ServiceNow CMO – ‘We aren’t a cloud system of record, we’re a cloud system of action’

SUMMARY:

Cloud vendor ServiceNow has historically struggled to define itself in a market where HR, CRM and ERP rule – but that’s changing.

Business team hands joining jigsaw pieces in cloudy blue sky © hin255 - Fotolia.comWe at diginomica have written previously about the serious potential for ServiceNow to win big in the SaaS cloud wars. That’s a bit of a cliche, because there won’t be just one or two winners, but a few. However, ServiceNow has historically struggled to compete on a marketing and branding front – because it’s roots in ITSM weren’t as ‘glitzy’, or even as easy to understand, as the CRM, HR, e-commerce and ERP vendors.

This is despite the company aiming for a $4 billion run rate by 2020 and having plenty of customer success stories to speak to. So why do some not talk about ServiceNow in the same breath as they talk about Oracle, Salesforce or Workday?

From my perspective, this is beginning to change. ServiceNow is beginning to refine its approach to market and is beginning to recognise that its ITSM mindset won’t win it big(ger). It is evolving into a company that is putting customers at the centre of its messaging, is focusing on customer outcomes and is shifting its messaging away from ITSM, towards the idea of ‘service’ as a necessary, cross-enterprise platform.

This is something that has coincided with the appointment of John Donahoe as CEO, in the spring of this year. Donahoe comes from eBay and recognises the need to sell the message of ‘servitization of the enterprise’ – something that naturally stems from the consumer web.

I got the chance to sit down with ServiceNow’s CMO Dan Rogers in London this week, who is gearing up the marketing organisation to take on this opportunity in 2018. Rogers has previously worked at AWS and Salesforce, and so has a comprehensive background in cloud marketing. However, he’s all to aware that ServiceNow needs to carve out its own niche in the market – one that isn’t necessarily competing with CRM, HR or ERP.

ServiceNow is positioning itself as a system of action, not a system of record. Rogers said that ServiceNow is aiming to tell the story of cross-enterprise service management. Making life easier for those requesting services (fix a laptop, requesting information about benefits), for those providing services (categorising service requests, insight into who they belong to), and then also making the overall service owners’ jobs more effective – allowing them to rethink processes and introduce automation. All of this being done within the context of cross-enterprise collaboration.

Rogers said:

That what I call the modern expectations of how work should look. For someone requesting a service, that should be easy. You should be able to go to a single portal and make a request and see the status of that request. Just like you do with Uber. All the other things behind it have been abstracted to the user. They don’t care about how your organisation is set up.

I’m going to make life easy for the person providing the service. In one place, all the things being requested, all categorised, to see who in the organisation who it might be routed to, the implication of that request on a particular service. In the current world, you get a bunch of phone calls, a bunch of IMs, but it’s not really a process. You never get better.

Now, as a service owner, because you have all this visibility, you start to build a better service, you can start to automate, you can start to orchestrate.

We think we can apply this service management mindset to most forms of work that are happening inside a company. The end result is a smoother process. Just like the Uberization in the consumer life, applying that to workflows in the enterprise.

This is the key to what I believe ServiceNow should focus on. Step back from talking about HR, or IT, or customer service management, or security as standalone products – but talk about ‘what services does my organisation need internally and externally?’. Not only that, but if I had the opportunity to start again, what would those services look like? How can I reimagine the process?

Rogers appeared to agree with this, and said:

The software alone is not sufficient. The power of the platform really comes to bear when you reimagine how work is going to get done. So there’s a culture change that needs to happen. A great place to start with that is with the experience that you want the customer to have. Start with the customer and say, wouldn’t it be great if the experience was this way?

Then you can build the service across the organisation to deliver towards that. What we are trying to do is very disruptive, we aren’t trying to do things in the same way as systems of record. We aren’t trying to have a cloud system of record for the existing process. We are actually trying to create a cloud system of action, to get things done.

We aren’t a category

I asked Rogers if he thought the job of marketing ServiceNow is more difficult than some of the other companies that it- on the face of it – appears to compete with (e.g. Salesforce, Workday, etc. – even though these aren’t really competitors, they do often all get lumped together in market discussions). Service management isn’t as easy to grasp as say, CRM. Rogers said that he understood this, that ServiceNow isn’t in a recognised category. But he added that it was going to let its customers do the talking. He added:

The nature of the transformation that we are trying to drive, it’s not a known category. It’s not a known single category. I was joking with Gartner the other day, we were trying to talk about which market we are in, and I said we shouldn’t think about total addressable market, we should think about total addressable pain. The pain is big. And every customer has this pain.

You could try and pre-categorise into software categories that you have used in the past 15/20 years, but we are imagining a totally different way that work is going to get done in the 21st century. I think when you’re a bit more disruptive in your technology, it’s a little bit harder to describe that story. But in 2018 we are doubling down on how we tell that story and our purpose.

This year we made a good nudge to opening up the aperture, but in 2018 we will really be able to unpack that. We now have so many phenomenal customer reference points now. Those validations help us explain the market a little bit better. Get down to root cause and work across the organisation.

What you will see is that over time our customers will become our voice in describing service management in action.

Scaling

In terms of other challenges, Rogers said that ServiceNow is acutely aware of wanting to maintain the attention it gives to its customers, as it branches out into new areas of service and as it scales up as a company. He argued that ServiceNow is so “customer obsessed” that it “borders on intimacy”. He points to ServiceNow’s 98% retention rate as evidence of this.

However, ServiceNow has been on a hiring spree as it scales and it is branching into new product lines and markets. Rogers said that ServiceNow wants to keep what’s great about its culture in spite of this and that’s what keeps him up at night. He hopes that the marketing team can play a part in this. Rogers explained:

In 2018 the marketing organisation, one of the things we are focused on is customer success at scale. This idea that we care about our customers to value. Traditionally marketing departments get customers into the top of the funnel. I’m equally obsessed with, not even the bottom of the funnel, but post-funnel, how do we make sure that customers are getting to value as quickly as possible?

I want to build things like codification of best practices, sharing of top tips and tricks, spending a lot more time on our community, reducing the cycle of getting customers to value. That’s very unique from a marketing organisation.

My take

I’ve been saying for a long time that ServiceNow needs a new marketing position if it’s going to effectively compete. And so it’s great to hear that Rogers recognises this and is putting it into action. ServiceNow needs to take what it does well – service – and put it front and centre of everything. Talking about HR, CSM, security and ITSM is confusing because people assume you mean the system of record.

Instead, ask – “What do you want services in your organisation to look like? ServiceNow can do that and we can do that across multiple departments, cross-organisation.”

At the end of the day, services typically touch multiple points within an org and require collaboration. Forget the silo thinking. Focus on the end service experience and ServiceNow is on to a winner.

Image credit - Business team hands joining jigsaw pieces in cloudy blue sky © hin255 - Fotolia.com

Disclosure - ServiceNow, Oracle, Workday and Salesforce are diginomica premier partners at time of writing.

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