Podcast: Automation critical to government surplus with US Coast Guard Seth Fargen
Automating effectively could completely eliminate the US Government's budget defecit, says Seth Fargen, deputy director at United States Coast Guard
Photo by Ian Simmonds on Unsplash
Recorded at Intelligent Automation 2017, Seth Fargen joins us and shares that directly after 9/11, the TSA was created from scratch and Fargen and his team, as an existing shared service center, were asked to set up TSA's financial systems and processes.
Want more? Try this: Automating a city with Copenhagen's Mads Andersen
Fast forward to today, and Fargen and his Coast Guard team are on an automation journey to optimize their 1,300 internal processes that make up a day’s work. Fargen says that simply through efficiencies, the US government spending deficit could be totally eliminated. His commercial colleagues tell him they're seeing 30-70 per cent savings through automation.
"Fortunately for us, they have been very accepting of change management as a part of our organization," he says.
And the key thing he's learned over the course of his career?
"Genius has it's limits, but stupidity knows no bounds."
Tune in as Fargen joins The AI Network Podcast's host, Seth Adler to discuss how he's managed RPA over the course of his career, the impact of his early days in the military on his career and outlook, and why the future generation faces more of a challenge than ever before.
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Interviewer: Seth Adler
Guest: Seth Fargen
Interviewer: Seth Fargen.
Guest: Well, we’ll give it a shot.
Interviewer: We’ll figure it out, right?
Guest: Yeah, that’s right.
Interviewer: So now this is… I told you when I met you, I know other Seths but usually, they’re roughly my age and as best as I can tell, I think you’ve got a couple years on me. Is that fair?
Guest: I may have a few more gray hairs than… than you Seth.
Interviewer: Right. Just a few.
Interviewer: And you then told me the corollary of the name Seth…
Interviewer: and so I would love…
Guest: Yes. The… the real value of the name Seth is, I think, you will all remember from your book of Genesis, that Adam and Eve had three sons.
Guest: There was Adam… there was Cain, Abel, and Seth and a lot of people don’t remember Seth too much.
Guest: He’s not mentioned too much but what happened was you all know that Cain slew Abel, so he got he sent up the river and then the last son around was Seth.
Guest: And Seth was the sole inheritor of everything Adam and Eve had which is basically everything we have. So as a Seth, I am just waiting for my inheritance. So…
Interviewer: Which is the kit and the caboodle, I guess, right?
Guest: Yes, the kit and the caboodle and everything in between.
Interviewer: All right. So you’re US Coast Guard and I was drawn to you immediately, you kind of did a little bit of a session here at Intelligent Automation Chicago, 2017...
Guest: All right.
Interviewer: where you kinda just speak matter of factly, right? So how…
Guest: Yes, [03:39] I’m very direct.
Interviewer: That’s it. Now, how much of that is because of the military and how much of that is because you were perfect for the military? Meaning, did the military teach you or did you just fit right in?
Guest: I think that probably it’s just been a result of my experience in life. So because I’ve done other things, I’ve actually been with the Coast Guard about 10 years and what we actually have is we have a shared service center for the Department of Homeland Security and our actual finance center has been in existence for 29 years.
Guest: And what happened in 2003 was the Department of Homeland Security was setup as reaction to the events of 9/11, so what they did is you know, DHS was kinda formed together and they threw a whole bunch of different agencies under this umbrella, so was very unstructured at the time and they had to set up financial systems for the department, they have a new organization which is called TSA, Transportation Security Administration, which did not even exist prior to this…
Guest: now has about 50,000 employees. So as an existing large component of this new department, we were asked to come in and help TSA. So part of what we did was to, as a shared service center, was command to help them stand up their financial systems and processes and procedures and ever since then, they had been a great customer or so now going on 15 years.
Interviewer: Okay. And so if you’re listening and you’ve got legacy systems and you’ve been through a major merger or acquisition, Seth does not feel bad for you.
