ServiceNow Is Muscling In on the Intelligent Automation Continuum

As the supply side meanders through soul searching and trepidation while the industry transitions toward notions of digitization and automation, the buzz and enthusiasm around ServiceNow is a welcome change. DXC Technology acquired Dutch Logicalis SMC to boost its European ServiceNow capabilities. Adding to its Fruition Partners and Aspediens acquisitions, the move follows Accenture’s deal with solid-serVision and Atos’ purchase of Engage ESM, all focused to boost European implementation capabilities. This continued consolidation emphasizes two key issues: The war for (ServiceNow) talent and the expansion of the ServiceNow platform beyond IT Service Management (ITSM) into business functions. HfS had the opportunity to engage with ServiceNow executives in the context of their NowForum customer event in London.

Our key takeaway from the London event was that ServiceNow is making solid progress expanding beyond ITSM. In Q2 2017, 58% of the company’s net new annual contract value (ACV) came from outside of ITSM, compared with 40% a year ago. Crucially, however, the capabilities behind this expansion are no longer confined to what ServiceNow calls enterprise service management (ESM). While ESM capabilities are driving ServiceNow deeper into business functions such as customer service or HR, new functionalities include cloud management, security, and, increasingly, Intelligent Automation. This dynamic is adding to large system integrators and BPOs standardizing their service delivery on ServiceNow, not only for ITSM-centric activities but across broader business functions. Enough reasons for HfS to assess how ServiceNow is impacting strategies for building out Intelligent Automation capabilities.

Despite All the Noise Around RPA and AI, Service Delivery Is All About Integration and Orchestration

At risk of sounding like a broken record, we have to think beyond RPA when assessing the future of service delivery. As organizations progress toward the OneOffice notion, they require a holistic approach to overcome the organizational stovepipes of infrastructure, applications, and business processes. This ambitious goal cannot be achieved by throwing a piece of technology into a data center, and definitely not with RPA alone. Rather, organizations have to drive change management and change their mindset to align service delivery strategy at the intersection of data, analytics, and Intelligent Automation. ServiceNow can be a critical enabler on this journey. As we stated in our inaugural ServiceNow Blueprint, providers like Atos, TechMahindra, and Hexaware are standardizing service delivery on ServiceNow. This then gets linked  up to orchestration engines like Automic or Cortex and the plethora of Intelligent Automation are being integrated on top of that. Thus, ServiceNow is becoming part of the broader discussions on service delivery and automation.

Fast forward 18 months and ServiceNow is not only a standardization layer along delivery backbones but it is also moving to become a key player across the Intelligent Automation continuum. Through the acquisitions of DX Continuum (machine learning) and Qlue (virtual agent capabilities), ServiceNow is embedding core automation capabilities into its Now Platform. As with all acquisitions, ServiceNow is re-coding the acquired capabilities into its platform so that customers can continue leveraging the advantage of a single code and data model. The acquisitions are the main building blocks for the Intelligent Automation Engine underpinning the Now Platform. The more ServiceNow expands beyond ITSM to scenarios like ESM, security, or IoT, the more organizations have the requirements to leverage data and workflows across traditional organizational stovepipes. On top of that, the volume of data is increasing exponentially because external data sets also must be integrated.

ServiceNow is Getting Serious About Scaling a Partner Ecosystem

ServiceNow is expanding the notion of service management to evolve into the “third estate between CRM and ERP”, providing a new cloud-based level of efficiency between the front and back offices. Thus, there is a strong alignment with the HfS OneOffice concept and its goal of connecting the back, middle, and front offices to truly enable a digital customer experience. However, while ServiceNow has become synonymous with cloud-based innovation, the company has been very slow at embracing and nurturing the notion of an eco-system where a partner is not just a sales channel. Thus, the ServiceNow Services eco-system is still nascent with an innovative dynamic aiming to take the platform far beyond its ITSM heritage into broader enterprise scenarios.

With the change of CEO, ServiceNow is starting to change its approach to partners. Amidst a raft of announcements around partnering for specific capabilities, nowhere is this new approach more tangible than in the partnership with IBM. It is telling that cognitive solutions are on top of the areas of collaboration next to Bluemix and IBM Cloud orchestrator capabilities. The partnership is expected to drive a deeper integration of Watson capabilities into the Intelligent Automation Engine. One of the main use cases will be a virtual agent prebuilt for self-service, resulting in incident deflection that can be easily extended to additional use cases. Those scenarios will contain Watson conversation trees as well as ServiceNow actions to support ITSM self-service use cases for expedited time to value. These use cases will be underpinned by pre-configured conversation topics including “create an incident” and “search knowledge base” – all the way to a live agent handoff. Following the same thought process, ServiceNow is building out proprietary virtual agent capabilities based on the Qlue acquisition. The proprietary approach will allow users to design the conversation topics. Furthermore, the longer-term vision is to expand those capabilities to advance toward notions of intelligent event management, particularly with scenarios like IoT in mind.

ServiceNow’s strategy on Intelligent Automation is not one to supplant other tool sets but to complement existing ones. Atos’ approach to integrating IPsoft’s IPcenter with ServiceNow is a good example for that. At the Now Forum, ServiceNow’s Chief Innovation Officer Dave Wright outlined that the machine learning focus is likely to start with its ITSM roots to route and categorize work as well as to predict and prevent future issues. But Wright also echoed our views that the move toward a more data-centric model is a painful journey. It is about enhancing the learning models and finding ways to integrate increasingly semi-structured and unstructured data. As ServiceNow is looking at IoT scenarios in the longer run, that is certainly the right mindset to have. However, in order to find traction and visibility in an increasingly crowded market, ServiceNow needs to find a way to get access to the table where the sourcing decisions on automation are being made. That is in the context of Intelligent Automation and service delivery, not just around its sweet spot in ITSM.

Bottom Line: RPA Needs to Support Outcomes Through Orchestration of Disparate Sets of Technology and Data

ServiceNow is not replacing RPA or other approaches such as autonomics, but its enhanced capabilities put the company at the heart of the discussions of the OneOffice. Clients remain enthusiastic about its single code and single data model. To route data seamlessly through delivery backbones is at the heart of digital transformation and the OneOffice, as HfS prefers to call it. To become the cornerstone of those digital operating models, the enthusiasm for ServiceNow technology must be leveraged to build an effective ecosystem. Salesforce is both a role model and a new competitor because ServiceNow is aiming to push its offerings to the front office. Building out a vibrant developer community is critical to pushing ServiceNow deeper into ESM scenarios, as is building out an ecosystem of partners. To stand out with both machine learning and virtual agents, ServiceNow is increasingly competing with the mega ISVs starting to dominate these segments. Stakeholder management and dedicated marketing initiatives are required. HfS is just kicking off the second Blueprint on ServiceNow Services, so stay tuned for the progress of those efforts.