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

All right. Well, let's get started indeed. Today's webinar is Play, Manage and Execute Service Delivery with ServiceNow. And today, we're going to talk about some better-together stories, combining different technologies, processes, workflows, engaging the different teams and systems to next-level your service operations. And in doing so, we are engaging some of the folks, not just myself, my name is Rob Schaefer. Rob, James and Romit, we're all product management folks. We've all been in the industry for years. I come from a field service background. Next month, I'll celebrate 30 years in the field service industry. I have that photo up because, it's probably 12 or 13 years old, I look much better in that photo than what you see in the video. So I'm really glad to have James and Romit here. Together, we're going to tell some stories, answer some questions, show some product demonstration. And we really value your feedback. We really value your questions. So please feel free to submit your questions. It tells us a couple of things. One, are you out there, right? Two, did we get something wrong? Like, is our message coming across as confusing that we need to clarify, right? If you're having those questions, there are probably other people out there. And three, are there other topics that you were expecting us to address that we did not? So as James and Romit begin their stories as well, I'll ask them to introduce themselves. So for now, today's agenda, we've done a little bit of welcome. If I didn't say it, welcome. We are going to talk about service delivery, in particular, my area of domain expertise, which is field service; and James' area of domain expertise, in project management, and how they work together. James will showcase some flows and stories as well as a demonstration. And then after that, we're going to talk about bringing order management, particularly for telecommunications into this mix as well. Now there are other areas in the ServiceNow platform that can be leveraged to support and complement these stories. It'd probably be a 4- or 5-hour webinar if that was the case, so we're just focusing on these areas. But again, that's the agenda, after which we will start reviewing the questions that have come in, and we'll start answering those for you. Again, questions are always a great thing between the 3 of us. I certainly hope that we would be able to answer those for you. All right. So there's been a lot going on. I suspect you've all been paying attention in the last few years of what's been going on in the world. And we have to find ways. Years ago, the mantra was do more with less. Well, that was 15 years ago. Now we really, really, really need to do more with less and, at the same time, deliver that faster value to the customers. But let's take a step back and let's think about who that customer or those customers are because they come in many forms, with different names and titles. Employees might be customers. Shareholders, managers might be customers. You might have constituents. You might have more traditional customers, right, the people who buy your services or products. So you may have subscribers or owners. And to deliver a closed-loop service, we need access to the people, the processes and the technologies, but not at the delays that come from this combination of those resources that I just mentioned; certainly, not the finger pointing that comes with it as well. So how do we alleviate the stress? How do we reduce the administrative burden? How do we speed time? How do we deliver faster value to those customers? So where traditional service focuses on how those customers engage, right, we have to think about each of the departments that might be involved in processes, right? They don't necessarily know the big picture. They just know here are the tasks I need to do. They all have their own agendas. And they're often not all aligned to the same overarching goals, right? So when those departments aren't aligned to those goals, those processes and systems, then that's where you start seeing those delays. And usually, at the expense of that customer again, whether it's another employee or a manager or a shareholder or a product owner or a subscriber or customer, whatever that part of your customer is defined as. And then think of processes that are managed or the intake is by e-mail or by accessing spreadsheet, paper forms and filing systems, talk about administrative burden, right? That's really a pain point. So in a perfect world, there would be some type of request from some type of customer and we'd be able to look it up and answer it. But oftentimes, we can't. So we toss things over the cubicle wall. And sometimes it falls into a black hole and sometimes it goes to one or more of these parties. And think of all those arrows as both delays and fingers pointing at each other. Here, we can see that 64% of employees believe the unnecessary effort in their everyday job prevents them from creating a higher quality customer experience, right? They recognize the delays and the impact and the pain to that customer. But they often feel that they are helpless in that process because they're tied to those systems, whether they're paper-based or technology. They're tied to antiquated processes. So we've got a poll. And thinking of what I just talked about, where does your organization have challenges with handoffs and the communication between field service and other parts of the company? I'd like you to start by picking just your top 3. So where do those disconnects occur? Where are you seeing those challenges? So I'm going to just chat for a couple of minutes, for a minute or 2, while you select your top 3. Please review them. I think in prior organizations or some of the customers I've dealt with when those customers would do acquisitions, right, now they're engaging with systems that they've never used in the past or in some cases, their service contracts were in paper files that hadn't been normalized into some technology system or package, right? So there are a lot of issues with the handoffs or