 We're back, this is theCUBE, we're here at Service Now Knowledge 14, live at Moscone. We're in Moscone itself, stop by and see us, we're in the right hand corner up by the escalators. Of course here with Jeff Frick, we've been going two days now, right? This is midway through day two, we're here all the way through Thursday, we had Fred Luddion this morning, we had Frank Slutman on yesterday, so we're sort of mirroring the keynotes and Fred was just amazing. Bart Murphy is here, he's a CUBE alum, came on last year, we met him, he's like the busiest guy at the show, he's CIO and CTO of the CareWorks family of companies and also the president of the CareWorks Technology Division which we're going to talk about, relatively new initiatives there around Service Now. Bart, welcome back to theCUBE, good to see you again. Thank you, glad to be here. Yeah, so what do you think of the venue here at San Francisco? Oh, I love the venue, I think the innovation sort of culture of this city resonates well with this conference. Yeah, I thought Frank's Gold Rush analogy up front was really good, you can go a lot of directions there, right? There's the history of the city, Service Now is kind of a Gold Rush, right? A lot of investors made a lot of dough on Service Now, probably more to come and then of course you've got IT organizations actually producing value after decades and decades of cost cutting and maybe not decades, I mean it's ebbed and flowed but so what's happening with CareWorks, give us an update on both your role and sort of the new initiatives that you're working on. Sure, so within CareWorks, I mentioned before, four of them are really in the healthcare and the managed care space and we've continued to just push the Service Now platform and continue to look at opportunities to automate our business and really the investment that we've made in the last year from a Service Now platform perspective was just that, looking at it as a platform, so looking at applications and ways to build processes and really identify use cases that we could decommission other types of systems and put it into Service Now and then also continue to expand our use of the governance risk and compliance component to really manage our business. The audit activity is picked up, we have more companies doing more audits and a lot of the way that we've been able to manage that and continue to maintain our sort of perfection if you will from an audit perspective was leveraging that platform and automating those controls. So you're consolidating, even getting rid of some stuff in your portfolio, is that right? Yeah, we've consolidated, we've gotten rid of redundant systems but we've also then been able to look at our landscape of what I call all the Lotus Notes or the access or the SharePoint, those type of components and really make a decision architecturally to move those into Service Now and decommission those types of systems. So all the homegrown stuff around those platforms that never really were able to live up to the promise that they had, you know, in case of Lotus Notes decades ago, right? Yeah. But how was the decision made to do that consolidation? Can you take us through sort of an example as to how the decision made and what role the Service Now platform plays? Well, I mean part of the decision was made simply because in many of these, it's made for you, I'll give you an example. So we had to deploy to Windows 7 which brings up a lot of issues with a lot of these systems that can't migrate when you're going into let's say Office 10 or Office 12 environments and that's when you find out from the business that they have these applications that are critical that in reality nobody from IT was really involved with the building of some of them. I'm not going to say all of them, some of them. And so when you look at that and look at what we need to do to create an actual better functioning system, we look at how can we evaluate Service Now deployed into that infrastructure that we know is high performing. We know the development is low cost to do that development work and get out of the business of running these smaller types of apps and having to support them. So really from an architecture perspective, it's either my main ERP which is Claims Management Bill Review, those type of things or Service Now is really what we look at. So you got, let's go through an example. So you got some apps, let's say whether they're written in Lotus Notes or Excel or whatever it is. So when you retire slash migrate those, what do you do? You develop an app in Service Now with similar comparable or even greater functionality. How does that work? Do you sort of replicate it and it's just the benefit of having it into the system or do you sort of re-look at the business requirements or both? Both, depending on really what the need is. Some of it is just a straight replace. Other times you have to rethink what's the purpose. In many cases, as I mentioned last year, they had outsourced IT for one of the larger companies for quite some time. So those were built out of necessity because they couldn't get them accomplished through their managed outsourced agreement. So it just depends on are they still applicable? Does it make sense to either go into the core ERP system or does it make sense to go into our core IT ERP system? Just one quick follow-up and I'll turn it over to Jeff. Do you ever get the, look, it ain't broke, why fix it syndrome? Yeah, we do, but I try to educate the business on what technical debt means. And there's significant technical debt and skill sets that you need to continue to manage disparate platforms. And getting them to understand both on the infrastructure side what technical debt means and getting them to understand on the app side what technical debt means. All of that does is it really reduces your flexibility and your ability to innovate for the business. So educating them on that and as to that alone to me to create a nimble environment where we can meet a business need in weeks, days sometimes, because