ServiceNow: The Workflow Workhorse
One of the hottest tech companies in the world is ServiceNow. The company’s Q2 earnings were a barnbuster (30% YTY growth, 40 deals over $1M, and now running at a $4B annual subscription runrate – at a 97% renewal rate). The stock is now trading at 23 times sales (more than twice the multiple of Workday) and the company is now worth $85 Billion.
Why such astounding growth? It’s very simple: ServiceNow has effectively pivoted from a company focused on “service delivery automation” to become the premier Workflow Workhorse for business. If there’s anything we’ve learned from the Pandemic it’s that companies need digital platforms that help them quickly build “workflow applications” to solve urgent business problems.
In the HR space this is the enormous market for “Employee Experience” solutions – everything from onboarding and transition management to workplace scheduling, attestation, and many new Safe Workplace apps which every company needs. ERP applications like Workday, SAP, Oracle, and others are just not designed to adapt this quickly – so ServiceNow is becoming a standard platform for any large company’s digital solutions.
How Important ServiceNow Has Become
In the area of HR Technology and Employee Experience, ServiceNow has become essential. While every HR Tech vendor wants to build new applications to help with wellbeing, back-to-work, and digital experience management, none of them have built a development platform that lets any company build the workflows they need. I remember seeing the original workflow development studio a few years ago and I was excited at the time. Now that this is available, companies can build their EX applications on ServiceNow (in a low-code/no-code platform).
While many companies have adopted cloud-based HCM systems already, we are in the middle of a big architectural shift. Today companies need to build an employee-centric architecture, one which makes it easy for companies to build new employee workflows that may change every quarter.
For ServiceNow, the timing is perfect. The company has been building out its HR product line and now has more than 750 HR customers. And since the platform is open and cross-functional, it integrates EX across HR, IT, Finance, and Legal and can easily help companies build cross-functional applications that run between the HCM system and other applications in the company. Many companies have Business Services teams that handle HR service delivery and other HR services. These groups want an integrated platform that brings workflow applications across each functional area – and that’s what ServiceNow enables.
Making Employee’s Lives Better
Throughout the Pandemic we’ve seen dozens of needs for such a solution. PepsiCo, Chubb, AB-Inbev and others have radically simplified their performance management process to save time and create a more meaningful, useful support system as employees change roles and work from home. Companies like UHG, L’Oreal, Pizza Hut, and Verizon have rapidly rolled out Pandemic support platforms, attestation tools, and many new types of “back to work” systems that merge together location data, virus data, and workplace data to help employees schedule their workplace each day.
These types of applications were never imagined only six months ago: companies had to design and develop them in days and weeks, not months or years. They needed these applications to integrate with their legacy systems, use data in their HCM or Learning or Talent platforms, and they needed them to be supportable, scalable, and easy to modify. ServiceNow is designed to do all this.
The other technology vendor that does this well is IBM, who can build Intelligent Workflows to perform many of these functions. But IBM’s Intelligent Workflow technology isn’t off the shelf, and typically designed for more complex solutions. Workday just announced its new case management system (as has Oracle), but these are only a small fraction of what ServiceNow has to offer.
From HR Tech to Work Tech
Think about it this way: the future of HR tech is not more HR, but more integration with work and live. Just as Microsoft Teams is now becoming a standard platform for meetings and collaboration, so ServiceNow can become a standard platform for enterprise employee applications. And as this picture shows, these applications look more like “work tech” and less like “HR tech” every day.
Bill McDermott is an inspirational leader, and I know his presence at ServiceNow has been transformational. Let’s watch this company carefully – as important as HR Tech has become, let’s hope ServiceNow continues to make it even better for everyone.
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