ServiceNow, Inc. (NOW) Earnings Call Transcript & Summary

Great. Thanks, Derek. So as Derek mentioned, ServiceNow has a rich hyperautomation portfolio and toolkit that enables you to accelerate automation across your entire organization. And a core part of that toolkit is Automation Engine. Automation Engine is an in-platform automation solution that empowers automation leaders and ServiceNow platform owners to quickly connect and automate any system, document or task with ServiceNow workflows to achieve seamless efficiency and measurable ROI as well. Within Automation Engine, there are 4 main capabilities from a low-code integration with Integration Hub that enables you to integrate ServiceNow workflows with modern applications using APIs; RPA Hub, which we'll dive into next, that enables you to automate [indiscernible] a UI-based task with unattended and attended RPA robots; Document Intelligence, which enables you to access intelligent document processing for digitizing off-line document data and connect those to ServiceNow workflows; and lastly, Automation Center is a new capability that we announced earlier this year, and it's a central vendor-agnostic hub for complete visibility of the entire hyperautomation landscape within ServiceNow as well as with your third-party vendors as well. And so today, we'll do a double-click into RPA Hub, which is part of Automation Engine, and it's a new capability that we announced earlier this year. So RPA Hub is a native capability on the ServiceNow platform that enables you to orchestrate digital robots as well as create, monitor and manage those robots for task automation in a dedicated RPA design studio, which allows you to build attended robots for automations triggered by employees as well as unattended robots for self-run automation processes. RPA Hub and ServiceNow comes with over 1,300 out-of-the-box components and connectors. These include essential automation tools such as computer vision, OCR or optical character recognition and rules engine, as well as prebuilt connectors accessible in RPA design studio to common systems such as Chrome and Internet Explorer, Windows, Excel and e-mail. And being natively built on the Now Platform, RPA Hub works seamlessly with ServiceNow tools such as Flow Designer, which allows you to incorporate RPA Hub directly into ServiceNow workflows that you're working on. So that's a quick overview of RPA Hub. Next, we'll talk briefly about Automation Center, which is a new capability that is a central repository to monitor all automations across your entire organization, not just within ServiceNow, but also in third-party RPA and automation vendors as well. With Automation Center, you can access real-time automation insights and continually optimize through intelligent automation discovery, ROI measurement and goal tracking and automation and health management at scale. In addition, Automation Center enables you to gain visibility into RPA bot executions, not just in RPA, but also in third-party vendors such as UiPath. And this allows you to view an executive summary and execution summary snapshot and status over time, incidents and upcoming changes to automations and insights powered by robots as CMDB CIs to be able to proactively prevent automation failures and maximize automation uptime. And as mentioned, Automation Center is a central and vendor-agnostic hub. So it integrates not only with ServiceNow RPA, but third-party RPA platforms, and to enable you to access execution data from these different vendors to provide a unified set of analytics. And so that's a quick overview of Automation Engine. And to learn more, we have some more resources that we'll share end of this webinar to help you learn more. But now to see how Automation Engine enables transformation of manual legacy processes, and our customers and partners, I'm really excited to hand off now to Dheeraj and Neha from the Orange Business Services team to share more about the organization, as well as best practices for prioritizing and identifying RPA opportunities and then dive into several key use cases with RPA Hub. Dheeraj, over to you.