we pushed to code production every two weeks for our core systems. And that level of cadence, we need to be freed up from technical debt in order to focus on innovation. Powerful concept, you don't want technical debt on your balance. No, I don't. Did they get it? I mean, did it when you sit down and actually work it through like that? Yeah, the business has been awesome. We had a chance to rebuild the relationship between IT and the business as part of the Insourcing Initiative. And it's been an education on both sides. I think IT understands a heck of a lot more about the business now. I think the business understands a lot more about what our challenges were and what we need to do to ensure that we have platforms and capabilities that can meet what they need for future enhancements and what they need to go attack a market. Yeah, now you're in a unique position in why we were joking that you're the busiest guy at Knowledge 14, because you are both an internal service provider for a company like a lot of the CIOs here are. But you're also running a separate technology business that's selling technology to other customers. So one of the conversations and themes that we've had going on over the last couple of days is the CIO's perspective, they lead with a technical hat, or do they lead with a business hat? You wear both. What can you say about how both of those roles have helped you and the other and what do you take back and forth between those two roles? Well, you got to understand the business, period. The technical components help support a strategy that you need to deploy and certainly having the capabilities with the technology company helps. But even when I look at trying to build the capabilities that I feel could serve the market well, I have to first make sure that they would serve our companies well. So I get a little bit of benefit there because I get approved through that process with my internal companies before potentially looking at a client problem or engaging the external market. So that's a big benefit but you can't lead with technology. You got to lead with solving a problem. You got to lead with some type of business case as it relates to improving their metrics, improving outcomes. And so the technical component comes to where, how good are you from a capability perspective to make that happen? And that's, so good example is we do a lot of management of infrastructure in IT for companies within that tech company. And one of the things that we wanted to do to meet our clients' needs was to do real-time SLA reporting of our own services. So we use performance analytics within service now and now our clients can get real-time SLA reporting versus a monthly report or other things that may have been part of the initial discussion contractually. So solves a lot of business problems because there's ways to identify quickly whether we have issues either on the relationship side or on the value proposition side for the work we're performing. Those are valid concerns when you're doing a managed service for a company. And the other thing we talked about offline before we came on air is that you're going through a merger. And mergers are big IT events traditionally. So talk a little bit about how it's kind of a service now and ERP only focus are going to help you execute the required tasks for this merger. Well, I think the biggest piece that we benefit from is our sort of the way that we've built in GRC and the way we've built in our governance into our platform because it's very scalable. We started that with our MCO, we then scaled that out for the other companies and that model to prove to be real scalable. And now when we look at the acquisition that we are required for, we're looking at how would that scale out to even a larger set of companies. We've already proved through the process. And the good thing is it allows you to move fast but with the automation of the controls and the use of the service now platform. People really aren't allowed to make mistakes that could potentially impact us in the heat of an integration, right? So we actually just completed the first integration in six weeks. We got a company integrated into our environment. And I think when you're working at that level of speed, you have to have platforms that are already built in. So all of our ITIL practices are built in. They're not just paper documents that people are following. They're actually automated controls within the system that help drive and influence that behavior. So from that perspective, we can ramp up people in a faster fashion without having significant organizational risk. And it allows us to really, really move fast. Okay, so CTO, Technical Visionary, CIO leader of the technology group, business liaison, seat at the corporate table. President, you got to worry about sales. Yes. What's your favorite job? Leading. Whether it's all those other things are great and they're certainly challenging. But I think leading people and leading IT people specifically to do better. I really push the team members to be very poly skilled. And we don't divide, build and run. So I don't want to have folks that feel they're too good for one type of work or not. Really, we're in it together to move the business forward. So leading people and changing the mindset of a lot of tech people from being focused on technology and being more focused on customer service. Whether that's the business and external client, that's really the key, I think, to the future of IT. And if we don't do that, we'll be outsourced or we'll be whatever the term is and we're not moving the business forward. So when we get to do that and we move the business forward, it's a good day. So we've heard a lot of talk at this conference about, it's interesting. Last year, was still a lot of problem management and change management to the starting point, but we've really seen an acceleration of business value creation. One of the themes of Frank Slutman's presentation is the CIO needs to become a business leader. Absolutely. It's