the finding of the data that they're looking for. So I'm going to give you a few more seconds, and then we'll start looking. And we can see that certainly customer service, operations and IT lead the pack here and finance and third-party systems, of course, as well. Yes, I certainly have seen those in all. And there are different reasons for it. Sometimes IT is driving the selection process. Other times, departments drive the IT selection process. So now IT is on the hook for embracing and adopting and implementing these different technologies that maybe they didn't have access to before or didn't know about before. So there are a lot of different reasons for the issues with the handoffs, the disconnects between these organizations. So pretty interesting feedback from you all. Let's move forward. So we talked about the problem, we talked about the finger pointing. And if you think about the different ways that data comes in and the processes and the disalignment between those processes and technologies, we then have to think about how can we improve on that communication, on that collaboration, on the action that's desired in support of those customers. And with ServiceNow being a system of action, a workflow-based technology, we remove the barriers, whether they're based on processes or technologies and with our workflow-driven approach then, we're focusing on automating, streamlining, providing the data for all parties to make quick and informed intelligent decisions that work in the best interest of the customer, that speed, that time to service execution and delivery. A mantra I just keep repeating is reducing the administrative burden on the worker. And by doing so, by reducing that administrative burden, by automating those things that can be automated, we can deliver results like a 25% improvement in first contact resolution, 33% productivity improvement in daily work orders and 75% decrease in technician administrative time. So think of a scenario from a technician's perspective where some of the work was automated and some of it was paper forms or using multiple systems to enter data, whether it's time sheets or lockout/tag-out procedures or safety inspections or when they're off-line and so they don't have access to the system, now they've got to fill out these paper forms. So instead of having to spend extra time at the end of the day or, God forbid, the end of the week, right, we can reduce the administrative effort so that they're not spending that extra time and that they're focusing on the tasks at hand and able to get more work done in any given day. So for today, we're going to start by talking about the interplay between field service management, my area and James' area of project management. And when we think about those areas, aligning project management and execution with field service to deliver true value to your organization and your customers while reducing confusion, improving morale, again, whether it's your project folks, your field service folks, your customers' contractors. So let's think about what these solutions have in common that make them such a favorable match. Well, there are data points in common, certainly time lines, schedules, inventory, assets, financials, scheduling of resources like technicians, crews and contractors, plus you can even make this stronger if you incorporate order management and procurement service management capabilities. So by combining those, right, we may have a project, an overarching project that may span weeks or months or, in the case of something like the Big Dig, years, right, how can we provide visibility and how can we generate work orders from a project that need to be supported, scheduled, executed, forecasted by the field service team, buy your dispatchers, assigned to your technicians, assigned to crews, recognizing where we need certain parts or resources with skills or equipment to support that work. So by doing so, we have a holistic view of these projects across departments, and we can generate those work orders and schedule and manage inventory, respond to and document risks and delays and then gain control over those third-party contractor resources that will help support some of these projects and then overall improve cost management. So that leads us to a quick snapshot of field service management, supporting things like installation, break/fix, preventive maintenance, inspection of equipment and even sites. And this is used by hundreds of customers, organizations globally to support both servicing their own internal sites and equipment as well as external customer-facing equipment and infrastructure and with a focus on getting the right person on time with the right skills and parts and availability on site, again, making sure that work gets done the first time. And while I'm focused on field service management, there's that interplay with project management. So this project portfolio management is part of our strategic portfolio management offering, which links strategy to delivery. You can think of it as having 3 levels: strategy, alignment and delivery. The strategy layer captures goals and targets, defines some road map to meet those goals. And the alignment layer captures the idea and requests from wherever they come from and optimizing the overall plan of work to deliver on the strategic road map, in line with our known constraints of people, time and money. And then there's the delivery layer. And the delivery layer, we're providing complete visibility of all work, enabling teams to that work using whatever work method and, at all times, capturing the benefits and outcomes being delivered. What's unique with ServiceNow is that we're doing all of this, the field service, the project management, on a single platform, a single cloud, right? And that's one architecture, one data model, encompassing key areas to support your service delivery from project management to field service and much, much more. So I'm going to ask James Ramsay to say hi, to walk you through this approach and even show you a demonstration of this process in action. The floor is yours, James, or at least the screen.

