Measure value from ServiceNow

A checklist to measure value against today’s actuals

 Measure value from ServiceNow
Introduction and intended use
Every customer wants to maximize how much value they get from their ServiceNow investment. To do this, you must regularly track how well your implementation is performing against
defined metrics and goals. This insight into your current state allows you to stay on course to deliver value by making course corrections to ongoing projects and prioritizing the right
projects for future implementations. But tracking can be difficult—at any time, you need to know whether you’ve made progress in achieving your operational goals and what monetary
value you’ve realized as a result. 
This checklist provides a step-by-step list of activities to measure the current value realized* from your ServiceNow implementation. Here are the key insights:
• Have clear set of expected business outcomes and measures of success (or key performance indicators) for your implementation.
• Aim for simplicity to calculate value—the goal is to have a directionally correct estimate that helps in strategic decision-making.
• Communicate value realized—measuring alone is not sufficient.

Use this checklist as a guide to building your own process for measuring value realized from ServiceNow on an ongoing basis. Typically, the ServiceNow platform team in your
organization measures value from ServiceNow every quarter and shares with stakeholders. However, we encourage all service owners and applications owners to follow the guidance from
this document and calculate the value realized for processes they own.
We highly recommend defining the business outcomes and KPIs needed to measure success at the start of implementing any ServiceNow solution. Steps 1 and step 2 in this checklist are
provided for you to revisit what you defined during implementation—or in case you didn’t define them in advance.
Note: Always work with your account team and engage ServiceNow’s value consultants to calculate the absolute, true value of your organization’s ServiceNow investment. This checklist is
only meant to help you with a simple, back-to-the-envelop calculation of value to inform decision-making.
* “Value realized” is the measurable business benefit that your ServiceNow implementation delivers to your organization when it meets expected goals.

Key implementation steps

1. Select the business outcomes to 3. Define how to calculate monetary 4. Collect data and calculate
2. Define key performance indicators 5. Communicate value realized
measure value value

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Checklist: Measure value from ServiceNow
Step 1: Select the business outcomes you need to measure
See slide 4 to complete this step.
⎕ Identify the business outcomes your stakeholders expect.
⎕ Select the expected business outcomes that apply to your current implementation.
Step 2: Define key performance indicators
See slides 5–6 to complete this step.
⎕ Identify key performance indicators (KPIs) for the business outcomes selected.
⎕ Define time-bound goals for each KPI.
Step 3: Define how to calculate monetary value
See slide 7 to complete this step.
⎕ Define the formula or equation to calculate value.
⎕ Identify the data elements you need to calculate value.
Step 4: Collect data and calculate value
See slide 8 to complete this step.
⎕ Source the required data for calculating value.
⎕ Calculate the monetary value realized.
Step 5: Communicate value realized
See slide 9 to complete this step.
⎕ Share the value you measured with your stakeholders.
⎕ Enable strategic conversations about value.
3 © 2021 ServiceNow, Inc. All Rights Reserved.
Step 1: Select the business outcomes to measure
Clarify the business outcomes your stakeholders expect to realize from the ServiceNow solutions implemented. The value you measure and communicate must align with the business
outcomes your stakeholders expect.

Identify the business outcomes your stakeholders expect Example:

• Review the expected business outcomes cited in your business case as the reason for investing in
ServiceNow.
• Validate the expected business outcomes with your executive sponsor and senior stakeholders
(such as functional leaders). Discuss:
• Changes in enterprise and functional objectives, if any
• Changes in any assumptions that were made while defining the expected outcomes
Select the expected business outcomes that apply to your current implementation
• Review the scope of your current implementation and how it aligns with the program plan
proposed in the ServiceNow business case.
• Select the outcomes you’re likely to realize based on the current solutions implemented.
• This is critical because you may have not yet implemented all proposed ServiceNow solutions
from the business case. For example: if you're still in phase 1 of your implementation and don’t
have the CMDB implemented yet, you shouldn’t aim to calculate value against “reduce IT asset
costs” because the CMDB will be an essential part of doing that.
• Review the final list of outcomes (that are relevant to your current implementation) with your
stakeholders, for example, functional leaders and your executive sponsor to make sure it aligns
with their expectations.
Alpha Co. set an enterprisewide objective to optimize operations at their
organization. The ServiceNow team at Alpha Co. created a business case for
using ServiceNow solutions to enhance analytics and data reporting in
support of their organization’s goal. Their operational objective is to
intelligently identify problems before employees know about them.
Enterprise objective
Optimize operations to save cost
Functional objective
Enhance analytics and data reporting
Operational objective
Intelligently identify problems before employees
know about them, thereby avoiding work disruption
and saving time
Practitioner insight: Avoid selecting business outcomes your current
implementation cannot deliver. If there are business outcomes in your
ServiceNow business case that your current (or planned) implementation
cannot deliver, work with your account team to help include the right
ServiceNow solutions in your planned implementation roadmap.

4 © 2021 ServiceNow, Inc. All Rights Reserved.

