CONTRIBUTOR
General Manager and Editorial Director,
Techstrong Group

Synopsis

Post-pandemic, it appears more and more digital transformation initiatives are being driven by SaaS platforms.

In this Digital CxO Leadership Insights series video, Mike Vizard speaks with Chris Bedi, CIO for ServiceNow, about this topic and what patterns he sees in how people are using SaaS platforms to drive innovation.

Transcript

Mike Vizard: Hey, guys, welcome to the latest edition of the Digital CxO videocast. I’m Mike Vizard. Today we’re here with Chris Bedi, who is the CIO for ServiceNow. Chris, welcome to the show.

Chris Bedi: Thanks. Great to be here, Mike.

Mike Vizard: One of the things that we’ve all seen now post-pandemic, is that a lot of the digital business transformation initiatives are being driven by SaaS platforms that people have access to customize using a low-code/no-code tool. They can run it as is if they’re so inclined, and for a lot of people that’s a step up in its own right. But there’s a lot of customization that goes on now.

Having seen all this, are you seeing any patterns in how people are using SaaS platforms to drive innovation? And is there any kind of thing that people should be taking away as a best practice or a way of thinking about being able to repeatably launch multiple projects at the same time?

Chris Bedi: Sure. Mike, there was a lot there, so let me try and unpack it. One, you talked about SaaS platforms playing a bigger and bigger role. So we are absolutely seeing that, where CIOs, chief digital officers, regardless of the title, they’re betting and taking a platform-based approach. All the 20th century architectures, so to speak. There’s a lot of systems of record out there, but what’s broken today is work actually flowing across those systems of record to provide great experiences to customers, to employees, to help things just simply operate better.

So that’s where you’re seeing a platform-based approach, and there’s economies of scale of putting things on one platform, one skillset to build across your talent inside your organization, the ability for it to interoperate across multiple departments. There’s lots of benefits there.

Then you touched on low-code/no-code. I think low-code/no-code has been around for a while, but has sort of been off at the edges, so to speak. I think low-code/no-code is coming into center stage, so to speak, and I think there are a couple factors that are driving that.

One is there’s an insatiable appetite to go digitize things, and there’s no shortage of things to go do, and it just simply cannot get done by the central tech organization.

The second thing around it is the talent entering the workforce today. They’re equipped – I read a recent study that said up to 40 percent of today’s workforce at the average company is equipped to participate in low-code/no-code at development. Now that’s a combination of a very tech-savvy workforce coming into the organization as well as low-code/no-code evolving. So it’s easier to get things done.

Back to the demand, I think those 500 – an estimate of 500 million enterprise apps need to get built over the next three to four years. That’s a lot, and it’s not gonna happen without low-code/no-code citizen developers, more of the workforce participating in that journey.

Mike Vizard: Do you think we’re gonna get to the point soon where we may have too many applications going through the pipeline at the same time, and people who are building out these low-code platforms need to think through some of the more nuanced aspects of continuous delivery and how we think about all that?

Chris Bedi: Well, for sure. I think low-code/no-code, the key is, now that it’s come to center stage, low-code/no-code with the right governance. So if you think about previous forays into this arena – and I’ll go way back with Lotus Notes, which it may be some of the audience doesn’t even know what that is. Or most people in my role have encountered SharePoint sprawl and things like that because it was ungoverned low-code/no-code, even though we didn’t really use the term back then.

I think now it has to be low-code/no-code with the right governance, where the central tech organization doesn’t have zero role. They have a really important role, all the way from the intake process to make sure duplicate apps aren’t getting developed, but also as the CI/CD change pipelines get built, those almost have to be invisible to the person doing the low-code/no-code.

So the central tech org has to instrument those CI/CD pipelines, build in automated security scans, provide trusted datasets that the person in marketing can actually use without fear of doing something wrong from a data privacy standpoint, but can still operated independently. If they want to release code to production, that’s fine. Maybe for somebody in HR it’s every week, because they’re on a different cadence. There’s not gonna be a one-size-fits-all.

