Pega’s Vision for AI and How Blueprint is Changing the World of Application Development – Six Five On the Road

By Patrick Moorhead - June 17, 2024

On this episode of the Six Five On the Road, host Keith Kirkpatrick is joined by Pega‘s Matt Healy, Director of Product Marketing, Intelligent Automation for a conversation on how Pega’s innovative approach to AI and application development is reshaping industries.

Their discussion covers:

  • The evolving role of AI in application development
  • How Pega’s Blueprint technology stands out in the market
  • Real-world impacts of Pega’s intelligent automation
  • The future vision of AI and automation at Pega
  • Challenges and opportunities in implementing AI solutions in businesses

Learn more at Pega.

Watch the video below, and be sure to subscribe to our YouTube channel, so you never miss an episode.

Or listen to the audio here:

Disclaimer: The Six Five Webcast is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we ask that you do not treat us as such.

Transcript

Keith Kirkpatrick: Hi, I am Keith Kirkpatrick, Research Director with the Futurum Group. Thanks and welcome to Six Five On The Road. Today I’m really happy to have Matt Healy, Director of Product Marketing with Pegasystems here as my guest.
Welcome, Matt.

Matt Healy: Hey, thanks for having me, Keith.

Keith Kirkpatrick: So it has really been a really interesting and exciting two days here at PegaWorld. Perhaps you can talk to me about some of the things that really made an impression for you and for some of your customers.

Matt Healy: Yeah, I mean, PegaWorld is the best time of year for a couple of reasons. I love Las Vegas, and then of course with PegaWorld being in Las Vegas you also get to talk about innovative capabilities. And there’s a ton of new capabilities which we got the opportunity to announce over the past couple of days. And really a couple of the themes that have stood out are around accelerated delivery and development of transformational applications. We have some cool new stuff there, which I’m sure we’ll talk about.

Keith Kirkpatrick: Sure.

Matt Healy: And you heard Deutsche Telekom on the Keynote stage talk about how they’re using all of the latest and greatest to modernize their estate really quickly.

Keith Kirkpatrick: Yes.

Matt Healy: And then once those applications are built the focus is on making sure the employees and the customers who engage with them have a great experience, and have everything they need to get their job done and get services done with the businesses who they engage with. And we heard a ton of great stories there too.

Keith Kirkpatrick: Right. Well, Matt, you mentioned something really interesting. If we think about what’s going on with artificial intelligence automation, it seems like the most important thing to your customers really is it’s how can we get this done quickly? We need to really focus on time to value because the pace of innovation is so fast right now. If it takes 6, 8, 10 to 15 months to implement something the value is gone.

Matt Healy: Yeah. And Pega’s been in the AI game for over 20 years now, and that’s all statistical. Hard word to say. Predictive AI, for the purposes of really personalizing customer experiences. So even there we were focused on accelerated time to value through what we call next best action designer, which lets marketers and CX elites define their strategies, and then the platform automatically creates AI algorithms behind the scenes that personalize customer experiences and really drive out that strategy across all your channels. So that’s been core to our DNA is responsible and fast application of AI.

Keith Kirkpatrick: Right.

Matt Healy: So when generative AI came around a couple of months ago-

Matt Healy: It feels like forever. But really we were set up to apply those capabilities as well in a way that our clients are going to get value fast, but also with enterprise-grade governance control, security trust built in.

Keith Kirkpatrick: I’m glad you mentioned that because I was in a roundtable with your CEO, Alan Trefler, who said that. He said the platform that you guys have been building over the past several years that was already in the works, and then generative AI came around. And what he said, which was really interesting to me is, “When we look back and we look at the impact of generative AI, we wouldn’t change a thing, based on how the platform is architected because it really is built for change. And there’s really no bigger change than generative AI.”

Matt Healy: Yeah, yeah. And core to that platform, probably some of the reasons he was saying this is it’s built for large enterprises, and that’s who Pega partners with. And they need things like the ability to vary their processes and their decisions across lines of business in global regions. They need things like auditability tracking, reporting. They need to be able to control the performance of their models. And all of that was built beforehand, so generative AI just plugs right in, which is great.

Keith Kirkpatrick: Right. Right. One of the other things that really strikes me when I talk with customers here, or even Pega employees, is again, is Pega’s commitment to be building something that is not only robust, but is trusted, is safe, and perhaps as you mentioned, is scalable.

Matt Healy: Yeah. I mean, you heard the VA yesterday talk about how they’ve been using Pega to move from a fax-based, mail-based, paper-based process to something that can support more digital engagements with these veterans who need to get services done. So obviously it’s been really core to you can’t mess something like that up. So we’ve had to perfect enterprise scalability, performance, reliability for the world’s most important organizations and agencies.

