trend over the past six years, and like you mentioned, foundational building blocks is key, right? So that's key, and so let's take this to the next level, I want to ask you questions. I think this is something we see all the time on theCUBE when we do interviews, is that technology now is so much different than the old days, it was, we knew the process, and we don't really know the technology, let's go automate that accounting, blah, blah, blah. We saw that, ERP, CRM, all those vendors. Now, I have technology, I don't know what the process is going to be because some new big data analytics will change the insight and change the value chain or change a business model, one tweak, radically will disrupt proven process which no one wants to change. Whoa, so there's now a real factor. Give us some insight and color around how that goes down because someone has an insight, they want to roll it in and implement it, it changes the entire process flow. Right, well the key thing is having an insight as a single person in a process is one issue, but rolling it out across a Fortune 500 company is a whole nother proposition, right? You've got regulatory issues and compliance issues and customer experience issues that you've got to work through, all those accommodations may be there, the value prop may be there, but you've got to work through it. You can't, you know, at a billion dollar organization you can't just change it, you know, for the heck of it, right? You have to work all that out. So what's the playbook? Yeah, so the playbook is when we have an insight, you know, what we talk to customers about is you've got all these tools now to arrive at insights you couldn't get to before or by the time you got to them you're doing your analytics over data that's six months old. Okay, now I have an insight about what would have worked six months ago. The difference is with cognitive and machine learning algorithms and the analytics you have available today and the access to the data, those insights are available now. So we have to rearchitect the processes to reflect that and to let me make new decisions within that operational context. The data, good. Operationalizing those insights. Go ahead, finish your thought. The data, well, the data first thing that she talked about is key. We just had our big data event in Silicon Valley when Congress was trying to do was data in motion and batch are working together now to your point. The time series of data is relevant in the time you need it, right? Right. Not yesterday. But the question of, okay, you got some spark thing going on. I see I've got spark, that's cool. But now how do you get it into the app, right? To developers. Right. I'm a developer, I'm a coder. Do I need to be a wrangler, data wrangler, or a data scientist to make that happen? So this is the conversation that people are trying to figure out. Right. What's your perspective on that? I think a lot of the tools that are available now basically make a common coder, right? Has a decent chance at competing with their data scientist friends. There's a different level of expertise, obviously, for the data scientist. But much like in business process, years ago, you had to get your Lean 6 black belt and you had to really study it to get good at it and really master statistics. Now I've got tools that will run the statistics for you, right? So you don't have to master the statistics, but you've got to collect the right data. You have to engage in the business. And so I think you see a sort of democratization of data science, right? With the tools that are available now. So talk a little bit more about decision management. Go back to the mid 2000s and the Harvard Business Review is writing articles that gut feel Trump's, you know, paralysis, analysis, paralysis by analysis every time. Right. That's seemingly changed. But what specifically has changed in regards to operationalizing those insights? Well, I think there are a couple things that are interesting. If you look at how processes were traditionally designed, you know, before BPM came along or the BPM and decision management tools came along, just write the code, build your application. And then when you wanted to change the decision, well, you had to find where that was modeled in the code and edit the code, right? And that was a challenging proposition. The guys who wrote it might have moved on to other projects. So how do you figure it out? So gut feel was faster. And BPM and ODM gave us tools for managing those things. BPM in terms of process, having a diagram that a mere mortal can understand and find the right context for where that decision gets made. Decision management to manage rule sets and the interactions between these rules in a more codified way that, again, mere mortals can understand, right? So you don't have to go hunting through code. You're looking at a model, a representative model. I think the change now with machine learning, with cognitive computing, the real-time access to data is that you have to really rethink your processes and allow those decisions to be altered in real-time, not later, six months later, when I'm doing a revamp of the process as a separate sort of institutional operation. But actually, as I'm running my process, we design it to accommodate the idea that as we're collecting data, we're going to learn and get better and actually affect those decisions or recommend a different decision to the person who's drowning on the spot. Are you finding that the business impact is that your customers, the consumers of this new way of doing decision management, are seeing things that they wouldn't have seen before or is it more greater conviction and faster time to everybody pulling the same direction? Well, I think for sure they're seeing things they haven't seen before. We're surfacing data that they just didn't have access to before in a timely fashion and in the context of their process, which was always a difficult thing to do in traditional systems, right? You're running your traditional ERP or CRM system, the notion of where you are in your cross-functional process may not be present. But today, you have that context, you have the real-time access to it, that really changes the nature of what you're seeing. I think the other bit is, yeah, the action ability, how easy is it to turn that insight into an action? And have you seen any effect on the politics of decision-making? Because we all know the P&L manager, who's the strong voice in the organization, he or she's going to pull data that supports their business case. Have you been able to sort of neutralize that, sometimes damaging effect in organizations? Yeah, well, I think in the economic cycle, if you rewind five or six years ago, almost every project we engaged with with a customer was about operational controls, reducing cost, trying to produce the same result with fewer resources, right? And that has shifted dramatically over the last few years. The last two years, it's been almost entirely about capturing revenue. Opportunistic, yeah. Serving new revenue streams without having to hire as much to support it, right? And so it's much more about revenue capture and customer experience. And I think that reflects the stage we are in the cycle. Is that a bubble indicator? I hope it reflects a good long-term view. I hope so too. You know, but it's interesting. There's a customer speaking here at Interconnect today, StepHub, about their customer experience. And they use BPM to manage their customer experience. And back in 2009, 2010, when everybody was pulling back and they