But while everyone who follows the space knows that Salesforce does CRM and Workday offers HCM and financials, most find it a lot harder to categorize ServiceNow. What exactly does it do that is forecast to capture revenue of almost $1.4 billion this year?
ServiceNow's origins are in IT service management, and its early successes were won against the likes of BMC, CA and HP. But while that's still a strong component of its business, these days it can also be found in use by customer service teams, HR, even procurement and finance. The platform seems to have something to offer across every enterprise function.
Filling the gaps
It turns out that ServiceNow is perfectly tuned to solve one of the oldest challenges in enterprise IT — it helps fill in the gaps between separate islands of automation. When the ServiceNow team took me through their offering on a recent visit to London, I was forcefully reminded of Staffware, which before its 2004 acquisition by Tibco was a rising vendor in the once fashionable field of business process management (BPM). The BPM vendors wanted to automate end-to-end processes across the enterprise, cutting through all the complexity of stovepiped systems.
Although ServiceNow's cloud-based technology is of a different order, its goal is similar. ServiceNow's forms, workflow and knowledge stores provide the glue that joins all the separate transactions and processes that criss-cross multiple systems and unautomated operations in the modern enterprise. Most are in dire need of a ton of that glue.
Where ServiceNow differs from that earlier generation of BPM vendors is in its user experience — for both developers and end users. IT teams find it's a flexible platform that makes it easy to rapidly automate pretty much any knowledge-based process for requesting and delivering an outcome. End users like the web-based and mobile user experience, delivered from the cloud.
Front-end service layer
Thus ServiceNow is frequently found acting as the front-end service layer for conventional enterprise systems. If your incumbent procurement, HR or customer service system is too clunky and cranky for the average user, ServiceNow provides an easy, reliable way to put an ad hoc request process online.
In this respect, Deutsche Post DHL is a typical customer. It has twenty separate service management applications running on ServiceNow, including HR case management. Having them all on the same platform means they share a single access management system, and it's easy to aggregate reporting across multiple applications.
This customer defines multi-tenancy as the ability to have several of its HR service centers each running independently on the same instance of ServiceNow. It's able to deliver the functionality to a new operating unit just by setting some configuration options, says Bernhard Schüber, head of its global ServiceNow competence center.
When a different shared service center decides to use the solution, they can configure the solution without programming. There's no release of new software, it's just data in some Excel sheets that we upload into the system and boom, there's a new solution for the new shared service center.
Best practice defined
One explanation for ServiceNow's ability to automate service management processes across the enterprise lies in the unique history of IT service management. Not content with simply automating their own operations, the IT profession decided it wanted to distil best practice as it did so. The resulting emergence of ITIL as a standardized framework for describing the ITSM lifecycle means that service management is highly systematized.
Having developed its platform to conform to ITIL, ServiceNow is able to stand on the shoulders of all the collective IT brainpower that's gone into defining best practice in service management. As CEO Frank Slootman says in the company's most recent earnings call:
We are going out with the service model as it has been defined and pioneered and matured on the IT side. It’s a holistic model because it doesn’t just care about the engagement model with the customer. It also cares about root cause analysis, which is the engineering vector, and it cares about operations.
Now that every function in every enterprise wants to digitalize its operations to improve productivity and free up resources, the hunt is on for admin processes to streamline. Long-winded, error-prone paper- and email-based processes are obvious candidates to replace with self-service online and mobile alternatives, as a prelude to systematizing the service and ultimately automating it fully.
Because ServiceNow impressed IT users in its early deployments as an IT service management tool, many started to adapt it for other service management purposes around the enterprise. That has brought credibility and referenceable customers as the platform expands into new functional areas.
If the old BPM vendors provide one comparison, another is that 1990s favorite of ad hoc workgroup development projects, Lotus Domino, which was used again and again for a variety of different purposes simply because IT departments were already familiar with it. ServiceNow unites that jack-of-all-trades flexibility with the necessary enterprise discipline to ensure compliance. It's a combination that seems set to take it far.