Keith Kirkpatrick: Right. Well, the other real component there, and we heard a lot about this in the popular press, sometimes it gets a little distorted, but this issue of AI and privacy, specifically data privacy, and Pega has a very strong position on this. Perhaps you can talk about it?

Matt Healy: Yeah, yeah. So when we look at generative AI, I’ve had the opportunity myself to engage with a ton of IT leaders, data leaders, who are thinking about how they’re going to apply it. So I get to hear about the risks and some of the questions that they have around it. So obviously data privacy is one, but then there’s others, like the large language model market itself is very volatile, right?

Keith Kirkpatrick: Right.

Matt Healy: New models pop up, CEOs get ousted, it’s just all over the place. Enterprises are thinking ahead and they’re like, well, if I pin my whole architecture to one model how is that going to set me up for the future? And then of course, governance, visibility is really important. Seeing what is AI doing across my operation, who’s using it for what purposes? So that’s informed our generative AI architecture and how we’ve applied it. So built into all generative AI capabilities, they’re all built on the same architecture, and that architecture brings privacy control, so you can do things like mask prompts, mask-ups, potential PII in the prompts, prior to any data getting sent over the wire to a large language model. It includes model flexibility, which has allowed us just this week to start to announce that we’re adding additional model support.

Keith Kirkpatrick: Yes, I saw that in the expo. Yeah.

Matt Healy: So expanding beyond Azure OpenAI to AWS and to Google. And then all of this is also benefited by reporting governance visibility, so you can see what’s going on.

Keith Kirkpatrick: Sure. Well, it sounds like given a lot of the customers that you work with, they operate in very regulated industries or environments, and that seems to be a real point of strength for you because you never want to start from a place of, oh my gosh, I can do anything and then have to work into those industries. It’s always great to be able to start there as your starting point, because really who doesn’t want more controls in security?

Matt Healy: Yeah. Yeah. I mean, look at the brand list. It’s these people cannot just be applying things willy-nilly, so.

Keith Kirkpatrick: Right. Well, I just want to pivot a little bit to another announcement that was really, really interesting. You’ve announced some enhancements to Blueprint. Maybe you can first start by explaining what is Blueprint, and why is that important to your customers?

Matt Healy: Oh, yeah. So Blueprint is incredibly exciting. So these projects that Pega delivers on, these applications, these solutions, when you think about workflow there’s different grades of workflows. It’s a spectrum. Pega is really, really good and finds ourselves operating at the mission-critical multi-line of business end-to-end customer journey spectrum. So these aren’t small departmental workflows. And what that means is you need to bring together 10, 15, 20 different people in order to design out that application, get all their input, paint the vision that they’re all going to agree upon, which is great, and then turn that into requirements. And then turn those requirements into user stories, turn it into an architecture, turn that into the actual Pega components which you’re going to build along the way.

That whole design process takes weeks, if not months. So we really see a massive opportunity to shorten that, and allow teams to see value faster, and hit the ground running. And that’s really what Blueprint is focused on. It lets business and IT teams collaborate on an application design together in a SaaS platform, and throughout the journey they get generative AI suggestions. So rather than starting from scratch, they’re building on something which has best practices incorporated into it.

Keith Kirkpatrick: So this is a real alternative to the sort back of the napkin, I got an idea and let me pass that napkin around to 30 different departments and try to figure out how this is going to work. Now, I got a chance to go down to the Innovation Hub and actually play around with it and start to build my own application. I found it really, really intuitive in terms of even me just being able to go, hey, I’d like to build a billing application. So where are all these frameworks coming from? Because I saw there were just tons of different types of applications. Where is all that coming from?

Matt Healy: Yeah, absolutely. So Pega has 40 years of helping the world’s largest organizations solve different problems, so we’ve done many different types of projects over and over and over again. So we’ve used that expertise and incorporated it into Blueprint. So when you fill in your requirements, the first part of creating a Blueprint is defining what you’re looking to automate? What are your goals, imperatives? What’s your business’ problem? What are your processes? And then generative AI will create a template for you. Well, it’s not just going to pull from the internet, it does pull from GPT-3.5, but it’s also informed by that 40 years of experience. So those templates are baked in as well.

Keith Kirkpatrick: Right. Now, to be clear though, and I want to make sure that we’re clear on this, you are not pulling from customer data or anything like that to build these, correct?

Matt Healy: No. Yeah. So obviously we talked about enterprise privacy data being really important, so that’s built into Blueprint as well. We’re not training any AI on customer data. Nothing is visible across lines. So yeah, security’s important.