Guest: No, I think… I think we can all related to that. I think particularly in the government, just to give you an idea where we’re at. I was talking with the CFO of another department about a month ago and we were talking about application for financial reporting and as the conversation unfolded, he revealed to me that their department runs on all government Coded Cobalt System.
Guest: And so, I started out in Cobalt probably 40 years ago, so I was thinking “how do you even find people that know how to code this anymore…”
Guest: And he said “basically, they’re all retiring or dying off so…
Guest: …he’s very concerned about how do I get to, you know, modern… how do I get into the 21st century.
Guest: So there’s a lot of opportunities there because you can imagine some of the inefficiencies that exist within the government and we, I think last year, the deficit of the government spending was about $560 million and probably if we could ever get the government to halfway efficient to up to the 21st century, we could probably, totally eliminate the deficit.
Interviewer: Wait a second. Hold on one second. Are you telling me that the deficit could be eliminated simply by efficiency?
Guest: Oh, I think it could be.
Guest: Yeah, I do because the government spending is about $1.6 trillion…
Guest: And when I’m sitting here talking to my commercial counterparts…
Guest: and they’re telling me they’ll be able to use intelligent automation RPA and they’re having 30-70% savings…
Guest: And these applications right there, I mean you know, granted the government has a lot of transfer payments, entitlements but the day to day operation of government, we’re just scratching the surface. So we’re at the tip of the iceberg.
Guest: And so, we don’t know how deep it is but there’s a lot of opportunity for improvement.
Interviewer: Okay. That’s fair and that’s clearly fair for… the government clearly fair for corporate America, clearly fair for me, this…
Interviewer: podcast host, right?
Guest: Yeah, absolutely.
Interviewer: True for all of us, true for all of us.
Guest: We’re all... I’m always for saving money for the government…
Guest: if you like it, it’s intrinsic part of my job and I’m passionate about it.
Guest: Because guess what, it’s my tax money and the last time I checked, there was a big difference between the gross and the net on my paycheck.
Guest: So, I think a lot of you can relate to that.
Interviewer: Yeah, probably, probably.
Guest: Yeah, right.
Interviewer: So, let’s make sure that we understand. That’s kind of the picture that we’re painting and that’s a little bit of the history of where… of what got us here.
Interviewer: What’s on your desk right now? How are you doing what you’re doing and you know, what do we need to know?
Guest: I think, you know, the way we have approached this is… we were actually going through a strategic planning and through that process, we have a consulting firm that introduced us to this idea of RPA.
Guest: So this goes back about 6 months. Now, we have been doing… we’ve had a continuous improvement group…
Guest: within our organization, that has existed now for 12 years.
Guest: They have 4, 5 black belts, 30 green belts and probably a 150 yellow belts.
Guest: So the culture fortunately for us, they have very accepted change management as a part of our organization. All the way we get projects from the bottom, we get projects from the top, to 30-40 projects in a year. So I believe our employees and our contractors are very used to this. So they’re used to having change and the way we approach t his, this RPA can be another tool in a toolkit.
Interviewer: There you go.
Guest: So our approach to it has been… one thing we did is I want to know what our world of work was. So we actually went out and looked in every part of our organization. We came up with 1300 processes.
Guest: That we… we do. That’s a day of our work.
Guest: And we’ve gone out, we documented them all, we’ve done a value stream mapping, somehow we’ve done LSS projects on and so the way we’re looking at it, I can take that value stream and say “okay, while we eliminated duplications, non value added but oh, here’s a step in here that I have 30 people doing on a daily basis and they’re spending 4 hours a day.”
Guest: So there’s a lot of time being spent…
Guest: and when you examine the process at a deeper level, you say “oh well, this is a perfect candidate for a bot.”
Interviewer: Yeah, you got it and so where are we on that journey?
Guest: We are in the process of identifying, going through those processes, looking for the, you know, high return…
Guest: In other words, where can we get the biggest… we’re going for the low hanging [0:10:53]
Guest: Seeing out of those, you know, where do my people spend all their time?
