 This is Dave Vellante, as I said before. We are unpacking a lot of the service now, messaging, testing that with some of the customers of service now, IT practitioners, these are the people that are in the trenches when we hear about going from no to now. This is the faction of the organization, the IT organization that is having to affect that transformation. I'm here with my colleague and co-host Jeff Frick. Bart Murphy is here. He's the Vice President of Shared Services and he's also the Chief Technology Officer at CareWorks. You've got many titles. You're also the President of one of the operations as well, so Bart, thanks for taking some time out and coming in the queue. Thank you. Thank you for having me. You're welcome. So tell us a little bit about CareWorks. You were describing it as sort of a holding company out of Columbus, Ohio. Tell us about the businesses that you're in and specifically your role. So CareWorks is a family of companies that consists of six companies. Five are in the healthcare space, mostly around the workers' comp and medical management area of the industry. And our sixth company is actually an outward-facing consulting company from a technology perspective, which I'm the President of as well. Okay, so you actually sell technology services? We do. So, you know, I manage all the internal IT resources and infrastructure and also then manage our external-facing organization, which goes out and helps and consults other clients. And so we've implemented service now actually within both all the five companies within one instance and our external-facing company within one instance because we do manage services. So there's some different requirements on each of those instances. I always love stories of, you know, turning IT as a cost center into a profit center. Absolutely. So we'll talk some more about that. Yeah. So tell us about the unique drivers in your business, healthcare, obviously highly regulated. There's, you know, Obamacare, all kinds of transformation there. What's driving your business right now? Well, I mean, obviously you mentioned the regulations are driving our business, upgrades, you know, everything from 5010 in that space to ICD-10, and those mandates that are coming down are driving our business. And certainly I think just trying to get care and the cost of care under control. So our value proposition typically when we do the managed care is that we're doing it with a high degree of accuracy, we're reducing the costs on the bill review cycle, and we're getting injured workers back to work, which eventually would lower premiums for those employers. Yeah, and improve productivity for the country. Absolutely. Right. Okay. So how do those pressures drive your IT strategy? Well, I mean, so a little bit of background. From an IT strategy perspective, the largest company that we have is a managed care organization. They had outsourced their IT for close to 15 years. When I got brought in, we talk about my role as the CTO, I was brought in to build and insource all of that technology capability, which none of it was transferable from the outsource model. So we built up that capability and really had a chance to start and just look at the landscape fresh and say, what type of platforms do we need in our organization to become a high-performing IT organization to help be a strategic asset to the business? I think that their sort of relationship over the years became less and less strategic and they really couldn't move the needle on their assets in order to generate top-line growth or improve productivity and reduce costs. So part of that was ensuring that we built a shared services platform that could then support all the family companies because they had sort of siloed IT up until that point including one of the largest companies outsourced their IT. So we had to look at a platform and I had to look at a platform that could help me run the business of IT so I could focus on the innovation of the enterprise. And that's really why I looked at ServiceNow. So a great opportunity really for Greenfield. I mean the bad news is none of that old stuff was transferable. The good news is none of that old stuff was transferable. From that perspective, it did drive having the largest company insource and let us do some Greenfield. The other companies did have some established systems that we had to replace but the ease of use and the ability to convert into the system didn't present an issue. But the value that we got with all the modules and all the other components to again run a shared services organization that's supporting six companies, the value that I got from that platform far outweighed any of the sort of investment that was made year to date or even history to date on those other assets. So what was the driver to bring in ServiceNow? What was life like beforehand? Let's start there. You know, I think each business had a different sort of customer interaction with IT based on their level of sophistication. We either bought companies or organically grew them from start. So the level of sophistication with an IT varied within each company. The interaction with IT certainly varied depending on the type of platforms they used or email or tapping on the shoulder type of stuff. So there was no real consistent way to approach work and to work with our end users and also within our companies we have both corporate users and we have one company where it's all remote users. And that experience vastly was different from a customer service and satisfaction perspective than the corporate users, you know, to our out in the field users. So trying to create a standardized way to interface with our business regardless of company A, B, C or D and regardless of what type of technology stack that they're working on and that's what ServiceNow allowed us to do. So specifically consolidating all these shared services and then as a byproduct of that, I mean we keep hearing stories about people running on spreadsheets or disparaged tools or emails. Was that is that an accurate description? Yeah, it's accurate. 