The new, I guess, requirement for central tech is to enable low-code/no-code at scale with the right governance model. Otherwise, as you appropriately said, we create another mess for ourselves.

Mike Vizard: How unique are each of these applications? Because a lot of times I’ll look out there, and there’s a template for a particular workflow that seems perfectly fine and I don’t need to go build a lot of code. So when do I decide to just kind of leverage a template and maybe extend it versus write an entire new app?

Chris Bedi: Yeah. I think what we’re gonna see – and you use the word templates, maybe prototypes, maybe examples – I fully envision a community of low-code/no-code that just really cooperate and help each other out. It could be I start with a template and I need to evolve it. I think the North Star has to be you never need to write code or even anything that looks like code. But to get to the domain-specific requirements, even if you start with a template, you’re likely gonna have to add some business logic, some nuance, particularly to that department domain or your industry.

So I think that’s always gonna be there. Again, I’ll go back to the role of central tech, which is evolving in this environment. I’ll use, again, maybe another dated reference from that show Who Wants to be a Millionaire? If you remember it, like the phone a friend concept. So the idea that if you do get stuck, you can still contact central IT to help get unstuck. That’s where I think starting with a template, putting your business logic in place, and then if you do get stuck, having the ability to reach out to the tech organization.

When we look at skillsets needed to actually be successful in low-code/no-code – and this comes from real-world experience because we have people in marketing, in HR, in finance, all domains creating low-code/no-code apps on ServiceNow. It’s really a couple things.

One, there’s no substitute for knowing the domain where you’re trying to build the app in the first place. That’s kind of a no-brainer, because they life in that department every day and they’re doing the work.

The second is if you can build like an Excel macro, you can build low-code/no-code apps. If you have an analytical mindset, you can build low-code/no-code apps. If you are pivot tables in a spreadsheet, you can do low-code/no-code apps. So the bar isn’t tremendously high, and I think as the tooling evolves that phone a friend concept will become less and less important.

Mike Vizard: One of the knocks about low-code is that we – or at least a concern is that you wind up with a lot of citizen developers, who may not necessarily have a good understanding of how to build an attractive application that somebody wants to use. There may be security issues. And sometimes there’s a concern about whether it will scale.

What’s your sense of how do we guide these people through that process, in a way that doesn’t result in a million applications that all have an issue?

Chris Bedi: I think it starts with the intake process and how we enable this community. On the intake process – and I’ll give you a very real-world of what we do here at ServiceNow – when someone has an idea for low-code/no-code, the only time it’s a no is if there’s an app that already exists, because we don’t want to duplicate apps and we say, “Okay. Let’s either improve the one that exists or let’s agree we’re gonna kill it,” because you’re gonna create something far better.

The second criteria is sometimes there is very sensitive data in the enterprise, and you say, “We don’t think that that’s a great use case for low-code/no-code.” So we try to catch it really upfront. And it’s never a no. It’s like, “Hey, IT will build that part for you, but you do everything surrounding that that you wanted to do in the first place.”

Then the third criteria we use is simply like, “Hey, you’re gonna get in over your skis. Why don’t you do this one with us as well?” I’m sure the words on the slide say something different.

Then the enablement part is super-important because you say, “How do you make sure you use different words, but you’re not building a crappy app?” How do you make sure it’s an app that has virtual agents, that has –? And we define this term of next-gen apps at ServiceNow, and the attributes of it are use a virtual agent as a form of the experience. Mobile has to be there, search as a paradigm as opposed to navigating a bunch of trees of – to find your piece of information, various other attributes that go and we train people on that, and we gamify it to a certain point.

Then the other thing that we do as a central tech organization on the backend is rigorously measure daily active users, weekly active users, monthly active users. And for ones that are going up into the right, fantastic. For the ones that are flatlining or it’s going down, we do reach back out to the citizen developer to say, “Hey, this is the behavior we’re seeing. How do you think it’s going with your app?”

