Welcome back to the third installment of our monthly ServiceNow Data Talks series, where Acorio’s VP of Strategic Initiatives, Juliet Acuff, and VP of Strategic Marketing, Meghan Lockwood, offer our executive team’s opinion on the ServiceNow and Service Management numbers that matter to you.
Last month, we covered the most significant Future Trends the ServiceNow ecosystem is talking about, including Virtual Agent (plus a little AI) and Global Business Services (you can read the whole article here.)
Up this month – a topic nearly every ServiceNow platform owner, influencer, and Wall Street analyst is thinking about worldwide – is the massive platform expansion, adoption and multi-product purchases we have seen in the past 12 to 18 months.
Where is the ServiceNow Platform Going, and Why Do Companies Care?
Meghan Lockwood: When we first did the research, this chart was one of the more interesting results because it really showed the change and the transformation that ServiceNow is driving.
A full copy of the 2019 ServiceNow Insight and Vision report can be found here. The research covers everything from industry case studies to the biggest ServiceNow implementation challenge areas.
I also think this chart is one of the ones that will likely change the most when we refresh this research in the next couple of months.
But what we’re seeing in this data as it stands now is ServiceNow’s evolution from a single-use ticketing tool to really an enterprise platform.
Almost 54% of companies are currently deploying two or more elements of the ServiceNow platform, 27% have three or more, and 12% of responding companies have four or more elements of the platform currently implemented today – which is a significant number when you consider how many business units that spans over!
These numbers certainly align with the recent Q2 earnings report that ServiceNow’s CEO John Donahoe announced – where they said that 17 of their top 20 deals involved three or more products. We see that as one of the key elements driving ServiceNow’s growth, which is still 33% year over year in a very mature ITSM marketplace. That amount of growth is directly related to this enterprise expansion and platform adoption.
We are no longer seeing clients coming to us and looking to do a single project – standing up Incident, Problem, Change, for example. Really, the way that ServiceNow is evolving is by becoming an enterprise platform driving digital transformation, and so clients come to us with goals of multiple phases and multiple products in their roadmap.
Juliet Acuff: Agreed. And, even beyond that initial number of the top 25% of deals being multi-product Enterprise purchases, the people who had already had ITSM, had already gone down that path, and now are ready to expand beyond that initial implementation, right?
This platform growth is happening both in the initial purchase, but also as an expansion throughout the organization as ServiceNow gets into one business unit, shows its value, and is quickly adopted by other departments throughout the org. – Juliet Acuff, VP Strategic Initiatives, Acorio
We are seeing a lot of that – not just in the original research that we are reflecting upon now, but also among Acorio client requests and engagement. That was part of our own company’s delivery and advisory practice pivot about 18 months ago, so that, as we are asked to deploy ITOM or SecOps and the significant growth we are seeing in HR, we have true expert capabilities to address those needs.
It’s kind of what we were talking about a few months ago – it’s that idea that ServiceNow offers one transparent view to customers (both internal and external) and the same intuitive approach for people to access services no matter what the department.
On top of the fact that these multiproduct purchases are driving ServiceNow’s growth, their top sales are, of course, going to be multiple modules (which intrinsically will cost more money). While ITSM is still reflecting almost 50% of their business in Q2, there is still that gap between that “ITSM-alone” purchase. And in that remaining 50%, outside of “ITSM -alone” purchases, we’re seeing significant growth in multiple products and services purchases.
Lockwood: We’ve both been with Acorio and in the ServiceNow ecosystem for a few years and I remember when you and I were talking about the platform even a couple of years ago, you were saying that it really becomes a snowball inside the organization.
Once one team had adopted ServiceNow (which had traditionally been the IT team), all of the sudden there were all these different groups clamoring for the elements the product offers – to streamline the workflows, to see the access, to see the reporting.
So not only are companies initially starting out with more products in mind, but we’ve also seen platform growth happen organically throughout an organization.
Platform Maturity is Opening New Doors
Acuff: There are inflection points in that process.
For example, when we go through a Roadmap discussion, or an upgrade readiness assessment, we do see a lot of our Virtual Assistance clients begin to look at their platform and their use of the platform and their processes. These numbers reflect, to a large extent, client interest and appetite for expansion, and we are definitely seeing that in our engagements.
We’re coming up to the New York launch in a few weeks, and so, these are some current discussions we’ve been having right now – can I get a health check to see how prepared we are to launch into the next part of our journey? They’re reading in the documentation that IT Business Management has had a lot of changes, or that the CSM product has really matured, so, they’re interested to see how they can begin to leverage those.
Lockwood: Absolutely – and we’re excited to see what New York brings by way of this platform maturity, not just in the platform architecture and capabilities but also in the verbiage and how ServiceNow is shifting their language to be more along the lines of industry standards. They are no longer this emerging platform with their own nomenclature, but a dominant enterprise feature. Which is why the entry point into an organization is no longer just one product.
So yes, one element of this platform growth is that snowball effect, that once ServiceNow makes a beachhead into an organization, it rapidly expands across the platform into now – Security Operations, IT Business Management, HR, Customer experiences, etc.
But also, now, as an entry point, people are buying three or four (or five or six) elements of the platform as a part of a digital transformation program. So, it’s not, “let’s dip our toe in and see what’s going on” anymore. We are seeing clients believe – at the executive level – that the model has been proven. ServiceNow is being launched as an Enterprise Platform from the very first scoping call, as opposed to just growing organically.
Acuff: Exactly right, it’s a double-win as ServiceNow really becomes that enterprise platform staple. We’re seeing both of those approaches driving ServiceNow growth – Whether it’s that legacy approach of starting with ITSM and expanding from there or an entire enterprise transformation program.
That being said, we are certainly seeing more of that enterprise program approach, where people are looking to holistically replace their underlying systems and change the entire perspective of Service Management. And, increasingly we are seeing HR or Customer Service as the first entry point into the platform, and not the add on work.
If your company is already considering ServiceNow as its enterprise platform, the first step of your journey will be writing a Request for Proposal (RFP) to determine the best partner for your needs. The exercise of writing RFP questions and reviewing potential vendor answers is no longer about just searching for a vendor to just help you implement the technology, but it’s about searching for a partner who understands your business’s goals. Lucky for you – we’ve created a guide to help you ask the right questions (and grade the responses you get in return).