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

Hello, everyone. Today, we will be going through ServiceNow's project portfolio management solution. And we'll be talking about how we help organizations of all sizes in all industries plan, fun, fund and align their work across their company. [Operator Instructions]. Myself and my co-presenter, Ben, we'll be monitoring that for questions throughout today's demo. So we are scheduled for right around 60 minutes today. I don't believe that we will take that full time. I'd imagine we take around 30 to 40 minutes today. So hopefully, we can get some time back to you today and as well as just leave some questions at the end, leave some time for that. So with that, let's get started in today demo. So to start, I just wanted to go over a quick agenda. Today, we'll begin with the ServiceNow platform overview. What ServiceNow is, what we do, for those of you that may not necessarily be familiar with ServiceNow. Then from there, I'll be going over how ServiceNow is helping plan, fund and align work across your company. From there, we'll be jumping into our ServiceNow Instance to do our demonstration. And after that, we can follow up with a quick recap and address any lingering questions that are going on. So at ServiceNow, we refer to ourselves as the intelligent platform for end-to-end digital transformation. And what does that mean? Well, we help spur end-to-end digital transformation across all of your current systems. If you look at the bottom row here, you'll see a lot of third-party systems that I'm sure you're most likely familiar with, like Adobe or Salesforce or Microsoft, SAP, Workday, to name a few. And these are just among the few that we commonly integrate with. And what we commonly see is that these applications do a really good job at working by themselves. They're really good at what they do. But the problem is that we find with a lot of our customers is that they experience a lot of swivel chair between these applications. As they're really not designed to communicate with each other. And ultimately, at the end of the day, this causes some issues. So ServiceNow, we do like to say that others do not have to lose for us to win. And what that means is that you don't need to rip and replace any of your current systems that you've had in place, we sit on top of all of these different applications. And after that single layer of engagement that connects these oftentimes siloed applications together through automation, engagement, AI and machine learning, all through a low-code, no-code environment that is in a very secure way. And at the end of the day, this is to help keep your business more agile, adaptable and flexible. So as we move through this slide up to the top, we have our prebuilt and configurable solutions that we sector up into little buckets here, depending on their focus. What we're going to be focusing on today is our project portfolio management, and this falls within our technology workflows. But you may also be familiar with some of our other workflows such as our employee workflows or our customer workflows. And if you're currently a customer of maybe, let's say, ITSM or ITOM or wherever it might be, this is a way to see that we have a lot of different applications that apply to your business as well. Additionally, we have creator workflows. In creator workflows is one of our prebuilt solutions that if you have a business need that doesn't necessarily apply to one of our sectors here, you can have the ability to create yourself a low-code and no-code app. So I want to point your attention here to the bottom of the slide. And this quote it says, by 2025, 70% of digital investments will fail to deliver the expected business outcomes in the absence of a strategic portfolio management approach. And what this means is that strategic portfolio management, product portfolio management, will continue to be a very critical piece for your business to stay on track in today's business climate. And at the end of the day, all of this stems from a lack of alignment and difficulty ensuring that teams are working on the right stuff to deliver the right outcomes. And when this is combined with the resource constraints that may slow down the delivery of work. It's really easy to see how you can lead into these silos and a lack of transparency within your organization. So moving over to what ServiceNow's approach is to solving this issue is it brings us to our three main goals, which is to deliver more value, faster by focusing on these three pillars which are consolidated, align and accelerate your business. And what this is going to do is going to bring your teams together to be able to focus on that right work and at the end of the day, be able to transform how your business operates. So I want to bring you to our demo road map today for our product portfolio management demo. So we're going to be able to start today with Paul, and Paul is our project manager, and we'll see that he'll be able to go through and review any project demands and deliver on those projects in his project workspace. From there, we'll be moving over to our second persona, which is Meghan, and she is our portfolio manager. And in her day-to-day job, she is going to be reviewing different project KPIs, analyzing those funding value streams as well as planning backlog for her agile board. So with that, I'm going to take a pause quickly and check for any questions before we get started with our demo. [indiscernible] We're good to go. So today, we're going to start