Thanks, Jack. Welcome, all. So just introducing Orange Business Services to you. So we are a network-native global digital services company. And from networks to the cloud, we manage complex digital frameworks like IoT, artificial intelligence and security. And all of this is obviously aided by data and automation, which is at the heart of our core and our expertise to deliver such services. Now within Orange Business Services, we are working on 3 major initiatives, which is obviously an employee experience perspective, focusing on the Workplace Together initiatives. From a smart industries perspective, we are working on Orange experience kind of an initiative as well. And obviously, the customer experience side, which is augmented customer experience initiatives. Who we are in terms of how do we operate as we connect, protect and innovate for sustainable business growth? We create impactful data. We create some evolution platform, our software-based digital environment to manage cloud connectivity and data. So that's really our core expertise at the moment. Thank you. Moving on to the next slide, just showcasing how Orange Business Services has evolved in terms of numbers. If you would say what all we have implemented in terms of Orange Business Services on the RPA investment perspective? So we have close to around 1,000 business and technical expertise that we have created across Origin Business Services. And then, obviously, we have 100-plus RPA professionals trained on multiple use cases and complex use cases that are delivering value for our customers. We have 130 artificial intelligence specialists as well. Talking a little bit about our experience. We have close around 1,000 running bots and use cases that have been implemented for our customers across the globe. We have close around 10 years of investment in terms of expertise and platform development and innovation that we've invested in artificial intelligence. We have close to around 400-plus robots being delivered for our customers. In fact, as we speak, there would be a robot in production. So that's on the Orange Business Services expertise that we have been able to create globally across the globe. So moving on to the next slide, talking a little bit about our methodology, right? So how do we create this magic? How do we ensure that we deliver absolute value for our customers in terms of either a product delivery or outcome of the robotic process automation. Now the important thing that I want to keep in mind, and I want to reiterate at every stage that we discuss robotic process automation, is invest in your people, invest in the understanding of the process. And with this, the way we start is we understand the process improvement. We take on the reengineering work, followed by a detailed process discovery. Now the process discovery could be an automated process discovery or it could either be a manual process discovery. And all of this actually leads to 2 kind of approaches. One is acting like a human and second is thinking like a human. When I say acting like a human, it's more about identifying the manual repetitive tasks, which qualify for a perfect RPA deployment. And then, obviously, enhancing or modernizing your existing BPM, business process management, tools that could have been not being able to provide you with an absolute digital experience. So the idea is not to reinvent the wheel, not to replace a platform. Idea is to enhance the overall experience using robotic process automation to modernize your BPM tools or the workflows. Thinking like a human. So how do we ensure that we actually think like a human? Things like low-hanging fruits, which can be instantly migrated or transferred to a complete unattended robotic process automation bigger, things like intelligent document processing. Every organization processes documents, right? And you would probably find plethora of solutions available in the market around intelligent document processing. But the key over here is how do you actually impact that on a unit level. The key over here is how do you connect your IDP outcomes to your process and business outcomes. Obviously, customer interaction, which is chatbot. You would find a number of chatbots available in the market, right? But the key over here is how do you make that 1 experience with the customer more enriching and more engaging, right? So yes, we are investing a lot on the chatbot side of it as well. Moving on, in terms of our methodology, so we have key tollgate-based implementation life cycle that starts with discovering and strategizing your processes, your business areas; followed by developing and deploying your robots, your robotic products of automation; followed by training and managing and also managing the change management. Because please remember, this is all about human at the end of the day, right? It's not about robots. So we have to ensure that the process has changed. We need to train your staff. We need to manage that new process that's being brought in place because of robotic process automation and obviously manage the change management as per the change management guidelines. And then, obviously, moving on to operate and maintaining, which means that whatever has been implemented needs to be maintained for small upgrades, batches or small change requests coming in. And then creating a review and audit trail across the business line for all the robots, all the automation, all the hybrid automation or all the unattended automation that's been deployed across an organization. So that's how we actually manage it holistically for our organization. Moving on to the next slide. Here we talk about a little bit more on how do we actually classify. Okay, great. You know that you need to start off with automation journey, but how do you actually start? The first step is review overall processes that are in scope, okay? And when you're reviewing it, do not wear a technology hat stating that, "Okay, I have to automate." It's not necessarily that you have to automate. You have to understand that there's business transformation that can also take place before you automate a process. So the step 1 is reviewing your overall processes and scope, followed by assessment as per the transformation framework and identifying your key stakeholders who are going to be delivering that knowledge, that process overview of that knowledge to the people who will be designing your process design documents and solution design documents. Moving on to the third point, which is on the final qualification. Now you know what you need to automate. You've got some ideas. You know some processes which you need to automate. All you need to do is you need to categorize as per the processes on 3 buckets, which is on process improvement initiatives, which is, like I said, the business transformation side of it, followed by digitalization. If there's any digital lever that needs to be applied in terms of predictive analytics and in terms of mapping data journey or hyperautomation itself. And then, obviously, the intelligent automation towards the end. Once you categorize your scope of work into these 3 buckets, now comes the fourth step, which is prioritization. We need to prioritize because everything cannot be achieved, right? So you need to pick up the high-impact areas, and we're going to talk about how