Step 2: Define key performance indicators
Build clear measures of success or KPIs for the business outcomes you selected in Step 1. These KPIs will help you measure progress toward delivering those outcomes. Ensure these
KPIs are measurable and consistently defined across stakeholder groups.

Identify KPIs for the business outcomes selected Example:

• For each business outcome, identify at least one KPI that best indicates progress.
• Review our list of top KPIs that ServiceNow customers use to measure and communicate
value.
• To define your own list of KPIs, review our guidance on managing ServiceNow performance.
• Make the KPIs you’re tracking as specific as necessary to provide actionable insights for your
organization. For example, you may want to track reduction in all incidents separately from
reduction in high-priority incidents.
• The more specific your KPIs are, the easier it will be to diagnose the root causes of value loss
and take steps to improve value.
• Work with your service owners and process owners to define a consistent method to measure the
defined KPIs. For example, reduction in high-priority incidents is change in % of high-priority
incidents, which is measured as:
• % of high-priority incidents = [[Sum of number of priority 0 and priority 1 incidents resolved
during the month] ÷ [Total number of incidents resolved during the same month]] x 100
• Configure ServiceNow Performance Analytics and other dashboarding tools used across the
organization to track and report KPIs as per your definition.
Alpha Co.’s ServiceNow team implemented ServiceNow for all its ITIL
processes and built-in artificial intelligence, machine learning, and
analytics capabilities to achieve the operational objective to intelligently
identify problems before employees know about them. To measure
success, the KPIs they use are:
Operational objective
Intelligently identify problems before
employees know about them
KPI #1 KPI #2
Reduce outage volume Reduce outage triage time
These KPIs clearly indicate whether they have been able to avoid
outages and resolve them quickly because of the intelligence they built
in their workflow.
Practitioner insight: Consider using the KPI Composer feature in your
ServiceNow Performance Analytics application. It helps create a visual
hierarchy of business goals (e.g., to save cost), success factors (e.g.,
increase IT efficiency), and the measurement (e.g., reduce high-priority
incidents). This helps build transparency and alignment with your
stakeholders.

5 © 2021 ServiceNow, Inc. All Rights Reserved.

Step 2: Define key performance indicators (Continued)
Define time-bound goals for each KPI Example:

• Define a baseline timeframe for comparing progress against each KPI you’re measuring value against. Alpha Co.’s ServiceNow team measures year-to-year performance
We recommend setting the baseline as the start of the implementation or last year, whichever is against their KPIs and sets target for each year. Below is their target for
earliest. 2019:
• Note that for some outcomes, such as consolidation of tools, it’s hard to do a year-to-year
comparison. For such metrics, use “before ServiceNow” or the start of ServiceNow Operational objective
implementation as the baseline.
Intelligently identify problems before
• Define the goals for each KPI according to your baseline. See the box on the right for an example. employees know about them
• Ideally goals should be defined at the start of ServiceNow implementation.
• Consider using the ServiceNow Benchmarks application for ITSM=related KPIs. These KPI #1 KPI #2
benchmarks serve as great industry-specific, peer-tested goals to have for your KPI. Reduce outage volume Reduce outage triage time

• Also consider working with your account team to get peer benchmarks on the KPIs you’re
tracking.
• Record a measurement for each defined KPI at the start of your baseline time frame so you can
compare future results against your starting point.
Goal: Reduce by 30% from Goal: Reduce by 50% from
last year last year
Practitioner insight: As you set goals, consider what factors may
impact performance against your KPIs—you may see trends that are due
to changes made in other parallel processes. For example, you may find
that post ServiceNow implementation some incidents (which are high
cost) are converted into requests (which are low cost). In this case an
increase in requests is not a bad thing. So when you set a goal for your
“reduce request volume” KPI, account for an increase in requests due to
incident deflection.

6 © 2021 ServiceNow, Inc. All Rights Reserved.

Step 3: Define how to calculate monetary value
The KPIs defined in the previous step will help you measure the improvements made at the operational level. You’ll need additional data to calculate the monetary value realized for
the organization by achieving your KPI goals.

Define the formula, and the data elements required, to calculate value Example:

• Identify the formula or equation you would need to use to calculate cost savings from the To measure the value of ”reduction in outages” (the KPI set in the example in
improvements made in the KPI measured. Refer to the value equations provided in our step 2), Alpha Co.’s ServiceNow team collects the following data elements as
top KPIs to measure ServiceNow value guide. per the value equation shown below:
• Based on your value equations, list the data elements you need to calculate the value (in cost Data elements:
savings) associated with each KPI you’re tracking. Outage volume (#)
KPI #1
• Identify which of these data elements you expect to change as a result of your ServiceNow Reduce outage volume Buss. cost per hour of outage ($)
implementation. For example: “outage volume” should decrease, but the “business cost per
hour of outage” will not change. Avg. length of an outage (hours)
• Assume there’s no change over time in the data elements the ServiceNow Cost Savings ($) = change in outage volume x avg. business cost per hour
implementation will not have an impact on, for example, the hourly wage of an IT of an outage x avg. length of an outage
service agent.
• Consider validating your value equations with your finance department. They note that their ServiceNow implementation helps reduce the number of
outages and time to resolve them. So they only need to track the current
values for the data elements associated with those two and the cost is
assumed constant.