off our demos here today in as the persona Paul. And again, as I explained, Paul is our project manager. And to give a little bit of context into who Paul is and what he does, he currently works for a company called Globex. And he's been having a lot of different issues with all the different intake systems that they have over at Globex. In the past, it sometimes seems that like an incident may come in as a project, or a project may come in as an incident, and it really gets pretty disorganized for him. And at the end of the day, that's really causing a lot of slowdowns for him to be able to complete all of his work. So because systems don't communicate with each other, work is not being sent and routed to the right people, which is making it hard to make sure that all the work is being done on time and in budget. But thankfully, we have this new approach with ServiceNow and our strategic portfolio management solution. So currently, what we're looking at is Paul's demand workbench. And within this workbench, I'm able to easily follow the different demands that have been coming in. It's all within this very easily readable chart that compares all of our demands by risk and the value that the project adds. So a good example of this demand is here is in the top left corner of the screen, which is this add fingerprint and facial recognition to mobile app. And what we can see here is that this specific demand is a very low risk demand to the organization, but at the same time, has a very high value to the organization. And so we know that this is going to be a very good demand to be able to turn into a project because all of these bubbles are turned into different colors. So we can see that this project here, the contract migration playbook, this is a very large project based on its size, but it does have a lot of that -- or it has like a middle-of-the-road value, but it's very risky to the organization, and it has turned red because of that. So because we know that our add fingerprint and facial recognition to the mobile app is a very low risk, but very high-value project or demand to the company, we can go ahead directly within here and right click on the bubble, and we can actually take action from this dashboard and create a project directly from here. And at the end of the day, because of this, I can -- as Paul, I can really prioritize the right work that aligns with my organization strategy, and it's all because of the comparison that is really offered by the demand workbench, where I'm able to input those key metrics and be able to see where demands are great for the organization. Another way that the workbench really helps Paul is that it can intelligently differentiate between demands and requests. So for example, if we were to look over at this score applications for rationalization, we can see that it has the risk value, the value and the size. But we can go ahead and if we right click on this, different to what we've seen with the other one, it says create a change. So this is the intelligence of the platform being able to differentiate between the different types of requests so that they can go to the right person and minimize that confusion. So the way that the platform is able to do this is a key differentiator for Paul because sometimes when projects are coming in as incidents or incidents coming as projects, it can get really messy for him. So just to wrap up what we've seen within this view for Paul into demand workbench. As you can see, I have all the resources I need at my fingertips to complete my tasks efficiently while making sure that the right work is prioritized. So now before I leave this workbench, I want you to really think about the type of impact that this tool would provide just based off the visual comparison that the demand, easily you're able to easily prioritize your work. So now as we go forward here, we know that the work has been initiated when we created that demand into a project. And we're going to be able to go and see that we're going to get this done on time and on budget. To ensure that it's happening, I'm going to move over into our Project Workspace. And so in the Project Workspace, this is where I can actually begin the work of delivering on this project. So looking at this view here, we can see that it has added in a different tasks for going along for this project, along with a Gantt chart of all the different tasks in a visual manner. So specifically for this project that we created, and for the add fingerprint and facial recognition to the mobile app, we can simply go in here. And let's say that we need to add a resource to this task. So what we're able to do here is we're going to be able to go in and add a resource allocation directly to this task. And for this one, we wanted to add Alejandro because we know that he is best aligned for this project. And the first thing that we're going to see when we add in Alejandro is that we get a glimpse into what his availability is for this project. And at the end of the day, because of this, organizations are measuring a significant increase in the percentage of projects that are being aligned to their end business strategy. So let's say that, for today, that was enough for resources today just for time's sake, but now that I'm really done allocating those resources, I want to be able to create a status report from this. And typically, without ServiceNow, creating status report can often take a long time since up-to-date information needs to be compiled and everything needs to be formatted. However, with