It’s time to drive much more strategic value from ServiceNow engagements: Here’s how

When one enterprise leader described service management as “unglamorous but necessary”, it encapsulated one of industries biggest perception challenges—service management is not strategic: It’s a necessary cost to keep the real value-add areas in check.

However, this is changing as modern service management solutions, models, and processes are enabling enterprises both to open up new opportunities for adding value to business services and to build single platforms to analyse data and orchestrate services.

A lot has changed since the first ServiceNow Services Blueprint- enterprise service management is out of the wilderness and providers are figuring out new ways to add value to the maturing ecosystem. In part, it is the increasing importance of good service management practices that have led to the development of a vibrant and diverse services ecosystem covering the full spectrum of business demands. Fuelling these are the particular needs and increased requirements of enterprises seeking to build a layer of management over the expanding digital technology. Business services are developing as operations shift their models to meet the needs of their consumers better.

Enterprises place a high value on service management—and are pushing providers to deliver the goods

One of the key findings from buy-side interviews was simply how diverse and varied both motivations and expectations were. Many enterprises were focused on getting the traditional focus areas right and were bringing in heavy-lifting partners to boost the maturity of their service management, most commonly the conventional stomping ground of ITSM. Others are looking to embrace the now proven value of pooling business services and orchestrating through enterprise service management (ESM). Meanwhile, the more innovative and cutting-edge enterprises are looking to implement a service management and orchestration platform that will spread from the back-office right through to the front—a single platform from which the majority of business processes can operate.

The concern for many of these enterprises is whether or not their provider can keep up with their demands. At their most positive, clients talk about enablement and guidance at the highest level from their providers—feeding into, and in some cases driving, the overall roadmap. However, not all clients were as impressed with their provider’s capabilities and advised that outside of the initial implementation it was tough to quantify the value from the engagement. For these clients, it was important that the provider maintained momentum and continued to deliver the outcomes their customers needed.

Indeed, this deep divide in experiences and its impact on the engagement was directly proportionate to the degree to which enterprises were willing to hand over the reins. Many enterprise leaders with multiple outsource engagements under their belt provided a more pragmatic view of their engagements and viewed them for their merits in delivery, with any need to change or refocus contained as they built out and evolved the roadmap on the buy side. For others, there is a cautionary note about handing over too much control over the direction to providers who do not have a clear vision for the engagement or track-record of delivery.

Not all acquisitions were created equally: providers and enterprises have tough questions to answer where the added value is for customers

One of the standout findings of this research—alongside some of the broader themes captured in our IT Services Blueprints—is that not all acquisitions are created equally. Or, more to the point, not all acquisitions are managed equally. Stories from clients that had been part of an acquisition process can be depressing, particularly when the change process is not managed correctly.

The ServiceNow provider ecosystem has been the battleground for a series of high profile mergers and acquisitions, many fuelled by the ongoing talent crunch and the increasing demand for ServiceNow services.^[1] For some clients, this activity is an encouraging example of their provider’s commitment to services they rely on and will continue to use. For others, the acquisition activity has been so smooth they have not noticed any major differences. But for the majority, the tales from the trenches are those of confusion and fear as positive and productive relationships with boutique providers disappear into the industrialised service delivery of leviathan firms or talented service professionals from previous engagements disappear into the machinery of their new service provider.

Ultimately, there is a huge amount of work to do on both sides. Some of the experiences were strikingly dissimilar, even when part of the same acquisition activity. The root appears to be the differences in experiences and expectations of the enterprise buyers and sourcing experts—those battle-hardened professionals were aware of what to expect and what areas of the engagement to focus on. For others, either more optimistic or inexperienced, the expectations were considerably higher, and anything compromising their engagement impacted perceptions of service quality enormously.

But, providers aren’t completely off the hook; some of the stories could easily be remedied by better communication from vendors. Improved change management is a necessity as acquisition activity in the space shows no sign of calming down. To avoid a sizeable impact to their reputation, during an acquisition providers need to take care of their existing clients and make their journey as smooth as possible.

The talent shortage is pushing enterprises into the arms of service providers

The acute ServiceNow talent shortage is making an impact across the ecosystem. Providers and enterprises are figuring out ways to bring in the talent they need and reimagine services to accelerate delivery and boost innovation with a restricted talent bench. For enterprises, this talent shortage has led to two shifts in approach.

Firstly, it has forced many enterprises to use service providers for work that they would have preferred to take on internally. To an extent, this has led to the initiation of agreements between parties where, at least on the buy-side, there is an accentuated degree of caution. Multiple client references advised that they were handing over work to service providers piecemeal to mitigate risk—emphasising that this was an overhang of their business’s reluctance to hand over work in the first place.

But the second shift, which is accentuated by the first, is that enterprises are scrutinising the realities of their access to service provider talent. This scrutiny starts at the contract level. While access to development FTEs may sound traditional now, it’s the currency of the day when access to talent is the commodity sought after. But it extends well beyond that to the perceived quality of the talent, with many clients fearful of any change that may see them lose the high-quality professionals they have become accustomed to (such as through an acquisition) or, should the scope of their engagement expand, bring in additional resources from elsewhere in the organisation that might not be up to par.

While this is a valid concern—and several clients highlighted areas that require significant improvement where talent consistency is concerned—most providers are working hard to develop innovative recruitment and retention programmes. One approach is bringing skilled professionals from other areas of the business, which is championed by the large consultancies. Another is building internal universities to upskill promising talent employed elsewhere in the global outsourcer’s services. It’s clear to see talent is weighing on the minds of both providers and enterprises alike.

