The digital goals
In this digital era companies are challenged to accelerate their digital transformation to increase market scale. The common objectives are to:
- Modernize and enhance the customer and employee's experience
- Reduce administrative overhead to optimize revenue per employee and increase operating margin
- Increase speed to produce products, deliver services and innovate in new market opportunities
- Increase security, compliance and audit success rate
The employee workplace of today
Employees struggle to be more productive with an increased workload. While enterprises try to optimize and automate business processes, functions and tools, there is often a lack of collaboration across the organizations silos that directly impact employees experience and productivity.
Employees interact on a day to day basis with the various departments of the organization to perform their job. They may need help from procurement to issue a purchase order, they may need to know their daily meal allowance while on a business trip, may have an issue with their paycheck or may need the sales operations team to help with the pricing of a product or service. While IT has been pretty good at standardizing, streamlining and automating the services they offer to the employees and the processes that support them, other functions such as HR, Finance, Facilities, Procurement, Customer Service, etc. still have a long way to go.
The cost impact
According to a Lawless Research study (The Productivity Drain) employees spend an average of 40% of their time on administrative work. The implied costs and huge opportunity to enable further and faster growth without augmenting the workforce is immense. Many customers of ours include in their digital transformation the objective of digitizing their employees’ workplace with the objective of enhancing the employee’s experience (i.e. retain/attract talent), reduce admin overhead and increasing security and compliance. Some examples of our large customer’s targets:
- A large pharma enterprise with 120’000+ employees: Give 3 days per year back to all their employees
- A large energy company with 80’000+ employees: 95% of employees to be productive on day 1
- A large manufacturing G2K with 300’000+ employees: Reduce rate of reworked sales orders from 80% to 20%
The digital workplace
Digital allows employees to do more with less. Employees need time back so they can perform their job and not be bothered by heavy administrative activities. The Employee Digital Workplace should not be a point in time destination, but a journey to employee-centric experience for operational excellence. For a company of 50’000 employees just giving one day per year back to every employee represents a capacity free up of 250 FTE. While some companies may need to reduce their OPEX, most of our customers are rather looking at increasing revenue and innovation without having a linear workforce increase ratio.
ServiceNow will help digitize the employee workplace with the following capabilities:
System of Engagement - A single place to find services and information
Connect with the enterprise
e.g. Chatbot for recurring questions or service delivery automation, embedded chat for traceable & trackable conversations about a request, integrated org chart to browse and reach out to teams and organizations, etc.
Order products & services
e.g. Hire an employee/contractor, request expatriation support, request support for an RFP, prepare a NDA, onboard a new vendor, get an error in an invoice fixed, get a new master data created, order a new phone or laptop, get a chair replaced, get the climate control fixed, get the office cleaned, order tools and equipment for a factory, get an event organized, get a business trip organized, canteen & catering service, etc.
Find useful information & news about those products & services
e.g. Travel & expense policy, paycheck explanations, vendor onboarding procedure, mobile phone plans, car allowance policy, climate control user guide, mobile phone upgrade procedure, application outage, latest news, project go-live, this week’s canteen menu, etc.
System of Action – An enterprise platform that orchestrates and automates the work
Service integration & automation
e.g. Standardize and automate recurring activities (e.g. generate a reference letter, or retrieve a sales order), integrate System of Action with the System of Record to automate low added value activities, leverage a predefined service integration framework to plug business process outsourcers.
E2E Service experience & work orchestration
e.g. Digitized E2E Business Value Chain that creates, orchestrates and assigns tasks to the actors of the required process steps. Every action is tracked & traced, has a defined SLA and can follow a simple or advanced workflow.
Universal TODO and Approval list
e.g. Easy access to a consolidated TODO list for all tasks and requests assigned to me, quick access to approvals pending my action from multiple tools (SAP, Workday, Ariba/Coupa, SFDC, etc.).
System of Insight – Enable proactive, predictive and preventive service delivery
Predefined Service Levels
Employees know when to expect the service or product they order, and can plan their work around it. In case of delay, an escalation procedure is predefined too, and Service Analytics enable continuous improvement.
