How Avalara Drives Business Growth, Using ServiceNow

Sean Dawson: Hello, and welcome to the Cask Distillery Podcast once again, where we unlock the full potential of ServiceNow with expert insights and practical strategies, only here on the Cask Distillery Podcast. I’m your host, Sean Dawson, client architect here at Cask. And with me I have Derek Nohr, who I want to run and do a quick intro, and then we’ll get into our talk. But Derek has been working in technology for over 23 years, basically at two large companies—30,000-employee companies—to start his career and in the space of defense and aerospace industry and in healthcare. And he has now joined Avalara, a financial technology company, as the director of ServiceNow. 

First of all, thanks, Derek, for jumping on the podcast. I know we talked previously. It’s been a pleasure getting to know you. And thanks for taking the time to come on the podcast. And we really appreciate it.

Derek Nohr: Sean. Great. Thanks for the invite. Love it. I love to talk about one of my favorite subjects: ServiceNow. 

Sean Dawson: Yeah, you are passionate. I love talking to you, and I’ve loved getting to know you, but I was hoping for—first of all, let me frame—you know, what we’re going to be talking about is just the day in the life of a customer, what Derek’s running through, what he’s seen on the platform. And we thought it would be a good story. Because, in talking to him, we’re like, “This is really valuable to our listeners and watchers of the Distillery.” So I thought it might be good to kind of go through your company, the background, and what’s going on there real quick. 

Derek Nohr: Sure. Absolutely. Avalara is the biggest company you’ve probably never heard of. It is a financial technology company that automates tax compliance. So we sit behind really big integrations like Oracle’s NetSuite. And we also provide end-user tax compliance. So we have about 30,000 customers across the globe. So, we do tax compliance for just not in the United States. We have, like, we work with the big brands like Zillow, Converse, and even Netflix. So, things that you probably use. And we are integrated with a bunch of partners. So, Stripe is one of them. So, if you go out to eat and you see a Stripe point-of-sale machine, you just used an Avalara product.

So, it is pretty awesome. We have 5,000 employees across the globe. So, it’s a pretty small shop, and it’s just a fantastic company to work for, and I’m really grateful that I get to implement ServiceNow here at Avalara. 

Sean Dawson: Yeah. Awesome. And I know we—Cask has had the pleasure of working with you and the team there. And I thought what would be good to know, as well for the audienc, is what in the platform are you using right now today? 

Derek Nohr: Yeah, sure. We’re about only 18 months into our ServiceNow journey, Sean. And we started with Safe Workplace and ITSM. So those are the first—our entry into that. And right now, we have HRSD, SecOps. We had about half of the IRM, and we’re using Employee Center. And Sean, I’m going to read your mind to see, like, what’s next. And, well, I got a couple of big things coming. So, we’re getting after software asset management in the ITM space, and we’re going to be upgrading our safe workplace module to the full workplace service delivery, which is, I’m really excited.

And I’m sure you’ve heard that I’m partnering with you guys, Cask, to make that happen. So those are, like, the immediate things that are happening at Avalara. 

Sean Dawson: Yep. Okay. And so you’ve obviously—you’ve expanded far beyond the foundation. Everybody knows ServiceNow for ITSM. Can you give us an overview of that journey? And we already talked about the products you’re in, but how did that come about? I mean, most people get on ITSM and, quite honestly, sometimes people would just stay there, be happy and content. What made you look at the full possibility in the scope of ServiceNow? What was that journey like? 

Derek Nohr: Well, I mean, ServiceNow is a business platform, which, and it automates a bunch of business processes. And if you’re just going to have one Lego brick, like ITSM, there’s not a whole lot of things you can do with it. Yeah, you can optimize your IT—like help desk and things like that—but when you’re talking about full automation crossing over businesses, business silos, departments, organizational structures, like, ServiceNow is that sort of platform.

So, I mentioned Lego. ServiceNow is like Lego to me. The more bricks you have, the cooler solutions that you can make. And we at Avalara are getting all the Legos. We are going to use all of ServiceNow, with the exception of project management and DevOps. We have other tools for that, but everything else is fair game.

So that’s how we kind of came around to what we’re going to be doing with this amazing platform. 

Sean Dawson: Yup. And I like how—you know, I imagine what you’re looking at is the business services, not the technicality of it, that we can bring in a ticket and make it more efficient. But you’re looking at the big picture of that.

So, when you were doing that, you know, how did you go about defining and sharing the vision inside of that? Was it a challenge? Was it—what were you doing practically? Because we’ve honestly talked about that in the podcast previously. It was actually one of our first, where we’re talking about sharing a compelling vision with ServiceNow. But what was it you—what did you see? How did you accomplish it?