100 percent. I think every company has that depending on how they've grown. And we were no different. You know, we've used ServiceNow to do standardization not only of the service that we're providing to our customers, but also to create some standardization on our controls and processes. We use GRC, which is the Governance Risk and Compliance module, to, we're highly regulated so there's an audit going on almost every day of the year, whether we're doing it internally or whether we're getting audited by an auditor. And each company is on a little bit of a different cycle so that we can help support that. So we've been able to centralize all of our audit testing, all of our control testing, automate schedules around that, which has then in turn reduced our fees from an audit perspective. So there's tangible ROI with that level of standardization, not just within IT and tickets, but within spreading that out into business operations and IT operations, like audit, for example. As that tangible ROI measured in the cost of achieving compliance, the productivity impacts. Oh yeah. Not getting fined, right, is always good. Not having exceptions on your report is good. And being able to reduce your professional fees because they're willing to accept your rigors of testing is another key component to help drive down those consulting fees that you're paying on a yearly basis. So there's the lower risk, you mentioned not getting fined, and then the better productivity. And then are the original five units or six units then customers of the IT services firm? Or did you do that just, we talked before about transfer costs and really getting a handle and more organized around that. So the way we approached it, and this is before my time with the founder, they bought a technology company about eight years ago, knowing that one of their largest companies was outsourced and they needed to start building that capability internally. That company internally in our consulting division helped stand up a lot of our organizations that we started organically. There's other companies that we purchased which had their own IT assets that came into the organization. So we have this sort of mix of capabilities that we've built ourselves to help support maybe a startup of one of our companies to bring in established assets on different technology platforms that we needed to manage as well. So part of it was to build up that internal capability so that we could be a strategic asset to the business. It's good that there's CEOs out there and CFOs out there that see IT as a differentiator to their business and that's how they view us within our organization. We are not simply a commodity, they understand that that's just not the case, especially in a high complex world as it is in managed care and healthcare. Do you think that is a sentiment that is generally changing in the industry, i.e. that IT can be a source of competitive advantage or do you think that's unique to your organization and your executive management? I think it's unique to IT teams that can actually speak to the business and be that partner at the table to strategically plan with them what is actually possible with the technology and how that translates to top-line growth and speak in their term. So I don't think it's something that's necessarily special to what we're doing, I think it's we've shifted our IT priorities to not just be what IT is doing but to try to be that partner at the table with the business on how to grow it. So I can infer from what you just said that you believe that IT can be a differentiator from a competitive advantage standpoint but you've got to have the right people, the right culture, the right philosophies to make it happen and not just going to happen on its own. It's not going to happen on its own and I think it's been proven with the different trends that we've seen from an outsourcing, all those type of components but I think when you look at companies that are really making things happen in the industry or those forward thinking companies, many of them, if you go back they have very strategic IT assets, they have very automated processes, they've been able to bring the cost down so that they can invest in innovation and do less time on maintenance. It's a real big driver within my team and you know maintenance to me and technical debt, all those type of components that you hear about that make IT sort of a cost center to the business, it's not bringing tangible value to them, spending time on things like an upgrade of IT service management platform that hasn't been touched in seven years. You know and it's 2,000 hours and a bunch of money and that's the type of stuff that I want to stay away from. That's why a cloud provider like ServiceNow brings value to me because I don't have to be distracted with an internal IT project simply because I've ran out of support or those type of things and I can focus more on what is a good business innovative idea that we need to bring into our systems to help them grow revenue. Did you do a detailed business case before you brought in ServiceNow or was it more just kind of like... We did do a detailed business case I think you know from the standpoint of what we thought the upgrade cost we're going to be you know again that cost of labor every three years the licensing but we also looked at the full package you know so you get sort of you know it's one of those great things and bad things you get all this functionality within ServiceNow you get to choose how you're going to use it and you need to build out a roadmap in order to leverage that to sort of retire redundant systems. So that's the sort of the roadmap that we built in the business case we built was all around that and trying to get rid of redundant systems get standardization and really build out a shared services organization which did not exist. So the hard dollars were sort of ongoing maintenance and new capex on legacy systems and then the soft dollars were the productivity impacts and I'm assuming that because your executive management seems to be pretty IT savvy that those soft dollars were a major factor in the business case that weren't just red line that ignored like oftentimes business cases. Yeah and we do that in operations as well so it's not a foreign concept to our to our business and we relate automation to other soft costs and hard costs as well. So I think you have to look at a whole list of getting the total cost of ownership not just a year one return. Other than the the plan to effectively retire older systems what were your concerns about bringing ServiceNow on? You know to be honest I had concerns if I didn't bring ServiceNow in my team I did a team based procurement my team it was a 100% votes to ServiceNow and not one vote to another supplier that we had in. Is that right? Yeah so from that perspective you know to