the Project Workspace, the system automatically generates reports for us. So in this view, the system is bringing together all of that key information. And we're able to easily see it here with -- so -- and we're able to make this so that we can easily share with any key stakeholders and having all of that key information here as well. So within this view, we can see that we have all of the key information like the name of the project, the current state, the phase, along with any -- the costs for resources or current status. So one of the things that we understand here is that we know that some organizations really prefer to view status reports in, let's say, a PowerPoint. So what ServiceNow provides here is, for your project managers, is the ability to export the status report and turn it directly into a project or into a PowerPoint. And as we go forward here, maybe we wanted to add a day, add a specific template for this, because maybe Paul's Boss really wants the status report and he loves PowerPoint. And this, at the end of the day, is making it really easy for Paul to not have to go out and format all of this himself, and taking hours out of his day to really stay efficient in his day-to-day work. So at the end of the day, this is really helping increase that product manager efficiency by simplifying project dashboards and reporting with the ability to export that into a PowerPoint for better resource management. And as a result of this, we've seen that around 10% to 15% increase in project manager efficiency, leading to increased number of FTEs. So the next thing I want to show within this tab here is our analytics. And because this is a new project, we're not going to see a lot of things that are populated in here, but it's just to give you an idea of what we provide here right out of the box with this. We can see that this project has -- what phase it's in, the current status, how much of the project is actually completed. And these are all things that are really important, not only to Paul, but to everyone that's involved in this project. And this gives them a really good glimpse into how the current state of the project is going. One thing that I often hear from customers is that there's really a strong lack of visibility for their leadership team to have into those analytics and metrics where they're often replying to those project managers for all that important information. And so at the end of the day, as we know, one important aspect of delivering work is ensuring that value is actually being realized. So ServiceNow wants to help your leaders to able to be efficient and effectively track the actual benefits of the work that's being provided to make sure that expectations are being met, and this all can be done within ServiceNow's project management dashboard. And so within our PMO dashboard, this is where we provide your executives with all of that aggregate data from potential projects or even demands. And this is the area for them to be able to monitor all of the different moving parts, make sure that everything is being prioritized effectively. So as we can see here on the overview or the summary rather tab, we can see that as an executive, we can get that view into anything that's going on with our active projects. Any costs that are being allocated to this, the benefits, the estimated completion, all of these really important KPIs that are necessary to be able to have insight to you for leadership. Additionally, we've taken our project health tab, we are going to be able to get a full view of those different projects that are currently going on. So for example, Paul, he's interested in seeing, oh, you know what, there's actually two projects with a red status or there's three projects that are currently overdue. These are all really important insights for him to be able to get that are in a very visual manner, he can get all of this not having to run around and look for that information himself. So to wrap up what we saw with Paul today, we saw all of the different ways that ServiceNow allows you to consolidate all of this intake as well as evaluate and prioritize that work. And at the end of the day, because of this, project teams are decreasing the amount of time spent on admin activities and actually increasing project team's overall productivity. Additionally, we saw the ways that in which project managers and leaders will be provided with that increased visibilities so that they can understand all of the different moving parts of their organization. So now before we move on to our next persona, I will take a quick pause to answer any questions and check the chat. Okay, it looks like we're good. Oh, no, there is one question.

Okay. So the question is, does the solution provide the ability to adjust time lines and visualize impacts on milestones, stage gates and projects? Okay. Yes, that's a great question. So what I'd say is that the data displayed in our investment portal and all of our ServiceNow dashboards is from the project management in demand record details and can be filtered by drilling into those, and those specific projects and making those adjustments. And those changes will be reflected in the investment portal or the corresponding dashboard upon just refreshing. And I do want to point out that everything that we're seeing today does come out of the box with our SPM Pro solution. But again, keep your questions coming. I'll answer them to the best of my ability, but we will be moving forward here, and we'll be checking out our next persona, which is Meghan.