Thank you very much, Rob. Good afternoon, good morning, everybody. My name is James Ramsay. I'm part of the strategic portfolio management, product management team. For the last 7 years or so, I've been working with ServiceNow customers in terms of how they've been adopting strategic portfolio management. And for the 2 decades before that, I've been working on project portfolio management and product life cycle initiatives with major organizations across the globe. Now what we're going to do in my section, we're going to build on what Rob so expertly described of how uniquely, on one platform, we can join the worlds of field service and strategic portfolio management together to see how we can enable organizations to become better able to manage and deliver on that service delivery. Now in my world, strategic portfolio management, it's all about how we connect the strategy of the organization with their delivery. And that's the delivery of any type of change of innovation, whether that'd be products, services, programs of work, field work, that they're actually delivering to their customers. And as Rob explained, those customers could be internal stakeholders, internal employees. It could be external organizations that we're delivering products and services to, things that we're deploying, things that we're installing. And the sheer fact that we're doing this all in one platform enable us uniquely to provide all of the different stakeholders with inside that process with overall visibility, better awareness of what's going on with inside their role so they can make better decisions, so they can deliver better value to their customers. So through this end-to-end process, we're going to give you a snapshot of a demonstration through different areas of the process. And in each area, we're going to take the lens of different personas. So we're going to start out from an executive, from a business leader. So we take an example organization, Eco Industries. We're all about how can we deliver environmental solutions to our customers. So if we start from that executive layer, what we're going to be looking to do is to understand what Eco Industries wants to do as an organization, understand where that organization is going, capturing their goals, their targets or some organizations refer to them as their OKRs, their objectives and key results. Because by capturing those, that gives us the ability to measure our performance in terms of value were being successfully driven to our customers. Now once we capture those goals and targets, we're typically going to translate those into strategic initiatives. And these initiatives typically form part of an organization strategic road map and other vehicles by which we're going to deliver that value and be able to deliver on the strategy of the organization. Those initiatives themselves then feed into our delivery plans. So as we look to optimize our delivery road map in terms of how we drive work and deliver work through the organization and deliver products and service to our customers, we're going to iterate on our delivery plans to optimize the work we're delivering, making sure we're delivering the high-priority, high-value stuff as quickly as possible and doing that in the lens of our constraints, of people, time and money. So let's start out by looking at what that looks like from an executive with Inside ServiceNow. [Presentation]

So importantly, we're able to link strategy with delivery, very important when we're looking at maximizing value. We're going to shift gears now and look at how do we get things into the process. So if you think about it, demand requests for activity can come from many sources. We could be collecting ideas, orders, request directly from the customer. We could be pulling in requests from other channels with inside the organization, maybe through sales, maybe through procurement. But what we're trying to achieve with Inside ServiceNow is to give you that single central pipeline of all the requests that are coming in to give you full visibility of that. So then you can objectively prioritize the high priority work that you need to deliver in order to maximize value to the customer. So what we're going to look at now is how we engage and collaborate with the customer and showcase how a customer can log a request to feed that into the overall process. And then from that, we'll take that request, and we'll convert that into a project, which we will then execute on. [Presentation]

So James, I'm really excited about what I saw because every time, I learn something new from you. So thank you. This was a lot of the project side of it, but I can really see how you're setting things up to lead into field service. So please continue. I'm excited to see more, even though I know where this is going.

