What’s in Store for ServiceNow with McDermott at the Helm?

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ServiceNow recently completed its six-week virtual conference. Not just one or two days, but a whole six weeks of sessions about the ServiceNow’s solutions and various customer stories. We were looking forward to the keynote from ServiceNow’s new CEO, Bill McDermott, the former CEO of SAP.

Last year, we reported extensively on developments at ServiceNow. We kind of wrote a book about ServiceNow, with the title: Nobody knows what ServiceNow is and what you can do with it. In any case, we’ve helped thousands of people get started with what ServiceNow is. However, the big question with a company like ServiceNow is: what else can it be? The vision and keynote of a CEO can be decisive in this respect.

This time last year, many will know that ServiceNow was led by its former CEO, John Donahoe. We had a number of conversations with him about ServiceNow, but we found it difficult to assess his long-term IT vision. In the meantime, however, he was offered the top job as CEO of Nike, after serving on its board for 5 years.

McDermott is a man with much more experience in enterprise IT and was the CEO of SAP for 17 years. The question now is whether McDermott can once again grow a company exponentially, this time ServiceNow.

What does McDermott add to ServiceNow?

By bringing in McDermott, ServiceNow has gained a great deal of experience in enterprise IT. A landscape in which it has been active for years, but in which it can still gain, and perhaps, even learn a lot. We were therefore particularly curious about McDermott’s vision, what he’s going to do differently from his predecessor and what ServiceNow will look like in the long term.

McDermott is known for his strategy, making acquisitions, to achieve growth – we have already seen ServiceNow make four of them under his leadership, despite these being driven by very specific technology capabilities. McDermott has a bold ambition for the company; he believes that ServiceNow will be the defining enterprise software company of the 21st century.

His former company may beg to differ based on a comment made by SAPs CEO Christian Klein during its recent conference keynote stating that: “true business transformation does not happen only with an intelligent workflow solution, or by selecting many best-of-breed vendors, leading to a fragmented IT landscape, or by just moving your IT landscape on a public cloud infrastructure and creating data lakes. You can’t do it without an integrated business model and data structure across the business.”

But many companies no longer want the vendor lock-in of one large closed platform. On the contrary, they want multiple (smaller) solutions that work independently of each other but can also work together to achieve business transformation. Because only then, they can easily replace an individual solution when it’s no longer sufficient. ServiceNow is one of the companies that makes it possible for these types of services to work together. McDermott puts it in even more concise terms, ServiceNow is the ‘platform of platforms’

To him that is where the company’s strength lies. Thanks to the platform, ServiceNow was able to switch directly from working in the office to working from home, virtually overnight.

During one of his Knowledge keynotes, McDermott went on to say: “Companies that are more digitally oriented have a big advantage over companies that are not. Using new technological solutions provides a better business model. Many companies want help with innovation.”

“9 out of 10 CIOs have a digital-first strategy, while only 4 out of 10 are prepared for a digital challenge from a competitor.”

According to McDermott, “9 out of 10 CIOs have a digital-first strategy, while only 4 out of 10 are prepared for a digital challenge from a competitor.” The need to innovate has accelerated enormously.

We’ve already seen the pace at which innovation is taking place. In mid-March, when the COVID-19 outbreak took hold, ServiceNow launched four emergency response apps to help its customers navigate through the crisis. By the end of that month, nearly 1,000 organisations had downloaded them.

Since then, it has released a further suite of Safe Workplace apps and dashboard to assist customers navigating the minefield on how to safely return employees to the workplace – all powered by the Now Platform. Reportedly, over 1,600 installations took place in just four weeks including at companies like Uber and Coca Cola European Partners.

User-friendliness and efficiency must be improved through innovation

McDermott also said that many companies have invested in system-of-records solutions. Think of solutions from Oracle, Salesforce, Workday and of course, SAP. These are all large ERP or CRM-like solutions that contain an enormous amount of data, but these systems mainly run on their own. Integrating with other solutions, so that the data can be combined and analysed, is often still on the roadmap or wish list. Even something as simple as using these systems on a mobile device is sometimes not possible. Companies are looking for ways to make better use of these systems: with better user experience, more efficiency or just a faster application. This is where ServiceNow and its platform can play a significant role, and there are still many opportunities, according to McDermott. With the ServiceNow platform, workflows can be built that allow data to be shared, or even provide an interface for using a system or records in a modern way.

McDermott calls this switching from a system of records to a system of action, which is what he believes digital transformation should be about.

Employers will offer choice where you want to work

McDermott is convinced that we are now going to a society where you can work from anywhere. He argues that within ServiceNow people have become much more productive because the company is well prepared for working from home and he hears the same from customers he’s speaking to. McDermott explained “We enabled our company – all 11,200 strong – to pivot immediately to a work from home environment. It was really exciting because we didn’t skip a beat in serving our customers. But also, our customers, in running on the Now platform, actually used it more, and increased their productivity dramatically.”

 Based on this, he argues that in the future, employees will be able to choose where they work, so that they can do their work in the best possible way. The future will have to tell whether he is right about this.

“It is 25 times more expensive to acquire a new customer than to retain an existing customer.”

McDermott believes that companies should focus on connecting all the people within the company, because that’s the only way you can serve your customers the best. At the moment, many companies still have too many silos. According to McDermott, there are a lot of benefits to be gained there. “A 5 percent improvement in customer retention can improve the profitability of most companies by 95 percent. It’s 25 times more costly to get a new customer, than to keep the one you already have very happy.”

McDermott has been CEO of ServiceNow for over six months now. That’s still relatively short. We hope to engage with him at a physical event later this year or next year to see what more he’s contributed to ServiceNow and how he’s leveraged his experience to make ServiceNow an even bigger player in enterprise IT.