Boards with Purpose - Jagdeep Singh

00:00:05:06 - 00:00:33:28 

Phil 

Welcome to boards with purpose. Today I'm joined by Jagdeep Singh. We're going to talk about governance across technology for the not-for-profit sector the very broad area of technology. And I guess the challenges that boards are being asked to govern systems they can't fully see. You've had a lot to do in this space. Maybe we just kick off with some of your observations from what you're seeing. 

  

00:00:34:00 - 00:00:36:26 

Phil 

And here in the not for profit sector. 

  

00:00:37:01 - 00:01:13:04 

Jagdeep 

Thank you, thank you, thanks for inviting me. And good to have this conversation. Yeah, absolutely. Boards are being asked to govern increasingly the complexity in the systems where systems are deciding and the management and the board don't necessarily have a view in terms of how some of those decisions have been arrived at. So right now, you could you could argue that that's happening somewhere between 10 to 30%, depending upon which study you rely on. 

  

00:01:13:04 - 00:01:49:12 

Jagdeep 

But we all know increasingly it's going to be beyond 50%. And maybe in three, five, seven years time, 70 to 80% of the decisions are being made by the systems. Yeah. So it's an interesting position we find ourselves in. I think there's also a flip side, which is the intelligent machines or the so-called revolution will go into a space where machines are exploring areas or going beyond the grasp of human intelligence. 

  

00:01:49:14 - 00:02:20:06 

Jagdeep 

So they are finding paths, avenue, avenues, theories, potential customers, supplies, markets for other businesses which the boards and organisations have never actually thought of, and hence are deciding on some of those decisions which are, again beyond the grasp of human intelligence. I think that would be a much broader and interesting space that will hit us in the 3 to 5 years time. 

  

00:02:20:06 - 00:02:25:16 

Jagdeep 

But yes, right now it's a it's a it's a quite a vexed problem. Yeah. 

  

00:02:25:18 - 00:03:02:21 

Phil 

Well and for those of us, me specifically who are not confident and not comfortable in this space, that sounds really scary. But let me just take us back a little bit. If I think of the not for profit sector, the vast majority of organisations are small, sometimes volunteer run, but even those with a small number of employees are having some form of IT infrastructure, and they're needing to evolve into the next phase of that. 

  

00:03:02:22 - 00:03:23:09 

Phil 

And for many who don't have the technical skills, who are sitting on boards, perhaps I don't know the questions that they should even be asking. What are the sorts of things you perhaps you're mainly seeing there, just on that real basic end of being a director of a not for profit? 

  

00:03:23:10 - 00:03:54:09 

Jagdeep 

Yeah, I think that's a that's a great question, Phil. Maybe if I start with a couple of examples in the space the government has come up with, I think it's called integrated assessment tool, that with the reforms, every not for profit who is in care or, you know, care at home services has to has to use. Now the government will argue it's not an AI tool. 

  

00:03:54:10 - 00:04:29:13 

Jagdeep 

It is quite close to that. And the two is quite restricted. Where HK providers were able to previously make a human bias call on what package to be is relevant for which particular person in an aged care space. The tool is now deciding, and it is quite restrictive in the sense to override the tool. Now that has beyond the decision making capabilities of that tool. 

  

00:04:29:13 - 00:05:00:16 

Jagdeep 

And there's a lot of feedback for the government on the tool. But the point I'm trying to make is the decisions that tool will make for the organisations direct the organisations into a particular direction, perhaps changes their case mix, perhaps changes their demographic mix. And those are real decision implications that the board and the management of such organisations face because of a decision making capability of a technology per say. 

  

00:05:00:19 - 00:05:28:28 

Jagdeep 

I use a second example and then perhaps come to maybe what the boards can do, or what I've seen is perhaps a bit more effective than a than a journalistic approach to it. The second example is, I think, most not for profits and for profits, for that matter, are using lots of systems where we where we put our customer information, we call them CRM systems. 

  

00:05:28:28 - 00:06:09:18 

Jagdeep 

Most of those systems have for years been providing prediction on the success of this particular customer, or how much revenue we can make. Recently, there's been an example where a lot of not for profits charities have been using a third party platform to reach out to donors, and that third party platform was relying on a CRM that, for example, conveyed to the person who was calling the donor that Phil is a better prospect than JAG is. 