interesting, you're a good example of that. We had Atticus from Intuit on yesterday. He's coming right out of the business. So if you're skeptical about that, as sometimes I am, there's real examples here at knowledge of individuals that are CIOs that are actually business leaders as well. But the other piece of the messaging here is essentially taking IT from a cost center to a business value creator. And in your case, with the CareWorks technology side, it's a profit center. Is that right? It's its own company. It's got its own P&L and it's a purely external consulting business. So we only get revenue and sales if people are willing to pay for our services. We started a service now line of business last year based on our capability and what we've built within our family of companies internally. And we're now doing that work externally from a service now perspective as well. We have an interactive line of business, we have infrastructure services and then we have your typical IT consulting and staffing component to that business. So, it's Amazon like in that they went to solve an internal problem and then they pointed it externally and you've done the same I'm sure on a much smaller scale. Much smaller. Yeah, everybody's smaller than Google. So now, but essentially your role as CTO and CIO helps to sort of develop the product or the service in this case. And then you've extracted that or abstracted certain pieces of it and now you're competing in the open marketplace. Yeah, exactly. So, do you have a presence here at the show? We do. So this is our first year as an exhibit at the show, yeah, we have a booth at the show. You're paying away your way, all right, that's awesome. And we're specific into our capabilities and we really look at it as a platform. I think even on the buy side, right, as a CIO and CTO, I felt even the vendors that were in the service now ecosystem were really pushing incident problem change and missing the whole concept of the ERP of IT. And when I looked at it, I immediately gravitated towards the ERP of IT. And so that's where I think there's an evolution on the consulting side. People are starting to understand it's more than just a help to a system and that's the value proposition for this platform. I think you're really missing the boat if you simply do incident problem change and stop and don't look at your ecosystem within IT and figure out a way to leverage the platform. You know, it's interesting, we're always talking about Nick Carr. Fred Lottie mentioned him this morning. We sort of make poke fun at Nick, he's very good, he's smart, even though he got it wrong, but he's very successful and quite bright. But we were talking to Jeffrey Moore about this yesterday, so what did he miss? And Jeffrey Moore said he missed that he was focused on IT doesn't matter for systems of record, that's really what he was talking about. He sort of didn't think through the systems of engagement. So that was one piece, but what strikes me in talking to you, Bart, is that the other thing that he misses, what customers do with technology in post year 2000. What customers did with technology became much more important than what vendors did. So prior to Y2K, it was monopolies of IBM and Microsoft and Intel and Cisco and EMC, all these great technologies that they're developing. And then you saw Google, Amazon, and then a much smaller example of guys like yourself. What you did internally with technology, and then you're able to point that externally and create value. That, it seems to me there's a renaissance going on with technology. Maybe you don't even call it IT anymore, but it's technology driven, data driven organizations, do you buy that? Not only data driven, it's artistic. I think, just simply think it's just binary numbers and X's and zeros and ones. There's a creativity side that you have to infuse into your IT organization. You gotta make them think bigger. You gotta make the business think bigger. And I think that's lacking, and I think no systems, machine, Internet of Things will replace that component. And I think what you're seeing is you're seeing companies that are nimble that don't have a significant amount of technical debt. They're able to address it so that they can focus on those things. I think in many organizations, they're really good, and they have really good IT. But they simply come in and solve problems every day, and they're reoccurring problems. And that's where that maintenance dollar amount goes up. And they start to get marginalized by the business because they're going outside of them, whatever they call rogue IT. Which I just say is that's either you have a relationship broken with your business, or you have a very poor delivery system. If you have the business going outside of you as a leader of IT to try to find innovative technologies to help move their business forward. So, if you can get that creativity and that type of stuff, I think you'll have much better connected tissue with the business. They'll be more willing if you have a good delivery capability to come in and allow you the opportunity to show them what you can do. So the advantage you have is that you develop stuff internally. You can sort of eat your own dog food or drink your own champagne. As folks like to say now, you can perfect it. I love that notion that you're using your own technology, and then you can go out and sell it. But now let's talk about go-to-market. I mean, that's something that is not, I mean, you don't really usually have those discussions with CIOs and CTOs. You don't talk about go-to-market strategy. So how did you make that transition? What is your go-to-market strategy with the tech business? Talk about that a little bit. Well, really the go-to-market strategy was around our experience of leveraging as a platform and really around our governance and our interactive company. So when we look at even the vast number of great suppliers in the ecosystem for ServiceNow, we had to make sure that we differentiated our experience. To me, incident