ServiceNow clients have spoken: Providers must sort out talent issues

Recently, we published our ServiceNow services Top 10 report, which examines the strengths and opportunities in the provider ecosystem. While the market has come a long way since our last report almost two years ago, there is still a dark shadow hanging over the industry—an ongoing talent war that’s hoovering up significant client and provider mindshare. And while clients are sympathetic to an extent, the reality is that many providers are facing existential pressures as the talent deficit grows. So, providers must make a choice: ramp up internal talent development and inorganic growth or start turning down lucrative ServiceNow services engagements. 

ServiceNow talent is a prized commodity, and many providers are struggling to hold on to the cream of the crop 

As with any high growth market caught in the middle of a messy talent war, there are winners and losers. The best way to find out how different providers are faring is by asking their clients—which is exactly what we did in our latest Top 10. A story we heard repeatedly was that some of the big hitters, particularly the major IT services firms, have exceptional internal development processes. The only challenges are that other companies are poaching their top talent or pricing them out in hyper-competitive bidding wars. According to a healthcare executive in the middle of a hefty implementation project, their provider was particularly affected by this issue, hampering the progress of the project. “Like any organization that has exceptional talent, they are often recruited, and we have had great developers leave.” They went on to point out that their partner has always been “proactive in filling the void and never leaving us in a difficult situation.” 

Even with a proactive partner, the loss of top-tier talent can have a significant impact on engagements with significant customization or complex business requirements. An executive at a utilities company pointed out that their partner has a very talented expert; the only problem is that there is just one of them spread over many projects, and access is increasingly limited. The average expertise across the rest of the team is substantially lower, which would be a major—potentially project defining—problem if the expert leaves. 

Talent churn is hampering delivery—fixing it now with innovative development programs is vital 

This theme carries more broadly across the entire ecosystem. An implementation project manager at an insurance firm pointed out that turnover with a partner had increased over the last two years, and it was causing serious delivery issues and putting the success of the overall project into question. 

There are, of course, success stories, and it’s here where providers need to take note and implement change in their organization. Boutique firm Linium has made sure to communicate the value that Ness Digital, which acquired Linium in 2019, will bring to engagements through more talent with a more diverse skillset.   

DXC has also proved it’s able to reverse the narrative that a string of major mergers and acquisitions can bring. Clients of Fruition Partners were unsure at first about the type of change DXC would bring. However, with a clearer story around ServiceNow, a hefty investment push, and the retention of top-talent, DXC has maneuvered to be a real leader in the market. The other IT services majors are building talent development capabilities internally, buoyed by a hearty appetite for internal talent to move to ServiceNow from other, less rewarding technologies and tools. They’re also pushing their partnerships with educational institutions to open up talent pipelines. 

Consulting firms, notably KPMG and EY, have tackled talent issues by cross-leveraging consulting talent from other areas of the business, a move that has helped the firms push the ServiceNow platform into governance, risk, and compliance. After all, who better to advise on GRC than the consulting firms who have climbed to the top of the audit industry? 

The Bottom Line: The talent issue cannot be solved organically; providers must develop innovative development programs to keep pace with demand. 

All of these firms aside, the idea that such an acute talent supply issue will resolve itself is fanciful. With the recent CEO change, ServiceNow is on a more aggressive growth path than ever before. Enterprise appetite for the platform shows no sign of dying down, which means one thing—demand for talent will continue to grow. With this in mind, providers must invest heavily in developing their ServiceNow practices.  

First, providers must build training programs internally to make the most of existing talent pools and those untapped in other areas of the organization. Second, they must build partnerships with educational institutions that can build reliable recruitment pipelines. Finally, they must work to deploy innovative solutions and accelerators to ensure their talent pools can operate at the highest level of performance possible. Without doing this, it’s likely the existing competitive landscape will shift dramatically as those committed to investment take the lead in what could rapidly become a winner–takes–all market.