the scoring mechanism works in the coming slides. So the prioritization happens over here in terms of the business case savings and cost optimization initiatives of the organization; followed by customer satisfaction, so identify all those points where you have a direct customer interaction; focus on the error reduction, which is, again, on the quality of the output; understand the process synergies. Now this is a very important point, right? We might be able to automate a process given in the value chain, but you're going to be making sure that you don't create backlogs for the upstream and the downstream processes, which means that you've got to look at a business value holistically as 1 single value chain as opposed to looking at the process in isolation. And obviously, governance and control comes in at the top of everything, making sure that you have absolute governance and absolute control over whatever implementation that you've done within the process, right? And finally, your implementation road map. When does it happen? How does it happen? What are the resources that you need to deploy? What are the sign-offs that you're going to use? So all of this forms a part of the methodology that we adopt to implementing a robotic process automation project. Moving on, talking a little bit more on the OBS methodology scaling perspective. So how do we scope out our processes, how do we prioritize our processes, right? Now there has to be a method in madness, right? There has to be a logic. So the way we define our priorities and the way we define our categories in terms of how we classify the project, there's obviously things like how many application accesses are defined in a given process? What's the quality of the input, right? What are the process steps involved? How many of reruns that you actually perform based just on the processes? And how much of business rooms and validations are being involved in each of these activities? Now it's very important to understand all of these key activities because these activities will actually give you your process scoring, which will help you determine how critical a process is. Now you would be surprised all of these features are readily available in the new ServiceNow platform as well, so you can actually make use of it, or you can play around with that as well. So coming back to this matrix. So this matrix actually defines how you categorize your processes, your transactions based just on the complexity that you're trying to deliver for your organization or the complexity that you're trying to address as a part of your organization. Moving on to the next slide, a little bit more -- I don't want to drag it until the end, but yes, a quick assessment methodology, something that's low-hanging fruit. But again, with a low impact and a high complexity to implement with a low complexity to implement needs to be taken in first because that's going to be your moment of truth across your organization, right? Some of us do face these challenges that organizations do not agree to the concept of robotic process automation. So the yellow block, which talks about the low-hanging fruit is an absolute moment of truth that you can present to your organization and your leadership to ensure that you get enough confidence in the organization to start with your hyperautomation journey, right? And then, obviously, moving on to the high-value metrics, which talks about the opportunities which led to medium to high benefit and -- but they are also complex to deliver. Just taking an example of a typical banking process, right? You're processing your banking applications. Processing the banking application would be a low-hanging fruit because all you're talking about is a simple data transfer. But when you're talking about the credit assessment or the risk assessment or the mortgage assessment of those applications for a mortgage process, those would typically qualify for a long-term or a high-value use cases because that involves enough decision-making, enough assessment that needs to be done. So you need to identify what are those processes which qualify into these metrics. Now with this, I hand it over to my colleague, Neha, who is going to explain you about the use cases that [indiscernible]. Thank you.

Thank you, Dheeraj. If you see, Dheeraj walked us through some assessment methodology and the quadrants. So I would like to present some of the use cases, which are coming out of those methodology and coming into quick wins of those quadrants. So here, I present one of the IT use case, where the challenge was to automate the change management process. We all are aware that how the changes are managed. So sometimes, you have change agents who have to handle a lot of back-end manual applications, large volume tasks to complete the change management process. So in this case, what we used, we used unattended bot application for reading the e-mails, which were coming to the change agents in the form of change tasks. So that is automatically extracting, validating the change task, going to multiple applications, which are approximately 6 to 7 applications part of the process; integrating with all the back-end system and bringing back all the business logic [indiscernible] back on the change task automatically so that the first level of change assessment can be done completely by the bot and later assigned to a human change manager to look into the manual update. So if you say -- what we actually say, so it was approximately 1,000 e-mails, which were handled by bot on a day-to-day basis. Each of the e-mails were associated with the Ctasks, and then those Ctasks were associated with multiple devices. So in a way, there were approximately 500 device details, which the bot was extracting, processing, using intelligent automation. And what we gain, approximately, we could reduce over 85% of the processing time and keeping only few tickets, which are actually going to our change agent, who manage the activities. So let's see the bot in action. [Presentation]

So you could see the power bot that handled the change task coming, do it away in the e-mail queue, managing, extracting details. And you could notice how fast the bot was managing. Again, if you compare that with the speed of manual handling, you can very well see that it is different. Our journey with automating IT processes doesn't stop there. So if you see, there is a huge list of IT use cases we are exploring because automation is a journey. We are embedding more and more of our IT processes on this automation program. And here, you would see the use cases ranging from incident management, automatically managing the user account creation activity by the bot handling problem and change management. You just saw one of the examples of the change management. Managing some of the provisioning, IT provisioning assets and infrastructure support activities, bot managing the complex reporting and dashboarding requirement, fetching information from a lot of our [ corporate ] tools and presenting it with the IT data. So bot managing all that reporting, dashboarding, monitoring, monitoring of the legacy applications. Sometimes, our IT landscape does include the legacy application. How do you monitor those? So the bots are used to monitor those applications, the legacy applications so that the user experience is