How Avalara fast-tracked Agentic AI with ServiceNow Impact

[RoxanneZ]

The fast-paced world of transactional tax compliance requires constant innovation. For Avalara, a pioneer in this space since 2004, staying ahead means continuously disrupting itself to deliver exceptional results. When Derek Nohr, previously Director of Enterprise Systems at Avalara (now Sr Director ServiceNow Platform and Development at Elara Caring), was brought in to overhaul the company’s backend operations, he faced a familiar corporate challenge: a disjointed landscape of spreadsheets and fragmented legacy tools. Fast forward four years, and Avalara has not only consolidated its core operations on a clean, out-of-the-box ServiceNow foundation, but it has also emerged as a trailblazer in agentic AI adoption.  

 Overcoming silos through best practices 

Transitioning an entire organization away from historical, "off-book" processes is rarely easy. Even in an innovative culture like Avalara's, certain stakeholders were heavily attached to their manual workflows—particularly within hardware asset management, which was run entirely on spreadsheets.  

To break down these operational silos without creating custom, messy code, Nohr leveraged ServiceNow Impact and Now-on-Now peer sessions. By aligning tough stakeholders directly with ServiceNow account representatives and the Impact consulting team, Avalara successfully steered the business toward industry best practices.  

"We were able to use the Impact program to get stakeholders to see that maybe their way is not the best possible solution, and to explore using out-of-the-box functionality," says Nohr. "We haven't looked back. It’s absolutely wonderful."  

With a solid, unified platform foundation in place, Avalara shifted its focus from core deployment to rapid growth. Following their purchase of IT Service Management Pro Plus, the team set an ambitious goal: completely automate Level 1 support using generative AI.  

Using the “Jumpstart Your GenAI” accelerator from ServiceNow Impact, Avalara created, tested, and deployed seven AI agents in production in just six weeks.  

The data “Aha” moment 

The deployment wasn't without its hurdles. Early testing revealed massive internal data gaps. Unless the platform team could map services, software applications, and configuration items to their proper ownership groups, the new AI agents wouldn't know how to act.  

To overcome this, Nohr met directly with the director of ServiceNow’s own internal help desk via the Impact program. By mirroring ServiceNow’s data structure and resolving their mapping challenges, the team unlocked the full power of the technology, making custom skill set development simple moving forward.  

Today, these AI agents sit at the ready, managing Tier 1 activities with incredible efficiency:  

• 30-second resolutions: End-users receive personalized, step-by-step instructions in less than 30 seconds.  

• Smart triage: The agents automatically detect VIP tickets and route them through escalation workflows.  

• Multilingual support: A translation detection agent identifies languages and delivers tickets to Level 2 human agents in their native language.  

By automating these mundane triage activities, Avalara has freed up human help desk staff to tackle complex Level 2 and Level 3 technical problems.  

Measuring the impact: velocity & value 

By aligning all platform efforts to clear, measurable business outcomes from day one, Avalara has achieved staggering financial and operational metrics. This includes a 3.5x ROI based on a 3-year contract value, and a 425% month-over-month increase in user self-service engagement. Productivity gains mean Avalara has avoided the need to hire the equivalent of seven FTEs. 

Beyond the help desk, this AI-first mindset is expanding across the enterprise. For example, the team overhauled Vendor Risk Management. Evaluating third-party SOX compliance reports used to take 40 to 60 hours of manual reading. Now, using generative AI content summarization, the system matches hundreds of pages against internal controls and recommends a risk rating in just six minutes.  

Avalara’s rapid transformation was driven by its active engagement with ServiceNow Customer Success. Nohr speaks with his Customer Success Manager three times a week to stay ahead of upcoming platform roadmaps, review platform health scorecards, and proactively look for security vulnerabilities.  

“I can’t imagine being as far along in our journey as we are without the support of ServiceNow Impact,” Nohr reflects. “It has been absolutely critical in getting Now Assist deployed quickly.” 

For organizations looking to accelerate their own AI journeys, Nohr offers a vital piece of advice: “Get your fundamental data in a healthy state.” AI cannot act effectively on formatted data gaps or siloed systems. Dedicate the time, lean on Impact accelerators, and stop treating technology as an efficiency tool—use it to completely reinvent what work means for your people.