Where are providers doing well? Clients dish out the praise!

Outside of these major trends, there is a raft of areas service providers are excelling in. Our clients haven’t held back when dishing out the praise to partners that are innovative and deliver the goods. Here are some of the key areas the ServiceNow services ecosystem is doing well in.

Leveraging experience to boost maturity: For many clients, simply boosting the maturity of their service management was the outcome they wanted to achieve, whether that’s boosting ITIL process performance or adopting more of ServiceNow’s core modules. For these clients, their providers excelled at bringing in the experience needed to get them across the finish line without needing to invest in a huge amount of planning and design.

Partnering up: Many of the engagements described by reference clients are extensive pieces of work spread over long periods of time. For these enterprises, finding a true partner that wanted to invest in the engagement and help drive the services they needed was a real winner. While for some clients this involves tangible investment and “money on the table” to help write off legacy, for others, it is simply about joining together as one team with a shared vision and delivering better solutions as a result.

Understanding the organisation: It’s a bit of a cliché but understanding a client’s organization holds real value for engagements. Many reference clients highlighted this as a notable plus for their provider. An example of providers getting to know organisations involves sitting professionals within the business before the engagement began to get a feel for culture, business environment, and priorities. In some instances, this core business knowledge has enabled the enterprise to make short work of future selection processes for upcoming projects, as their ServiceNow services partner already knows their business inside out—they are the preferred option from the outset.

Investment in services: Many clients have been with the same provider for an extended period and are encouraged by the ongoing investment in their services to build out solutions, bring in top-tier talent, and experiment with ServiceNow to ensure they are at the spear tip of innovation. While not all clients spoke positively about acquisition activity, some did highlight this as a clear sign of the provider’s commitment to the service area—and a reassuring testament that they won’t be left high and dry should the provider decide to move toward its independent service management solutions.

Where are providers dropping the ball? Clients dish the dirt!

Of course, there is always room for improvement. As a relatively immature market, the ServiceNow services space has plenty of room to develop services and its approach to engagements. Reference clients provided candid and insightful feedback about where their providers could improve or had dropped the ball completely.

Inconsistency of talent: The majority of engagements relied heavily on the highly-skilled talent that service providers were able to offer—even when tailoring out-of-the-box solutions. However, for some clients, the talent wasn’t up to scratch to deliver what they needed. Inconsistency was perhaps the most groaned about aspect of this issue, with multiple clients advising that they had a very effective team, but progress could be held back if the A-team wasn’t involved.

Never saying no: Some enterprise leaders advised that one of the most frustrating issues they encountered was that their provider would never say “no” to their request, even if “no” was the most appropriate response. This meant that further down the line, client’s encountered challenges because professionals tried to deliver something that was not possible, but had been promised and agreed to. In another instance, enterprise leaders and service managers were looking for a partner to bounce ideas off of and think around challenges, which was not possible if they only answer they could get was “yes”.

Account management: Some clients really moaned about account managers. Clients argued that account managers only seemed interested in sales and future opportunities and paid little to no attention to ongoing engagements. This was particularly the case after an acquisition, where close and friendly account management shifted to sales overdrive.

Communication and change management: Countless stories reached us about how providers had dropped the ball on communication and change management—whether that was at the engagement level and was a changeover of talent on the team, or at the corporate level as a result of acquisition or major changes in structure. Many of the challenges highlighted by clients could have been swiftly solved through the implementation of a communication plan that would keep clients up to date and reassure them about their engagement’s security and stability.

The bottom line: Demand for services is high, but so are expectations—providers must not get complacent and listen to their customers!

There is clearly a lot for service providers and their clients to be excited about. The space is growing rapidly as demand for ServiceNow services shows no sign of slowing down. It’s also growing into a rich ecosystem where both providers and enterprises are working to develop the platform through greater verticalization, across business services, and with innovative modules and accelerators. However, this is not the time to be complacent. Clients have provided candid feedback that is often far from complimentary. Providers need to address this feedback and ensure they are delivering the goods in the right way, or risk losing out to competitors who are able to deliver in a highly competitive market.

To finish off, here are our top three tips for service providers and buyers to make sure they get the most out of their engagements:

Three things providers need to do:

1. Communicate: Keep clients abreast of developments and movements in the space. The ecosystem is moving quickly, and you don’t want client trust to be a casualty.
2. Invest: Don’t hold back on investing in the space. There is clear demand for services. You will need to build out offerings to maintain market share. Additionally, ensure you have the right training and certifications to be a credible force in the space.
3. Experiment: Look for client organisations to work with so you can push the innovation envelope and build out proof of delivery.

Three things buyers need to do:

1. Validate: Look for evidence of delivery in the ecosystem and a clear commitment to innovate. There are too many vendor promises out there; make sure they’re backed up with proof.
2. Embrace: Don’t be afraid to be involved in the process and in developing the roadmap. Providers may have the solution expertise, but you know the particular requirements of your business.

Learn: Ensure there are mechanisms to capture knowledge and expertise from engagements. ServiceNow skills and experience are now prized commodities, look to develop your own wherever possible.

[1] For a deeper dive into the emerging trends in the ServiceNow Services space, take a look at our recently published ServiceNow Services Blueprint 2018.