problem change, that's just a way we do work. And ServiceNow is the mechanism in which we do that. Really, what we're trying to do is bring that to the next level by looking at the ways to automate on governance. To look at it as an entire system in ERP for IT and get companies. And we've had a lot of companies that have engaged us where they may have done an initial implementation, stood it up, and that's where they stopped. The other big area that we're looking at is leveraging our interactive and design capabilities and building way better portals. So when you look at even yesterday during Frank's session, they had a few customer portals up there, right? And there was a few good designs. I think there's a whole consumerization and engagement model that's missing. And you have to find a way to get people to engage more on the platform, and then that will bring in more use cases to the platform. So to do that, users, especially non-IT users, want to get that sort of custom experience. They want it to be branded, very similar from a marketing perspective as their corporate components. So that usability practice and that interactive and marrying it in with the CMS on ServiceNow is another sort of go-to-market strategy that we have because we're unique in that space. There's very few folks that have both the interactive and the engineering background to do that on the ServiceNow platform. Yeah, and you're really seeing the ecosystem start to come alive here. And that's a sign of a healthy company and a healthy ecosystem when the partners start making money. Because it's all about making money at the end in solving problems, of course. But when you go to a show like this, right? When you're talking about partners, they got to get margin. But what an interesting concept, though, to use the delivery as a demand gen for your own internal service. I mean, we don't hear that very often. We hear about people making nice customized portals and really kind of packaging their services as products. But you're really thinking it through to the next level about, I love your word, connected tissue, to make sure that you are connected and getting more connected with the business users by delivering what they want. And then that turns around and drives your demand so you can buy more stuff and get more people and deliver more value. Exactly. And the faster you can do that pace, you're going to end up outworking most people. And so they do say work harder, smarter, not harder. I think I do both. And I think by working hard on the engineering disciplines within your organization, whether that's automation on the agile side, whether it's good coding standards, whether it's shorter sprints, and all the discipline that requires on the build side, you have to look at the engineering discipline in order to improve that velocity. You start to improve that velocity. You start to have different conversations with the business. There's things that they didn't even have time to think about that now they do. So that's what we try to push. I want to have just better IT. I think IT's got a bad rap for quite some time. And we just need to do a much better job of moving our businesses forward. Every company is a tech company. And that's just the way it's going to be. So if you know that, you have to make sure that you can move that tech forward. So we're going to talk a little bit more about the technology division. What do you actually sell? You're selling consulting, you're selling implementation, management, design? We've done it all. So we sell the implementation, so the implementation of service now, and we'll work through whatever wave function and recommend sort of maybe the path in which they want to implement certain modules to meet certain business issues. We do the CMS. We do a lot of work around governance and risk and compliance and trying to marry in audit. I always laugh. There's not an IT team that I've gone to from a client side where they have much good words to say about IT audit or audit in general. And in our organization, we're one. I mean, there is no disconnect. There is no animosity. And I think, look, we use the platform to help facilitate that relationship, right? Just like we've been able to help facilitate the relationship with the business by removing our technical data, improving our innovation. So if you can use a platform like ServiceNow to help bridge the gap and maybe mend some pretty bad relationships between your audit and your IT, that's another good opportunity that a lot of organizations are looking at. So how do you compete with the big whales? I'm thinking Accenture or any Deloitte, Cloud Sherpas. How do you compete with those guys? Speed, I think that when we engage in the type of work that we do, one, we bring that same level of breakdown of work and short sprints to our ServiceNow work, the same thing we do on our Interactive. I mean, on our Interactive, we could build a new brand. I think we did one in eight weeks and launched it. And that's our value proposition on that side, especially when you're working like in e-commerce space. It's a lot around speed. And I think that speed, and I'm not reducing, no reduction in quality. I think speed is something that a lot of the larger organizations just, they can't do. And so that's really one of our value propositions is the speed at which we can get that done, implemented and operational. And your practice is primarily focused on ServiceNow or is that just one line of business? That's one line of business underneath tech. We have four, so we have a standalone Interactive called CWT Interactive. We have an infrastructure services division, which does the managed services for companies. And we have, it's called IT Automation and Governance, that's really why we called that line of business for ServiceNow is really it's around IT Automation and Governance. So when you create that automation, don't lose sight of your governance and drive a lot of automation from your governance requirements. So it's leveraging the ServiceNow