Standard Metrics & KPIs
Delivery of services and products is continuously monitored, controlled and improved to ensure a seamless user experience. Surveys are continuously measuring the user perception while KPIs and PPIs provide facts. Actions can be automatically triggered and assigned based on predefined thresholds.
Role-based Analytics & Dashboards
Service Analytics and Dashboards must be designed to deliver the needs of the various roles and personas interacting with the services, e.g. operational reports for service/contact centers staff, service analytics for service managers, vendor performance & risk management dashboards for vendor managers, executive dashboards for e-staff, etc.
The transformation journey
Human-Centered Design is a good framework to focus on real employees needs and pains. One will want to start with the identification of the top 5 services that cause the most hurdles to employees (e.g. Employee Onboarding and Expatriation, Travel & Expense, Visitors & Guests Services, Organization of internal events, etc.), and keep digitizing more services by small batches to ensure fast and continuous delivery of value.
It will be very important to quantify the pain and the cost of the current state, and define targets that can then be measured and tracked to ensure success over a defined period. Sharing this success with key stakeholders will be key to increase trust within the organization and gain additional budget to transform more services.
While the first step will be to standardize and streamline the service, subsequent phases will tackle automation to reduce manual effort and integration with system of record and outsourcers.
The value estimation
The economies of scale for the digitization of the employee workplace are immense, especially for large enterprises that suffer from siloed organizations. Based on case studies and market benchmarks, we can estimate the following value areas for just a couple of E2E Services typically consumed by employees. This is a value hypothesis that is based on conservative assumptions that will vary depending on the context and maturity of the company. It is however a starting point to understand how much benefit can be realized through just a couple of use cases. Those numbers can be easily transposed to all the services of the enterprise, which will quickly climb the benefits ladder.
- Use Case 1 - Employee & Contractor Onboarding/Offboarding
- New hires: Productive on day 1 rather than after 1 or two weeks + Direct NPS/ESAT increase
- Hiring managers: 2-3 person-days of administration/coordination spared for every new hire
- Use Case 2 - Employee Move/Expatriation
- Employees: 2-5 person-days of avoided productivity loss + Direct NPS/ESAT increase on frustration reduction
- Line managers: 2-3 person-days of administration/coordination spared for every new hire
- Use Case 3 - Employees’ questions and request for help (HR, Finance, Procurement, Facilities, etc.)
- Employees: 15 minutes saved per request, either avoided through knowledge sharing or delivered faster (across departments)
- Service Centers: Reduce employee's requests by 40% through deflection (knowledge) or automation
For a large enterprise of say 100’000 employees we could easily estimate a conservative 480 FTEs capacity free up and $10 million/year savings based on the following assumptions:
- Use Case 1 - Conservative assumption of 6% employee turnover:
- Employees: 6’000 x 5 days saved = 30’000 person-days, i.e. 150 FTEs of new hires who will be able to support the growth with less hiring
- Hiring managers: 6’000 x 2 days saved = 12’000 person-days, i.e. 60 FTEs productivity increase
- Use Case 2 - Conservative assumption of 4% employee moves/expat:
- Employees: 4’000 x 2 days saved = 8’000 person-days, i.e. 40 FTEs productivity increase
- Hiring managers: 4’000 x 2 days saved = 8’000 person-days, i.e. 40 FTEs productivity increase
- Use Case 3 - Conservative assumption of 1 request per employee per month across the departments
- Employees: 100’000 x 1 request x 12 months x 15 minutes = 188 FTEs productivity increase
- Service Centers: 100’000 x 1 request x 12 months x 40% = 480’000 avoided requests, corresponding to almost $10 milion/year if assuming $20/request
While those figures may consist of a mix of hard and soft benefits, the numbers are huge. Most of our customers are currently looking at ways to fuel their company's growth without a proportional staffing increase and are banking on those productivity optimization initiatives.
Please react, comment, agree or disagree. What is your view, your experience? What digital initiatives are you currently tackling? What benefits have you realized so far, where do you struggle?