No, that's great, Rob. So I think what we saw there was that ease of collaboration between an organization, their customer and the ability for that seamless, frictionless conversation about where are things and also the ability to request more. Now before we drill in to the world of the project manager and how we do that connection with field service, I think it's an important thing to identify with Inside ServiceNow, with strategic portfolio management, is essentially giving you one place where we can capture all work irrespective of what the work is, what work method is being used to deliver it, who the teams are who are delivering that work. So we have that overall visibility from a value perspective. And the other thing to point out is, as we converted that request into that customer project, what we've also utilized is a great capability around best practice templates. The way for you as an organization to capture exactly how you want specific pieces of work to be delivered and then to be able to do that on a repeatable basis, that not only applies at the long-planned work, i.e., projects, it also applies at the work order level. So we will see that ability to build out those projects based on those best practice templates. So let's now go and have a look at the world of a project manager. [Presentation]

So we've seen how we quickly and easily set up that structure of the projects or the project manager, all the hard work's already being done and focusing on how we can drive the project forward. In the last part of the demonstration, we're going to focus on the uniqueness from a ServiceNow perspective, and the ability for us to connect the long-planned work, those project tasks, with the actual activities on the ground that the field service teams are able to do. And by doing that, what we're able to do is actually connect project task with inside that schedule with those work orders that those field service teams are going to deliver. And as we'll see, those work orders have been automatically created as part of that templating process, again, to save the project manager and also the field service team's time. So again, through that automation, streamlining communication, let's go and take a look. [Presentation]

So we have a poll coming up. These are great transition sessions as well or sections. The poll question is, where does your organization have the greatest challenges in the project management process? And I want you to just focus on the top 2. We've got the strategy, the plan, the build, the operate, service and value. So while you're reviewing that and answering that, James, thank you, that really made a lot of sense. I loved how you tied in field service towards the end. Few things I want to say about field service just because of the format of this presentation, we just didn't have enough time to get into it, there's also a lot that we do around parts inventory management, parts consumption, documenting, inspections, questionnaires, checklists, all that fun stuff as well, whether you're connected or off-line, and that's really powerful when we talk about reducing the administrative burden on those workers. So let's review our results of the poll. So we can see that strategy, value and plan are probably the highest rated. I don't know, James, if you have any quick comments on that. Is that what you were expecting to see? Are those common?

Yes. I mean I'm pleasantly surprised in terms of what's come out there because it's sort of back to what we've actually been showing there in terms of that need to connect our strategy and plan and overall mapping of value to the actual delivery and service element. So yes, it's a very interesting feedback on that, which is in line with what we've been showing and how by bringing together the world of strategic portfolio management with the world of the field engineers through field service and also visibility and collaboration with the customer, through customer service, how we bring all of that together.

Great. Well, then it's a happy day on my end as well. All right. Romit, I'm going to ask you to talk about your experiences, what you've seen and what you've been doing from order management and telecom service management, tying into field service as well. Romit?