So, again, there’s new roles that need to be created, I think, in the central tech organization, because that’s a very different role than, “Let me get your requirements. Let me go build something for you.” This is, “Hey, I’m monitoring sort of a control tower aspect of the entire enterprise, all these apps that are out there,” and my role is more to curate adoption and make them better and better versus actually build them.

Mike Vizard: How smart will the control tower get? We hear a lot about AI, but I wonder. At some point, could I just start to be able to declaratively say or maybe even verbally say, “I need an application that does x,” and it will tell me if that exists already or, if it doesn’t, it will guide me step-by-step to build it?

Chris Bedi: Yeah. The beginning stages of that is we have an app inventory, obviously, and the first step in the intake process is searching for it. Does this already exist or not? Or does something like it exist? That’s only gonna get better and better with AI-driven search, which we’ve built into our platform as well.

But the other item you mentioned, which is – I’ll even take it perhaps a step further, Mike, which is leveraging process mining. So we have process mining on our platform, and rather than a person needing to figure out, “Hey, I have an inefficiency in my procurement process and in this particular step. Maybe I need to build an app around this particular step, because that’s increasing the cycle time by 80 percent, just this one step,” process mining will start to surface those insights to you.

We have process mining in the ServiceNow platform. We recently partnered with Celonis. So if you think about that, Celonis can do an x-ray, if you will, of any business process on the planet, regardless of what system its in.

Then when that insight has surfaced, that becomes a feeder to building the app. So again, using AI and ML to help the human understand what apps need to be built, I could easily foresee that saying, “Hey, a very similar app exists. You should just modify that one versus build from scratch.”

Then even take it a step further, Mike, and this is probably three-plus years out. Maybe the platform itself can start to write the beginning constructs of the app, because it knows the business problem that needs to be solved. So that’s where I see the evolution of this going, but as usual, we’ll overestimate what can get done in the short-term and underestimate in the long-term. But I think this has a very, very rich future.

Mike Vizard: Do you think post-pandemic there was a boatload of projects that were launched, and a lot of it was, to be honest, let’s just say reactionary? If I look at things now though, as we head into 2022, it seems to me at least that the economy is recovering, but we have issues. We don’t have enough people to fill these jobs. It doesn’t look like they’re coming back. There are a number of supply chain issues. Costs are rising.

Do you think we’re about to enter maybe a second phase of digital transformation that’s a little more proactive and tactical in the approach, because we’re going to try to solve very specific issues?

Chris Bedi: Yeah, Mike, I’m not sure I’d use the word tactical. But what’s very clear is digital transformation certainly got a jolt with the pandemic. It is the agenda for every single C-suite. It’s not just put a mobile app in front of my customers and call it a day. It’s more of how are we gonna create a digital experience that’s going to created brand loyalty, that’s gonna boost NPS, that’s gonna lead to more top-line revenue? Because there’s a lot of choices consumers and customers have out there.

You mentioned supply chain and talent shortage. I think on the talent shortage, we’ve certainly seen employee experience rising up in the agenda of the C-suite as well, because whether it’s talent acquisition, talent retention, engaging that talent, organizations need to care about that far more because of the scarcity of talent and make their workplace a place that people want to be.

It’s interesting. I was reading a study that said people entering the workforce out of college, one of their top three criteria is how well the organization is technology-enabled, because they don’t want to go to a place that feels backwards compared to the environment they had in college. So think about that. From an employee experience standpoint, from the hiring to the onboarding to the ramp-up, unless they feel like that’s a digitized journey, they’re maybe not gonna go somewhere else, because they don’t feel like they’re being as productive.

The other element on the talent is ESG. It is certainly a massively important issue for the entire planet, but more and more to engage talent at our organizations. How do we make sure that they can participate and know that the company’s mission around ESG is something real and not just a PowerPoint slide?

