In a significant move that could reshape how enterprises approach digital transformation, Pegasystems (NASDAQ: PEGA) has announced new AI-powered legacy discovery capabilities for its Pega GenAI Blueprint platform. This enhancement directly addresses one of the most pressing challenges facing enterprise IT today: the crushing weight of technical debt and the complexity of modernizing legacy systems.
The Technical Debt Challenge
The timing on Pega’s part couldn’t be more critical. Organizations are struggling under the burden of maintaining an aging IT infrastructure, with maintenance costs consuming massive portions of IT budgets. Traditional approaches to digital transformation have been notoriously slow and resource-intensive, often requiring months of manual analysis before any actual modernization can begin. The Pega GenAI Blueprint announcement represents a potential paradigm shift in how organizations can approach this challenge.
Pega GenAI Blueprint: Changing the Economics and Timeline of DX Transformation Projects
What’s particularly noteworthy about the Pega GenAI Blueprint release is how it leverages generative AI to automate the typically painful discovery and analysis phase of modernization projects. The new capabilities can analyze existing IT assets and create modern application blueprints in seconds rather than the months it typically takes using conventional methods. This isn’t just about speed – it’s about fundamentally changing the economics of digital transformation projects and the timeline generally associated with those projects.
Key Analytical Capabilities
The Pega GenAI Blueprint solution introduces four key analytical capabilities that deserve attention:
First, there’s the ability to analyze BPMN files, translating existing workflow documentation into new blueprint designs based on Pega’s case management system. This feature alone could save organizations countless hours of manual process mapping and redesign work.
Second, for organizations lacking proper documentation (which, let’s be honest, is many of them), the integration of Pega GenAI Blueprint with Pega Process Mining allows for automated discovery of existing processes and immediate conversion into new blueprints. This is particularly valuable for organizations working with poorly documented legacy systems.
Third, the platform can now analyze DDL files to automatically generate data models for new applications. This capability directly addresses one of the most time-consuming aspects of modernization projects: understanding and migrating existing data structures.
Finally, the ability to analyze OpenAPI documents and automatically build data object models represents a sophisticated approach to handling system integrations, potentially eliminating weeks of integration planning and development work.
Pega GenAI Blueprint has a Proven Track Record and Future Impact
What makes this announcement particularly compelling is the platform’s track record since its initial launch. With over 60,000 blueprints created, the Pega GenAI Blueprint already proven its value in real-world applications. The weekly feature releases and enhanced Live Preview capabilities suggest a strong commitment to continuous improvement. Pega is not alone on this front, as it relates to vendors embracing speed and continuous improvement rather than updating once or twice a year. We are beginning to see a new norm here, with speed relating to updates and the regular additions of and/or tweaks to functionality playing a key role in terms of value propositions for vendors—this makes a lot of sense in today’s rapidly moving world.
Business Transformation Implications
To my way of thinking, the real story here around the Pega GenAI Blueprint offering isn’t just about technology – it’s about using GenAI to help remove complexity and speed business transformation. By dramatically reducing the time and effort required for the initial phases of modernization projects, Pega is essentially lowering the barriers to digital transformation. This could be particularly impactful for organizations that have been hesitant to undertake large-scale modernization efforts due to resource constraints or risk concerns. And as much as it’s about speeding business transformation, it indicates to me that Pega is working to hedge its bets and expand its offerings at a time when RPA and BPO vendors are feeling the AI-focused budget crunch.
The Challenges RPA and BPO Vendors Face are Significant
Equally important and as I mentioned above, Pega and other RPA and BPO vendors face challenges today from the likes of Microsoft, UiPath, Infosys, Automation Anywhere, and others, especially as organizations are taking money from other budgets to fund their AI initiatives. Here’s a look at vendor trends data from our research partner ETR from its April 2024 study, showing some pretty serious declines in RPA spend. Although Pega has remained somewhat stable over the past handful of quarters, it’s obvious that Microsoft dominates and there’s every reason to expect it will continue to do so; I’ll note that Appian is making some significant inroads here as well. As you can see from the below, UiPath and Automation Anywhere continue to have some challenges, and Blue Prism, which at one time was a power player in this space appears, well …. not to be such a power player any longer.
Image source: ETR
RPA is not the only sector taking somewhat of a beating in these Gen AI-powered times, BPO vendors are likewise being challenged. As you can see, on the BPO front, Pega faces challenges from Appian, Progress, IBM, and others.
One of the reasons I like the ETR data is that it tracks buyer sentiment and provides timely insights into what drives ITDMs. For example, the top reason ITDMS shared they are adopting BPO software is the perpetual challenge of a lack of IT skills/talent availability (34%). Decision makers are also attracted by a breadth of features (31%), product technical capabilities (31%), implementation cost (28%), and time to value (28%), product cost/ROI, security (24%), and stack alignment (24%) and integrations. That lack of IT skills/talent availability indicates that a solution that can help reduce the complexity of modernizing legacy systems and speed time to value will be an attention-getter.
While Pega has done a fair job of staying the course, ETR’s October 2024 Spending Intentions report for Pega shows the company is seeing a slight increase in adoption rates over the past three quarters and is certainly trending upwards from the July data. That said, while ITDMs indicating they intend to replace and/or decrease is fairly low, the 49% in the flat category presents a timely opportunity for Pega to go and win some additional budget dollars with the new Pega GenAI Blueprint offering, and I would guess that’s what’s driving the focus here.
Image source: ETR
Looking Ahead: For the Enterprise — and for Pega
Looking ahead, this development could signal a broader shift in how enterprises approach technical debt. Rather than viewing it as an insurmountable challenge that will take time and/or an IT team/expertise that they don’t really have with solutions like GenAI Blueprint, organizations might now have a practical path forward to modernization that doesn’t require months of preliminary work or massive upfront resource commitments. When vendors (and their tech solutions) can do some of the heavy lifting on the modernization front it’s incredibly attractive.
For enterprise decision-makers, particularly those grappling with aging systems and mounting technical debt, these new capabilities from Pega are a bit of a deviation from the company’s standard solutions/offerings and warrant serious consideration. The ability to rapidly analyze and reimagine existing systems could be the key to breaking free from the maintenance trap and redirecting resources toward innovation and growth.
And for Pega, the company’s move to embracing the autonomous enterprise and the agility that AI-powered offerings like Blueprint provides is both strategic and well-timed. I’ll be watching over the course of the few quarters to see what happens on the adoption front for the Pega GenAI Blueprint solution, and I’m also looking forward to talking with customers to hear more about their experiences with it.
See more of my coverage here:
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Autonomous AI Agents: Microsoft’s Bold Vision, an AI OS for Enterprises
