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

Hello, everyone, and welcome to today's CRM Magazine web event brought to you by ServiceNow. I'm Bob Fernekees, and I'm the publisher of CRM Magazine, and I'll be the moderator for today's broadcast. And now our presentation today is titled From Insights to Outcomes: Elevate the Customer Experience While Lowering Costs. Before we start, I just want to explain how you can participate in this broadcast. If you have any questions during the presentation, just type them into the question box provided and click on the submit button. You'll receive a response by e-mail within a few days. Plus, if you'd like a copy of the presentation, you could download a PDF from the handouts tab on the console once the event is archived. And just for participating in today's event, you could win a $100 Amazon gift card. Okay. First, let's go over today's agenda. The purpose of today's presentation is to show how you can elevate customer experiences while lowering costs. I'll introduce our panel of speakers, and we'll -- we will feature a customer story and highlight key challenges and solutions. We will discuss the value unlocked with ServiceNow CSM and we'll wrap with lessons learned and the future outlook, followed by a Q&A. So, now I'll introduce our exceptional speakers for today's webinar. First, we have Julie Coates joining us. Julie is the VP of Customer Workflows for all of the Americas at ServiceNow, and Julie will be our moderator for our panelists today. Next, we have Bharti Sharma. Bharti is the Global Head of Enterprise Service Management at Aon. And for those of you not familiar with Aon, it's a renowned global consultancy organization with $11 billion in revenue, a workforce of over 50,000 dedicated professionals and a diverse portfolio of customers worldwide. Also joining us today is Elizabeth Dixon, author of the book, The Power of Customer Experience. Elizabeth is an influential business leader and serial entrepreneur known for her ability to inspire executives and their teams. She has worked with Disney, GAP, YMCA, and she brings nearly 2 decades of expertise in her various roles, including service and hospitality, strategy, research and development and human resources at Chick-fil-A Support Center. Elizabeth's current role is Executive Director of Trilith Foundation, reporting directly to Dan Cathy, Chairman of Chick-fil-A. Welcome, everyone. And now I'm going to pass things over -- our moderation duties to Julie Coates from ServiceNow to kick us off. Welcome to the broadcast, Julie.

Thank you so much for those intros, Bob. And how lucky am I to have these 2 ladies join me for this great topic. So before we get going, let's talk about a really well-kept secret. ServiceNow has an industry-leading customer service management solution. I mean, most people don't really know we actually have it. And we really tackle the whole problem of elevating customer experience while controlling costs. Like that's like the holy grail of customer service. So let's frame this up a little bit. So if you go to -- in the next slide, you'll see that most companies focus on the interaction layer to improve their customer experience. And this is a great place to focus, for sure. You want that service portal and the chat and everything to be world-class for your customer. However, half of the customer issues need help from the back office in order to get resolved. And we call that the messy middle. So think about that. You're taking this orchestrated situation and throwing it over into the back office, which has no real processes to handle this, it's all manual. So an e-mail is sent over or a phone call or maybe an instant message to try to resolve a customer issue, which means it gets resolved in perhaps days or weeks, and that is not a good customer experience. So the way we think about it at ServiceNow is, of course, you need to have those world-class interactions. However, we think that the entire company has to get involved in the customer experience and that we orchestrate and automate all these tasks that have to go into the back office. Thus creating a closed-loop scenario for that case to be solved in hours and days as opposed to days and weeks. And we are fortunate to have Bharti here from Aon to share with us what Aon has done in this customer service journey because they have figured this out.

So Bharti, let's go to your story, transformation for growth. What an exciting thing to be a part of. So share with us what were some of the key goals and challenges that motivated you and Aon to use ServiceNow's customer service management.

