← The Agile Brand with Greg Kihlström®: Expert Mode Marketing Technology, AI, & CX
The Agile Brand with Greg Kihlström®: Expert Mode Marketing Technology, AI, & CX
#763: Pega CTO Don Schuerman on how AI can pay down tech debt and accelerate digital transformation
00:26:23
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- [00:01]
Don Sherman
Close your eyes. Summer smells like sunshine, fresh citrus and salty air.
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Greg Kilstrom
What if your living room could feel just like that? With Pura's new summer collection, it can restore your sense of well being with
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Don Sherman
fragrances designed to move with your day. From bright, energizing mornings to soft, relaxing
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Greg Kilstrom
evenings make the invisible unforgettable. This season, visit pura.com to find your new favorite summer scent.
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Don Sherman
And Doug, there's nowhere I wouldn't go to help someone customize and save on car insurance with Liberty Mutual. Even if it means sitting front row at a comedy show.
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Greg Kilstrom
Hey everyone, check out this guy and his bird. What is this, your first date?
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Don Sherman
Oh no. We help people customize and save on car insurance with Liberty Mutual together. We're married. Me to a human, him to a bird. Yeah, the bird looks out of your league. Anyways, get a quote@libertymutual.com or with your local agent. Liberty Liberty Liberty Liberty the Agile Brand.
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Greg Kilstrom
Welcome to Season seven of the Agile Brand where we discuss the trends and topics marketing leaders need to know. Stay curious, stay agile and join the top enterprise brands and Martech platforms and as we explore marketing technology, AI, E commerce, and whatever's next for the Omnichannel customer experience. Together we'll discover what it takes to create an agile brand built for today and tomorrow and built for customers, employees and continued business growth. I'm your host Greg Kilstrom, advising Fortune 1000 brands on martech AI and marketing operations. To make sure you always get the latest episodes, please hit subscribe on the app you listen to podcasts on and leave us a rating so others can find us as well. Now onto the show. This episode is brought to you by Pega. Pega provides the leading AI powered platform for enterprise transformation. The world's most influential organizations trust pega's technology to reimagine how work gets done by automating workflows, personalizing customer experiences, and modernizing legacy systems. Since 1983, Pega's scalable flexible architecture has fueled continuous innovation, helping clients accelerate their path to the autonomous enterprise. Learn more@pega.com what if the most valuable use of AI in the enterprise is actually the often overlooked yet incredibly costly work of untangling decades of legacy code and process documents? Agility requires the ability to adapt and evolve, but for many enterprises that that ability is trapped inside decades of legacy systems and byzantine processes. What if the same AI that's creating the new could also be the key to understanding and modernizing the old? Today, we're going to talk about moving beyond the Hype. We're so used to hearing about AI and into the more practical, high impact world of agentic AI. We'll explore how this approach can help large organizations finally tackle their technical debt. Not by ripping and replacing, but by understanding and redesigning from the inside out, fostering a new level of collaboration between business and IT along the way. To help me discuss this topic, I'd like to welcome Don Sherman, CTO at pega. Don, welcome back to the show.
- [03:23]
Don Sherman
It is great to be here. I think that's the first time I've heard like a media influencer describe agentic AI as practical. So I'm excited for this conversation. This is good.
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Greg Kilstrom
Things move quickly. Right. So we're already away from science fiction and into pragmatism. Right. So before we dive in, I know you've been on the show before, but for those that haven't caught you before, why don't you give a little background on yourself and your role at pega?
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Don Sherman
Sure, yeah. So, Don Sherman, I'm CTO at Pega, but in an interesting sort of career twist, I also run our marketing organization, which at a software company, knowing a little bit about the technology isn't too bad a thing when you actually need to run marketing. And for those folks who are CMOs or in marketing, you know, marketers often are now managing their own tech stack as well. So it's, you know, the, the, the combination I think is, has been really a fun one. I've been around pega for over 25 years. I've worked across support and engineering and consulting. But really I, I view kind of what I do as being chief Translation Officer. How do we, how do we take in a world where the buzz and the hype around AI and agents can just be so confusing? And how do we help our clients translate that into actual real value? And then how do I take the stuff that our clients are saying and make sure I translate it back into stuff we can go put in our products so we continue to get better for our customers.