  

00:06:09:20 - 00:06:45:08 

Jagdeep 

And and while in that particular transaction that is helpful for that call centre person over time collect collection of such decisions is certainly shaping the response of the charity organisations on which cohort of donors they should focus on and which cohort of donors they shouldn't. And that subtle change in behaviour because of machine led intelligence then was subsequently detected and has been proven wrong and biased. 

  

00:06:45:14 - 00:07:17:27 

Jagdeep 

Now those. That is an example of where machine is making decisions over a long period of time, and the consequences are only visible after a period of time, and you are not aware how the intelligence systems has shifted the behaviours of your organisations. So those two examples, I think to your question that what can a board or the members of the board and the members of the management do? 

  

00:07:17:28 - 00:07:46:16 

Jagdeep 

I think one suggestion I have is to look at all things. They are in a framework of what is commodity AI, what is operational AI, and what is a strategic AI. And that question is important for each and every not for profit. And it's going to be distinct for each and every not for profit. Instead of saying everything as an AI, if we lay that up, then that's that's a different story. 

  

00:07:46:16 - 00:08:16:14 

Jagdeep 

And I'll give you an example. Commodity AI is all of us have access to the large language models that we're using. Me, I'm using ChatGPT and Claude and Gemini and I'm zooming. Everyone out there is that in my eyes is pretty much like salt and sugar. Everyone's capacity and capability to use such a technology, there is very little to no barrier. 

  

00:08:16:16 - 00:08:42:18 

Jagdeep 

So in theory, you and I and not for profit organisation and for profit ASX 100 or 650 organisation, we are all on the same level playing field. So that's a commodity AI. The advantage one person is going to get over other is limited because in theory, you and I have access to the same technology. I think then within an organisation, then the next level of AI is the operational AI. 

  

00:08:42:21 - 00:09:16:18 

Jagdeep 

And that depends upon what kind of technology, tools and systems are we using. Not for profit can be using a sales force as a CRM. If you're in here, you might be using a like as a k management system. A large organisations are using SAP or Microsoft 365. So those organisations and those tools are investing billions and billions of dollars to enhance those tools and put AI into those tools. 

  

00:09:16:20 - 00:09:42:12 

Jagdeep 

And that depending upon an organisation where the Crown assets of that organisation or the key data of that organisation sits dictates where your operational AI is and where you're going to get some operational benefits, whether that's insights on, you know, how to allocate the HK funding better or which customers to target for from a donor perspective as we used. 

  

00:09:42:14 - 00:10:23:13 

Jagdeep 

Or if you are, you know, Medical Technology Start-Up company, what cohort of potential, you know, technologies or healthcare solutions you should be focussed on. That information is coming from the toolsets that you're using and and the enhancements in that tool, sets that are being provided to you by the organisations. So that to me is that operational AI. So the has got to separate that in the sense of everyone using commodity AI to draft their research proposals or, or, you know, sorting through the CVS or cover letters or preparing meeting notes. 

  

00:10:23:13 - 00:10:50:15 

Jagdeep 

That's, that's commodity AI insights about their business and how our business can become a lot more efficient. But using the core technology that we're using, that's an operational AI. And I think the top level is what I would say, as is the strategic AI and what I mean by that. And we will hear the term AI being used a lot. 

  

00:10:50:18 - 00:11:18:24 

Jagdeep 

And that is if your AI can work across systems, if your AI can work across HR and payroll and onboarding and off boarding and customers and suppliers, and can provide you real end to end insights, and it does not matter whether you have one system or 20 systems. Now that is a strategic AI, that strategic AI in theory has decision making capabilities. 

  

00:11:18:26 - 00:11:49:16 

Jagdeep 

Should we fire a particular supplier based on their cost competitiveness? And will the board be comfortable in AI and making a call of $500,000 supply relationship on a Saturday morning available would be comfortable that we certainly hired a consultant and paid or the AI has hired a consultant and we're buying $2 million to a consultant. And that decision was made on a Saturday morning. 