Julie, first of all, thanks for having me here. I hope Aon's story around how we leverage our platform to deliver exceptional customer experience, would help other customers as well. So in terms of what was the challenge as to how did we get started? So the story goes back to 2019, that we have the strategic mandate called a transformation for growth. And as part of that, the core focus area for us was to be able to fully realize the economies of scale to support long-term growth. And we were looking at platforms to remove the processes and technology barriers between branches, departments, customers and colleagues to enable a standard operating model. However, Aon also had this stigma from the past that ServiceNow back then was considered largely an IT company. So laid the power of customer service management from ServiceNow for driving customer experiences, definitely was a big bag for us back then. So how did we go forward in terms of our preparation and strategy? Just a background, the core business unit back then that we were focusing on for transformation for growth was called as Commercial Risk Services. And then we were focusing largely on a specific geography to begin with. Multiple branches across Canada is what we were looking at. However, pre-transformation of the state that we were in was that every branch has its own set of processes, highly manual, highly siloed, not truly interacting with each other. So the idea was to get started with, first of all, standardizing the processes because as the saying goes, if you build automation on top of an efficient process, you will have a magnified efficiency in terms of experience and the reverse holds true as well. So we absolutely wanted to have standardized processes across branches to begin with. And in terms of solutioning approach, while the whole idea was to drive far more better experience, not just for our internal colleagues, but of course, delivering higher value for our customers as well, but we had to enable the colleagues to deliver that value for customers, which was done in terms of key basic stuff, like ability to see real-time insights into SLAs as to which areas do they need to focus on. Automated agent workload assignments truly help them getting onto the world directly rather than somebody manually looking on assigning work to agents and figuring out whom to assign it too. Clear case prioritization, of course, because now we had far better insights and also ability to get a complete 360 view of the customer from within the same platform as a single source of truth. So that's how I would summarize the entire journey from challenges to preparation to how we could see the benefits of the solution.

It's -- your story is just so fascinating because it kind of touches on a few of the things I said earlier, like you had to dispel the myth that ServiceNow had a customer service management solution and then you took a situation where it was all about disparate processes and you orchestrated them and you automated them and they were receiving some great benefits with that. Let's go to Elizabeth for a second. Like what are your thoughts on what Aon did and how that is resonating with the power of the customer experience?

Yes, absolutely. I think first, congratulations on creating such change. When you have such a large organization that's creating so much value and you change like that is absolutely noteworthy. As you were talking, it made me think about one of my mentors, so I'm sure you've read and heard from, which is Horst Schulze, who founded the Ritz-Carlton. And he used to talk a lot and still does talk a lot about how you have to be more sufficient and more efficient than the competition. And when you were talking, Julie about the interactions, we have to be more sufficient. We have to create more value. We have to add more to the customer continually. But then everything from this example at Aon, you have to be more efficient behind the scenes, all of the processes to be able to standardize them and then also to have all the knowledge and insights. Knowledge is power. When we know so much about our customer, we can serve them intentionally. And then that, in turn, helps us generate more value to the customer. So all the pieces that came in to create what you did are absolutely incredible and nothing short of sometimes a miracle because that takes a lot of people agreeing and aligning to do that. I'm personally curious how did you do that? How did you create so much alignment to be able to ensure that you could make that change.

I mean, Bharti, you obviously -- you could have chosen from a variety of vendors. So what led you to choose ServiceNow for solving the customer service journey at Aon?

Yes. So with this business imperative of transformation for growth, the first step in terms of bringing in the technology enabler was to evaluate the capabilities of platforms. And we absolutely looked into the capabilities of ServiceNow CSM platform in terms of how it enables us to digitize our business processes to provide more consistent, agile, positive outcomes for our stakeholders while leveraging the standard operating model. So that for us was the key. How do we make the processes more seamless and consistent and that's where we could see that ServiceNow could deliver on to those capabilities and the requirements that we had. Automation was a big key in terms of delivering more self-service capabilities to our customers so that they had faster resolution on issues and thereby absolutely driving a far better experience. I think what was also important in the entire journey was that building those internal champions who understood the capabilities and the value that it delivered on the technology side because we were already using ServiceNow as a ITSM platform across the enterprise. So since we had those technology champions who could understand the value really well, they could relate it to our business partners, and that is where we could get a buy-in and a much stronger alignment in terms of let's move together in this journey of driving transformation for growth.

