 from the Bellagio Hotel in Las Vegas. It's theCUBE, covering UiPath. Forward 4, brought to you by UiPath. Welcome to theCUBE's coverage of UiPath Forward 4 Live from Las Vegas. We're here at the Bellagio, Lisa Martin with Dave Vellante. Very excited to have in-person events back-ish, I'll say. We're going to be talking about automation as a boardroom imperative. We have two guests joining us here. James Matru is here, consulting principal of America's Intelligent Automation Leader at UI, and Irv Dennis, retired E-Way partner and former CFO of HUD. Gentlemen, welcome to the program. Thank you very much. Great to be here. Exciting topic, automation as a boardroom imperative. James, let's go ahead and start with you. How do you discuss the value of automation as being a key component and driver of transformation? It's a great question. I think what we've seen in the last couple of years is the evolution of what automation used to be to where it's going now. And we've seen the shift from what we call Generation 1, which is very RPA-centric type automation, to more Generation 2, which is the combined integration of multiple technologies that can target an end-to-end process. And it's quite important that you understand the pivotal shift, because it's now enabling us to move from a task micro-type agenda to a macro-gender that actually impacts an organization at a strategic level. The ability to be able to look at processes more deeply, to automate them in an end-to-end process collectively, and use these different technologies in a synergistic manner, truly becomes powerful, because it shifts the narrative from a micro-process agenda into a more systemic area. So Gen 0 is sort of manual. Gen 1 is RPA point tools, an individual, maybe, getting their personal productivity down. And then now you're saying, Gen 3 is across the enterprise, where are we in terms of, you know, take your experience from your practical experience. Where do you think the world is? It's like probably between zero and one, still, right? But the advanced folks are thinking about Gen 3. What's your thoughts on that? Yeah, no, it's a great question, and I can do the comparison between private and public sector on this, because it was 37 years with EY, then it went into retirement and CFO at HUD. CFO, HUD was nowhere. They had to just do all the intelligent digitalization throughout from scratch. The private sector's probably five or six years ahead of them, but when you think of what James talks about to Gen 1, 2, and 3, the private sector's probably somewhere between 2 and 3. And I know we're talking about the board in this conversation. Boards probably have one and two on their radar. Some boards may have three, some may not, but that's where the real strategic focus for boards needs to be, is looking forward and getting ahead. But I think from a public sector standpoint, there's a lot to go, private sector, more to go as well, but there's a bit of a gap, but the public sector's probably only about three or four years behind the private sector. So the boardroom's a discussion to be, okay, let's look at the numbers, look at the progress for the board, and now it's like discussion on cyber, discussion on digital, discussion on automation. It really changed the narrative over the last decade. Yeah, I think when you think of boards today, there's lots of conversation on cyber. That conversation's been around for a while. A lot of conversation on ESG today, that conversation's getting very popular, but I think when you think of next three, Jim talks, or James talks about, that's got to start elevating itself if it's not within the boardroom right now, because that will be the future of the company, and the way I think of a board's conversation is, if a company doesn't think of themselves as a technology company, in all aspects, no matter what you do, you are a technology company or you need to be, and if you're not thinking along that way, you're going to lose market share and you're going to start falling behind your competitors. Well, how much acceleration did the pandemic bring to just that? Organizations that weren't digital forward last year are probably gone. Now I think it certainly has shifted quite a lot. There's been a drive, the relevance of technology and how it plays with us in the modern workforce and the modern workplace has fundamentally changed the pandemic. We've re-imagined how we do things, technology has progressed in itself significantly, and that made a big difference for all the environments as a result of that. So certainly it's one of the byproducts of the pandemic has been certainly a good thing for everybody. Where does automation fit in the board regime? You got compensation committee, you probably, I don't know, is somebody in charge of cyber? You got ESG now. Is automation part of a broader digital agenda? What's the right regime? You know, I would personally put it in enterprise risk management from a standpoint that if you're not focused on it, it's going to be a risk to the enterprise. And when you think of automation and intelligent automation and RPA, I think boards have a pretty good sense of how you interface with your customers and your vendors. I think a big push ought to be looking internally at your own infrastructure. You know, what do you do in the HR space? What do you do in the financial statement closed