  

00:11:49:16 - 00:12:14:08 

Jagdeep 

And that's a market facing news what the board be comfortable with. So that is the strategic AI for every organisation. So I think a long answer to your question. But where I'm coming to as a board, the board needs to be clear what is commodity AI. And so they should it should be a focus, but it should be 1,020% of the board's focus. 

  

00:12:14:10 - 00:12:54:16 

Jagdeep 

What guardrails we have and what tool are we going to allow and not allow? What benefits opportunities exist by using and enhancing the technology the business already has. And so true in the not for profit sector space. And then at a strategic space in each one of the not for profit or for purpose boards. I think that's an interesting question, because every not for profit is perhaps using somewhere between 10 to 20 systems, not for profits are don't necessarily have an integration layer where all the tools are talking to each other. 

  

00:12:54:19 - 00:12:59:13 

Jagdeep 

The data is still being extracted from one system and. 

  

00:12:59:15 - 00:13:44:09 

Phil 

They've evolved over time, bits added here and there. And my guess my other observation with that is even not at a board level. But if we talk about governance at a team game that the most senior manager, whether that's a chief executive or an executive director, whatever the title is, they're often not skilled in technology either. So they're often relying on whoever they're outsourcing that knowledge to and, dare I say it, sometimes who they're outsourcing that to has a vested interest in upselling them into perhaps systems that they don't actually require. 

  

00:13:44:12 - 00:14:17:04 

Jagdeep 

Yeah, I think I think that is that is absolutely true. And hence an importance of a framework and prioritisation to, to, to, to to make sure the board is fully aware of what matters and to what degree it matters for for an organisation. A couple of things I would say in the not for profit space and maybe weaving in the cyber angle, perhaps the the technology space. 

  

00:14:17:04 - 00:14:34:21 

Jagdeep 

And I'm using the word technology covers cyber, AI, data and digital. So the board has to look at this space as one cohesive thing, not necessarily what are we going to do about AI and what are we going to do about cyber, and what are we going to do about data? 

  

00:14:34:21 - 00:14:37:16 

Phil 

But we just want to solve our CRM problem? 

  

00:14:37:19 - 00:15:14:06 

Jagdeep 

Yes, we just want to solve one. And so the CRM problem is I mean, that's that's an interesting point that you make. The CRM problem is by definition it's your customer relationship management. And so what what? Who is your co-workers and what is the minimum data you need in that space to be able to do, you know, to be able to work on the strategy and deliver on the strategy that we are here for. 

  

00:15:14:12 - 00:15:29:01 

Jagdeep 

So again, outside that is that is a board decision to clarify an article, light the third party side. I think you said the third party has an incentive to. 

  

00:15:29:03 - 00:15:47:09 

Jagdeep 

Sell more and more. Yes, absolutely. That is that is true. But that is that also comes back to board in terms of the opportunities that these new technologies offer, where previously. 

  

00:15:47:12 - 00:16:19:27 

Jagdeep 

The default was if we want better reporting, if we want better insights, we should put everything into one system and we should make it bigger or bigger. The technology now allows us to have that just in time insights. That does not necessarily require a huge data repository of every information in one piece of technology. It solves for, especially for, not for profits or organisations of smaller size. 

  

00:16:19:27 - 00:16:50:13 

Jagdeep 

It solves the problem of integrations that our systems don't talk to each other. So those are some of the benefits of AI. The challenge for the board is, as always. What is that in an innovation language? What is that minimum viable product that is that is beneficial for us? And again, in terms of the frameworks, what is that operational opportunity for us and what is that strategic opportunity for us? 

  

00:16:50:13 - 00:16:58:00 

Jagdeep 

And and perhaps that commodity opportunity for us is. 

  

00:16:58:02 - 00:17:08:07 

Jagdeep 

You know, is prioritised correctly at the level of day to day efficiency, not necessarily in a, in a strategic and internal provisional sense. Yeah. 

  

00:17:08:09 - 00:17:39:14 

Phil 

You mentioned the word cyber. And of course I'm thinking here lots of not for profits. If I think of our NFP study we just released, 60% were in human services. So it's a big part of the not for profit world right there holding some pretty sensitive data, even smaller, not for profits in that space are holding sensitive private data, which is very much. 