improved. As that bot handling these self-service requests coming their way so that there is very less self-service requests going to the actual services, test automation and data management. So data management handling [ exposure ], processing across multiple [indiscernible] is a quite common use case on the IT side. But the power of automation doesn't limit itself to the IT automation. We have been handing the implementation on the business processes side. So you will see one of the use case on quote automation, part of our finance and supply chain processes, where the bot supports agent to create -- automatically create the first level of quoting information. And it is only going to an agent for the manual processing only in this step 2 onwards. So you will see that how the bot is triggered by the agent and then bot extracting all the quote-related information received from the customer information, putting it together in a format -- a structured format so that it can be keyed into our quoting tools using UI interfaces, translating, loading all those customer-related order details. And finally, once the first level of quote creation is done, it's assigned to a human agent to do the pricing validation. Some benefits to call out our automating this quoting process. Now what happens, approximately 800 quotes today managed by the bot on a per week time. So we have to manage a quote for a lot of our diverse services and product catalog. And every product catalog would have its own combination of fields validation. So in this process, we could develop a business logic of handling 50-plus fields, which are orchestrated in the bot so that the bot can seamlessly and without much efforts could populate all these fields required for the quote creation. And what ultimately the aim is to reduce our manual efforts on the simple quoting task, and we could reduce approximately 90% the manual efforts, which were done initially by the human agent. Let's see -- quickly see this demo in place. Agent uses an attended automation to create the quote. [Presentation]

So like I said, your automation use cases are across your organization. So we presented some of the use cases. But if you say the potential of automating your back office processes are everywhere, you see HR, supply chain, IT services, procure-to-pay process, order-to-cash and record-to-report. A lot of these are actually adding in your automation journey. And we have saved approximately -- like saving approximately 70% of the manual efforts on these use cases. And this opportunity with ServiceNow Automation Engine is going in -- going with [indiscernible] use cases. Of course, these use cases, when we put together in our assessment on methodology, it pays some priority, depending upon the volumes and all, but the area of expansion is immense. Moving on. One of the key topic of any RPA management is -- in an organization is to have the right operating model of CoE. We had this -- our own story captured there. So we -- as part of our CoE initiation, we have to structure our CoE skill base based upon business on tech automation. And that's where we have to do training and the identification of the right program of skill-based CoEs, and that's where ServiceNow help us in translating all those training needs and transferring and incorporating the new skills, which are required for our CoE setups. And we could define the CoEs in a way that these CoEs are, today, supporting multiple automation platform scenarios, which is going to be the case with lot of organization now. Because hyperautomation require you to integrate a lot of the technology to give the power or for a large automation program. So one of the key takeaways to -- was to manage all these automation platform scenarios together part of our CoE structure. It was important to put together the operating model in the form of centralized, divisional and federated series. Because once you have every BU or every unit sometimes have their own CoE. And the challenge comes as an organization, how do an organization see that complete view in a single frame? And that's where we saw the power of ServiceNow Automation Center and streamlining the processes of managing the right operating model for CoEs that helps to structure the right resource identification, the reporting, how to estimate the resources that are still required. Because in the automation center, what we are integrating is other technologies and other technical resources also. So once you select a use case, you can see and select that -- which technology to use, which resource is available. So this was coming together for us on an Automation Center. And that's where we see our CoE model getting simplified with Automation Center, putting us the right cost model, the operating cost model and the charging -- chargeability. So a lot of things simplified with the Automation Center on our journey to automation with ServiceNow. Moving on, speaking a little bit of our partnership with ServiceNow. So I would call it is -- as a very long-term strategic partnership with ServiceNow, where we have been working -- ServiceNow has been our partner on MSI and our product offering since 2011. Yes, we also started our journey on ITSM side of the business. And then we -- part of the innovation objectives, we were working with the Intellibot. And that puts us in a little bit of a win-win situation that we could come together with ServiceNow, part of the design partnership to build together the ServiceNow Automation Engine capabilities consultative -- in a consultative approach. What it turns out to be for us that we are today the Lighthouse customer for a lot of ServiceNow Automation Engine capabilities. And today, we are expanding to support these services to the customers. And today, thanks to a lot of aggressive program of -- skill-building programs and our own automation journey, we have business and technology consulting skills established that helps us to identify the right use cases, put together the right ROI models and then getting digital integration expertise to implement the technology. So our journey for embedded automation is quite key with ServiceNow on this. As we talk of the ROI, so this is what we take as our automation engagement model. We start with uncovering the pain areas, the challenges on the processes, and then we conceptualize the use cases attached to those areas and the challenges. Once the use cases are established, we determine the related value levers, comparing the cost and revenue that are -- how much it takes to implement this. How are we going to save? How do we do more revenues? So all these objectives are put together on that use case, and we provide a simple automation experience to share with the sponsors. So it is to start small and grow big. So that's the approach that we try to make it simple for the sponsors. We started the use case and growing gradually. And then we [ appended ] it into an ROI, TCO and NPV calculation based on all the information for a larger transformation program, setting together the implementation strategy and experience -- and a simplified experience for all the automation initiatives. So this framework has worked with us, and I'm sure that a lot of our listeners can benefit from this engagement model. Moving on, maybe, Dheeraj, do you want to cover quickly the key takeaways?