At ServiceNow, we actually came out with a solution, ESG in a Box. We organize all of these elements, from planning the projects, measuring carbon footprint, you know, supplier base and looking at what your supplier is doing. Those things are really gonna start to matter.

And you talked about a really important issue around supply chain disruption. I think the workflows around supply chain are ripe for digitization, because to deal with these disruptions and react to them on a global basis, it is hard, hard work. So organizations I think are gonna really shift to digitizing more of their supply chain workflows, exception management, using machine learning and AI to help their workforces, how to react in real-time.

Mike Vizard: What is your best advice to CIOs about how to get in the middle of that conversation? Because after all these years, I still feel like there’s a divide between CIOs and the rest of the business. A lot of times, the business is going out and doing something with a consulting firm or whatever. How do you make sure that that CIO remains at the core of that conversation?

Chris Bedi: I think it’s all about communication, obviously predicated on execution. I’ll take the execution as a given. But on the communication side, it is really just making sure we’re talking about things that really matter to the next C-suite. It’s not a customer experience platform. It’s how we’re gonna boost NPS by five points, and we all know each point of NPS is co-related to revenue growth by 3.5 points.

So I think it’s communicating the why we need to do these tech investments, because everyone knows the future is tech. Right? Everyone is talking about digital transformation. It’s just what exactly are the tangible things that we need to do?

You tried to bring out that contrast. During the pandemic, there was reactionary versus maybe intentional. Right now, everyone is crafting their digital strategy, and I do think CIOs need to play a key, key critical role in crafting that, but communication around the business value that tech can drive becomes super-critical.

Mike Vizard: Yeah. It seems like every business event is now an IT event and vice versa; every IT event impacts the business. It’s just not clear to me quite yet that everybody has got that notion or at least has wrapped their mind around that. So, I don’t know. Do you think we should take the entire digital C-suite and put them on a retreat some place to get them to reset their minds? How do we get everybody to get that –?

Chris Bedi: Retreats are always useful for some blue sky thinking. But I’ll give you maybe one tangible one, which is for years we’ve talked about the technology organization, the CIO getting more business acumen, and appropriately so in some cases. I think we’re at a stage now where the entire C-suite needs to get a little bit more tech acumen.

So how can I use things like machine learning and AI and the data I have to further advance my strategies? What decision-making should I be relying on, machine learning algorithms to augment humans for faster and better decisions? Where can I be using mobile and virtual agents in automated workflows to get the most out of the scarce labor that I have, to focus on the future strategy versus mundane work?

I do think the CIO really needs to take it upon themselves to educate, which is again communication, and then help their peers get a little bit more tech-savvy. I think if everyone gets a little bit more tech-savvy, if the tech organization gets a little bit more business-savvy, that’s a force multiplier. Then you can go on the retreat and have a great conversation.

Mike Vizard: The last question: do you think that IT is now more agile than the rest of the business? For years, the business always said IT was slowing them down, but as I look at it now I have to wonder if IT is moving faster than the business can absorb.

Chris Bedi: I think perhaps in spots, and that’s a risk I think. Any organization, whether it’s the business – and I hate saying IT and the business, because I think IT is absolutely part of the business, right. It is driving the business in a lot of places. But any organization getting ahead of the other without the right organizational change of management, so that people can absorb the change, is a risk, whether it’s the supply chain organization getting in front of the tech organization or the tech organization getting in front of the supply chain organization.

So I think what it speaks to, Mike, more and more is these teams need to operate in an agile manner, but as really one team. And we’re seeing that. We certainly see that at ServiceNow with the way we do things with our partners around the company, but we’re seeing that in our customer base as well, as we serve 80 percent of the Fortune 500, which is really just one intact team regardless of the organizational boxes on the chart, to go get this transformation done.

Mike Vizard: All right, guys, you heard it here. Knock down those siloes as quick as you can. Chris, thanks for being on the show.

Chris Bedi: Mike, great conversation as always.

Mike Vizard: All right, guys, back to you in the studio.

Show Notes