Interviewer: When you say “low hanging fruit,” you mean big.
Interviewer: You mean enterprise.
Interviewer: You don’t mean well, we can do this and it won’t affect anybody. We’ll just do this at the desktop level.
Guest: Yeah, we do… because we’re responsible for all the appropriations for a major part of DHS, we have about $20 billion that we’re responsible for. We manage all the reporting, all the disbursements, all the collections, all the normal things that any organization would do and so, consequently, we have a large amount of people paying commercial invoices, another big chunk of people who collect money from other government agencies – they collect from the public. Just to give you an example, all those when you take it… airline flight, you get all those little passenger fees, facility fees…
Guest: Oh, it’s a little fees… a lot of them go to funding TSA. So their collections and we have to ensure for example, that the airlines are paying are their appropriate share.
Interviewer: Yeah. As opposed to fare share.
Guest: Yes, that’s true. I don’t know if the… I don’t think they pay any less if you get dragged off the plane but you know, I would certainly, you know, I would certainly volunteer to be dragged off the plane and beat up for a million dollars.
Interviewer: I’ll take it, sure. That sounds like a decent deal, right?
Guest: Hopefully that doesn’t happen to anyone else but you know, I think our main thing is we look at it as continuous process [12:32]
Guest: I’m looking at, you know, like I say, prioritizing these projects…
Guest: Because I got to tell you, when I’ve introduced this to my staff, explained to them what it is, I probably already have a hundred suggestions…
Guest: from people just for my grassroots and hey, we should do this because it sucks up all my time…
Guest: and it’s really boring and you know, it’s you know, something I, you know, I don’t enjoy doing.
Interviewer: Folks in the military, appreciate efficiency. Is that fair to say?
Guest: I would say so.
Guest: I would say so and particularly in the budget and you know, in the government, a lot of things go on and on but I can tell you in my 20 years of experience within the government…
Guest: Nobody has ever come around and say “you need some more money.”
Interviewer: It’s not how that goes.
Guest: It’s not how it works.
Guest: It’s like every year has a “how much can you cut?”
Interviewer: Right. Well let’s make sure that … kind of we understand how we have you and your service to us on this podcast and in the coast guard. Where are you from originally?
Guest: Okay, I grew up actually in… outside of St. Louis, Missouri.
Interviewer: Okay, that makes you Cardinals fan.
Guest: And I was part of it and I got drafted and rather than go to Vietnam, I joined the air force…
Guest: as a volunteer…
Guest: and I got sent to Vietnam anyway, so…
Interviewer: Thank you for your service.
Guest: … I didn’t really gain anything there but I got out, went back to school on a GI bill, put myself through Masters program, got a fellowship…
Guest: then I start working in commercial industry…
Interviewer: You say you didn’t gain anything there and obviously this is…
Guest: I didn’t gain the avoidness of going to Vietnam, so…
Interviewer: I got you.
Guest: you know, I still… I did a proud of my service but quite frankly, it wasn’t first on my list.
Interviewer: To do that.
Guest: To go vacation there.
Interviewer: I got you, vacation there. Fair enough.
Guest: But so…
Interviewer: So Bob Gibson is doing his thing in St. Louis…
Interviewer: and you’re over in the other place.
Guest: Absolutely, I used to see Bob Gibson. In fact, I… first baseball game, I ever went to, I was 7 years old and I went to the old Sportsman park in St. Louis and saw Stan Musial he had a home run.
Interviewer: There you go.
Guest: So, that kind of dates me. I did know that the… I know there’s a lot of rumor… rumors out there but I never saw [14:52] play.
Interviewer: Not quite that old.
Guest: Not quite there yet.
Interviewer: And I think Stan Musial number 6, if I’m not mistaken
Interviewer: He… my father’s baseball glove signed by Stan Musial.
Guest: Wow! That’s great.
Interviewer: Not his actual signature.
Interviewer: You know, the print.
Interviewer: You know, you know.