were all focused on cost containment, you know, I recall StepHub was working on how to make their customer experience better. It's kind of interesting, right? And they've done very well over the years, right? So I think that value system in that culture really pays off over time, but you have to really mean it. If you're just swinging back and forth with the ebb and flow of the economy, then I think it's very difficult to. Well, if you're doubling down when everybody else is sitting on their hands, we're going to get a competitive chance today, right? Yeah. So talk a little bit more about the IBM connection. What's going on at Interconnect and what's the relationship there? Well, IBM is our best partner. You know, we've been partnered very closely with IBM ever since they acquired Lombardi, which was our company that we came out of back in 2007. And that has become, you know, the heart of the IBM BPM portfolio. And we work with their business process products, decision management, as well as cognitive and blue mix. So we're in the mix with IBM in a big way. And I think this conference is a great opportunity for us to not only reconnect with folks from IBM, but also with our customers who tend to come to this conference as well. So it's a great, great opportunity for us. So specifically, you're leveraging IBM tooling, sort of repackaging that in your solutions for your clients? Right, so we are a reseller, we're also OEM IBM software, and we do delivery work for IBM's customers. So that's kind of the trifecta. So you started this company 10 years ago. Tell it, we love the startup stories. Tell us, you and your colleagues started, tell us that's your startup story and how you got to where you are now. Well, we were, you know, we would meet up at a coffee shop, right, and get together and kind of talk about, you know, the fact that it felt like there was a big opportunity out there. This is in Austin. Yeah, in Austin. My co-founder and I, you know, we were working at Lombardi, but we felt like there was an opportunity to build a great services firm in our space, right? In this business process space that there was a lot of untapped potential. And as we met and talked about it, we just got the bug that we needed to go out and do it. And when we started the company, you know, it's just the two of us initially, we bootstrapped the firm last summer for the first time we actually raised money outside capital to help fund the growth. 10 years then. Yeah, yeah. But all that time, we self-funded, right? And which was a great experience. I had a great learning experience, certainly lost some sleep over the years. But, you know, there was an aspect of kind of putting the band back together. You know, hiring people we really enjoyed working with and previous lives, previous jobs, and putting together a killer team to go after it. So the decision to take outside capital, maybe talk a little bit about that because that probably wasn't an easy one or maybe it was, I don't know. No, I think, you know, what we've been fortunate to do is we've taken some, you know, calculated risks over time, right? We used to only operate in the United States. We acquired a business in London to expand to Europe. And now, you know, a third of our business is in Europe. But those risks, you know, you can put the whole company at risk taking a chance like that. And so it occurred to us, you know, after taking a few of those calculated risks and winning, that maybe we should hedge our bets a little bit and have some more capital to work with and have a good financial partner that if we were engaged in that kind of discussion, someone who could help both advise and also possibly fund if we got into that situation. And so we took an investment from Petra Capital based out in Nashville. They're a great growth equity firm and they invest in healthcare and tech startups like ourselves. And so we got some great, I think great people on the board as a result. Mike Simmons from T2 Systems and Jeff Rich from another capital investment firm. And these guys have been operators, right? They've run companies much bigger than ours, but they've also been in the mix at our size. So we've got some great, I think, outcomes out of taking that investment. So you've been cashflow positive since the early days since the early one you had to be. Is it the plan to continue to do that or do you make sort of gasoline in the fire type investments? You know, I think it's cultural, right? I know there's a lot of business models where there's actually some good sense in the running and not worrying about profit for a while, but I also think you develop habits and in our business, serving enterprise customers, I think they deserve to know that we're being responsible with our money, with how we spend, with how we grow, and then we have a responsible level of growth. We could spend more and grow faster at the sector as a profit. At the risk of service. But at the risk of service quality for our customers. And that's not worth it for us because ultimately it's the repeat business with customers that really drives our growth long-term. We feel the same way, obviously self-funded. You know, I would say, you know, Silicon Valley is a story like the hierarchy of entrepreneurs and it's well known that the number one position is self-funded growth without outside capital. It's a lot harder, no offense to my VC-funded friends. It's a lot harder to do it from the ground up than just get other people's money. So tier one is do it yourself, what you guys are in. Get some capital, grow that and have an exit. Three, try and fail. Or four, work for a company. Right? And I think the key thing is it takes patience. If you're going to do it yourself and self-fund it, you know, let the business fund itself, not just throw in your own personal money, but actually make the business fund itself. You have to have a lot of patience to stick with it. And I think whether by hook or crook, we picked a space that afforded us some of that patience. Right? It's very innovation to get rewarded for good service delivery. And we feel like business is a human endeavor, right? So good business process and good decisions are going to be problems that our children will face. Not just us. And they're going to get more exciting for you as processes get automated with machine learning and AI right here on the doorstep. And DevOps is exploding with IoT coming on full line. It's going to change the game big time. Yeah, and I can't remember who said it, someone just yesterday was saying, you know, it's not as much about automation as it is about augmentation. And I really think that's true. I think if you automate out all the mundane, what's left is the stuff that's really interesting, right? And that's kind of how we view our job is to automate all the stuff that's getting in the way of highly skilled people doing their job, taking care of their customers. I always love the story when IBM's supercomputer beat Gary Kasparov at chess. You've heard this a million times. Kasparov didn't just say, all right, we're done. He's created a competition and he beat the computer. And now the greatest chess player in the world is a combination of human and machine. It's that creativity and that combinatorial blend that drives innovation. The creativity is going to change the game. Scott Francis, entrepreneur, founder and CEO, co-founder and CEO of P3 in Austin. Thanks for joining us. Appreciate it. More live coverage here. Stay with us. TheCube is at IBM Interconnect here in Las Vegas. More great interviews after this short break.