Keith Kirkpatrick: Right. Now, in the future, where do you see Blueprint going? I mean, Alan talked a little bit about some potential future enhancements, but I wanted to ask you just to make sure we’re not violating any NDAs or anything like that.

Matt Healy: No. Yeah. So I mean, just this week during the Keynotes and at the Innovation Hub, you saw what I think is the coolest Blueprint feature to date, which is a live application preview, which I’m super excited about. So the whole philosophy around Pega, the differentiation is that you’re able to define a workflow in one place, an end-to-end customer journey, and then embed that into the experiences for the people who need to engage with it. So plug it into a customer self-service, your customer service desktop, your back office portal, and drive that end-to-end automation consistently. Well, you can now visualize that in Blueprint. So at any point, pull up your preview of your application and see how it manifests across all those channels, which is absolutely mind-blowing.

Keith Kirkpatrick: Right.

Matt Healy: In terms of where we’re going, We heard Deutsche Telecom talk about this modernization project. We have a lot of clients who have seen the opportunity in terms of Blueprint in a modernization space, and how it might be able to help accelerate reimagining, redesigning workflows. But modernizations also have to be informed by where you’re coming from, so we introduced BPMN import. Being able to take legacy business process flows and start a Blueprint based off of those. And I hope I’m not violating anything here, but I hope to see that set of assets which you could start a Blueprint from expand over the next couple of weeks, months and years.

Keith Kirkpatrick: I think that will be really interesting, because if you think about the ways that organizations, they tend to not take that zero to a hundred approach. It’s more of an evolutionary approach. They have these existing processes and workflows, and they’re looking at ways that they can evolve them to a future transformative nature because of the fact that that’s the economic realities, the human realities of trying to accept change. So that sounds great.

Matt Healy: Yeah, and the other thing that’s really cool at the Innovation Hub that I saw is one form of legacy input is process mining analysis. Being able to really just take the event logs from your legacy apps and find how processes are run and where the inefficiencies lie. So that’s great, but what if you could inform a future application based on that? So there’s a booth with a demo showing process mining analysis, and then filtering out all of our inefficiencies that we don’t want to bring forward, and then pushing an optimized process into Blueprint to tweak and then take forward.

Keith Kirkpatrick: Right. That to me seems like a real differentiator for Pega, because if you think about a lot of the generative AI use cases, they are centered around productivity, case summarization, content generation. That’s all well and good, but let’s be honest, everybody has that now. And to Pega’s credit, I was in a session where I think it was Don Schuerman actually said, “Yes, we know everyone has that. We have ours. We like ours. But really our differentiation is going to be around what you can do to actually really assess workflows, see the inefficiency, and then create new ones that really accelerate productivity and efficiency. ”

Matt Healy: Yeah. Yeah, AI for Transformation, as we’re calling it, so we’re definitely super focused on that. Although I will add, I think we’re a little differentiated in the productivity space as well. So all of the Gen AI assistance capabilities for customer service agents, for back office employees, you’re right, everyone has their little widgets, which is great. But what everyone doesn’t have is the connective tissue to all of the data that a generative AI assistant is going to need in order to actually deliver value. So Pega, we have that end-to-end workflow architecture, which I talked about.

Keith Kirkpatrick: Right. And the data there under it.

Matt Healy: And that ties in all the data, all the knowledge, all the AI predictions, everything you need to actually make a powerful Gen AI agent.

Keith Kirkpatrick: Right. Well, Matt, I asked this question the last time I was here last year of my guest, and I’ll ask this for you. What can we expect sitting here next year at this time? What will have happened, or what do you expect will happen, and what can we expect from Pega in the months to come?

Matt Healy: Well, first off, Celtics will have won an NBA championship by then.

Keith Kirkpatrick: Okay, we’ll see.

Matt Healy: Probably we’ll be competing back-to-back, so that’s going to be very exciting for me.

Keith Kirkpatrick: All right.

Matt Healy: But then in terms of PegaWorld, I think we’re going to continue to pay off on that mission which we said last, PegaWorld to double developer productivity. I’m not saying we’re going to double it again, but we have some stuff planned to add some additional value there to take it to the next level. So I’m excited about that. Then of course we are going to see a ton of amazing client stories, as we always do, but this time I’m really excited because they’re going to be around the adoption of generative AI capabilities across the world’s largest organizations. And who else can say that? So I’m really excited.

Keith Kirkpatrick: Great. Well, thank you so much for sharing, Matt. This has been great, and I wish you continued success in the year ahead.

Matt Healy: Awesome. You as well. Thanks for having me.

Keith Kirkpatrick: Thank you. All right. I have been Keith Kirkpatrick with the Futurum Group, and this was Six Five On The Road, and we’ll see you again really soon.

Patrick Moorhead

Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.