Derek Nohr: Oh, sure. I mean, it’s—the vision is really simple. Like, we want to be able to make things easy for people to request services. Okay? Like, we want to go to one place. I want to, you know, log my HR ticket, request a leave of absence, check my payroll. I want to correct. I need something. I need to request a new mouse. 

All that kind of stuff should not be in fragmented systems. That’s a very compelling sort of end game so that I can go one place and get all my needs taken care of. So, from that sort of perspective, it was a really easy picture to paint from, like, an executive leadership to do buy-in and things like that, because we can create that one point of entry, that one-start-shop sort of thing with Employee Center Pro. 

And then also—so, customer experience is number one. Providing internal customers—you know, Avalarians—a good customer service that we provide our external customers, but the other one is automation, you know. So, I mean, it does route work to the right people at the right time and make sure that work is being done and tracked by SLAS and all that kind of stuff. So, we want to use ServiceNow as an automation platform as well to get things out of email, Post-it notes, phone calls, that sort of thing, into a very structured way. So, those two tenants made the vision for adoption of—full adoption of—ServiceNow very compelling. And I was able to successfully paint that picture. So I got buy in. I love it.

Sean Dawson: That’s awesome. And so what did you do? Did you just schedule? And I know I’m asking because what I think people do is they get wrapped in their own world. Like, how does it, like, they really need the step by step. Walk me through. Did you just announce it? Or did you have relationships with these people and you got the stakeholders in? And what did you find that worked and didn’t work? 

Derek Nohr: Sure. I mean, I want to—I talk to people all the time, okay? So it’s just all about relationships, okay? I’m out advocating for the platform, advocating for my team, and talking to everyone about what we call the art of the possible, you know, like, what we can do here and what sort of tools can we bring to you to make your job better, right? And approaching it is to—I have options for you so that you can do more. You can keep your head count flat and accomplish more. You can automate some of the easy stuff all the way and focus on the hard things.

Like, these are things that leaders of organizations, departments, teams—that’s really interesting to them. I’m not bringing them work. I’m taking work away through automation and through a consistent platform. So talking to the stakeholders.

Sean Dawson: So you’re truly partners. 

Derek Nohr: Yep. That’s it. 

Sean Dawson: Yeah, that’s awesome. I had another question that popped in my mind, but no, it just went away. So, I’m gonna move on with that. I guess, what—did you find anything that didn’t work with the stakeholders? Do you have any tips or tricks as people start approaching this?

Derek Nohr: Sean, I’m gonna talk about—to me, there’s two different types of stakeholders. Okay? There’s the people who are in and, like, are using the platform, and then the people who are new. Okay? So, like, how my approach to those are a little bit different. And so, existing platform, existing stakeholders, people are working the platform, know it and love it. I do something called stakeholder rounding with them every quarter. Okay, that keeps them engaged and figure out how we can better support them and what their pain points are, stuff like that.

Now, where a lot of work comes into, and where I spend a lot of my time, is with these new stakeholders. Okay. And I go through lots of demos, lots of design sessions, a lot of pre-contract work in order to make that happen. And so, like, workplace service delivery, I did mention at the beginning that we were working with Cask to deploy that. I had you guys come in, show the stakeholders in the facilities of Avalara, like, all the capabilities of the platform. So that was super critical. 

Now, to answer your question about, like, what hasn’t worked? I’m going to tell you that some of these existing stakeholders, when I said quarterly rounding, like, it’s not enough. They want to meet with me every two weeks. My tech ops teams, things change on a dime in that domain. So they want to meet with me all the time to make sure they stay ahead of stuff. So, and then, Sean, every time I have a surrounding meeting, I come out with about 20 action items for my team. That is also pretty challenging, too. So, yeah. So, that’s how I handle stakeholders and also some of the challenges, but I’m constantly talking to leaders in the space about what we can bring to the table to help them. 

Sean Dawson: Yeah that’s great. Did you do, I don’t know, anything like an ROI, you know, when you’re talking about stakeholders and the efficiencies and, you know, MTTR? You talked about eliminating tasks. Do you get into ROI with them at all and showing what the benefit and the cost savings could be?

Derek Nohr: Yes, we do. So—and also, I mean, Cask is really helpful with all that stuff, too, about saving things. And I have to give it up to ServiceNow, because, like, they are able to really articulate very clearly and quickly what their anticipated ROI is for the modules that they’re seeing. So, that’s really good.

You know, key performance indices are also really important to make sure we understand and agree on those and track out—track those things within the dashboard, and all that kind of stuff. So, that’s the kind of stuff that the ROI things that these teams are really loving. And also, Sean, like, anecdotally, like, they’re like, “We’ve kept our head count flat,” and Avalara has grown as a company by nearly double in the last couple of years.