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Greg Kilstrom
Yeah, love it. And also for listeners who might not be as familiar with pega, can you give us a high level? What's the company's core focus and who are the primary customers you serve?
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Don Sherman
Sure. So we see ourselves as an AI platform for enterprise transformation and we really focus helping our customers drive transformation in four big areas. First, transforming a lot of the legacy systems and old technology that is the boat anchor keeping them from driving innovation, transforming a lot of the operational workflows that kind of run the underpinnings of the business, transforming the customer service experiences and the workflows and processes that really fulfill the requests that customers have. And then finally more on the CMO side, transforming how clients approach personalization. Right. So you look at some of our clients like Verizon who use us pretty much across every touch point to figure out the next best action. What's the right conversation to have with a client? Or you look at an organization like Lloyd's Banking Group who have used us to optimize many of their workflows across all of their servicing areas. Or I just was speaking with somebody from Daimler Financial and they've used PEGA to modernize a lot of old applications. They just transformed a Lotus Notes application and they actually use some of the agents that we're going to talk about probably later to transform that application so they turn it into something new and better, but still get there pretty quickly.
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Greg Kilstrom
Yeah, yeah. So yeah, we're going to, we're going to touch on a few things today, but first I do want to talk about Agentic. And you know, I mean I remember this is one of those things. Certainly people started out as a buzzword, definitely got getting a lot more traction and attention over the last several months. Instead of maybe a technical definition, you know, how would you explain it to a CMO who's more concerned with go to market speed than maybe AI architecture?
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Don Sherman
Yeah, look, I, you know, I think agents are still definitely a buzzword. I was just down at one of Gartner conferences earlier this week is all everybody was talking about. I think like if the word wasn't on every vendor booth, I think the vendor got kicked out of the conference. Right. The way I think about this is agents are, you know, at the end of the day we talk about, well I'm going to manage teams of agents and my HR team is now going to talk about agents. You know, keep in mind that under the covers this is all still just software. Right. It's really smart software, it's powerful software, it has AI and increasingly it's able to do things that look a lot like sort of human multi step thinking. But really what I look at the value is how can I use agents to design, to execute and to ultimately optimize the workflows that fulfill all of my customers request. But also those moments of personal personalization that allow me to engage better with my customer and deepen my relationship. Whether that means increasing retention, increasing my cross sell upsell rates, helping me acquire new customers into the business. You know, how do I use this agentic approach of AI meeting a lot of automation to design, automate, and optimize those pieces.
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Greg Kilstrom
Yeah. And speaking of the hype part of this, I mean, you've talked a lot about taking a pragmatic approach to AI that, you know, generative AI isn't the silver bullet to every problem. I mean, first of all, you know, AI wasn't invented three years ago. You know, a lot of people still maybe a little confused on some of those things. But, you know, Jenny, I. You know, really good at some things, not really good at some other things. Why is it so critical for enterprises to use the right AI for the task, especially when they're sitting on, you know, sometimes decades of complex undocumented processes?