process? What do you do in your procurement process? I suspect there's still a lot of very routine transactions and processing within that infrastructure that if you just apply some RPA, artificial intelligence, the data extraction techniques, you can probably eliminate a lot of man hours from the routine stuff. And the many man hours is probably not the right way to think of it. You could elevate people's work from being pushing numbers around to being data analyzers and that's where the excitement is for people. And is that how it's viewed at organizations we're not eliminating hours? Well, I- We're focusing folks on much more strategic value-added tasks. Yes, I would say that that's exactly right now. In the private sector, you're always going to have the efficiency play and profitability so there will be an element of that. I know when at HUD we're focused, we were not focused on eliminating hours because we needed people and we focused on creating efficiencies within the space and having people convert from again, being routine transactions to being data analyzers and made the jobs in a short fun form as well. I mean, this is a lot of fun stuff and if companies need to be pushing this down through their entire infrastructure, not just dealing with their customers and the third parties that they deal with. What's the catalyst in public sector? So you mentioned they may be five or six years behind, but I've seen certain public sector organizations really lean in, they learn from the private sector and then even when you think about some of the military, how advanced they are. Absolutely. You know, the private could learn from them if they could open it up, but they can't. Yeah, I think that's well said. I was in the civilian part with the Housing and Urban Development. I think the catalyst is bringing the expertise in. I know when I came, I went to HUD to elevate their financial infrastructure. It was probably the worst of the cabinet agency. The financials were a mess. There was no, there was not a clean order of opinion for eight years and I was there to fix that and we fixed it through a digitalization and a digital transformation as well as a financial transformation. The catalyst is just creating the education, letting people know what technology can do. You don't have to be a programmer, but it's like driving a car. Anybody can drive a car, but we can't work as a mechanic on it. So I think it's creating the education, letting people know what it can do. And at HUD, for example, we did a very simple, I was telling James earlier, we did a very simple RPA project on a financial statement closed process. It was 2,600 hours, six months. Once we implemented the RPA, brought that down to 70 hours, two weeks, people's eyes exploded with it. And then all of a sudden, I said, I want everyone to go back and come back with any manual process, any routine process that can convert to an RPA. And I got a list of a hundred. Then it came, then became trying to slow it down. We're not going to do it over. Yeah, exactly. But it was self-funded. It was self-funded, yes. And how do you take that message to customers that it can be self-funding? How's that resonating? Very well. And I think it's important, I always like to say it's a point of differentiation because if you look at, I mentioned earlier that organizations are basically technology companies. That's what they are. But now if you look across that, we no longer compete at the ERP level, whether I've got SAP or Oracle, it's not a point of differentiation. We don't compete in the application layer whether I've got ServiceNow or Blackline. How we use them is helpful. We compete at the digital layer. And with automation as a major component of that, that's where your differentiation takes place. Now, if you have a point of differentiation that is self-funding, it fundamentally changes the game. And that's why it's so important for boards to understand this because that risk management, if you're not doing it, somebody's getting ahead of the game much faster than you are. Yeah, you mentioned ERP and it triggered something in my mind because I said this 10 years ago about data. In the 90s, you couldn't have picked SAP necessarily as the winner of ERP. But if you could have picked the companies that were using ERP, could have made a lot of money in the stock market because they outperformed their peers. And the same thing was true with data and I think the same thing is going to be true with automation in the coming decade. Couldn't agree more. And I think that's exactly the point that differentiation and acceleration happening this. And it's harder because of the ERPs, once you knew what it was, you can put the boundaries around it. Digital, the options are infinite. It just continues to progress us out from there. We have a good question for you. You talked about some great stats about how dramatically faster things were, took far less time. How does that help from an adoption perspective? I know how much cultural change is very difficult for folks in any organization. That sort of self-seeming, how does that help fuel adoption? Well, it's interesting. We're actually going to talk about this tomorrow. It is a framework and it's got to start at the leadership. It's got to start with governance. It's got to start with a detailed plan that's executable. And it's got to start with