In Meghan, as I mentioned earlier, she is our portfolio manager. And the first place that she goes to start her day is the strategic planning workspace. And this is a space where she is positioned to prioritize initiatives and track progress against our organization's goals. She can see all of the different portfolio plans that she has. And like Paul, she knows that the mobile experience is something that is very important to her organization. And is it just overall a big priority that she wants to make sure that she can track and follow all the deliverables for. So as we open up our consumer digital products here, as this loads in, we will see that the portfolio specifically is using a value stream lens, which is seen right here within our value streams. And this is the view here of the overall goals dashboard. And on this goal's overview dashboard, she's presented with all of that important information that she needs to see, she's presented with informational widgets about those goals. So she can see that the digital project's goal is good, the status, the work alignment, if there were any targets due for review as well as goals from the work items not related to the value streams. But for her, the first thing that she'll see is that the status goal is currently in the red. And for her, she might want to go ahead and take a look at this as this is something that is important to her. So moving over here, we'll be able to see in the hierarchy view of this view is that the increased customer satisfaction is the project that is in red. And going in here, we can drill down into the specific value stream and see that of all of these, the increased CSAT score is the thing that's being flagged. And because of this, at the end of the day, in a few clicks, she was able to gain that visibility into why this portfolio's goals aren't on track to meet its goals, and can now make the informed decisions to make sure that all that work is being delivered on time and in budget. So moving over to planning. She can see that this information is presented with her all within this list view of all the different planned work that is currently going on. And for her personal preference, she -- this may not be the most organized view. So she actually is going to go back, and similar to Paul, go into the hierarchy view. And what this is able to do is it's able to break down all of the different value streams into a consolidated view, so she can easily find all that information as well as being able to see all of this in a Gantt chart as well. So as we mentioned earlier, the mobile is a very important aspect of her organization. So as she scrolls through these different value streams here, she's going to look for that specific mobile experience to find where that might be most important. And we can see that Mobile GUI development right here is an important thing, which is Mobile GUI, for those who may not know is Mobile Graphical User Interface development. And so directly through in-line editing, we can go ahead and change this prioritization of this planning stage from new to prioritize. This goes back to what we talked about earlier about strategically aligning all of that work in that strategy to making sure that all of that work is being prioritized efficiently. And in this case, when something is not in line with what she's expected, she can quickly can easily reprioritize that work and bring it back into alignment. But at the end of the day, again, it's not just about prioritizing the work. It's also about ensuring that the people working on it are set up for success. And to make sure that, that work can actually be completed, she can take a look over here at the investment information about these portfolios. And before we move on to our investment part of this portfolio, the demo. I do want to take a quick pause here to quickly share about how our customers are using these tools to truly modernize their organizations. As we went through that last view, it did remind me of a customer that I always love hearing their story is a customer called Raymond James. You may or may not know them. They're a fairly well-known financial services organization. And previously, they had used an enterprise management system for project tracking, but there are other IT systems, it was very siloed. And that meant that at the end of the day, it wasn't really practical for them to be able to have any reporting or budgeting or financial analysis. And in the end, they were mostly just using it for scheduling. So I'd like you to pause and consider what processes you currently have in place at your organization and think about how this solution could possibly make your day-to-day work that much easier. At Raymond James, they had to toggle between Excel spreadsheets in the enterprise system for resource allocation and pipeline management, which is very time consuming and very cumbersome for them to be able to go through. And specifically for Raymond James, they were one of ServiceNow's early adopters to ITSM or IT Service Management, meaning that they were somewhat already a little bit familiar with the ServiceNow platform and its efficient automated process. And at the end of the day, because of this, they really like the vision of having that single global source for accessing a streamlined portal. And for them, consolidating on ServiceNow would deliver the project, resource and cost transparency that they require while also eliminating some of those legacy IT systems. And with Raymond James, after implementing ServiceNow's strategic portfolio management they were able to drastically improve their transparency, leading to better prioritized portfolios, and they were able to make better and faster resourcing decisions. So that's just one customer story I'd like to keep in mind when it comes to our ServiceNow Strategic Portfolio Management, Project Portfolio Management solutions, but let's jump back into what we were talking about with Meghan. So Meghan's next step is to review the funding for the value stream that is relevant for the mobile app project. So ServiceNow's investment funds allows the organizations to set up portfolio guardrails and enable a lean portfolio management. So as we can see, there are already some investment entities that are created. There's all investments by value stream, all investments funded by portfolio as well as investments funded by business unit. And so for today, we're going to take a look at all of the investments by the value stream. And what we're going to see as we open this up is that we're presented with four different widgets that are populated up at top. And these are the funds received, the