Digital workflow vendor ServiceNow has announced a fresh commitment to pursue a verticalization strategy, announcing a number of solutions and products for industries that include manufacturing and healthcare. Senior executives at ServiceNow have this week shared details with diginomica about the thinking behind the industries-led approach, stating that it is being driven by - and is being designed in collaboration with - the company's customers.
The new releases were announced at ServiceNow's annual user event, Knowledge 2021, which can be accessed here. For all the diginomica coverage coming from Knowledge 2021, check out our dedicated hub here.
ServiceNow CEO Bill McDermott also today laid out the vendor's growth ambitions, where he said that it is targeting $10 billion in subscription revenue by 2024 and $15+ billion in subscription revenue in five years time. ServiceNow's annual revenue presently is close to $5 billion, which highlights just how aggressive McDermott's ambitions are.
Commenting on ServiceNow's announcements this week, particularly around how the Now platform is expanding more aggressively from line of business ambitions towards industry products and solutions, Dave Wright, Chief Innovation Officer, said:
The connected enterprise side was good from an IT perspective, but then when we look at the adoption, it tends to be a lot in the manufacturing areas. So this is leading us down a path of having a much more vertical focus as well, where people are coming to us saying ‘we appreciate what you've done for human resources or IT, but this is the part of the company that makes us revenue, so what can you actually do to start improving that?'.
A few years ago there wasn't really that much of a virtualization strategy, it was more everything we do applies to employees or people or customers. But what we're seeing now is predominantly customer driven, it's these different industries coming to us and saying ‘we think there's something more we can do with the platform in those areas, if we give you the expertise can you help build the product?'. So it's a lot of work with design partners to actually build these solutions, and then with the integration partners to actually look at what they can provide around that as well.
In terms of new releases, let's take a look at what was announced today for each of the industry solutions.
ServiceNow has made a strong play in the healthcare sector this past year, given its COVID-19 vaccine management and contact tracing solutions. Updates to the vaccine administration management solution this week include:
Clinicians and staff can now schedule walk‑up appointments on‑site for first and second dose appointments, allowing for in‑person registration.
Contact center agents have access to all of the available appointment times instead of having to choose the first available, allowing flexibility and choice to recipients who lack internet access and must schedule an appointment over the phone.
People have the flexibility to reschedule appointments to different vaccination centers, based on what is convenient for them.
However, in addition to the above, ServiceNow has today also announced Healthcare and Life Sciences Service Management, which is aimed at improving workflows across the front, middle and back office for healthcare and life sciences organizations, which is expected to be available in Q3 2021. New capabilities for this offering include:
A Healthcare data model, which upports interoperability of patient data and the flow of information, following FHIR standards.
Healthcare Agent workspace, which provides a ‘360‑degree view' of the patient, enabling clinicians and contact center agents with the right information at the right time.
Pre‑built workflows for Healthcare, which aims to remove the friction of processes based on paper and tribal knowledge, and the complexity of navigating healthcare systems
In addition to healthcare, ServiceNow has announced new industry-specific solutions for manufacturing - with news that Siemens has come onboard as an early adopter. The product being launched today is Operational Technology (OT) Management and sets out to address the manufacturers' need to ensure the availability of their critical technology. ServiceNow states that OT Management will allow manufacturers to gain:
Visibility - Minimizing blind spots with a unified view across IT and OT and proactively understanding the connections and dependencies between systems with automated discovery of OT systems
Availability - Avoiding downtime and improving response and recovery with workflows and change management processes designed for OT systems
Security - Reducing risk and streamlining compliance efforts with pre‑built proactive and reactive security workflows
In addition to this, ServiceNow has said that its new manufacturing solutions will connect workers to digital operations and will give them training, knowledge and access to real-time data and communication. The aim is that by connecting workers to the ‘factory digitization experience', organizations can improve their overall equipment effectiveness.