Guest: Yeah, that’s close enough. You won’t find those nowadays.
Interviewer: That’s right.
Guest: I doubt.
Interviewer: So you get into one of the six finger, first basements club but…
Interviewer: let’s digress, you find yourself kind of in corporate America after this GI bill and all that.
Interviewer: Where were you? What were you doing?
Guest: I spent a number of years in a telecommunications and computer industry, general dynamics in United Technologies. A lot of the big defense contractors…
Interviewer: And that’s Cobalt
Guest: That is and then I got you know, I actually got my Master’s degree in Accounting.
Guest: So I kinda switched careers into Accounting after that but I still was pretty computer-savvy.
Interviewer: So tech plus finance.
Guest: I was tech plus finance and always at interest in the systems but I went from there and actually, the company I worked for which was a subsidiary of General Dynamics got bought and sold by 3 or 4 times and I was one of 13 people survived through the 4th acquisition and it was bought by a company called Telex Computer Products.
Guest: That later merged with Memorax, became Memorax Telex. I had a great fortune to work with some people at [16:26]
Guest: We saw a bunch of joint funds to savings and loans. For those of you that don’t know, that you know, we went bankrupt and it was, it was one of the few… it was one of the companies that cost the savings of loan industry to collapse.
Interviewer: You were there?
Guest: I was there in the frontlines as spectator.
Guest: And some of the stuff splashed on me but then I spent about 2 years of my career going off, going around, selling off parts of this bankrupt company and through that process, I was… became involved in leverage buy out of a company that later became known as Telenova.
Guest: Now, Telenova is kind of off-shore company but they invented their first digital non-blocking phone system in the United States. It was up to that point, everything was analog.
Guest: You go back to the days before digital, it was analog telephones. You had analog phone in your home.
Guest: With a rotary dial.
Guest: Touch tone was a big innovation.
Guest: We went there, unfortunately a big owner of or company which was based in Santa Clara was all state venture capital fund and when Sears got into big trouble…
Guest: and the early 1990’s, they pulled the plug on us and we went bankrupt.
Guest: And I said “enough is enough.”
Interviewer: So is that… hence your foray into the government?
Guest: No, not quite.
Guest: There’s a couple steps in between I went after that.
Guest: I got… I was working as a comptroller in a custom fabrication shop…
Guest: and got involved… did some investments, private equity and got involved in a company that made the prepaid phone cards.
Interviewer: Okay, sure.
Guest: And so, I actually went to do that full time at my own company for several years.
Interviewer: How was that?
Guest: Was great. We built it up. We were one of the first ones in the company. I had lot of corporate accounts.
Guest: Had accounts with the navy…
Guest: I had a number of tracking firms…
Guest: Had… Hooters was a client of mine, it was very interesting because all the ladies fought to be on the cards and they were very big sellers at the truck stops.
Interviewer: I would imagine. I would ask you similarities between the navy and the Hooters but we don’t have enough time.
Guest: Yeah, we’re not right now. So that’s something I probably should discuss on air.
Interviewer: Fair enough. So anyway, you make your way to government and you know, we understand what you’re doing now…
Interviewer: And I guess, understanding that you speak directly as we discussed.
Interviewer: What advice would you give to weather it is a public company or a public institution, corporate America and otherwise, as folks are making their way into this journey, you know, what would you tell them to do? What would you tell them not to do?
Guest: I think one of the things you have to do is realize there are a lot of stakeholders in this process and one of the things we’ve tried to do or I’ve tried to do is make sure that those people understand what RPA is. We’ve gone to RCIO, we’ve gone to our data servers people, gone to various people in financial management, senior management to make sure that they understand what this is.
Guest: To make sure that they understand that the level of risk and the level of effort are both low but the returns are high and you don’t get those many opportunities…
Guest: in any organization to have those kind of things.