Practitioner insight: Value calculations for the same business outcome are
typically not mutually exclusive. Don’t add them up to calculate cumulative
value as you will end up double calculating. You often only need to calculate
value against one KPI to get the cumulative value.

7 © 2021 ServiceNow, Inc. All Rights Reserved.

Step 4: Collect data and calculate value
Once you know what data you need, the final step is to collect that data and calculate value. This requires identifying the “delta” or change from a baseline, as defined in step 2 and
today’s actuals.

Source the required data for calculating value Example:

• Track the data elements you need (as identified in step 3) in ServiceNow Performance Analytics. Alpha Co.’s ServiceNow team calculates cost savings from reduction in
Refer to the full list of indicators tracked out-of-box in ServiceNow Performance Analytics to number of outages as (see table for example):
verify.
Cost savings ($) = change in outage volume x avg. business cost per hour of
• Work with your stakeholders to estimate values for the data elements that that are not directly an outage x avg. length of an outage
tracked in the Now Platform, such as “business cost of outage”
• These values will likely remain more constant over time, so you don’t need to reevaluate Baseline (2018) Current
(2019)
every time you calculate value. Cost savings ($) =
Outage volume 250 150
• Consider using external benchmarking data for your industry (like the ones available from (250 – 150) x 1000
HDI) to make estimates on data elements like “hourly wage of service agent” if it’s not Buss. cost/hr. $1000 $1000 x 3 = $300K
readily available. Outage time 4 hrs. 3 hrs.
• Get the baseline measure (as defined in step 2) for the data elements that are changing as per your
value equation. Alpha Co. realized cost savings of $300K by just reducing the number of
outages over last year. Note that to calculate value savings from reduction in
• In the absence of a baseline measure, consider using historical performance data to make an volume, they didn’t account for the change in outage time. Calculating the
educated guess of the baseline. Also ask process owners to use their best judgment to value separately for the two KPIs (see step 2) helps them identify whether
provide a starting estimate. they should invest in decreasing outage volume or length in the future.
Calculate the monetary value realized
• Calculate the value realized against each KPI using the formula defined in step 3.
• Consider whether you would need to show value for different geographies separately. If so, repeat Practitioner insight: Aim for simplicity while making the value calculation
these calculations for each geography. —don’t try to account for all changes in the environment that may affect the
cost. Look for a rough estimate that helps you identify and prioritize your
next steps.
8 © 2021 ServiceNow, Inc. All Rights Reserved.
Step 5: Communicate value realized
Your value calculations are most useful when communicated effectively to the right stakeholders. Create a communication plan that educates stakeholders on the value realized to
help them take the required steps to maximize value in the future.
Share the value you measured with your stakeholders Example:
• Create a custom dashboard to track and share value measurement data and progress toward KPI
Alpha Co.’s ServiceNow team communicates how reducing outage volume
goals with your stakeholders.
has helped them increase IT service management efficiency, thereby
Note: ServiceNow Continuous Improvement Management has a Value Realization Dashboard improving the employee experience (faster resolution) and the reputation of
feature that displays the progress of all initiatives tracked in the application to compare outcomes the IT services. They also highlight how the extra capacity created is being
to expectations related to the overall business goals of the organization. used to perform other higher-value tasks.
• Ensure the dashboard is customized to highlight the metrics most relevant to the stakeholder group
and provides options to dig deeper into additional supporting metrics.
Enterprise outcome
• The audience for the value dashboard must include the executive sponsor, senior leadership, and
the platform team. Saved $300K that is available to reallocate capacity
back to the organization
• Communicate the value realized, opportunities to increase it in the future, and the next steps to
broader stakeholder groups, such as service or process owners, front-line workers, and end users. Functional outcome
Consider creating a quarterly newsletter. Improve efficiency, experience, and reputation
of IT services
Enable strategic conversations about value
Operational outcome
• Review current data (at least quarterly) on the KPIs and associated monetary value as part of
Reduce outage volume by 40% in the last
ServiceNow steering board meetings. Make sure to year
frame these conversations around the value delivered to the business. Questions to discuss:
• How should we enhance the current implementation to capture improvement opportunities? Practitioner insight: Conversations on value should inform prioritization
• What new investments we can make to innovate and grow the business? and course correction decisions. This activity is not meant to assess the
• How should we effectively reallocate capacity back to the organization? wholistic, true value of implementing ServiceNow for your organization.
Focus on what next steps your team should take and how you should tailor
the KPI targets for next year against the expected outcomes. 

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Related resources
• Success Playbook – Realize and manage value from your ServiceNow investments

• Key performance indicators (KPIs) to measure value from your ServiceNow investments

• Success Workbook – Build a performance management approach for ServiceNow

• Success Quick Answer – How should I improve value from ServiceNow?

• Success Quick Answer – How do I have effective strategic conversations about value?

• Success Quick Answer – How do I summarize ServiceNow value on one page?

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