getting buy-in from not only the organization, but the people you're dealing with outside the organization. And I think that's absolutely critical. And when you bring this back to the boardroom, they are the leaders of the companies. And James, I talked about this and we're getting ready for tomorrow's session. I think the number one thing a board can do today is an own personal self-assessment. Do they understand automation? Do they understand what next generation three is? Do they understand what the different components can do? And do they understand how the companies are implementing it? And if I was a board member on our boards, I'd say we need to understand that or else this is nothing's going to happen. We're going to be at the reliance of the CEO and the CFO strategy, which may or may not include or be thinking about this next three. So leadership at the top is going to drive this and it's so critical. We were talking about catalysts before and you mentioned education and expertise. I'm always curious as to what drew you to public sector? Yeah. Because it's, you know, I mean, very successful. Yeah. You're with a, you know, one of the global SIs, right? Frankly, you can make a lot more money on that side. So what was it? Was it a desire to serve the country? Was it take one for the team? And I'm going to do a selfish plug here. I just actually wrote a book in this whole thing called Transforming a Federal Agency. What's the name of the book? Transforming a Federal Agency. Transforming a Federal Agency. I spent my time at EY for 37 years, fully retired. I wanted to give back and do meaningful work. And we lived in Columbus, Ohio, as I was talking about earlier. I was going to go teach and I got a call from the President's Personnel Office to see if I wanted to come and be the CFO at HUD with Secretary Carson and turn the agency around. It took me a little while to say yes, because I wasn't sure I wanted something full-time. It was in DC, so I'd be in a commuting role. Back and forth, my family's in Columbus. But it was, so I did it and I loved it. It was, I would ask anyone that has the ability to go into public service at any point in their career to do it. It was very rewarding. It was one of my favorite three years of life. And to your point, I didn't have to do it, but I wanted to do something and give back and that met the criteria. And we were very successful in turning it around with the digital transformation and a lot of stuff that we're talking about today gave me the ability to talk about it because I helped lead it. Thanks for sharing that. And so did it start with the CFO's office? Because the first time I ever even heard about RPA was at a CFO conference. And I started talking to people, you know, this is going to be game changer. Is that where it started? Is that where it lands today? Well, from an infrastructure standpoint, the CFO has the wonderful ability to see most processes within a company in its entire life cycle, beginning to end. So CFO has that visibility to understand where efficiencies can happen in the process. And so the CFO plays a dramatically important role in this. And you think about a CFO's role today versus 20 years ago, it's no longer this, the bean counter rolling up numbers that become a business advisors to the board to the CEO and to the executive suite. So the CFO I think has probably the best visibility of all the processes on a global basis. And they can see where the efficiencies and the implementation of automation can happen. So they can be catalysts and really fueling the actual redesign of work. Yes, they probably need to be decatalyst. And as a board member, you want to be asking, what is the CFO's strategic imperative for the next year? And if it doesn't include this, it's got to get on the agenda. So we'll curve ball here. It's a CFO question. And three years or two years ago, you wouldn't have even thought, I mean, let me set it up better. One of the industries that is highly automated is crypto. You wouldn't even thought about putting crypto in your balance sheet a couple of years ago, but I'm not sure it's a widespread board level discussion, but as a CFO, what do you make of the trend to put Bitcoin on balance sheets? Yeah, I'm probably not the right person to ask because I'm a conservative guy. If somebody's in a board meeting said, hey, why don't we put crypto on a balance sheet? Yeah, I would get much more educated. I wouldn't shut it down. I would put it into, let's get more educated. Let's get the experts in here. Let's understand what's really happening with it. Let's understand what the risk are, what the rewards are, and can we absorb any sort of risk or reward with it? And when you say put it on a balance sheet, you can put it on in a small way to test it out. I wouldn't put the whole, I wouldn't make the whole balance sheet on day one. So that's what I would think about it. Tell me more, get me educated. How do you think about it? How can it help our business? How can it help our shareholders? How does it grow the bottom line? And then you start making decisions. Because CFOs, I mean by nature, often conservative, and most CFOs that I talk to just say no way, not a chance, but maybe you're not as conservative as you think. Well, no, but I would never say go away on anything. I mean, because I want to learn, I want to know. And all this stuff