 From Orlando, Florida, it's theCUBE. Covering ServiceNow, Knowledge 17. Brought to you by ServiceNow. We're back, this is Dave Vellante with Jeff Frick. Chris Beatty is here, he's the CIO of ServiceNow. Chris, good to see you again. Good to see you as well. Yeah, so a lot going on this week, obviously. You said you're just getting pulled into a million different directions. One of those, of course, is the CIO event. Decisions, yeah. CIO decisions, it's something that you guys host every year. I had the pleasure of attending parts of it last year. Listen to Robert Gates and some other folks, which was great. What's happening this year over there? So, CIO decisions, it's really where we bring together our forward-thinking executives. We keep it in to mid to about 100, because really it's about the dialogue, us all learning from each other. It really doesn't matter the industry. I think we're all after the same things, which is driving higher levels of automation, increase the pace of doing business, and innovating at our companies. So we had Andrew McAfee, MIT research scientist, really helping push the boundaries in our imagination on where machine learning and predictive analytics could go. And then we had Daniel Pink talking about his latest book to sell as human, and really as CIOs, we often find ourselves selling new concepts, new business models, new processes, new analytics, new ways of thinking about things. So really trying to help call it exercise our selling muscle, if you will, because we have to sell across, up, down, and within our own teams, and that is a big part of the job, because as we move into this new era, I think the biggest constraint is actually between our own ears. Our inability to imagine a future where machines are making more decisions than humans, platforms are doing more work on behalf of humans. Intellectually, we know we're headed there, but here I'll help really bring it home. Well, you know, it's interesting. You talk about selling and the CIOs. Typically IT people aren't known as salespeople, although a couple years ago, I remember at one of the knowledges, Frank Slubin sort of challenged the CIO to become really more business people, and he predicted that more business people would become CIOs. So do you consider yourself a salesperson? I do. I'm selling people on a vision, a concept, the promise of automation, you know, technology. People fear it, right? You know, when you're automating people's work, the fear and the uncertainty and doubt or what I call the organizational antibodies start to come out, so you have to bust through that. And the large part of that is selling people on a promise of a better future, but it's got to be real. It's got to be tied to real business outcomes with numbers. It can't just be a bunch of PowerPoint slides. So we always like to take the messaging from the main tent and then test it with the practitioners. And this year, there's this sort of overall theme of working at light speed. You and I have talked about this. How does that resonate with the CIOs and how do you put meaning behind that? Because, you know, working at light speed, it's like, oh, that sounds good, but how do you put meat on that part? So the way I think about working at light speed is three dimensions. Velocity, intelligence, and experience. And velocity is how fast is your company operating? And I read a study that said 40% of Fortune 500 companies are going to disappear in the next 10 years. That's almost half, right? But I think what's going to separate the winners from the losers is the pace at which they can adapt and transform. And with every business process being powered by IT platforms, I think CIOs and IT are uniquely positioned to explicitly declare ownership of that metric and drive it forward. So velocity, hugely important, intelligence, evolving from the static dashboards we know today to real-time insights delivered in context that actually helped a human make decisions. And BI and analytics, as we know it today, needs to evolve into a recommendation engine. Because why do we develop BI and analytics to make decisions, right? So why can't the platform, and it can, is the short answer, with the ability to rapidly correlate variables and recognize complex patterns, give recommendations to the humans, and I would argue, take it a step further, make decisions for the humans. ServiceNow did a study that said 70% of CIOs believe machines will make more accurate decisions than humans. Now we just got to get the other 30% there. And then on experience, I think the right experience changes our behavior. And I think we in IT need to be in the business of creating insanely great customer and employee experiences. Too often we lead with the goal of cost reduction or efficiency, and I think that's okay. But if we lead with the goal of creating great experiences, the costs and the inefficiencies will naturally drop out. You can't have a great experience and have it be clunky and slow. It's just impossible. And it's interesting on the experience because the changing behavior is the hardest part of the whole equation. And I almost think back to kind of getting people off just an old solution, people used to say for startups, you got to be 10x better or one 10th of cost. And a 2x, 3x is not enough to get people to make the shift. And so to get the person to engage with the platform, as opposed to firing off the text or firing off an email or picking up the phone, it's got to be significantly better in terms of the return on their investment. So now to get that positive feedback loop and this is a much better way to get work done. It has to. And we can't bring down the management hammer and force people to do things. It's just not the way people work. And very simple example of an experience driving the right behavioral outcome. So ServiceNow is a software company, very important for us to file patents. Process we had was clunky and cumbersome. We're not perfect at ServiceNow either. So we re-imagined that process, made it a mobile first experience built on our platform of course. But by simply doing that, there was no management edict, you have to, no coercion if you will. So an 83% increase in the number of patent applications filed by the engineers. So the right experience can absolutely give you the right desired economic behavior. You talked about 70% of CIOs believe that machines will make better decisions than humans. We also talked about Andrew McAfee, who wrote a book with Eric Brynjalsen. And in that book, The Second Machine Age, they talked about that the greatest chess player in the world, when the supercomputer beat Gary Kasparov, he actually created this contest. And they beat the supercomputer with a combination of man