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Don Sherman
Yeah, well, I think. I think the decades of undocumented processes almost make it more critical that they use the right AI for the task. Right. Because if you just try to. If you just tried to deploy a bunch of large language models, which, by the way, are powerful, they're great. They're pretty transformative. They can be incredible creative powers inside our business. They're also hugely unpredictable. Right. They don't give you the same answer twice. Sometimes they hallucinate or they make things up, but they do it with a degree of confidence. You know, I was trying to get an AI agent to help me put together a little marketing video, and the agent strung me along, it asked me all these questions. It said it really excited. I'm ready to make your video. I just need this. I need this. Okay, couple more seconds. I'm gonna make your video. Okay. I'm working on your video now. Your video will be ready soon. And after a bullet to this, I finally asked the agent, I'm like, well, can you actually create the video for me? And the agent said, oh, yes, I can create the video. What I'm gonna do is I'm gonna give you a whole bunch of storyboards, and then you can go use a editing tool to go create the video. And I said, so you actually can create the video? And the agent said, no, I can't actually. Right, but, but, but, but I think, like. And again, that's fine. I was playing around. I was trying to test out what the AI could do. But certainly if you're trying to figure out whether or not you want to offer a customer a loan. Right. You don't want the agent behaving in that level of unpredictability.
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Greg Kilstrom
Right. And, you know, some of. Some of this goes back to, you know, some of those legacy things that were. That we're talking about as well. And, you know, one of the biggest friction points, I know this painfully firsthand as well, is, you know, friction points and transformation is translating business needs into technical requirements.
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Don Sherman
Absolutely.
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Greg Kilstrom
I know on, on my video show, one amazing thing we've had, we've demoed PEGA Blueprint. You know, amazing tool. Definitely recommend people check, check out the video show as well. You're using AI agents in PEGA Blueprint to analyze legacy assets from source code to process diagrams. How does this practically change the conversation between a marketing leader and maybe their IT counterpart when they're looking at new customer journeys?
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Don Sherman
Yeah, I think this is really important. Right. Because I think there's a lot of conversation about agents at runtime. And we can talk about how do you build customer service agents, how do you build support agents, how do you build agents that help your sales team, you know, suggest the right offer and follow your sales processes? Oh, great. And we're doing a lot of that in pega, but I actually think there's this massively untapped need, whether you're a CMO or a chief customer officer or a customer service leader. On the design time side, how do I design my processes, how do I design my personalization, how do I design my experiences, my treatments, my offers, all of that. How do I do it faster and how do I do it in a way that, as you say, facilitates the discussion with my IT partners who actually make it live. And that's been our big focus with blueprint. Right. So, you know, I'd love, you know, I can talk about blueprint. The best thing to do is go try it out. You go to pega.com blueprint you can test it out. We've actually got a blueprint for designing workflows, you know, processes that drive things. And then there's also a blueprint for designing personalization strategies. So basically AI powered marketing campaigns. Yeah, but the secret of blueprint is it uses AI agents to actually help you design and those agents can take as inputs. You know, Gartner talks a lot about context engineering now. Right. So how do you give the agents the right context? Well, we've done the context engineering for you in Blueprint. So all you need to do is describe what you want your process to be. You can describe what you want your personalization targets. Do you want to drive more retention? Do you want to drive cross sell, upsell, do you want to drive acquisition? Do you want to reduce support costs? And then you give it contacts, you can point it at your website, you can upload old Documentations you can upload, campaign plans you can upload. We've even had clients who have taken screen cams like Camtasias of people using mainframe systems and uploaded that into blueprint. And Blueprint will reinvent those business processes buried in the mainframe application. But in a couple minutes you're actually got a working prototype of a cloud based system that's modernized, that's got agents that automates things. So using agents on the design side is this hugely powerful opportunity that we believe. You know, whether, again, whether you're a CMO or a CEO or a cio, I think it's a really great opportunity.
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Greg Kilstrom
Yeah, yeah, I remember seeing the demo of that at pegaworld last, last summer, like pretty, pretty blown away because mainframes are still in use.