Thank you, Rob. Hi, everybody. My name is Romit Ghose, and I'm Director of Product in our industry products organization with specific emphasis on the telecom, media and technology industries. Today, I really want to walk you through an experience of service delivery in the telecom industry. And we picked the telecom industry to share this with you specifically because of the complexities involved in the telecom industry. And when we talk about service delivery in the telecom industry, you will notice that a lot of the complexities exist in a lot of other industries as well. But telecom often, as we've noticed in conversation with our customers, ends up being the super set when it comes to complex processes and the number of steps involved, the time it takes to really deliver service within telecom. So what really makes it that hard in telecom? And I do know that a lot of you folks across various industries will resonate with this. So in telecom, processes as far as service delivery is concerned tend to be super labor-intensive. Many, many stakeholders tend to be involved in laying out parts of the network, which eventually deliver the service to the end customer. There tend to be many, many systems involved, which have been added over the years iteratively as new lines of business, as new technologies have rolled out. And interacting with all of those systems across the board requires a ton of swivel-chairing and that completely breaks the service delivery experience and takes the efficiency out of it. Another key aspect, which is not unique to telecom but also to several other industries is having access to equipments and resources as you're processing that order through its journey to delivery. So disconnected systems when it comes to either parts or inventory or assets as you're really laying out that part of the network for service delivery creates even further means of efficiency. So going into understanding a little bit more about where you come from, we want to understand that when it comes to service delivery or delivering your final products to your customers, what is the biggest challenge that you think you'll encounter? And I'd love for you to take a quick poll on this. Is it about having the right information to process an order? Or is it about integrating an order tasks with the work orders for field service technicians to dispatch? Or is it about providing field technicians with the complete customer and task information? I can see responses are starting to come in. And it can also be a combination of all of these challenges that makes service delivery or product delivery that complex in your organization whenever a new customer order comes in. And this could also apply to change orders. So feel free to think beyond and outside of the box and respond to this poll. Just when you see change orders or requests coming in, how do you see that playing out? What is the biggest challenge that you encounter? I'll give it another 5 seconds for responses to come in, and then we'll go into seeing how we see this process come together and how we bring all the goodness that Rob spoke to and James spoke to within the world of service delivery. All right. So this is no surprise. Of course, all of these challenges pose a problem. But the biggest problem often ends up being having the right information to process an order. And we will talk about how we ensure that the right information cascades through every single stakeholder who is involved in delivering that service to the customer. So let's get into a customer journey within telecom. Within telecom, the capturing of an order is the simpler, shorter piece. It ends up being the step which happens either on a portal or on a website or in an agent-assisted fashion. It also could happen between a system-to-system interaction from the customer side to the telecom service provider side. But once the order has been captured is where the complexity starts to unravel. The get part of getting that service to the customer is where the complexity lies. The first step in the process ends up being the decomposition process where the incoming order is decomposed or deconstructed into the parts and pieces and services that need to be delivered to deliver that entire service. It also gets decomposed into a ton of order tasks. Now a lot of these order tasks need to be either executed sequentially, some in parallel, some with tremendous amount of dependency and interlinkages between each other. And in doing so, multiple different systems often need to be invoked, whether it's a part system or an inventory system or an asset system or even a service qualification system, to determine whether service delivery can even happen at the location where the customer is requesting it. So the next step comes in, it's the step of orchestration. Orchestrating all these tasks and really bringing together all the stakeholders involved in this journey is the process of orchestration. And the next step is, of course, assignment. Assignment ensures that the right folks get assigned, whether it's a field service technician who needs to be dispatched or an internal order processing or fulfillment agent who's working behind the desk, to make and coordinate this to happen. All the assignments there are done with that step. And of course, the step of installation is extremely key in ensuring that the right install has happened either at the customer location or in the network that leads up to the site or the location where the customer requires that service to be delivered. And the final step being, of course, communicate. And as you can imagine, all of this makes for an amazing use case for our project plan and project execution to take shape. So as we go deeper into this process, you will see that as the customer, in this case, a B2B customer, Julie, orders, let's say, an SD-WAN service for multiple sites, how that unfolds. So let's take a quick look at that, of when that order is captured, where that goes and what happens. So Julie selects exactly the service that she'd like to see from the service catalog being implemented at her sites. Mike, who's an order fulfillment manager, receives that order and sends out an auto-generated response to the customer indicating that the order has been received. And the system then automatically decomposes or deconstructs this order into multiple orders and tasks that eventually need to be accomplished in order to deliver that service. The system also, based on the design time workflow that is working behind the scenes, automatically routes each order to appropriate teams and departments to fulfill. That's where the orchestration piece comes in, the project plan comes in. This is where multiple teams take up each of their individual tasks in the sequence in which they need to be performed. And this is a great time to let the customer know that the SD-WAN services are now ordered for all the locations that have been requested for. Verifications begin, all sorts of data validations begin, and all of these could be as automated or as manual as your use case may demand. From this point on, you could also require to look into systems, which are entirely disconnected from your process. So order tasks could actually invoke API end points as well to perform checks and validations that may be required before it gets assigned to a field service technician, as an example. There could be parts that might require to be procured. So right there, an order task becomes a conduit to invoke procurement services as well. And all of this is orchestrated on the project plan as project tasks with workflows behind the scene. This is where, at the assign step, the scheduling dispatcher Lisa essentially assigns the work order to field service technicians for installation. And several of the field service capabilities over here come to life, whether it's a skills match or availability match, et cetera. At this step, customers can be informed that their services are scheduled to be installed and the customer at this step asks, "Okay, that's great to know that my services are scheduled to be installed. But when will the field technician arrive? When do I make room in my calendar for him or her to arrive?" And that's where the field service technician notifies and provides the actual details and starts that interaction with the customer in order to actually go down to the customers' location and perform the install, right? Location statuses are made available by Teddy, the field technician, to the customer as he makes his way to the site. Once the install is done, whether it was an equipment that needed to be provisioned or activated or whatever the task that Teddy was supposed to perform, a lot of times, in case of SD-WAN services, it's a customer premise equipment that needs to be provisioned and activated. So once that is completed, control goes back to Mike, the order fulfillment manager, with a cascade of status updates that just automatically make their way back to Mike in order to provide ongoing visibility and communication to the customer. And that's where Mike goes ahead and informs a customer that the SD-WAN services have been installed. Now while we have oversimplified the process on this slide for the sake of this discussion, a lot of you are aware of how complex this can get and how project plans and project tasks can completely manage and change the approach towards delivering services. So clearly, the benefits are manyfold. You're able to launch services and realize revenue faster, you're able to mitigate order delays because you're managing it all on a single plan. And you're able to send the right people and equipment for the installation because all data is being cascaded over from the incoming order right through till the work that was done. And that's how you inspire customer loyalty and improve your NPS and CSAT score by providing complete visibility throughout the process to the customer. All right. Rob, over to you.