  

00:17:39:16 - 00:17:57:18 

Phil 

That boards have to make sure that that is held safely. What would be the one question that you would ask as a director, if you were joining one of these organisations to to satisfy yourself that we had the right controls on that sort of area. 

  

00:17:57:20 - 00:18:34:01 

Jagdeep 

The organisations I work for, the first question I normally ask is what is our recovery capability? Not necessarily our protection and defence capability. Fortunately or unfortunately, I along with my peers, were in one of my previous roles involved in a global cyber incident and what that incident taught me is what matters is the recovery and the speed of recovery. 

  

00:18:34:03 - 00:18:59:08 

Jagdeep 

What matters is does the board has a fatigue management plan? And what I mean by fatigue management plan is when the crisis happens, you typically have that group of 5 or 10 people who are charged with recovering your organisation back to health, and you do not have eight hours to sleep and come back and start again and do your 16 hour day. 

  

00:18:59:08 - 00:19:11:07 

Jagdeep 

It is 24 over seven until you recover. Does the board have a crisis management plan, which. 

  

00:19:11:09 - 00:19:41:08 

Jagdeep 

They have done the dress rehearsal in real time? And what I mean by that is we're doing this podcast. Should we have an unannounced emergency drill? We will stop this and we will follow the protocols, and the fire wardens will come out and we will do everything that we are supposed to do. Most boards, while some boards, still do not have a crisis management plan, but most do. 

  

00:19:41:10 - 00:20:11:24 

Jagdeep 

But of the most that do their practice runs is very theoretical and very prepared and a consultant lead. And in my experience, I've only seen two not for profit boards where the chairman was game enough to actually call an in out of turn board meeting and say, okay, we have a crisis, and X amount of data has been lost. 

  

00:20:11:26 - 00:20:50:13 

Jagdeep 

Asked the board and the management team to, for the next six hours, stop the business and help him understand how we will recover and who will do what. Now that amount of preparation, I think will convert into hundreds and thousands of dollars effort and and, you know, addition to reputational damage instead of reputational kind of damage that I think most boards for purpose are still lacking on. 

  

00:20:50:13 - 00:21:16:09 

Jagdeep 

So so that's that's kind of outside my first point in terms of protection versus recovery. I think in the not for profit space, the cyberspace has a couple of angles. One is the biggest risk is the third party risks in terms of technology tools. So I said previously, most not for profit boards are using up to 20 different systems. 

  

00:21:16:09 - 00:21:54:18 

Jagdeep 

And I'm kind of talking the scale of organisations from a 3 million turnover to around 25 million turnover. So 20 systems and you go higher and you have more and you go lower, you have less. Most of them are cloud. Most of them are sourced through their outsourced IT service provider. That IT service provider is potentially sharing that system with few other not for profit organisations to to achieve some bulk licensing and other things. 

  

00:21:54:20 - 00:22:32:26 

Jagdeep 

So I think there's an angle of governance there. What data is going where, who is governing. What data is that data? Do we have a sovereign risk angle as data? Must I in Australia, for example, do we understand how quickly we can recover the data? Do we understand. And one interesting question that I sometimes ask is does the board member can can the board members give me five top examples of how their data can be compromised in the next six hours? 

  

00:22:32:28 - 00:23:02:19 

Jagdeep 

And and most will have answers in the cells of or we protect our data and we are following essential lights and x, y, z. But most do not have an ethical answer on what data will I be losing where that is going to impact my business? So that's governance angle. So there's an angles of your traditional cybersecurity maturity frameworks that boards follow and can follow. 

  

00:23:02:19 - 00:23:23:21 

Jagdeep 

But there's those questions that boards need to ask of the third party in terms of where is my data? How soon can I recover? It? Is my data being mixed with others? How you going to take my phone call at 2 a.m.? Is the business that we are outsourced to has a backup in the sense that business go bankrupt? 

  

00:23:23:21 - 00:23:48:25 

Jagdeep 

Do you actually have an access to your data and information? There's a lot of key personal risks that I say in the not for profit sector that only one person knows who to contact to in. And so those are those are, I guess, the standard governance angles, the bigger risks. I say though, in the systems that are perhaps not official systems, they are the shadow cloud systems. 