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Don Sherman
They're still there, man. You know, again, I just talking to Gartner, right? You know that like mainframes are still in use. We've got a client who's working with us and they have 200 lotus Notes Applications still like running the business, right. And so, and if you want to take advantage of everything that's coming with AI, you know, one of the first things you need to do is you need to get your data and you need to get your business logic up out of those applications so that then you can start attaching your agents to it. The other thing that we've been really thinking about with agents is you don't want all that great reasoning and creativity that I want to use at design time to figure out what my process should be, to figure out what my offers should be. I actually don't want that reasoning running at runtime because I don't want it randomly suggesting things to a client. I don't want it randomly putting up an offer that a client might not be eligible for. I don't want it randomly approving a loan that I don't want to give. So what we want to do is I want to use the reasoning power to design the right processes and design the right predictive models to then deploy those at runtime where I operate with a much higher degree of one, predictability and consistency. But two, I actually operate faster and cheaper because I'm not calling the expensive large language models for every single interaction that I need to have. Right. So I think there's a really nice balance between where you deploy your large language models and where you deploy more traditional approaches like decisions and predictive models. And this is exactly what you started with earlier. You know, Greg, about it's all about the Right AI at the right time.
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Greg Kilstrom
Yeah, yeah. And the other component there is maybe to throw another jargony thing in there, the, you know, the human in the loop as well. And the governance part of this too is how do you think about that? Obviously agentic. Some of the point of that is that it's able to do a lot of things without constant human intervention. How do you think about getting the human and the right parts of that so that there can be the right types of guidance and the right types of governance?
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Don Sherman
Yeah. So classic example of what we've done with some agents in our Customer Decision Hub products. So Customer Decision Hub is used by cmos kind of at large organizations. I mentioned Verizon.
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Greg Kilstrom
Yeah.
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Don Sherman
To recommend the next best action to clients and do it in real time. But in order for that to really scale, you actually need to have lots of offers in the system because you're being very, very personalized. You need to have lots of treatments for each offer because again, you're being very, very personalized. You're not thinking in terms of segments, you're trying to get down to segment of one. Right. Well, it can take marketers lots of time to divine offers to create treatments, et cetera. Great place to use AI agents is give them the context so they understand your brand and then give them the context of the existing offers you have and then use them to figure out who in your target market doesn't have really good personalized offers and let it recommend them. Let it take a first draft of the treatment and then the job of the human is to finalize it, to tweak it, to suggest changes. But I'm not asking the human to always take the first draft. I'm giving them kind of a starting point and a way to run at the solution.
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Greg Kilstrom
Yeah.
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Don Sherman
I also think at runtime, you know, you're going to see over time agents that get smarter like, and begin to look at the world maybe even from specific Persona lenses. You know, imagine a brand agent that's out there looking and understands your brand and is testing and validating. Hey, is every conversation I'm having brand compliant?
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Greg Kilstrom
Yeah.
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Don Sherman
And then imagine also a CFO agent and it's out there looking and saying, hey, am I spending my money effectively? Am I putting my offers in the right place? Am I spending my ad dollars, you know, in the, in the, in the right ways? Am I getting the right CPM out of what I'm investing in? So you could have those, but you're still going to need a human in the loop because sometimes The CFO agent and the brand agent are going to disagree. Right, Right.
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Greg Kilstrom
I would imagine quite often, but yeah, Right.
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Don Sherman
Like, just frankly, just like your CFO and your head of brand probably disagree sometimes in real life. Right. And so you're still gonna need those moments where a human steps in and provides the final decision, the arbitration, but now we can provide that human who's making the decision with a whole lot more guidance and context. So you can make the right decision as well.
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Greg Kilstrom
Yeah, yeah, absolutely. And so, you know, from a. From a measurement perspective, I mean, sure, you know, traditional marketing measurements don't stay in place, but how should marketers and marketing executives think about, like, are there other measures of success or other measurements they should be using when we're talking about making some of these transformative changes?