that's new, it's easy to say go away, right? But all of a sudden, three years later, to go away, all your competitors are doing it at a competitive advantage. So never say go away, get yourself educated before you jump into it. That's good advice in any walk of life. Question for you, Irby, talked about the education aspect there. I'm curious, from a risk mitigation perspective, especially given the last 18, 19 months, so tumultuous, so scary for all those organizations that weren't very digital, they're either gone or they accelerated very quickly. How much of an education do you have to provide to certain industries? And are you seeing certain industries, I think, healthcare, manufacturing, financial services as being leaders in the uptake? Well, I think the financial service industries for sure. They get this, and they need to, because they're a transaction-based industry, so they get it completely. I think maybe some manufacturing distribution, some of the old line businesses are, they may not be thinking of this as progressively as they should, but they'll get there, they're going to have to get there eventually. You know, when you think about the education, I thought you were going to ask a question about the education of the workforce, and I think as a board member, I would be really focused on how am I educating my workforce of the future, and do I have the workforce of the future today? Do I have to educate them? Do I have to bring in hiring for it? Do I have to bring third-party service providers to get us there? So as a board member, really focus on, do I have the right workforce to get us to this next stage? And if not, what do I need to do to get there? Because boards will allocate a percentage of their budgets to training and education. The question is, where do they put it? And is it the right training and education? Yeah, right. Right, where do they focus? Now, we hear UiPath talking about their horizontal play, but James, when you, and Lisa, when you're asking about industry, when you go to market, are you, are you more focused on verticals, or are you thinking more horizontally? It's on two things. What you often find is, regardless of the sector, with some nuanced variation, the back office functions are regionary. A peer-to-peer process is the same fundamentals regardless of the sector. Where the differentiation comes in at a sector specific is when you start going to the middle of the front office. You know, I mean, a mining has only one customer. They sell their product to an emergency. A retailer has an endless number of them. So when you get to the middle and front office and really start engaging with a customer and external vendors, then the differentiation is very unique. And you'd have a lot of sort of customer, I mean, sector specific nuances and variations in how you use the platform. And that's where the shift now is happening as well, is the back office functions that are largely driven by the CFO have now getting good robust value out of it. There's pivot to make it a differentiator in the market, comes in the front and middle office. And that's where we started to say sector specific genres, solutions, nuances really come to the fore. You guys have that deep industry expertise. Do you think digital at all changes that? The reason I ask it, because I see Amazon as a retail and then they're in cloud and they're in grocery, now they're in content, the apples in financial services and you're seeing these internet giants with a dual agenda. They're disrupting horizontal technology and then they're disrupting industries. My premise is it's because of data and digital. Do you ever see that industry specialization changing, that value chain? Without a doubt. And I think it happens initially, it starts off when people start looking at the process, they realize there's such key dependencies on the upstream and downstream components of the value chain that they want to control it. So they actually start bridging out of what they call practices or the core business to own a broader agenda. And with digital you can do it. You can actively interact more systemically. That then starts triggering well maybe I have a different product offering, maybe I can own this. Could I monetize the information I had at my disposal today in a completely new line? And that really gets truly innovative and starts creating a revenue increase as opposed to cost saving. And that's what they're really going after. It's how do I... And I guess that vertical integration is not new. There are plenty in the Koch industry, there's Tyson Foods, but now it's digital. So presumably you can do it faster with greater scale. Out of doubt. You don't have to move your big ERPs and things like that because that's not what it would take. It's five years to move my technology backbone. With digital I can do the interaction tomorrow and we can build up enough to be able to sustain that in the short term. Right. And speaking of speed, unfortunately guys we are out of time, but thank you. Great conversation. Joining me, fantastic conversation, automation as a board imperative guys. It's been great. James, Irv, thank you for your time. Thank you so much. Great to be here. For Dave Vellante, I'm Lisa Martin. You're watching theCUBE. We are live in Las Vegas at the Bellagio at UiPath Forward 4. Stick around, Dave and I will be right back.