A quick rundown on The Rundown: Each month I spend just a few minutes bringing you up to speed on three major ServiceNow articles, news appearances, market shifts, acquisitions, or anything else insiders are talking about. With a 100% exclusive focus on ServiceNow and the largest team of focused ServiceNow consultants out there, you can bet we pay a lot of attention to the inner workings of the company.
This month’s rundown will skim over ServiceNow’s recent HR articles in Forbes and the Harvard Business Review, their recent robot campaign in downtown San Francisco, and then break down three key market metrics as we approach the halfway mark of 2019.
HR Demands Collaboration
If you are in HR, you already know the pains of operating in a vacuum. It simply cannot be done. And yet, as ServiceNow continues to bring to light with their sponsored articles in Forbes and the HBR, many departments have failed to design a successful structure for teams to work together.
In particular, ServiceNow’s platform highlights the need for HR and IT to be fully aligned and in communication. Bridges between the two departments (and the many systems they each use) allow for HR to create unified and digital employee experiences. Luckily for us, in their recent article, ServiceNow identified five first steps to spark communication between HR and IT.
- Build and structure new work teams. Designing a successful workplace strategy requires a cultural shift in the relationship between HR and IT—and that shift demands new skills and talent, as well as structuring teams in a way that allows work and ideas to flow between groups. This is why organizations are redesigning existing decentralized service delivery models under a global experience function for HR, IT, payroll, and other people services. HR is similarly reinventing its structure with new “experience” teams or even retitling functions, including “people operations” and “HR service delivery.”
- Make technology investments together. According to Gartner, “By 2022, 75% of organizations will include employee experience improvement as a performance objective for HR and IT groups.” To keep up, organizations are adding new global HR technology teams that interface regularly with their IT counterparts so that together they can focus on architecting the use and mobility of HR software, applications, and systems.
- Optimize the employee experience on a single platform. Employee-centric organizations are replacing websites and email with self-service delivered via a single, digitally driven employee service center. By creating these one-stop shops that address multiple employee needs, HR and IT can work together to simplify the employee experience and remove the complexity that arises when dealing with multiple processes and systems.
- Design a digital experience that inspires connection and collaboration. Transformation of the employee experience isn’t just about automating tasks or addressing individual inquiries. It’s about identifying and reimagining moments in the employee journey that can have an overwhelmingly positive—or equally negative—impact on the end user.
- Listen, design, test, and iterate. In attracting, retaining, and engaging the best talent, the pendulum is swinging away from what HR thinks employees want and toward what employees actually want. Companies seeking to put people at the center of their organization are introducing feedback channels to build trust and capture the voice of the customer.
Read more about HR’s collaboration with IT here in the Harvard Business Review, or here in Forbes. For more detailed information on ServiceNow’s HRSD platform and offerings, check out our Empowering Employee Experience eBook.
Making the Future Human
It would be impossible to give a rundown of the past month and not mention ServiceNow’s recent robot takeover in downtown San Francisco. Before we continue, if you haven’t seen the short video, give it a quick watch below.
A Pew Research study found that 72% of Americans are worried about a future that includes more Artificial Intelligence (AI), Intelligent Automation (AI), and machine learning. With the new campaign, ServiceNow is trying to change the narrative to surround how technology-driven automation and the likes are actually just evolving how people work, not erasing humans from the workplace altogether. It’s more about technology in the service of people, instead of technology in place of people.
For so many people, workdays are filled with monotonous, repetitive, tedious tasks. Manual processes. Systems that don’t talk to each other. This status quo robs us of more meaningful work – work that creates more value, gives us better work experiences, and unlocks our productivity. Like ServiceNow, we see technology enabling us to focus more time on work that matters most.
“The future of work is not about everyone being automated, and people going away in the office, but actually technology helping people work better.” – Alan Marks, Chief Communications Officer, ServiceNow
Over the past decade, technology has transformed our personal lives, making everyday experiences simple, easy and intuitive. Why can’t technology make our work lives as easy as our personal lives? It can if companies embrace digital workflows, machine learning, AI and other technologies that make “work, work better,” as ServiceNow likes to say.
As an added bonus, check out this Twitter thread for some of the awesome GIFs that the robots spawned.
ServiceNow Quality Factors
As we move into the second half of the year, there is no doubt that investors, possibly even you, are taking a close look at market trends to make the crucial decision on whether to buy, hold, or sell their ServiceNow stock.
To help you get a quick look into the company, here are three key market metrics and their definitions. Important editors note: these numbers are subject to change after publication and past stock performance is never indicative of future results. Acorio’s reporting of these numbers should not be considered legal or financial advice as the author is not licensed to sell, trade or offer advice on security purchases (sincerely, my boss).
ServiceNow, Inc. (NOW) based out of the United States, has a market cap of 47,522,881.49 after recently touching 288.8 on a recent bid. NOW sees an average trading volume of 339,809.7.
Free Cash Flow Yield (FCF Yield). This is the free cash flow of ServiceNow in the current year minus their free cash flow from the previous year, divided by last year’s free cash flow. Free cash flow is the cash produced by the company minus capital expenditure. This cash is what ServiceNow uses to meet its financial obligations, such as making payments on debt or to pay out dividends. Financial experts say the higher the value, the better, as it means that the free cash flow is high, or the variability of free cash flow is low, or both.
ServiceNow’s FCF Growth is currently 0.012935 and their five year FCF yield is 0.005453.
Price Index. This is the ratio that indicates the return of a share price over a past period. This is calculated by taking the current share price and dividing by the share price at the specified timeframe mentioned. If the ratio is greater than 1, then that means there has been an increase in price over that timeframe. If the ratio is less than 1, then we can determine that there has been a decrease in price.
The Price Index of ServiceNow for the past month was 1.089482 while the 3 month Price Index is at 1.180751.
EBITDA and Enterprise Value (EV). EBITDA or Earnings Before Interest, Taxes, Depreciation, and Amortization is similar to the Earnings Yield. It is used to evaluate or compare the value of a company, similar to how you would use a P/E ratio. However, a stock’s P/E ratio is often greatly affected by debt levels and tax rates, where EV/EBITDA is not. The best way to think about the calculation is taking all the revenue and subtracting the costs that solely go into running the business. The obvious downside to EBITDA as an investment metric is that it can be misleading for companies to declare “one-off” costs that should really be considered normal costs.
ServiceNow has a current EV/EBITA of 393.273416.