total funds allocated, how much is available and the total actuals. And what this is able to do for her is it's able to show her a roll-up of the total funds within that fiscal year and/or quarter. And below, she can see a list of all of the different investment entities to be able to better understand the direct investments for which funds are being allocated. So from here, she's going to move over into her tree view similar to a hierarchy view. And this is going to be able to show her the investment entities displayed in different cards as a hierarchical view. And she can seamlessly drill into these cards, which allows her to see the fund allocations for all of her different investments. So specifically, we're going to drill down into the digital products card here. And from there, we can drill into the mobile app. And now that we can see this view, we can see that actually mobile team B, their actuals are greater than their funds received. And because of this, we can go ahead and mainly focus on what is important, and that's allocating the correct funds. So from here, we can go and view this specific investment. And it shows us that all the different allocations and money needed to make this specific team correct. So now going back to improving that customer experience. Since the mobile app team is directly related to customers, Meghan can comment in and increase this specific funding at the top level. And moving forward here, we know that specifically, the mobile team is having a few different issues going on. And we know that there are a few different teams so we can move over into our Agile board to see how Meghan can efficiently allocate these resources. And the first thing that we're going to see to be able to do this is we'll see that within this Agile board, we're able to see how different software projects are efficiently being managed and tracked during the life cycle of these projects in an iterative and incremental approach. So we know that as a portfolio manager, Meghan is always thinking about the alignment of portfolio and how it aligns to business work outcomes. So within this Agile board, Meghan is able to have that transparency into that work that's planned so that she can ensure different work efforts are on track and that they're being directed towards features that are going to help drive that customers satisfaction score. So, here Meghan can quickly see that there are two sprints that are being flagged, and we can see that these are being flagged in as they are in the color red. And that means that this team has too many tasks on their plate, and this is leading to strain on their resources financially, plus leading to targets that are not actually met because they're overloaded. So again, we can see at a high level how work of how the status of work allows Meghan to make those quick decisions that we'll get that work back on track to deliver those necessary features. So Meghan can now work with the development managers to move the dependency stores to sprints so that we can fix the capacity issue. So she can go ahead and use the drag-and-drop functionality here directly within this interface to move around the different aspects of each project. So we're going to go ahead and move this up over to sprint 4 for team B, and move some of these projects around to see that these projects are now not going to be totally overallocated. So again, Meghan was able to take that at a very high-level view of the portfolios and ensure that these specific goals are being met. And when they weren't, she's able to reprioritize the work budget and timing. All of this is a very intuitive intelligence system, not only to Meghan, let Meghan know that the goals aren't being met, but also by prioritizing her in the right direction to fix these volumes. So in summary, I want to cover and say that with this, we were able to -- directly within this interface, Meghan was able to readjust the products team work and stay on track and align with the portfolio's overall strategy. So end-to-end within this platform, Meghan could detect where she needed to refocus that portfolio's alignment. And from here, she increased funding for the necessary work and shifted that work between teams to ensure that they have the capacity that they needed. So with that, we're going to go ahead and hit back on slides. And so one thing I want to say here is that the platform does have a lot of capabilities. And you'll see on the left-hand side here that some of these capabilities that we looked at today, like maybe dashboards or workspaces and specifically, the data model itself, it's really important to keep in mind that we looked at -- what we looked at today is specifically just one area of portfolio management. So with our PPM, SPM products here, we're able to see how you can align your work to your organizational strategy, whether it be from the perspective of finance or perspective of planning and work scheduling work. So I already shared one customer story, but I do want to go over one other one I also found very cool for this specific use case? So UNC Health had grown from a single site hospital to a state-wide operation. And with this came thousands of medical staff and millions of patient touch points. And if they wanted to be able to establish a consistent approach to their IT and HR processes, standardizing that all on a single digital platform that would accommodate all of their names. And what UNC Health did is that they initially introduced IT Service Management. But from there, they can quickly extended to deploy their Strategic Portfolio Management and Project Portfolio Management. And what that did is it streamlined, streamlined the onboarding of their new hospitals, while application portfolio management helped UNC Health to rationalize its application landscape across multiple facilities. And today, the organization also uses IT Operations Management, HR service delivery as well as automation engine. And what this did for UNC Health is that, like I said, it's made that into a single platform for now they have 11 hospitals with 350 technicians and over 3,200 physicians. All of this was be able -- they were able to consolidate into a single platform for them. And with that, I do want to say thank you very much for joining today's demo center. If you do have any questions, please feel free to either throw them in the chat. I will be hanging around for a few more minutes or feel free to e-mail me at the first e-mail or to demo center to get any further information on any future demos that we have for you. So with that, I want to say thank you very much, and hopefully, we'll see you again soon.