A FORRESTER TOTAL ECONOMIC IMPACT™ STUDY COMMISSIONED BY SERVICENOW The Total Economic Impact™ Of ServiceNow Impact Business Benefits Enabled By ServiceNow Impact OCTOBER 2023 THE TOTAL ECONOMIC IMPACT™ OF SERVICENOW IMPACT Table Of Contents Executive Summary ................................................ 1 The ServiceNow Impact Customer Journey ......... 6 Key Challenges ..................................................... 6 investment objectives ............................................ 7 Composite Organization ........................................ 8 Analysis Of Benefits ............................................. 10 Faster Time To Value For New Applications ....... 10 Increased Value From Existing Platform ............. 12 Improved End-User Productivity ......................... 16 Improved Operations Staff Productivity ............... 20 Unquantified Benefits .......................................... 23 Flexibility ............................................................. 23 Appendix A: Total Economic Impact .................. 25 Appendix B: Supplemental Material .................... 26 Appendix C: Endnotes ......................................... 26 Consulting Team: Erach Desai Henry Huang ABOUT FORRESTER CONSULTING Forrester provides independent and objective research-based consulting to help leaders deliver key transformation outcomes. Fueled by our customer-obsessed research, Forrester’s seasoned consultants partner with leaders to execute on their priorities using a unique engagement model that tailors to diverse needs and ensures lasting impact. For more information, visit forrester.com/consulting. © Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to forrester.com. THE TOTAL ECONOMIC IMPACT™ OF SERVICENOW IMPACT 1 Executive Summary Enterprise SaaS software deployments across many applications, are challenged by complex interlinking of the services spanning these applications. Digital transformation coupled with growth demands and complex software deployment can result in a stack of underutilized capabilities. ServiceNow Impact is a value acceleration platform combining AI-driven guidance and curated training with a designated team of experts to extract additional value across the ServiceNow application suite. The business appeal of software as a service (SaaS) has primarily been about value-based pricing: customers select the specific services that they need to drive business outcomes. The promise of SaaS often falls short with complex enterprise software interconnected with company-specific services. Multiple applications from multiple vendors create a stack of unutilized capabilities as organizations pursue growth on top of digital transformation initiatives. Enterprise software deployments across many applications — even those with the same vendor — are intrinsically more complex due to interlinked services. This is generally further exacerbated by organizational growth and aggressive digital transformation initiatives. Even with a cloud-first approach, most larger organizations are dealing with sizable technology debt due to customized code accumulated over time. ServiceNow Impact is a value acceleration solution that is layered on top of all ServiceNow applications. It promises to accelerate and extend the value of an organization’s ServiceNow platform with AI-driven recommendations, expert guidance, curated training, premium support, and platform health and monitoring — all under a centralized and personalized dashboard complemented with a designated team of experts. ServiceNow commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential benefits and financial impacts enterprises may realize by deploying ServiceNow Impact.1 To better understand the benefits and risks associated with this investment, Forrester interviewed seven representatives from organizations that have extended their ServiceNow implementation with ServiceNow Impact. For the purposes of this study, Faster time to value for new applications by Year 3 21.0% KEY STATISTICS Increased value from existing platform by Year 3 24.0% Improved end-user productivity by Year 3 11.7% KEY STATISTICS Improved operations staff productivity by Year 3 12.2% THE TOTAL ECONOMIC IMPACT™ OF SERVICENOW IMPACT 2 EXECUTIVE SUMMARY Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization, a global B2B organization based in the United States that generates $4 billion in annual revenue and has 20,000 ServiceNow end users/employees. Prior to the addition of ServiceNow Impact, interviewees’ organizations struggled with increased complexity of their interlinked IT services and applications, challenges in hiring IT staff with ServiceNow platform expertise, and a sizable amount of technology debt. Almost all issues could be traced back to the scale and geographic reach of these organizations and the resulting growth in complexity. After the investment in ServiceNow Impact, the interviewees’ organizations were able to extract greater value from their ServiceNow platform of applications. Interviewees’ organizations were not only able to derive value from their current ServiceNow solutions, but they were also able to accelerate time to value as they added new applications. Interviewees also provided anecdotal and quantified examples of cost savings and productivity improvements for end users as well as operations and development staff. KEY FINDINGS Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include: • Faster time to value for new ServiceNow applications of 21% by Year 3. With the addition of ServiceNow Impact, the composite organization is able to shorten the time to ramp up and derive value from newly deployed ServiceNow applications and features. ServiceNow Impact helps unravel the full potential of new applications for end users and fulfillers across the enterprise. ServiceNow Impact enables the composite organization to deliver faster time to value of 16.0% in Year 1, 18.5% in Year 2, and 21.0% in Year 3. • An increase of 24% in value from the existing ServiceNow platform by Year 3. With the expertise, resources, and leverage provided by ServiceNow Impact, the composite organization is able to extract additional value from its installed base of ServiceNow applications. ServiceNow Impact delivers incremental ongoing value of 18.4% in Year 1, 21.2% in Year 2, and 24.0% in Year 3. • Improved end-user productivity of 11.7% by Year 3. In addition to extracting additional value from the platform by utilizing previously unused capabilities, end users at the composite organization experience improved productivity from upgrades and faster mean time to resolution (MTTR) for critical incidents on the ServiceNow platform. The Impact solution delivers improved employee productivity of 10.0% in Year 1, 10.4% in Year 2, and 11.7% in Year 3. With ServiceNow Impact, end users for the composite experience productivity savings of just under $1.8 million over three years. “What is the price tag we’re willing to put on less disruption to our business? That is the bottom line. What we’ve gotten out of Impact is less downtime and less disruption in supporting our digital core on the platform.” Enterprise services director, professional services THE TOTAL ECONOMIC IMPACT™ OF SERVICENOW IMPACT 3 EXECUTIVE SUMMARY • 12.2% in cost savings by Year 3 for the ServiceNow platform support and development teams. With ServiceNow Impact, the composite organization can redeploy or repurpose ServiceNow platform and developer professionals for higher-value work like focusing on more strategic and complex tasks. Due to the deployment of ServiceNow Impact, the composite realizes operations cost savings of 5.3% in Year 1, 10.8% in Year 2, and 12.2% in Year 3. With Impact, the ServiceNow operations team can derive $2.6 million in cost savings over three years. Unquantified benefits. Benefits that provide value for the composite organization but are not quantified in this study include: • Better employee experience driving improved customer experience. Interviewees noted that the ServiceNow Impact solution enabled end users (i.e., employees) to get the most out of the overall ServiceNow platform of applications. By enhancing their own employee experiences with Impact, these organizations were able to drive improved customer experience. • Exploring strategic initiatives. Interviewees discussed how having access to ServiceNow Impact allowed their organizations to utilize support and DevOps resources for more strategic initiatives instead of spending time on platform support. • The value of free training bundled within ServiceNow Impact. The availability of free training modules for all end users was consistently cited as one of the key components of the ServiceNow Impact package by various interviewees. The representative interviews and financial analysis found that a composite organization experiences a risk-adjusted present value (PV; discounted at 10%) of benefits of $7.60 million over three years. “The amount of scale we’ve been able to create [with Impact], what we’re delivering to the organization, and the abilities [we’re creating] for them to take advantage of, all while simplifying its posture, removing other technologies, automating workflows, etc. … I would argue that Impact probably pays it back twofold.” Senior director, enterprise & IT, computer technology “Yes, we see a ton of value enabled by Impact. Especially in terms of the general expertise that we have access to.