  

00:23:48:25 - 00:23:57:21 

Jagdeep 

Every not for profits is using for example, WhatsApp for example. 

  

00:23:57:24 - 00:24:23:27 

Jagdeep 

A lot of marketing teams or people who are doing marketing and and outbound communications are using tools like Canva, for example, for the designing and pamphlets and other purposes. A lot of people in not for profit space are using Google and Google Drive, yet it might not be classified as one of the systems that we that we use in a not for profit sector. 

  

00:24:24:00 - 00:25:01:03 

Jagdeep 

You use calendar sharing systems, you use note taking systems. So so while there will be an official 20 systems that are not for profit is using and it's outsourced and there's a support and a maintenance and interior cyber protection agreements in there, potentially ten plus other systems that we're using without realising that we are using a way the sensitive data is being is being shared, that, you know, that the board does not have the visibility or or we haven't tried to articulate those systems in a variety risks system. 

  

00:25:01:03 - 00:25:03:25 

Jagdeep 

So that's a that's a second example that I say. 

  

00:25:03:27 - 00:25:44:09 

Phil 

And just fascinating. I wanted to pick up again on AI, NFP study findings on this. Picked up this area where the not for profit sector was running behind the for profit sector, in particular, in terms of how might we use AI to be more efficient or achieve better outcomes. And often directors in not for profit boards were saying, oh, if I'm on a for profit board as well, I'm often bringing those insights into the NFP space. 

  

00:25:44:13 - 00:25:50:07 

Phil 

Are you getting that sense that not for profits are a little bit behind their for profit counterparts? 

  

00:25:50:09 - 00:25:59:19 

Jagdeep 

I, I think the my practical experience is that it's mixed. 

  

00:25:59:21 - 00:26:31:24 

Jagdeep 

There certainly is a lot of AI usage happening whether it's allowed or not. So so you have in terms of the policy space, you have still have NFB, who would say we do not allow AI, which I do think is is a flawed position. And then and then you have probably the vast majority of in the middle that in theory have an, an AI policy. 

  

00:26:31:26 - 00:26:38:21 

Jagdeep 

But there's question mark in terms of how we governing and measuring it. 

  

00:26:38:24 - 00:27:09:13 

Jagdeep 

I think in terms of the usage at that operational level, that if we go back to the framework of in a commodity and operational level, I think the commodity is there that the team members are using it out there and there is there is are the sharing sensitive information and having guardrails. So I think that is that is happening that operational AI has two angles. 

  

00:27:09:15 - 00:27:40:28 

Jagdeep 

One is whether we like it or not, the vendors are introducing that functionality into the all the cloud based systems. So you and I, we use Microsoft Teams and we use Microsoft Word and PowerPoint. AI is inbuilt and it's coming in whether we like it or not. Similarly, most boards will most board directors will have one or other platform where all the board packs go. 

  

00:27:41:00 - 00:27:41:16 

Phil 

All the papers. 

  

00:27:41:18 - 00:28:17:00 

Jagdeep 

All all of those tools are now summarising things in AI for the board members. So whether we like it or not, the vendors are imposing that technology onto onto the boards and similar thing is happening at operational level within those organisations. So so I think the governance angle is loose in terms of what decisions are being made. And do we have a human in the loop and do we have any guardrails around those decisions? 

  

00:28:17:02 - 00:28:56:02 

Jagdeep 

And if those decisions are being made? How are we calibrating that decisions against other guidelines for a delegation of authority is a common thing that we understand as as accountants, as how do we how do you apply that in in an AI, a genetic world? So that level is a little bit of a discovery, a little bit of a miss that I'm saying I did want to bring it to the other side though, which is the opportunity space. 

  

00:28:56:04 - 00:29:28:26 

Jagdeep 

And I think the opportunity space is massive for not for profits. Firstly, I might address the cost question. There is typically this angle of and I was with one NFP in the last four weeks where they inquire about can we have AI licenses that keep the look and feel of our documentation the same the way we do it in our organisation? 

