While Oracle’s takeover of TOA Technologies last week sparked speculation of further M&A activity in the field services space, some players in the sector are planning expansion into new areas in order to grow.
For example, ServiceNow is pushing out from its traditional enterprise IT installed base to move aggressively in the direction of the HR department.
CEO Frank Slootman explains that the basic principle of service management is transferable across organizational boundaries:
If you take it through its logical conclusion, everybody who works in the enterprise is both a requester of services and a provider of services. As a provider of services, that's really what your job is. If you're working in an organization, you are a provider of services in some form or fashion. So that means that if you are a provider of services, a service model is probably in order, depending on what your deal with. You work in procurement, you deal with suppliers, you work in facilities, you work in sales, you work in marketing, wherever it is, if you're a service provider, a service model is typically not far away.
You're also a requester of services. We all are because we need help from HR, we need help from IT, we need help from facilities. So we need to have the ability to invoke the help and the systems of these organizations, and that's also, of course, where we have the service models. So in the end, every single employee in the enterprise is both a requester and a provider of services. You're on one part of the service model as a requester or as a provider on the other side. It's not just white space. It sort of engulfs the entire world of work, if you will, and that goes on in an institution or in an enterprise.
- Private sector modern HR tech spend on the rise, but public sector locked in antiquity (diginomica.com)
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- Franken-HR, the unwanted monster stalking Workday's cloud (diginomica.com)
- Extending service management across the enterprise (diginomica.com)
HR departments are on the receiving end of massive volumes of service request via multiple channels, such as email, face-to-face and phone, says Slootman, but often while executing on the service model, they’re not really managing it. Hence, the need for a service model:
In human resources, the workloads tend to be very information-centric. People are looking for answers to specific questions, what's the policy on this and so on. The faster that people can get to that information without actually invoking the time of people, the less resources are needed to deal with those workloads.
When you put a service model in place, a number of things start to happen. You get immediate data on what it is that your organization is working on. You can break it down by geography and categories and also how well your organization is actually doing in terms of responding to the workload that is coming at the organization day in and day out and so on.
Once that data becomes apparent, first of all, we can manage our workforce a lot better. We can hold people accountable for their performance. But we can also start to get proactive around why is all this work coming over? Are we having a problem with our group plan health insurance? Are we having a problem with our 401(k) provider? What is it that's driving our work into the HR organization? Most people proactively start knocking off the problems that are driving the volume.
I've seen organizations that have cut their HR staffs in half. Once they get started, they get full visibility to the work that was flowing through the organization week in and week out. So going from not having a service model and not managing a service model to actually having one and then fully incrementally improving it, the benefits are dramatic. That's why a lot of organizations say this is a total no-brainer compared to being on voicemail and email and just chasing our tail all day long.
Slootman cites a number of examples of this in practice, such as a North American insurance fund:
Their lack of a centralized HR service model inundated the group with questions and requests by phone and email. Advocated by the IT team, ServiceNow was selected to implement HR case and knowledge management for their 5,000 employees.
Another case in point, a Global 2000 insurance company chose ServiceNow to provide their 25,000 users with a modern HR case management solution. This deployment was driven by a broader initiative to improve business process efficiency such as reducing the thousands of inbound calls to human resources. The IT team at this company advocated the use of ServiceNow and drove the first platform demonstration and assisted in the campaign from start to finish.
IT and HR in tandem
The involvement of the traditional ServiceNow IT customer base in both those examples as recommenders is significant. This is an upsell and cross-sell opportunity, for now:
We always seek to land an IT organization, occupy that space, then use the advocacy of the IT organization to start invading adjacent service domains. We typically don't like to sort of go off to HR on our own without first having established IT as a strong advocate in rolling that out.
Doing it this way avoids putting noses out of joint in in the IT department, comments Slootman:
That said, as the HR footprint gets bigger over time, it will be more likely that direct conversations will take place, he adds:
We sometimes violated that and it comes back to bite us because all of a sudden, IT is now at odds with us because we've established ourselves in another service organization and we're not in IT yet. So we try to avoid that.
We're learning a lot more about why HR organizations are interested. We learn how to talk about it. We learn the language of HR better. We're able to point to a lot more references and successes we've had.
The other thing I'd tell you is that HR case management is different from IT service management. It tends to be very much focused on knowledge. HR is a very information-centric service model where employees are looking for answers to questions, whereas IT tends to be very defect-oriented. Something's broken and people need help mitigating a situation.
So even though the concepts are similar, where it focuses and the type of techniques and approaches they use are actually quite different. And these are the types of things that we're learning, which is really, really helpful when we go into new accounts and we try to explain what this is going to do for them.
An interesting example of diversification of strategy to expand the potential revenue base. As the service management space hots up, having as many irons in the fire as possible will become a valuable asset to boast.