So, like, after using that platform, like, it’s been, it’s—we’ve been able to scale, which is awesome. Yeah. 

Sean Dawson: Yeah. So, in relation to talking to stakeholders, you’re kind of creating demand because you’re proactively going out and talking to people. Plus, I’m sure you get some demand, but when you think about governance, how are you dealing with governance at Avalara right now? And how do you approach it?

Derek Nohr: Sure. And that’s a great question. And to me, governance has two components to it. Okay. So the first is, like, what sort of standards processes practices do you want to have in place to ensure that everything is kind of treated the same way? Okay. And the second one is who’s the ultimate decision-maker? So, like, everyone wants to work for my team. So, where do I draw that cut line and sort of stuff like that? 

So, I will tell you from the first one. So, like, here, like, getting standards and stuff. We at Avalara, we firmly believe in do using out-of-the-box sort of functionality. And that’s what I’m talking with stakeholders that I want to make sure you’re willing to blow up your existing practices, you know, and use the best practices that ServiceNow has identified in this domain to redo the way that you might be doing work today.

So that’s one of our tenants of governance is out of the box. But I will tell you, we do smart customization as well. So, it’s not a hard and fast, absolutely not every time, but we have—the team has a discussion about it, and if it makes sense, we’ll do something in a customized way.

So that’s one part of governance. I’ll talk about the second one real quick. Like, who’s the ultimate decision-maker? Sean, with so many modules out here, I have so many stakeholders. Okay. I think I have about 15 of them. Okay. So, and of course, all of their work is number one on their list. But when they throw the list together, that list of 1 through 1,000, we have to draw a cut line somewhere within our quarterly commits. So that’s where my amazing TPMs and also my boss and my boss’s boss are able to advocate for “This is our cut line for our capacity, and that’s what we’re going to deliver this quarter.”

So that, to me, governs the two things. The standards are going to follow, and the best practices, and also who’s the ultimate decision-maker. 

Sean Dawson: Okay. Okay. And we’re talking about governance. We’ve talked about what you’ve got going on. Let’s skip over to, you know, team building. Like, how are you thinking about—you’re building your team, and do you decide to bring it in versus working with a partner like Cask? How do you approach that right now? 

Derek Nohr: Well, yeah. So team building is super important because you can deploy things. But if you don’t maintain it, okay, and you don’t enhance it, you don’t upgrade it, the value that you’re getting on year one is going to be zero by year two. So, to me, team building is the acknowledgement that one team cannot do it all.

Okay. So you—I have a core platform team that is super knowledgeable about everything in the ServiceNow ecosystem. Okay, but they’re not knowledgeable about legal practices, facilities maintenance practices, that sort of thing. So we need to grow and upskill ServiceNow skills within those departments so that they’re able to do—have direct access to the platform to be able to update the things that they need. So, we—I’ve been able to do that. I don’t know if I made this up, but I call it a skilled resource. So they’re basically a dotted line member of our team. They participate in our daily stand ups, you know, they’re in our, all of our rituals, and all that kind of stuff. So they’re basically an extension of our team. So that’s pretty cool. 

And then the second thing, Sean, is, like, about building a very strong team, is just acknowledging that everyone’s strengths and just realizing that we are better together than we are individually. So that’s something that I really love because, like, Yuva, my BA, is different skill sets than Arpit and Ambuj, my devs, and they all have different skill sets than I do. But together, we really put that puzzle together. 

So now I want to ask—I’m going to go on to the next part of your question about, like, how do we use partners? So, we use partners at Avalara a lot and, Sean, I’ll be very transparent with you: Early in my career, I was very partner-adverse. Okay? They were expensive. The handoffs were terrible. They come in, and then they leave, and then you’re holding this thing, and it’s not a good thing. I have pulled a 180 on that, Sean. I’m actively seeking out partners in all of our modules upon deployment because I need their expertise in the industry best practices, okay?

So, and I was telling you the third time during this recording, that talk that we’re using you guys for workplace service delivery. And I am super excited to work with Kylie and Marnie on your team. Because what they were able to do at 7-Eleven just blew me away. So, they, if they can manage, I don’t know, 50,000 stores, I think we can, they can handle about 30 Avalara buildings across the globe. So that’s where I’m pretty excited to work with them. Yeah. 

Sean Dawson: Yeah. Good. Thanks for that feedback on that and for responding to that. Because, it’s something that people need to think about: “Are we going to try to do it ourselves? And do we have the experience?” And if you don’t, “Where do we go and how do you look at that?” So, thanks for that. 