  

00:29:28:28 - 00:30:19:25 

Jagdeep 

Can we put certain rules and policies? So the questions were like that and I said, yes, absolutely you can, but we don't have the money. We can't afford the $50 per month charge. That is an enterprise license. And the conversations are at the point that I'm making, is most not for profit boards and not aware that there are not for profit and charity plans available for with most of these large language model providers that they should ask the questions and get most of their third party support providers so the IT support providers should have access to these charity and not for profit licensing models that most boards sometimes don't ask the questions and and are 

  

00:30:19:25 - 00:31:11:07 

Jagdeep 

not aware of. Most boards are not a way that you can control it as infill. You can have access and I don't have access. That is equally possible. And obviously the guardrails of the organisations in terms of what to do and what not to do and the reporting, all those things are possible and quite cheap to do. So that would be, I think, the first thing I'd say, I think the second thing I would say is that ability to provide that license for controlled innovation to your teams, to go out and experiment and say what, what is possible with some of these AI tools, whether we're targeting who is who is the right socioeconomic sections 

  

00:31:11:07 - 00:31:55:27 

Jagdeep 

of donors that will that is appealing to us or we are appealing to them, what is you know, if I have a choice around three particular aged care packages, which one will be most relevant in and why? Compared to Sydney, for example, we have, you know, we raised most not for profits. Well wise a lot of amount of time in extracting information from one system and dumping it in another system, or trying to marry that information up with that new technology, it is possible to eliminate that effort without adding a new tool, for example. 

  

00:31:55:27 - 00:32:24:13 

Jagdeep 

But that is a level of control and experimentation and innovation that the board needs to authorise and govern. But more importantly, measure to to make sure it is it is still within the guardrails of the organisation and then figure the next steps out. Because this is also space where nobody knows the right answers. So, so so this probably leaves me to one other point, which is around the the board governance and structures. 

  

00:32:24:13 - 00:32:49:26 

Jagdeep 

This is a philosophical point that I have. Perhaps the typical board governance is, you know, have your ears and eyes and nose open, but keep your hands out. Correct. And the typical one is okay, maybe once a month, maybe twice a month. We get some information that the board absorbs and then ask the question. The world is moving at a much faster spice. 

  

00:32:49:28 - 00:33:16:25 

Jagdeep 

AI and cyber and other technologies are real time, so that potential board governance, which still is hands out, but is a nose and is in, but maybe is sometimes a daily, sometimes at weekly governance, what that model of the future is and what that right fit is. I think something that's a philosophical thing for us to solve. 

  

00:33:16:27 - 00:33:55:22 

Phil 

And it's interesting. I picked this up in a couple of different areas of boards asking questions, but boards then need to question the answers as well, and you can only do that effectively if you have a sufficient level of knowledge on the topic, whether that's in finance, whether that's in care, whether that's in digital and technology. So are we getting to this era where we're needing directors to have such a broad range of skill sets and knowledge to properly fulfil that role? 

  

00:33:55:22 - 00:33:57:16 

Phil 

And how the heck are they going to do that? 

  

00:33:57:18 - 00:34:29:08 

Jagdeep 

Yeah, I think so. My my view is that broader generalist experience which can cover not just a cyber angle in a technology technology enterprise in terms of data and cyber and, and your key assets, but then link it back to finance and link it back to her or link it back to the business that we are in. That is absolutely going to be extremely important. 

  

00:34:29:14 - 00:35:02:21 

Jagdeep 

I think the the board will have to move beyond policy is my view. The policy can be we must not or we. We allow the use of this AI that is still words on a piece of paper. How does a board measures it as relevant to that particular organisation? I think that is a question and a series of questions and answers to arrive at a fit for purpose metrics that are relevant to that particular organisation. 

  

00:35:02:21 - 00:35:45:25 

Jagdeep 

And I can use in cyber example for a lot of NFP I work for will say, are we follow an essential I, you know, Australian Signals Directorate's recommendation. So what are you measuring. Are we measuring how many systems are getting patched? How many systems have multi-factor authentication. But what does that sells you. So there's a gap between we are doing something around cyber versus what maturity level we are in and what is the fit for purpose maturity level for us as an organisation, not everyone needs to have a maturity level of five. 