Well, all right. Thank you very much. I wanted to just remind everyone, we've recorded this session, and it will be available to everyone. We'll be sending it out via an e-mail link afterwards as well. But I wanted to give a few takeaways about what we've seen today and what we've talked about today. You've seen how we're able to provide visibility and improve on that visibility, driving a powerful experience, single platform, single data model. There was a question about where this data comes from, whether it's the assets or the schedules or anything else, that can all be housed within ServiceNow or some of that data might reside in other systems as well. But the takeaway is we have a single platform data model for planning, managing and executing service delivery projects and field service. The next part of it then leads us to increasing the efficiency of those projects, streamlining the generation, the assignment, the scheduling of the work orders that come from that are related to those projects, the work orders, the tasks, by automating that process or allowing dispatchers to manually make decisions and adjustments and, finally, ensuring that efficient and transparent service delivery experience by making field service part of that overall service delivery process. Of course, field service stands in and of itself just as our project management stands in and of itself. But here, our message was showing the interplay and how they successfully work together. So we do have some time for Q&A. I'm going to answer 1 or 2, but I think the rest of them will follow up. Actually, it doesn't look like we have time. So we will be providing those in our e-mail as well. I did want to let you know next week in Chicago, there is going to be a field service management foundations workshop. So you can register. Here is the link to that. And then finally, in October 5, we also have a live broadcast of Supercharging Your Business on the Tokyo release of the ServiceNow platform. And this webinar and others are going to be available on demand at our site for our on-demand webinars. So with that in mind, and seeing how we only have a minute, actually, we're over time, so we will send out the answers to those questions. We received about 8 or 10 questions. So we'll compile them, we'll construct the answers and share them out with you as well. I would like to thank you all for your time, for your participation in this event, for your questions. If you have other questions as well, please respond to us. Again, my name is Rob Schaefer, I want to thank both James and Romit for participating with us and have a great rest of your day.