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Don Sherman
Look, I mean, I think. I think at the end of the day, right, our jobs as marketers is ultimately to grow the revenue of our business. Right. And we have. We have ways, you know, I think in many ways, some of our traditional funnel measurements may be shifting. Right. But I think there are measures along the way of how are we engaging buyers through the journey, how are we. Where are we creating awareness? Are we doing it for the right people that we want to get right? I think a lot of those metrics stay. What I think we also need to look at, though, is how quickly am I able to bring new ideas to market. How quickly am I able to empower my marketers to respond to change? The classic example I always have when I'm talking to some of our insurance clients are, you know, I know a hurricane is coming, but I'm still got agents out in market selling coverage. Right. How. How can I respond faster to the changes that are coming and the changes that are surrounding me? And I think that ability to move quickly and to be in a continuous transformation mode is going to be something that. That is going to be really essential. Again, not just for CMOs, but I think for any leader in the business.
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Greg Kilstrom
Yeah, yeah. And I mean, that's something that simply, you know, humans, we're good at a lot of things, but we can't scale that kind of thinking to enterprise level. Right. So that's where this agentic approach makes sense. Right.
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Don Sherman
Well, and I think the other thing is some of the stuff that we've wanted to do, especially around legacy transformation and getting some of these legacy systems shut down and retired. I think prior to having tools like blueprint, the ROI became really hard because you just would need massive amount of humans to read through the documents and Figure out what these systems are doing. Well, I can now automate that, and I can actually focus the human effort not on documenting what the system has got, but on rethinking it. How do I want to move it forward to something new so the ROI becomes much more achievable, Both the ROI you get when you shut down the system, but frankly, and more importantly, the ROI you get because you put something in place that is significantly better. Better in terms of the efficiency of the business, better in terms of its ability to generate revenue.
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Greg Kilstrom
Yeah, yeah. So thinking about the, you know, the people in the process part of this, you know, from a. From a marketing leader's perspective, you know, with agents being able to do a lot more and probably, you know, continuing to be able to do a lot more, what should, you know, marketing leaders be thinking about for the human part of their team? And, you know, what changes. Changes in roles here?
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Don Sherman
So, look, most technology changes are people changes first, right? And people changes last. Frankly, that's the hardest part. So in my team, I work with our creatives, right? And our head of copywriting went on a really interesting journey. When Gen first showed up, her stance was, whoa, this is attacking me. I'm not. I do not believe that AI can write better copy than I can write. I've built my career on this. But as she started playing with it and she started using the tool and treating it almost like a creative partner that she could bang ideas back and forth on, I think what she began to realize is, well, wait a sec. Maybe what this means is not that my job is in threat, but my job dramatically changes, and more importantly, the scope of what I can impact in the business changes. All of a sudden, I'm not the copy team who writes the copy for the 10 ads that cross our desk every month and the three major web pages we put up. But I can actually help train these agents so that every piece of copy that anyone in the business, from the marketing to sales to our training teams to our support teams, I can help ensure that every bit of text that we put out is highlighting our brand in the best way possible. So now all of a sudden, my role becomes a. I'm able to empower and scale what I personally can impact in significant ways. And I think getting people to understand that, you know, if you embrace these tools, they are scale tools, they allow you to increase your impact into areas you might not have thought before. I think that's a way that, especially CMOs, as we're dealing with people who, you know, again, are Used to being the creative, used to being the person putting pen to paper, can start thinking a little bit differently about how that's going to transform what people actually do day to day.
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Greg Kilstrom
Yeah. I mean, and there's a lot of different schools of thoughts on, on this, but, you know, there's, there's some people saying that the future is like you're going to manage a bunch of AI agents and they're going to be your team. And, you know, it's, there's others that are more, you know, augmentation, all that, you know, where, where do you see this going?
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Don Sherman
So, so look, I, I think it's really important that we all step back again. AI is really powerful. Agents are really powerful. It's still just software.
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Greg Kilstrom
Yeah.
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Don Sherman
You manage people. Right. You know, I posted about this earlier this week. You manage people. You would try to inspire people, you incent people, you recognize people, sometimes you have hard conversations with people. Right. You manage people. AI is software. You configure software, you code software, you test software, you validate software, you upgrade software. It's different. Right. And so let's not confuse that with what good leaders need to do.
