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Don’t just run your business. Transform it

If you’re thinking of service management as a way to reduce headcount, you’ve got the wrong outlook

By Matt Denton

  • Smart companies use service‑management projects as an opportunity to rethink their strategies
  • Service management can be used to cut costs, but companies that focus on this are missing strategic opportunities
  • Service management can be applied to a broad range of functions, including IT, HR, customer service, and finance

Not long ago, I was meeting with a major American bank about a proposed service management implementation. The bank’s team told me they could fund this project if they could eliminate 120 full‑time positions.

These conversations often involve talk of headcount reductions, so I asked if they planned to let the affected employees go.

An executive gave me a puzzled look. "Of course not," he said. "We're going to retrain and repurpose them. We need their help with the company's strategic transformation."

I was glad to hear that, because it demonstrated that the bank understood the difference between running a business and transforming it. From my work with customers who are thinking about service management solutions, I know that not everyone appreciates this distinction.

Service management allows businesses to transform a broad range of business functions: IT, HR, customer service, marketing, finance and more. Currently, most companies use a patchwork of email, spreadsheets and legacy applications to run these operations. Too often, the "systems" they use are an unmanageable kludge that perplex all but the most experienced users.

Service management replaces these antiquated software systems with intuitive, cloud‑based collaborative workspaces that map out every step of a process—for example, bringing on a new employee—and then show front‑line workers exactly where they are in the process and what remains to be done.

Some companies think service management is about reducing operating expenses. It can drive cost savings, but this is a reactive approach that I associate with managers who are forced to cut their budgets just to keep the lights on.

Companies looking to grow and transform their business look at it differently. They ask themselves questions like, "How do we rethink our strategy to stay a step ahead of the competition? How do we grow our revenues? How can we improve our employee and customer experiences? How do we make sure we're getting all the benefits of revolutionary new digital tools like AI?"

Those are just a few of the things you need to do to transform your business. And I’ve worked with plenty of companies that are seeing concrete business benefits from implementing service management programs. Here are some examples:

Healthier patients, happier nurses

One hospice care company is moving to replace a paper‑based note‑keeping system for its field nurses with an entirely digital one that runs on mobile devices. The new system will be more efficient and will allow the company to serve more patients. More important to the company is the fact that nurses will no longer have to be heads‑down, filling out redundant paperwork.

This IT transformation is a catalyst for giving precious time back to employees so they can focus on what matters most: human interaction with staff, patients, and families. With average turnover rates in this industry approaching 35%, the company is confident that increased job satisfaction from the new system can help it become one of the exceptions to that rule.

Stoked recruiters

A top business consulting firm recently moved to a new service management platform for HR. The system will help automate the dozens of steps involved in onboarding a new employee, which involves everything from ordering a computer to setting up a 401(k). It also provides the company's workforce with a robust self‑help system that allows employees to handle routine matters by themselves.

The consulting company understood that the real advantage would accrue once their HR staff, freed up from tedious daily tasks, would finally be able to spend its time on higher‑value activities like recruiting talent. The company is embarking on a major expansion, with the goal of nearly doubling annual revenue to $50 billion. An HR operation that isn’t bogged down handling mundane tasks and answering routine queries will play a key role in that growth spurt.

Faster cash flow

When a major multinational conglomerate implemented a new customer‑acquisition platform, its intention was to reduce the time involved in onboarding a new customer from three months to 30 days.

That improved efficiency isn’t just good for its own sake. It will flow straight to the top line, because the company will be able to recognize the revenue from a major as much as two quarters sooner than would previously have been possible.

Satisfied customers

At one health insurance provider, call center workers were being forced to switch among a half‑dozen legacy systems as they answered customer queries. Their computer screens were an ungainly mess of applications, some of them decades old.

ServiceNow is helping them implement a new front‑end that integrated the jumble of data into a single, easy‑to‑navigate interface. Customer queries can be handled more quickly and more accurately, and Net Promoter Scores for the operation is expected to increase by 40 points, which should translate into more revenue due to higher customer renewal rates.



Bottom line

Every company needs people to make sure that the lights stay on and the doors stay open. But if you want to thrive in the long term, you’ll need most of your team to focus on digital transformation, not simple operation.

Encouragingly, customers often tell me that while their “operators” once outnumbered their “transformers," the ratios are starting to reverse now that a service management installation is up and running.

If you’re looking at a digital strategic initiative as a means to pare headcount, you've probably got the wrong outlook. Every company needs to deal with the disruptions caused by digital technology. You’re going to need all the help you can get, so don’t think of service management as a way to shed excess baggage. It’s the key to turning your workforce into your biggest asset.

Matt Denton leads the business value practice at ServiceNow, which helps customers modernize and transform the way they work. He previously held senior roles at VMware and General Electric.

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