Field Service Management
Whilst maybe not always considered a vertical in the traditional sense, if we take the ‘service industry' as a whole, field service management forms part of ServiceNow's latest verticalization pursuit. Driven by the impact of COVID-19, it's anticipated that the annual market for field service management (currently approximately $3 billion) software is projected to more than double by 2027 - so the opportunity is there.
ServiceNow has announced the following as part of its Field Service Management solution:
Dispatcher Workspace aims to make it easy to schedule and track tasks, technicians and locations in one place, to deliver quicker resolutions and a higher first‑time fix rate.
Capacity and Reservations Management claims to allow field service managers to create granular scheduling rules for teams and contractors to help ensure proper prioritization of work and adherence to contracts. Dynamic Scheduling will then automatically assign technicians to tasks based on skills, availability, location, customer preference and contracts.
Contractor Management provides support for the end‑to‑end contractor process - from onboarding to project completion - with the aim of improving communication between an organization and its third‑party service providers;
Offline access to mobile field service app provides the information technicians need to complete their work even when technicians don't have internet access in the field, from customer and task data to knowledge articles and questionnaires.
Native Asset Management provides a single repository for assets in stock and inventory control, helping to ensure that parts are always available. It also claims to provide technicians with better visibility into asset history, including the last time something was serviced.
I got the chance to speak with Marshall Tyler, VP of Industry Solutions at ServiceNow, about the vendor's verticalization ambitions shortly after the announcements were made. It's noteworthy that just a few years ago ServiceNow was making some moves in this direction, mostly along the financial services lines, but that this was largely being driven by partners that wanted to take products to market.
There's a distinct change in tone from ServiceNow this week at Knowledge 2021, where the vendor is clearly doubling down internally to drive a lot of the industry products and solutions itself. Tyler explained that ServiceNow has spent the last year and a half building up industry assets to equip sales executives with and has reorganized much of the company along vertical industry lines. Tyler said:
You probably saw yesterday we announced that we're going to be a $15 billion dollar company by 2026 so, if you do the math, that's another $10 billion into our business. And by the way we think that's on the conservative side. Why do we think that's on the conservative side? And how are we going to get there. Well we think we're just scratching the surface of the potential of this platform, of this technology, of what ServiceNow can do
I think we were always meant to do more than route work through IT or route work through customer operations, route work through HR. We're supposed to route work throughout the enterprise, and when you do that, that work increasingly takes an industry flavour. So the work that gets done to provide a software defined network in a telecom, or the work to allow a customer to dispute a payment is very different.
The roles and responsibilities in that are different, the systems of record that they interact with are different, the services they're providing are different, the integrations to the systems of record have to be different. And so if you want to pull people out of their systems of record, which we do, in one system of engagement that unites the work that has to get done to provide a customer and employee a service, then the ServiceNow platform is tailor-built for doing this - and it takes an industry context to do it.
A vertical push from ServiceNow is interesting, as it's a distinct change in tone from what we've heard over previous years - where line of business has been the focus (HR, CSM, IT).
I think this is in part being driven by COVID-19, where the rapid change across industries has forced companies to think about what's specifically required from digital in their markets. This also ties into the Lightstep acquisition ServiceNow announced this week, which will see it expand into software that its customers are building themselves - as direct to consumer becomes more critical.
But verticals aren't easy. A lot of vendors shy away from them, as it requires a lot of internal knowledge and expertise to get the product and solution set right. ServiceNow will need to work with partners and customers closely to ensure that it is hitting the right notes for its engagement solutions, in order to meet the needs of specific verticals.
But there is opportunity there, as we have seen with other vendors that have maintained a narrow focus across industry lines. We will be pushing ServiceNow for customer interviews for these newly announced solutions as they begin to take hold, as that's where the real test lies.
For more diginomica stories from Knowledge 2021 visit our Knowledge 2021 event hub. Knowledge 2021 opened on May 11th and sessions are available to view on-demand until October 2021. This is the event registration link.