  

00:35:45:27 - 00:36:09:22 

Jagdeep 

A lot of not for profits will be okay if they have a maturity level of one on the bulk of their systems, but have a maturity level of 3 or 4 on their core Crown assets. So they personal information or aged care information so that level of information or distinction is missing. The second thing that is missing is instead of. 

  

00:36:09:25 - 00:36:43:16 

Jagdeep 

For example, in the cyberspace, instead of saying this is how well protected VR goes back to that recovery question is I should you have an incident to die? How soon would your case customers be back on the system for you? Now that is a different metric for board to measure in terms of cyber. Then to say, you know, we are patching 100% of our systems are patched because that in my eyes means nothing. 

  

00:36:43:18 - 00:37:34:04 

Jagdeep 

That system can still be compromised. Depends upon the sophistication of of that attack. So that I think model then by extension needs to apply to AI and any other technology program of work that the board has. What is that AI capability delivering in real sense for the board, for example? I mean, maybe, maybe one thing perhaps that's not to do now, since AI came on board, every not for profit is using that commodity level AI to draft their proposal funding proposals and are sending it off to the government and other agencies to say he is my request for funding that person or group of team that is looking at those proposals that are looking at 

  

00:37:34:07 - 00:37:54:12 

Jagdeep 

this is Claude, this is ChatGPT, this is Gemini. So so that to me has become noise. It is actually adding no value to the not for profit people who are spending their time to draft using AI, and it is actually adding no value to the people who have to make a judgement to say, where should this funding go? 

  

00:37:54:14 - 00:38:20:14 

Jagdeep 

Now that is the level of governance that board can apply to. Say no, our story must be unique and differentiated for us to have any success at getting. Just use an AI to kind of research and do that. Similarly, at a at that operational level, if we're going to turn on AI, we better turn it on on the core business that we are in, not on the known core business. 

  

00:38:20:14 - 00:38:44:28 

Jagdeep 

That is not necessarily going to be a value add. And if you're going to turning it on on the on the core value add, that might be one system that might be five for most, not for profits. How are we then getting the best bang for our buck in terms of are we getting the right licensing. We, you know, using our networks to get the best price, for example. 

  

00:38:45:00 - 00:38:57:18 

Jagdeep 

Right. So so those are I think some of the examples I would I see and I would say there's a lot of work that needs to be done in the not for profit sector. 

  

00:38:57:20 - 00:39:42:21 

Phil 

In wrapping up today, I did want to come back to a comment or observation you made earlier about boards encouraging some experimentation with AI. But there I say it also with things like cyber and how can we best run the various hypotheticals that we might as a board? But also echoing in my ear is those not for profit executives who are so under the pump with their day jobs in delivering care, or putting on an arts program or running a sporting organisation. 

  

00:39:42:21 - 00:40:11:18 

Phil 

And they're going to say, I don't have time for experimentation. I've just got to get on and do what needs to be done that I think perhaps then comes back to this area of culture. And how does the board instil an innovative culture or an culture of experimentation, of saying, yeah, we actually do need to put aside some time to do those sorts of things. 

  

00:40:11:19 - 00:40:53:26 

Jagdeep 

Yeah, absolutely. And I think that that statement around NFTs in particular are doing so much with so little and anything that is seen as something extra and non value add is always going to be seen as such. And before I want to introduce a framework that I think is helpful. But before that I would also acknowledge that right now, especially around AI, the signal versus noise issue is quite big. 

  

00:40:53:27 - 00:41:17:09 

Jagdeep 

Yes, everyone's talking about AI, AI, and I think it's a collective job of the board and the management to work together and find the right signal that is fit for purpose for that organisation. I don't think one director can do it. I don't think the CIO or the CTO or the Siso can do it, nor can the CEO do it. 

  

00:41:17:10 - 00:41:50:25 

Jagdeep 

It is that collective experimentation that will help organisations find what is that fit for purpose, niche, right. And how do they how do they focus and and fill? That is my experience with most large companies. ASX 50 on words. Everyone is in that experimentation. Spice, design. We've sold the commodity AI. People are using it. You know, the big companies like Microsoft and Google and SAP and Salesforce are throwing billions at it and we can't control what they are doing. 