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Greg Kilstrom
Yeah.
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Don Sherman
But I do think what we need to figure out is how we are enabling our teams and our humans to think about their roles and how they can expand them, how they can change, how they can shift. When you have these new tools and these new capabilities available to us, I think that's the real transformative power that's available.
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Greg Kilstrom
Yeah. Yeah, I love that. Well, Don, always great to talk with you. A couple of last things before we wrap up here. If we were having this interview one year from now, what's one thing we'd definitely be talking about?
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Don Sherman
I think within a year there will be some pretty major news stories of agents gone rogue and impacting brands in bad ways. And so I think there will be a little bit more conversation at the cmo, the CEO and even the board level of, yes, we've got to embrace this stuff, but boy, we can't let it do things that impact the brand.
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Greg Kilstrom
Yeah, yeah, definitely. And last question for you. What do you do to stay agile in your role and how do you find a way to do it consistently?
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Don Sherman
So I would say two things. One is you've got to be putting yourselves in things that are uncomfortable, that are, you know, learning environments than that are new. You know, I've, I've moved myself over time. My career has gone from being very techy engineer to being sales engineer and consultant to now kind of being marketer Right. And that's been, that's been a shift. Right. But that, what's the joy of that is you're constantly learning new things. The other thing I would say is AI and agents. It is a hands on revolution. It's not like, you know, cloud or microservices or all these kind of techy, techy things that you hand off to your IT team. Like in order to lead your team through it, you actually have to have hands on experiences with these tools. You have to be trying the agents out yourself. You have to be building an agent on, you know, GPT or CodePilot. Go try blueprint. Right. To understand how blueprint can help you design things. The more you put your hands on this technology, the better you're going to be able to lead your teams and help your team see the possibility of what this opens up.
- [25:41]
Greg Kilstrom
Yeah. Love it. Well, again I'd like to thank Don Sherman, CTO at Pega, for joining the show. You can learn more about Don and Pega by following the links in the show notes. This episode is brought to you by Pega. PEGA provides the leading AI powered platform for enterprise transformation. The world's most influential organizations trust pega's technology to reimagine how work gets done by automating workflows, personalizing customer experiences and modernizing legacy systems. Since 1983, Pega's scalable flexible architecture has fueled continuous innovation, helping clients accelerate their path to the autonomous enterprise. Learn more@pega.com thanks again for listening to the Agile Brand. If you enjoyed the show, please take a minute to subscribe and leave us a rating so that others can find the show as well. You can access more episodes of the show@theagile brand.com that's theagile brand.com and contact me if you're interested in consulting or advisory services or are looking for a speaker for your next event, go to www.gregkillstrom.com that's G R E G K I H L S t r o m.com the Agile brand is produced by Missing Link, a Latina owned, strategy driven, creatively fueled production co op. From ideation to creation, they craft human connections through intelligent, engaging and informative content. Until next time, stay curious and stay agile.
- [27:18]
Don Sherman
The agile brand. And Doug there's nowhere I wouldn't go to help someone customize and save on car insurance with Liberty Mutual. Even if it means sitting front row at a comedy show.
- [27:37]
Greg Kilstrom
Hey everyone, check out this guy and his bird. What is this, your first date?
- [27:41]
Don Sherman
Oh no. We help people customize and save on car insurance with Liberty Mutual. Together we're married. Me to a human, him to a bird. Yeah, the bird looks out of your league. Anyways, get a quote@libertymutual.com or with your local agent. Liberty Liberty Liberty Liberty. The Jack Welch Management Institute at Strayer University helps you go from I know the way to I've arrived with our top 10 ranked online MBA. Gain skills you can learn today and apply tomorrow. Get ready to go from make it happen to Made it happen and keep striving. Visit strayer.edu Jack Welchmba to learn more. Strayer University is certified to operate in Virginia by Chev and its many campuses, including at 2121 15th Street north in Arlington, Virginia.