I think that session was really informative. So I know we all have gone through what hyperautomation journey looks like, right? So when you [ walk away from ] this webinar, 3 things that we need to keep in mind. The first things first, like I said, again, is keep business process at the center. What we need to do is develop complete understanding of business requirements and landscape to identify automation levers. Do not come with the preconceived notion that automation will exist. Sometimes it does, sometimes it doesn't. What we need to keep in mind is we need to develop an understanding of the business completely to ensure what could be transformed or what could be automated, right? So again, that's point #1, which is keeping the business process at the center. Then comes the technology, which is applying tech, right? So implement the global digital workforce to improve your employee and customer experience by using data at scale. Because everything is all about data in terms of how effectively can you predict your outcomes or effectively you can predict your day-to-day activities. You can prevent certain events happening, right? So all of this forms a part of the data journey. And obviously, keeping your strategic plan powered by your tech strategy, which means what needs to be automated will be automated, right? What needs to be integrated will be integrated. What needs to be modernized will be modernized. So that's point #2. Third is delivering value. If you're not able to calculate a positive ROI for all your cost of automation, everything goes down the drain, right? So it might be a small initiative applying an open-source automation just to select a POC and stuff like that, but everything should be directed at calculating the unit ROI models and the unit profitability. And that's exactly the model for deploying a consultative approach to co-build your own Center of Excellence, right? So these are the 3 takeaways that I believe that we all should do whenever we try to embark on the automation journey. With this, on a thank you note, I do want to say 3 points before I hand it over to Jack and Derek. The next steps that you need to do when you walk away from this webinar is obviously look to centralize your automation planning, right? Don't try to do things in silo. Get everybody's support in the organization, whether it's your CIO, CTO or your COOs as well. So centralize your automation planning, ensure that there is enough symbiotic relationship that exists between your automation and business, which means that your business should -- your automation should complement your business. You're not trying to create some uncomfortable or challenging times for your manual workforce as well. So that logic needs to exist. Integrate to accelerate. Not everything should be replaced. Not everything should be changed. So there does exist a strong integration possibilities using the hyperautomation layer, which can help you intelligently integrate to accelerate your business. So with this, I hand it over back to Derek and Jack. Thank you.

All right. Thanks, Dheeraj and Neha. That was super informative, and we really appreciate you guys joining us today and sharing more about your RPA journey with ServiceNow. So we hope that it was helpful for our audience as well. So kind of wrapping up here. So just a few next steps in terms of resources that you can check out on the ServiceNow side. So as mentioned earlier, Automation Engine is a core part of our ServiceNow hyperautomation portfolio. And if you like to learn more about it, you can feel free to go to our website at servicenow.com to learn more about some of the capabilities we talked about today with RPA Hub, Automation Center and as well as some of our low-code integration capabilities. So feel free to check out more details on our website there. Next, we are including some resources. If you want to learn more and dive deeper into some of the use cases that Orange Business Services shared today, we have some resources that we included in a dialogue box that you can access right in the platform here. So feel free to read that story and really see how RPA helped them achieve significant cost and time savings for their end customers. And lastly, we have the Hyperautomation Masterclass Series that folks on our teams on the ServiceNow side have created that really dive deeper into some of the automation tools that we cover, including Automation Engine, RPA Hub, as well as some of our AI automation tools such as Virtual Agent and predictive analytics and so forth. And so feel free to check that out as well to, again, a deeper dive on some of the product capabilities within the ServiceNow hyperautomation portfolio. So with that, thank you again for joining us. We really appreciate your time, and we hope it was helpful and informative as you learn more about how you can apply RPA to some of your business processes to really transform your organization. And just a few slides to wrap up here. So on-demand webinars. You can check out all this webinar on-demand as well as other topics as well at the link provided, and you can watch all the different types of webinars that you like to check out on the ServiceNow site on-demand. So feel free to go to that link to access those resources. And Knowledge. So Knowledge is back in Vegas for 2023. And so if you like to be informed on all the latest updates, feel free to click that link to get updates and to be added to the e-mail list, where we'll be sending out some information about the event as well as how to register or be a part of Knowledge. So feel free to click that link to get more updates as we have them. All right. Thank you, everybody.