That's amazing. I mean, as Elizabeth said, these are difficult projects to really get over the line. And you did a fantastic job getting that there. Now obviously, through the project, you've unlocked some amazing value. So let's talk about some of the value that you saw with delivering customer service on ServiceNow.

Sure. So in terms of value using ServiceNow CSM, I see value in terms of how it enabled our internal colleagues and thereby delivering business outcomes and, of course, driving customer experiences and value for the customers. So in terms of internal values, now since we had a standardized intake mechanism via the unified service portal. The entire process became far more seamless. And of course, behind that portal was the complex workflows managed beautifully and simply why ServiceNow. The core business processes be it certificates management, invoice management, underwriting or broking has completely digitized using on top of the standardized process that we got started with. And of course, using this value, now our client-facing colleagues would truly focus on delivering value, then focusing -- then struggling with the mundane task of, hey, where do I prioritize? Hey, where do I get started? Is there an escalated issue? Should I stop everything and start working there? Now they were far more efficient in managing their day-to-day operations. So that was more about enabling our colleagues to deliver better value. And of course, it started to translate into business value in terms of driving growth, retaining our customers, improving our customer experience, which, of course, started to relate back into benefiting our clients as well. Clients could see that there is far more consistency regardless of behind the scenes, which agents working on their requests, which branches it's getting assigned to, they could still get a consistent seamless outcome regardless of whoever is handling that. So that's how we could start to see value using ServiceNow CSM capabilities.

It's great that you define it in so many different fronts. Elizabeth, I'm curious to hear from you about what role do you think the company, Aon or any company plays in unlocking all this value through customer service.

Well, one thing I like to say is that customer-obsessed companies actually create company-obsessed customers. And so the brands out there that we, as individuals, are passionate about, and we obsessed about, they're the ones who are obsessing about us first. And I think of Amazon and Jeff Bezos as an example of this word obsession. I think he really coined it in a lot of ways. He was so obsessed about what his customers wanted in the early days of wanting books and then the story goes that he asked his customers what do they want, and they said windshield wipers. And he looked into that more and more and found really what his customer wanted is whatever they needed in that moment. And the more that he obsessed about them, it created this obsession back. And so what I love about this story is that as Aon has been so intentional and obsessed about the customer pain points and solving those and also the employee pain points in solving those, it creates so much value that the customer says I can't imagine my life without that company. And so I think a lot of times, that can feel really overwhelming. So what does that look like for us as an organization to truly obsess. And I think that there's 4 things that we continually need to ask and those 4 things are: first, what is our customer need? What is that specific thing that they need, the pain point that we can solve for? What is it that they value behind that? Typically, there's a value behind the need. So in the fast food industry, it's a need, what's for speed, the value was for their time and understanding what those values are, the need might be for accuracy or as you were just saying about, consistency. The value behind that is trust and dependability. And the more that we have trust with our customers, the closer the relationship and the more loyalty that we build over time. So what does our customer need, what is that they value behind that? What is it that they want next, the whole Wayne Gretzky, go where the puck is heading, the awesome quote from Henry Ford where he said, "If I asked my customer what they want, they would have told me a faster horse." Yes, we got to understand what those things are that our customers might need and then we have to deliver them to them. What is it that they want next. And then the last question that I believe we continually have to ask is what's the role that we play as an organization all the way down to the frontline employees, what is the role that, that employee plays. And do they feel empowered to be able to make things right. All these systems and tools should amplify and set up that frontline employee to be able to have that interaction, to create a moment with that customer to solve the problem, to go above and beyond and ultimately, to build that relationship that generates loyalty and trust. And the thing is that these relationships are ever evolving. We have to continue asking these questions, seeking to understand what our customers are needing, what they're valuing, what they're wanting next and the role that we play, so that we remain relevant. If we don't, we're trying to like -- I remember my sweet grandmother thought that my favorite cookie was oreos until the day she passed. I think I stopped liking oreos when I was 10. But we [indiscernible] asking the question, just the same way that we ask people in our lives that we love, like what are those things that you need, what do you value and the more that we continue that dialogue and discussion, the more relevant that we stay as a brand to our customers.