and other supercomputers. So do you see it as machine sort of intelligence, augmenting human intelligence? Or do you actually see it as machines are gonna take over most of the decisions? So I actually think they are gonna start to take over some basic decision making. The more complex one, the human brain plus a machine is still a more advanced, right? Where it's better suited to make that decision. But I also think we need to challenge ourselves in what we call a decision. I think a lot of times what we call a decision, it's not a decision. We're coming to the same conclusion over and over and over again. So if a computer looked at it, it's an algorithm. But in our brains, we think a human has to be involved and touch it. So I think it's a little bit, it'll challenge us to redefine what's actually a decision, which is complex and nuanced, versus we're really doing the same thing over and over again. Right, and you're saying that the algorithm is a pattern that repeats itself and leads to an action that a machine can do. Yeah. It doesn't require intuition. And we don't call that a decision anymore. Right. So in thinking about, you gave us sort of the dimensions of light speed. What are some of the new metrics that will emerge as a result of this thinking? Yeah, I don't think any of the old metrics go away. I'll talk about a few. You know, in light speed, working at light speed, we need to start measuring, for one, back on that velocity vector, what is the percentage of processes in your company that have a cycle time of zero, or near zero. Meaning it just happens instantaneously. We can think of loads of examples in our consumer life calling a car with Uber. There's no cycle time on that process. Right, so looking at what percentage of your processes have a cycle time of zero. How much work are you moving to the machines? Right, what percentage of the work is the platform proactively executing for you? Meaning it just happens, right? I also think in an IT context of percentage of self-healing events where the service never goes down because it's resilient enough and you have enough automation and intelligence. But there are events, but the infrastructure just heals itself. And I think, you know, IT itself, we've long looked at IT as a percentage of revenue. I think with all of the automation and cost savings and efficiency we drive throughout the enterprise, we need to be looking at IT as a margin contribution vehicle. And when we change that conversation and start measuring ourselves in terms of margin, I think it changes the whole investment thesis in IT. So that's interesting. Are you measured on margin contribution? We're doing that right now. If an IT organization is waiting for the CFO or CEO to ask them about their margin contribution, they're playing defense. I think IT needs to proactively measure all of its contributions and express it in terms of margin. Because that's the language the CEO and COO and CFO are talking about. So meet them in a language that they understand better. So how do you do it? I mean, you certainly can create some kind of conceptual value flow. IT supports this sort of business process and this business process drives this amount of revenue or margin is... But so I stay away from revenue because I think anytime IT stands up and says we're driving revenue, it gets really hard because there's so many external and internal factors that contribute to that. So we more focus on automation in terms of hours saved, expressing and dollarizing that, hard dollars that we're able to take out of the organization and then bubbling that into an operating margin number. Okay, so you sort of use the income statement below the revenue line to guide you and then you fit into that framework. Absolutely. When you talk to other CIOs about this, do they say, hey, that sounds really interesting. How do I get started on that? I think it resonates really well because again, IT as a percentage of revenue is an incredibly incomplete metric to measure our contribution. And with everything going digital, you want to pour more money into technology. I mean, studies have shown and Andrew McAfee talked about this over the last 50 hundred years, the companies that have thrived have poured more disproportionately more into technology and innovation than their competitors. So if we only measure the cost side of the equation, we're doing ourselves a disservice. And so how do you get started on this path? I mean, let's call this path sort of, what we've generally defined as light speed, measure it on margin, how do you get started on that? First step is the hardest, but it's declaring that you're going to do it. And so we've come up with a framework that maps at a process level, at a department level and at a company level, where are we on this journey to light speed? If light speed is the finish line, where are we? And I define three stages, manual automated cloud before you get to light speed and then using those same three dimensions of velocity, intelligence and experience to tell you where you are. And very first thing we did was baseline all of our business processes every single one and mapped it. But once you have it mapped on that framework, then you can say, how do we advance the ball to the next level? And it's not going to magically happen overnight. This is hard work. It's going to happen one process at a time, right? But pretty soon everything starts to get faster and I think things will start to really accelerate. When you think about sort of architecting IT at ServiceNow versus some other company, I mean, you come into ServiceNow as the CIO, everything runs on ServiceNow. That is part of the mandate, right? But that's not the mandate at every company. Now it increasingly may be coming that way in a lot of companies, but how does your experience at ServiceNow differ from sort of the traditional G2000? Well, probably the unique part about being the CIO at ServiceNow is actually really fun in that I get to be customer zero, in that I implement our products before all of our customers, get to sit down with the product managers, discuss real business problems that all of our customers are facing, and hopefully be their voice inside the four walls of ServiceNow and being a strategic partner to the product organization. Now implementing everything, our goal is to be the best possible implementation of ServiceNow on the planet. And that's not just demonstrated by go lives. It's demonstrated by, again, the economic and business outcomes we're deriving from using the platform. So that part is fun, challenging, and hard work all at the same time. So how's Jakarta looking? Fantastic. We're super excited about everything that's coming out, whether it's the communities on