Guest: So if I have a project that I can do for $25,000 and I have a payback period of 6 or 9 months, maybe have an ROI in the high 70’s or 80’s, it doesn’t take too long…
Guest: before the light bulbs starts going on. So I think we’re at the point now, we’ve got the ball rolling and like I say, we want… we want what fruit that low hanging fruit.
Guest: We also are doing a lot in changed management to educate people and we’re gonna do some, I think, unique things.
Guest: And if you are… if anybody beats me to this, it was said here so it’s my idea. It’s not trademarked but I don’t know if anybody goes online ever since the National Death Clock.
Interviewer: Yeah, sure.
Guest: And there’s a thing, it just rolls around, it just keeps getting bigger and bigger but you know, how much does the United States owe? And it’s just like a online wheel where we’re gonna have a clock….
Guest: for RPA that calculates our accumulative savings and so that clock’s gonna run to…
Interviewer: I love it.
Guest: and we’re hoping that clock goes faster and faster…
Guest: So, we get up there and so people can see what we’re doing in real time.
Interviewer: You’ll email me and then I’ll put into this…
Interviewer: description where people can find out…
Interviewer: once it goes up. I love it.
Interviewer: I love it.
Guest: We want people to do that and hopefully encourage other folks to do that because I think it’s… many important things and I think we have to do…
Guest: is we have to be able to measure it. How can you measure? Now it’s not all cost-savings. You might have an improvement in timeliness, you might have improvement in the quality of the data, you might have big reduction in errors, all those things add up so I encourage everybody, don’t… just don’t look at one dimension of this.
Guest: The other thing is the human factors. Can I take stress off people? I got people work for me, I mean once a month the ambulances comes out to our facility and take somebody down the street to the hospital and I don’t like that.
Guest: So you know, I don’t mind people working hard but you know, when you become too stressed out because you’re trying to get too much done in a short amount of time, I really think RPA can come in and help relieve some of that stress.
Guest: So that’s the human side of it.
Interviewer: I love it. All right, so we’re gonna keep checking in with you as you go in. especially…
Interviewer: when that dead clock goes up, right?
Guest: That sounds great.
Interviewer: Or the [22:47]
Guest: We’ll let you know as soon as it kicks off.
Interviewer: That’s it.
Guest: Pretty soon.
Interviewer: All right.
Interviewer: I’ve got 3 final questions for you. I’ll tell you what they are and then ask you…
Interviewer: them in order.
Guest: All right.
Interviewer: What’s most surprised you at work along the way? What’s most surprised you in life? And then on the soundtrack of your life, one track, one song that’s gotta be on there which I kinda can’t wait for. First things first though.
Interviewer: What’s most surprised you at work? You have had a pretty interesting and diverse work experience, sir.
Guest: I guess I learned that genius has its limits.
Guest: But stupidity has not bounds.
Interviewer: Is that your own? That is fantastic.
Guest: I don’t know if it’s my own but…
Interviewer: We’re giving it to you.
Guest: I take it… I take it applies to… I think a lot of you could really do that.
Interviewer: Without question.
Interviewer: I can relate to that in my own self.
Interviewer: What’s most surprised you in life?
Guest: I think what has surprised me is the resilience of our young people. I’ve got 3 children and 5 grandchildren and I know that they faced a lot more difficult world than I did when I grow… grew up…
Guest: A lot of things going on. There’s all kind of, you know, crazy stuff going on. The world hasn’t always but it seems to be more and more upfront.
Guest: You see people shooting each other for no reason or blowing themselves up…
Guest: and you know, that’s real difficult. I think you know that you can’t be afraid…
Guest: and I’m quite proud of, you know, young people that I see coming up and retaining that optimism…
Guest: and they wanna do great things and learn.
Interviewer: Yeah, and…
Interviewer: Just to take that tangent you spoke about the importance of communication as it relates to automation. I think generally, just you know, where we are today…
Interviewer: it’s been a long time since you could just go to the park as a kid and you know…
Interviewer: check out…
Interviewer: [24:50] man. I really and efforting trying to understand no matter your kind of… where you’re coming from, I’m trying to understand wherever… whoever you are, wherever you’re coming from so that we can have a conversation. What I dislike intently is you know, I’m from the 70’s right?