But do you still like the Spicy Chicken Sandwich from Chick-fil-A? I hope. But what a great segue to what we're going to chat about next. I mean, so you talked about empowering the frontline with the right tools. So Bharti, if you could chat a little bit about some of the functionality that you leveraged from ServiceNow CSM to deliver on this customer service journey, that would be great.

Sure. I'll just touch upon a few of the key aspects of ServiceNow CSM capabilities that we leveraged. And by the way, the project that we worked upon was internally branded as Polaris, so you would see references, the keyword Polaris here, but that was the entire journey of the entire experience change and transformation for growth using ServiceNow CSM capabilities. So few capabilities that we leverage extensively for driving efficiency and scalability. One is that you have to give them a single pane of glass. There has to be a unified portal for all needs for customer and for our internal colleagues as well as various personnels from front office to back office to middle office. And that's where unified portal really made that big differentiation in terms of not really getting to the hassle of looking at different applications or products or portals to deliver different needs, but all catering to same client. So that was number one. Of course, automated processes using the power of workflows and orchestration to deliver much higher self-service experience and case reflection or leading to a far more scalable solution because now with the catalog, we could have more and more processes getting added, we got started with 30 processes and then it continued to grow, leading to -- this was because of the scalability of the platform. Well, that's on the scalability part. In terms of the user experience and productivity, ability to give a personalized experience to a different personnels, be it an executive looking at an overall service performance or an operational manager trying to understand -- is there a need to shift focus in terms of prioritization because we are just about to hit the SLAs proactively or an agent trying to understand what's still pending in the queue and hence, he or she needs to prioritize work and so on. Real-time dashboards, of course were a big enabler, all within the same system, same unified portal rather than not having to jump out into a different dashboard or a portal or a system to look at how are we doing in terms of SLAs. It absolutely enabled far more seamless collaboration across teams from account executives to middle office to back office, everybody now collaborating within the same platform. No more exchanging ton of emails and figuring out and waiting for a response, it was all there, right, in the same system. Communication and integration, of course, led largely because of the power of the service catalog and the huge problem that we had earlier was how do we still continue to provide the same experience to our customers where they can still send out an e-mail but we can track it as a case automatically. And then the responses continue to be managed via the same system or the same case and managed and tracked centrally. It was another huge, huge value that we could see using CSM capabilities. Last but not the least, the same unified system could also interact with our business applications, largely in terms of policy management systems and other core applications and could read in real time to generate the kind of decisions and insights needed for the agents to deliver value to the client. So those are some of the CSM capabilities that I wanted to highlight today as to what we could use to deliver exceptional experiences for our customers.

I mean you're really leveraging the power platform, which is fantastic. So let's talk about -- to get these things, these projects done, it really does come down to the dollars in sense, right? And you have built a tremendous business case in order to get this done. It would be great if you could kind of walk us through at a high level what were sort of the categories you looked at and now $55 million expected is amazing returns on the project. So I'm sure everybody would love to hear what your thoughts are on that.

Yes. So since the go-live, Aon has seen improved revenue growth and sales efficacy for the specific use case that we built on CSM, on the ServiceNow platform. We could -- this absolutely help customers and internal colleagues to work together. In terms of some of the key highlights, in terms of outcomes, streamlined sales quoting and underwriting, all processes on a single platform, far more operational efficiency now, less friction, no more siloed processes, absolutely no more manual processes. Operational efficiencies, absolutely bound to come with the kind of efficiency which is now enabled on the system. This, in turn, of course, led to higher revenue growth directly translated to lower operational costs when handling these shared services across branches, across subsidiaries and regions. And then the easy access and benefits across all of these branches via the shared processes, it all led to an operational estimated savings for what I've quoted here and it continues to grow from here onwards.