customer service, software asset management, that's been a pain, right? For IT organizations for a long time, which is these inbound software audits, right? From other companies and you're responding to them and it's a fire drill. In my mind, our software asset management transforms software audits from a once a year, twice a year event to always on monitoring, right? Where you're just fixing it the whole time and it's not an event anymore. I mean, the intelligence that we're baking into the platform now, super exciting around the machine learning and the predictive analytics concepts. We have more analytics than we had before. I mean, there's just so much in there that's just exciting. We're already using it. I can't wait for our customers to get a hold of it. Well, CJ this morning threw out a number of 30 plus percent performance improvement. I had said to myself, when you're saying that with conviction, that's because you guys got to be running it yourselves. Yeah, we are, and that's not a trivial number. And I think the product teams have done a great job really digging in and making sure our platform operates at light speed. One of the things that Jeff and I have been talking about this week and really this is your passion here is adoption. How do you get people to stop using all these other tools like email and kind of get them to use the system? I think showing them the promise of what it can bring. And I think it's different conversations at different levels. I think to an operator, someone who's using the email to manage their work, they're hungry for a different solution. Life working an email and managing your business that way, it's hard, right? To a mid-level manager, I think the conversation is maybe about the experience, how consumers of their service will be happier and more satisfied. At the executive level, it gets maybe more into some of the economic outcomes of doing it because implementing our platform, you're going to burn some calories doing it. Not a lot, our time to value is really, really quick. But still, it's a project and it's initiative and it's got to have an outcome time to it. Chris, as you're saying that, and it's always tough to be stuck kind of halfway. You're kind of on the tool internally and it's great. And unfortunately, yeah. We don't use the word tool. No, it's the tool. Yeah, the platform actually. But then you still got external people that are coming at you through text, email, et cetera. I mean, it's part of the vision and maybe it's already there, I'm not as familiar with the parts. It should be in terms of enabling kind of that next layer of engagement with that next layer of people outside the four walls just to get more of them in it as well because the half-pregnant stage is almost more difficult because you're going back and forth between the two. And our customer service product does a lot of that. If you look at what Abhijit showed today, which is fantastic. Communities is another modality to start to interact with people. Certainly we have a connect part of our platform as a collaboration app within the overall platform so you can chat just like you would with any consumer app in terms of chatting capabilities and that mobile-first experience. And we're thinking about other modalities too. Should you be able to talk to ServiceNow just like you talked to Alexa and converse with ServiceNow? Farrell touched on this a little bit through natural language, right? And we all know it's coming and it's there. It's just pushing in that direction. How about the security piece? Sean shared this morning, you guys are well over a year in now. And he talked about that infamous number of 200 plus days. Nine months, yeah. Compressing that. Are you seeing that internally in your own? We are. We use Sean's product. We're a happy customer. The vulnerability management, the security incident response, and very, very similar results. And just like the customer who was on stage said, go live and iterate. And that's exactly what we did, right? Everyone has a vulnerability management tool like a QALUS that's feeding in. Bring in all those QALUS alerts. Our platform will help you normalize them and just start to reduce the level of chaos for the SOC and IT operations. Then make it better. Then drive the automation. So we're seeing very similar benefits. How do you manage the upgrade cycle? We've been asking a lot of customers this week on the upgrade cycle. Some say, I'll do N minus one just to sort of let the thing bake a little bit. You guys are like N plus one. How do you manage that in production though? Sure. So we upgrade before our customers. And that's part of our job, right? To make sure we test it out before our customers. But I'll say something in general about enterprise software upgrades, which is there is a cost to them. And the cost is associated with business risk. You want to make sure you're not going to disrupt your business. So there's some level of regression testing you just have to do. Now strategies I think that would be wise are automating as much of that testing as you can through a testing framework which we're helping our customers do now. And I think with some legacy platforms that was incredibly expensive and hard and you can never quite get there. Us being a modern cloud platform you can actually get there pretty quickly to the point where the 80, 90% of your regression testing is automated and you're doing that last 10 to 20% because at the end of the day IT needs to make sure the enterprise is up and running. That's job number one. But that's the strategy we employ to make upgrades as painless as possible. So that's got to be compelling to a lot of the customers that you talk to that notion of being able to automate the upgrade process. I mean, you're automating a lot of time and they can count that as money. It is money and automating regression testing it's a decision and a strategy but the investment pays off very, very quickly. So there's an upfront chunk that you have to do to figure out how to make that work. Just like anything worth doing. Yeah. Right? Excellent. What's left for you at the show? What's left for me, I love interacting with customers. I got to talk to a lot of CIOs at CIO Decisions. I actually enjoy walking through the partner pavilion and meeting a lot of our partners and seeing some of the innovation that they're driving on the platform. And then just, you know, non-stop I get ideas all day from meeting with customers. It's so fun. It's great. Chris, thanks very much for coming to theCUBE. Thank you. We appreciate you seeing you. Good seeing you. All right, keep it right there everybody. Jeff and I'll be back with our next guest. This is Kuber live from Knowledge 17. We'll be right back.