have an IT team that's excited to work on a platform you know we all want to enjoy our job. Service management is not a sexy business you know IT service management certainly not so to to to make it fun again and to make a platform that people can use and and easily configure to to automate we've automated onboarding important sort of processes to automate but they just aren't you know they aren't the the most fun to work on right so to get sort of your team excited about a platform to get them bought in you know it really was a good key differentiator as well in looking at ServiceNow. What about on that TDM out? Yeah the only the only problem you have is you have to really build your talent you know and you have to build your organization it's a new skill set and you have to really invest in the training side which was another component that we talked about during the procurement was that you know we want to be self-sufficient I want my teams all to be self-sufficient we shouldn't rely on any partner it's good to have them but we shouldn't have to rely on anyone so you have to do a good investment there to make sure that you're getting team ramped up in a manner where they can effectively move that needle on the platform. So that was part of the business case too that sort of training and reskilling and so forth what about the the security question you're highly regulated you know industry tell us about the discourse and the narrative internally prior to bringing in ServiceNow. Well my IT compliance director reviewed the solution you know we do some certain things we lock it down from an IP perspective that's why we have two instances of ServiceNow one that sort of serves our external consulting business the other that serves our internal so we've done some things to sort of limit that risk even being in the cloud but I think more and more regulators and other people are getting very mature and understanding these cloud solutions and sort of where their value is and where the risk is and how well they manage it from a data center perspective from an audit perspective from all their controls that they have in place which we can then leverage in our audits as well and we've had no issues from an audit perspective at all since we've gone live. And did you prior to bringing in ServiceNow did you get some outside help you know from whatever cloud sort of cloud broker cloud service provider? We did so you mean as far as our implementation we had a consulting partner that came in for about I'd say 30-60 days and again the whole the whole point there was to not only help us stand up our instance because we had to in-source and build 15 systems so this was just another one they not only wanted them to help us but I also wanted to pair with us so that we could become self-sufficient it's not that I don't like consulting I do but I want to use them strategically not as a crutch to my team so we actually talked about it with them upfront so these are the things that we want to do to make sure that in 60 days you're out of here and we're actually doing the rest of this deployment and these modules and these phases by ourselves and if we need help we'll give you a call. And how significant was the skills transformation that you guys had to affect? Again I think when you have people excited about working on the platform it's much easier adoption rate so although you know I would say it's not as difficult as some of the other platforms that people have worked on in the past my team has had experience with some of the other larger implementations and they really find this tool to be easy to use once they get familiar with the scripting component some of the nuances of the platform we haven't found somebody that hasn't been able to get it. And what made them so excited was did somebody come from somebody else and they'd worked on it before and was inside evangelist? No real evangelist no real evangelist they just came from other systems where they had either a nightmare scenario with upgrades they had a nightmare from an admin perspective as far as trying to manage it they just weren't good systems is it right now it could be just a product of the time you know they could have been implemented 10 years ago but as far as a platform for us moving forward and for me trying to look at cloud solutions as a CIO and CTO to say where can I invest in the cloud that's not strategic from an asset perspective for me so that I can focus on the business assets versus things that run IT. And so I think those things combined along with you know the ease of use and the platform those things all resonate with the team. Anything that you really want service now to do that would make your life better something to do list? You know all my to-do list is actually to try to get through more of the modules so I think it's just a constant investment we're working on asset management license management now I think it's just that you have to have a consistent method to implementing service now you can't take a break for six months you can't wait a year you have to constantly be improving it and looking at ways to reduce my overall cost and structure of IT and to articulate that cost back out to these different business units which so that cost center accounting it's helping me with that activity-based accounting it's helping me with where I didn't have those systems in place before. So that's your main advice that was my other question advice to IT practice you're saying keep exploiting the platform. You have to right it's not to invest everything in service now but there's there's tangible benefits to the modules that they have and there's even more of a benefit to have it in one repository that you can report off of which creates a lot of efficiencies for us as it relates to capital spending planning budget planning go down the list right license renewals all those things if I can have one sort of system of record hey that's a win for us. All right part Murphy great story we're out of time really appreciate you stopping by the cube and thanks for sharing your advice with IT practitioners you're very welcome we are unpacking the customer perspective here looking at how the service now messaging resonates with the customers and what they're actually doing with the platform let's see we've got FICO and Yale University up next after this break keep it right there I'm Dave Vellante with Wikibon with my co-host Jeff Frick this is the cube we'll be right back