  

00:41:50:25 - 00:42:25:24 

Jagdeep 

So so that is, again, being accepted in some that the the real I guess the fruit is at the top. How do you find that fit for purpose use cases that work across our business and give us some insight, some decisions, some new revenue areas, new customers or new funding that takes us forward. I in a couple of not for profits that I've recently worked with, I use a framework called focus, and the first one is essentially around filtering the noise. 

  

00:42:25:24 - 00:42:45:20 

Jagdeep 

What business are we in if we are in business? Well, let's talk about what are we worried about? Are we worried about revenue? Are we worried about retention? Are we worried about funding. So you know you have three teams for example in there. So just focus on that. Don't worry about writing reports and some submitting funding proposals using AI. 

  

00:42:45:21 - 00:43:20:25 

Jagdeep 

Let's kind of focus on that. I think the second thing is the in the focus, which is we need to look at technology as one. It can't be AI here and cyber here and data here or digital. It is all one. If you're not looking at technology as that kind of enabler of all things business in that cohesive sense, then that distracts and that disrupts, and you're going to have a cyber program of X million dollars here and a AI program of $1 million there. 

  

00:43:20:25 - 00:44:04:00 

Jagdeep 

And that's that's not an optimal use. The C and we didn't talk about this in the podcast. This is again going back to perhaps the first one. It's around Crown Assets. Where is our most valuable protected data sitting. Whether that is in a commercially sensitive data for a lot of big ASX miners around their quality of their Ino and and or it is for the aged care, not for profits in terms of what demographic we serve and weighs the best revenue coming from us. 

  

00:44:04:00 - 00:44:35:18 

Jagdeep 

So whatever is the Crown assets and most organisation, even the most largest organisations will not have more than 10 to 15 Crown assets. So by definition, and the board has to challenge this at the table out of the 20 systems we've got, where is the Crown assets, you know, and what must we absolutely protect. And then again brings the focus the the you is around a agency and that's around experimentation too. 

  

00:44:35:20 - 00:45:11:07 

Jagdeep 

So bias towards action. Nobody knows the right answer in this space. Any consultant or any advisor sighing any business I you must do this. And our system solves this. And our system is going to give you open up 20 new sources of revenue or customers. It's essentially not telling the truth in my eyes, because unless you experiment with your data within your guardrails, you're not going to find what the right fit for purpose solution for your NFP, for example, is so that urgency or the bias towards action, and then experiment and file and learn. 

  

00:45:11:07 - 00:45:41:16 

Jagdeep 

I think it has to be there. And the final one, and maybe it should be the first one SAS run service, you know, don't lose the fact that we most not for profit and for purpose organisations are trying to serve a part of our community, a customer, a sporting organisation, in a disability organisation. It is important again we don't lose sight of we are here to benefit that end customer. 

  

00:45:41:16 - 00:46:06:24 

Jagdeep 

If I can use the word so that service angle again dictates the loop from the f to to the s, and I kind of have used this framework to get the board to one focus and prioritise. Be comfortable with that. Uncomfortable that we don't know the answers, but we're going to give some approval to go out and experiment and come back in two months time and see what are we able to achieve. 

  

00:46:06:26 - 00:46:10:24 

Jagdeep 

And so so that's that's how the answer the question. 

  

00:46:10:26 - 00:46:31:09 

Phil 

And I love it. I love the fact that you've picked up in that model almost. This goes back to the NFP governance principles. Understanding the purpose of the organisation. How are we going to achieve that purpose and using technology in in that regard. 

  

00:46:31:10 - 00:46:42:27 

Jagdeep 

So yeah, absolutely. And we're not using AI because something new thing has arrived in the world. We are using AI to to benefit the purpose, to. 

  

00:46:42:27 - 00:46:51:09 

Phil 

Agree to achieve that purpose. Jag, it's been fantastic chatting to you today. Really appreciate your time and thanks for your insights. 

  

00:46:51:09 - 00:46:52:25 

Jagdeep 

Thank you. Thank you for having me.