Interviewer: So I remember lot of stuff that maybe some people don’t.
Interviewer: But we always, at least in my understanding, use to be able to communicate with each other and it seems like we’re at a place now where folks aren’t so interested in communicating with each other. It’s just this is... my way I think...this is…
Interviewer: the way I think and you know, you’re wrong and you’re wrong.
Guest: Yeah, I can relate to that on several levels.
Guest: I think when you look at our government and I think that the confidence in our federal government is at an all time low. I can remember back when I started out, there was a lot of horse-trading and the democrats and republicans, we get together. I’ll give you this if you give me that …
Guest: And so, there was a lot of bartering
Guest: between groups and in the end it worked out and I think…
Interviewer: Like the [25:56] Ronald Reagan type of thing, right?
Guest: I mean, you know, in those days I think they did had some common sense approach and they believe that now, we have various factions that have drawn this lines and the saying… saying they will never cross them.
Guest: Let’s… you don’t make progress when you do that. when nobody’s willing to compromise or nobody’s willing to agree that you’re not so smart, that you know everything, and… but I found as I’ve gotten older is I found that there’s less I know because I realized how much I don’t know.
Guest: And so I tried to surround myself with people that know more than me
Guest: But I think it’s very unfortunate that the leadership has gotten out… but then you see it on a personal level, I go out to eat dinner…
Guest: and I see four or five people in a family and they’re all sitting in their phones, texting.
Guest: And they’ll go through an entire meal and not say anything to each other.
Interviewer: Yeah. Yeah. Yeah.
Guest: You know, I have a rule when I go out, take my family out or when I you know… last holiday with my son and a bunch of grandchildren, and ,other relatives.my son was at the other end of the table and he was sitting there texting on his phone. Well he knows I have a rule, no phones at the table. So quite frankly, I mean we were in a restaurant but I took a role that was there and I flung it at the table and hit him in the head. So I did get his attention.
Guest: And I say would you like to pick up the tab tonight?
Interviewer: There you go. Exactly. That is your punishment, sir, right?
Guest: That’s my punishment, right?
Guest: So you can continue to do that and I’m gonna order steak and lobster…
Interviewer: Having the surf n’ turf, thanks.
Guest: That’s right. Absolutely. So you know… but like I say, it’s good. I think there’s a lot of good people out there and I think that you know, change will continue to accelerate. So it’s hard for people to adapt but I think one thing in life, you better get used to it.
Interviewer: That’s it.
Guest: Better get used to it.
Interviewer: And we’ll get there one way or another type of thing.
Guest: We will.
Guest: And hopefully in a good way.
Interviewer: Exactly. On a soundtrack of your life, one track, one song that’s gotta be on there.
Guest: Gee, I don’t know. If I have to have one song…
Guest: I don’t know.
Interviewer: Well, what were you listening to back in the day?
Guest: Well, I listen to a lot of Rolling Stone, Led Zeppelin. You know, yesterday was Jerry Garcia’s birthday.
Guest: You know, so you… for you [28:31] out there. I don’t have a favorite song…
Interviewer: Sure. Should we go with Ripple?
Interviewer: Yeah. From the Grateful Dead, we can do that.
Guest: Sure, we could do that.
Interviewer: That is… this, what just happened with the music thing…
Interviewer: One of the least expected things that I’ve had all month.
Guest: Okay. All right. Well, Seth it’s a pleasure.
Interviewer: And Seth, it was a pleasure.
Guest: Okay, thank you.
Interviewer: Thank you, sir. And there you have Seth Fargen. The genius quote was adapted from Einstein but I think the real thinking, the big thinking here is those percentages that are attributed to automation savings, if applied something as gargantuan as the US budget, I mean look out. Thanks to Seth for his time. Thanks to you for yours. Stay tuned.