Avalara looks for scale to support rapid growth and billions of customer transactions

Whether you’re buying clothes online or shopping for groceries, there’s a good chance that Avalara handled the tax calculation. The tax and compliance company processes billions of API calls to calculate tax for more than 43,000 organizations every year. Avalara has grown rapidly to match demand in the past four years. This growth challenged Avalara to efficiently scale and support processes such as onboarding new employees, quickly resolving cases, and providing the right technology to every department.

Avalara builds outstanding customer experiences with AI

Avalara chose the ServiceNow AI Platform to reduce IT workloads, speed up deployments, and eliminate costly integrations. By replacing multiple disconnected solutions and unifying data through a single platform for IT, HR, risk, security, and asset management, the team brought efficiency to previously labor-intensive, disjointed workflows. 

Avalara adopted an AI-first strategy, setting up an AI Center of Excellence (COE) with representatives from risk, legal, architecture, and HR teams. The ServiceNow platform team at Avalara works alongside the AI COE and the ServiceNow Impact team to support AI in both customer-facing services and internal processes. “ServiceNow is more than an efficiency platform at Avalara; it’s an employee experience platform,” says Derek Nohr, ServiceNow Platform Owner at Avalara. “AI provides the final key with automation and intelligence that gives employees everything they need in one location.”

More than $1 million in value gained in one year with IT Service Management

Avalara saw its greatest productivity improvements through ServiceNow IT Service Management (ITSM), which helped it simplify service delivery across the business. With expert guidance from Impact, Avalara connected multiple services on the ServiceNow AI Platform to reduce technical disruptions, boost IT staff productivity, and make it easier for employees to get IT support. It saw $1.03 million in savings over one year, a 3.5X return on investment.  

Nohr expects even greater savings as he adds ServiceNow AI Agents, including Now Assist for ITSM. “When I saw Now Assist, I knew we had to get it for Avalara. AI makes us more efficient. We can do more with less and free-up time to deliver more product innovations to customers,” says Nohr.

Avalara rolled out multiple AI use cases that boost IT staff productivity and improve employee experiences:

• Case Resolution Notes: IT staff use Now Assist to generate case resolution notes in seconds, so they can focus on serving more employees.
• Knowledge Article Creation: IT staff also use generative AI that automatically writes structured knowledge articles using case notes and resolution processes, saving hours of manual writing time.
• AI Search: When employees have questions, they get relevant and contextual answers from AI search, which summarizes information from Avalara’s 2,000 article database.
• Virtual Agent: Instead of dedicating a full-time employee to create and maintain a traditional virtual agent, Avalara used Now Assist to deploy one using out-of-the-box functionality. Employees can now talk with a virtual agent through Employee Center Pro or Slack, which has reduced the number of IT tickets filed by 57%. 
• Software Provisioning & Deprovisioning: When an employee needs access to software, they can ask the virtual agent. This triggers an AI agent to run the request through a custom provisioning tool on ServiceNow, which automatically provides access in minutes. Avalara now completes 78% of software provisioning and deprovisioning automatically, saving 1,500 hours per month.

“With the productivity we’ve gained from AI, we’re maintaining quality IT support with employee satisfaction over 95%, even as the number of employees has grown,” says Nohr.

HR closes half of all cases within one day with centralized case management

With Now Assist making a big impact for ITSM, Nohr plans to roll it out across all ServiceNow solutions. The HR team uses HR Service Delivery (HRSD) to centralize case management and monitor performance. With centralized routing and tracking, the HR team now resolves 52% of cases the same day. Now Assist could further improve HR speeds with generative AI case summarization and knowledge article creation.

Avalara recently upgraded to Employee Center Pro, giving them more dynamic, personalized experience where employees can find forms, policies, and records. Employees work with the virtual agents to solve more issues by themselves, reducing tickets by 72%. Nohr’s team will soon release an employee document management feature to replace siloed storage folders. Nohr sees potential for agentic AI here, using multiple AI agents to spot missing or unsigned documents and alert HR automatically.

Risk and security teams respond faster with a clear view of the risk environment 

Risk teams use Integrated Risk Management (IRM) to identify and prioritize vulnerabilities in one dashboard, providing a better overview of the risk landscape compared to the multiple tools used previously. Third-party Risk Management (TPRM) assists with setting up audit cycles for thousands of vendors, including a portal where vendors can upload documentation for secure document sharing. 

The security team saves around 800 hours per month—the equivalent of needing to hire an additional five full-time employees—by identifying vulnerabilities and suggesting remediation steps in Security Operations. With ServiceNow accelerating response times, security and risk teams not only operate more efficiently but can also focus on strategy and compliance to support more customers worldwide.

“Vulnerabilities pop up all the time, and they carry very different levels of risk,” says Nohr. “By connecting risk and security solutions, we can better understand what a vulnerability means to our business and prioritize fixing it.”

Avalara sees more value through a centralized platform for all workflows

Avalara benefits from using multiple ServiceNow solutions, as the benefits add up when more data, users, and workflows are connected. For example, to meet the company’s tremendous growth, Workplace Service Delivery (WSD) provides global visibility into workplace operations and cross-module ticketing ensures the right teams get involved. If someone requests a conference room for a big presentation in WSD, automated workflows submit a ticket in ITSM for IT support for that room on that day.

“While it’s easy to integrate third-party solutions, using ServiceNow products gives us more built-in functionality to deliver complex automated workflows,” says Nohr. “That means faster and less costly deployments.”

ServiceNow Impact: The secret to doing more with a small team

Nohr and his small team have accomplished a lot in just a few years with ServiceNow. The secret to their success, according to Nohr, is ServiceNow Impact, which helps the team get the most out of its investment by:

• Measuring Results: With Impact constantly setting and measuring KPIs, Nohr is always ready to show executives the value of ServiceNow products, building trust and support from leadership.
• Delivering Accelerators and Training: Accelerators help deploy solutions quickly and correctly, and training recommendations allow Avalara’s team to become experts right away.
• Providing a Comprehensive Health Assessment: Nohr believes strongly in the value of regular system health assessments to make sure that environments are well-maintained according to best practices.

Nohr believes ServiceNow Impact will continue to help deliver significant value as Avalara expands ServiceNow and adds agentic AI workflows. “The speed and quality of deployment we’ve achieved with ServiceNow Impact allows us to see results right away and get employees excited about the potential AI brings to them and our customers. I’m very proud of the work that we’ve done to transform operations at Avalara with ServiceNow.”