platform, but it's called that for a specific reason. It's really looking at your IT operational stack and determining how can I automate? How can I reduce the mundane tasks that people don't want to do? How do I elevate a tier one to really be working on tier two work? And then that means my tier two moves to tier three. My tier three now can be looking at strategic initiatives. So just trying to up the game of everybody within the IT. And then we have a staffing line of business as well, where we work with large organizations and make sure that we provide them with the appropriate types of resources as an augmentation. So can you share with us the size of the business, even if it's headcount, I don't know if you've divulged. Sure, I can give you a headcount. I can't talk about revenue, but we're about 220 consultants within our CareWorks tech line of business. Okay, so it's pretty substantial. And you operate primarily in the US or exclusively in the US? Exclusively in the US, mostly in the Midwest region. We do have clients in different parts. And now with the acquisition from York, when they acquired us, they have presence all over the United States. So that's starting to bring up demand for our services as well. And it was one of actually the differentiators, I think, when they talked to us, is they liked the fact that we had a technology company that they can now leverage for their internal companies as well and eliminate sort of the need to go out to different providers for the services that we provide. So the plan is to now take this across, well, nationally, right? And then globally as well, or do you envision that? You know, we've had, we've talked to some folks that reached out to us from Canada for GRC, things like that. No plans currently. I think there's enough critical mass, if you will, for me to focus on within the US and even in Ohio alone with a number of companies that are there and the number of companies that have adopted service now. This is a long road, just like any ERP system. You have to continue to invest and innovate on the platform in order to get the business value. It's not something you let sit and just say good enough is good enough. You can certainly do that, but I don't think that you're going to keep getting the efficiencies that you need to have in order to move the business forward. So your objective is what? Steady growth, profitable growth? Yep, profitable growth, steady growth. The one thing I'm very cautious about is, the people we hire, I want to have very good engineering backgrounds, very good skill sets. I think you've got to be very technical but also understand the business. So we really limit our growth from the standpoint of the resources that we can bring in and train. And then, I'm sure at some point we may look at a larger growth strategy, but we're growing at a very good pace with that strategy in place right now. Yeah, I'm just scaling the services business like that. It's not trivial, right? I mean, you've got the distribution channel and you've got the expertise and you've got the back end and you've got to deliver and it's... You've got to deliver, that's the key. So growth without having delivery issues is not something that I think is a good thing for us to do. So the focus is on delivery and then we'll grow based on our ability to grow that delivery engine and make sure that we can hit our projects. That's the goal. How about things that you want to see from service now? What's on there to do list? We talked about this a little last year and I thought you had good perspectives on it. So where do you want to see them focus? Well, like I mentioned, we did the performance analytics so I think executive dashboarding and those type of components which they've shown some stuff here that I've been impressed with but just getting a better management view into the system because again, that will drive some of my demand as far as what the management team wants to see in the application and service now. So I think there's some growth there still. They did do the acquisition of Mira42 last year which is now what they call performance analytics. So it could be just that we need to get more familiar with the platform but I want to see some more growth in that area. On the CMS side, I think that there's some work not from the standpoint of their own UI but the ability to influence that UI without maybe touching and impacting all of service now as every table. If I want the table to look different, for instance, an internal page, I don't want to have to change the entire style of all service now for all my internal users. So trying to figure out a way of how much more flexibility can they give us on a CMS side so that we can, when it's being, whether it's an external customer or consumer or an internal person, really they don't even know its service now. It's just a brand, it's consistent with their brand. It's consistent with their usability requirements and it's less of looking like service now. It begs the question, how do you interface with service now to get that information back to them? We work a lot with service now on the different teams. My head of compliance works with them a lot on GRC. They're gracious enough to let us go and talk to them on different parts of the platform. So we work a lot on the new releases as they go out for general lease and stuff like that. So we have a couple different avenues and they've been very, very gracious to help offer up when they can what type of features are coming or what type of enhancements are coming so that I hopefully don't spend the time custom developing that right and only to be replaced by feature and service now. All right, Bart, we're going to leave it there. Thank you very much for coming on. The new business executive, CIO, CTO, president, P&L manager, sales guy. Yeah, well done. Congratulations on all your success. Good luck going forward. All right, everybody, keep it right there. We'll be right back. We're live from service now in Moscone in San Francisco. This is theCUBE.