So, if you had infinite resources and you could press the go button yourself, what do you think you’d do? Because I got to know you well enough. I know you’ve got a lot of plans, but what would that be? 

Derek Nohr: Well, can we suspend reality for a moment? And can I, like, clone my team five times over? Because I would love all of that. So, but, honestly, if I had infinite resources, there’s a couple things I would do. One is really ramp up the scaling of my team. Okay? Like, when I said, “5x it,” I’m absolutely for real about that. 

The second thing is that I would bring in partners to deploy everything within the ServiceNow ecosystem that we had an appetite for, okay? Out of the box? Put it out there. Okay. Get it stood up. How—do the stakeholdering. Get everyone’s practices to out-of-the-box functionality. Okay. And everyone having a baseline use and understanding of the platform. And then, well, and then drive all the traffic to Employee Center Pro for everything. Okay. Everything. So, integrations with all of our systems—Concur, Workday, our learning platform, everything like that—everything. 

And then, finally, I would focus on doing, like, big things like cross department workflows, okay, and automating that. Okay. And what I mean by that is, think about employee onboarding, okay? That covers HRSD. That covers asset. It covers, probably, security and account provisioning. It covers, and it’s probably payroll, things like that. I would start using my newly cloned 5X team to implementing these sort of cross-module sort of platform business problems and do an automated streamline thing. 

That it would be if I had the go button, so I should probably play Powerball and make it happen.

Sean Dawson: So, that’s a lot. So the next question, actually, is a good feeder to that response or from that response, right, is how many projects is too many projects at a given time for you right now?

Derek Nohr: Well, Sean, we’ve been talking for a while here, and I—and it’s very clear that I’m a very aggressive person. So, I’m going to—so, for the people listening, take my answer with a little bit of a grain of salt, because I’m very aggressive. I’m very optimistic. And I often live in a state of suspended reality where everything works out wonderfully and everyone’s happy with the end product. Okay. So knowing that, okay, I’m gonna have to say about five is probably the most you can probably handle. But of those five, pick two of your most important, okay. So, like, uf something’s gotta go, trim the bottom three, okay? You can work on some things, but, like, you have to pick a top one and two and make those your top priority.

So, I like to grab little things and bring them along. So, that’s why I have a—cast a wide net, but really, focus on two. Maybe my answer is two, Sean. I don’t know. What do you think? 

Sean Dawson: I think your goal typically is more, but you might have to scale back to two. Yeah. 

Derek Nohr: Okay. Yeah, that’s right. I have big eyes, okay? And I have a big appetite. So, but I’ll settle on two, I don’t know. 

Sean Dawson: Yeah. Regarding value, I wanted to ask you—we talked about vision. How do you get your vision out? But once this all comes about and you’re starting to get the business value, you’re realizing the ROI. I know you mentioned you have regular meetings. Is that kind of where you do your business value from the given solution back to them? Or do you do something bigger than that? Or well, more between that.

Derek Nohr: Well, it’s—I actually kind of flip it back on the—use the leaders in that space. Okay. Like, I’ve got the platform, but they’ve got to drive on the road, you know, so they need to report to their leaders about how they’re doing with this shiny new toy that they just got.

So, yes, I work with them to develop KPIs and, you know, make sure we have the tracking mechanisms in place to enable all those sorts of things. So, I really, it’s like, it’s a—it’s me as the platform owner is—I’m important, but I’m not the—their boss is not my boss. And so they want to make sure that they’re having the right metrics and reporting for that value sort of thing.

But let me—Sean, let me show you a couple of cool things. I rattled off a ton of things that we’re doing already that we already have deployed. And, like, I mean, talking with the leader in the SecOps space, like, they’re through automation and they’ve saved about five FTEs. So that’s incredible. Okay, like, that’s 1,000 hours a month.

So, I talked about the—our help desk has stayed relatively flat, even though we’ve grown as an organization. Like, we’ve nearly doubled in about two years. I don’t know. We just deployed HRSD. Hey, I’ll tell you, Sean, the way to get HR case management was a shared inbox. Now, I go to Employee Center, and I have all these options to select, and it’s so awesome for direct access to things. And so they’re loving their life because the work is structured, and it’s segmented out based on, you know, the case managers of their areas of expertise. It’s payroll, leaves, whatever, that’s super cool. And then I told you a little bit of IRM deployed, the leader in that space. They love the audit once and provide evidence to many controls. So, they’ll be able to audit more frequently. So, that’s very fun. 

So, in addition to, like, hardcore numbers, FTE, say, things like that, like, just the structure and the knowledge and reporting and the sensibility of know what work is, has been really beneficial to all the teams that I’ve worked with.

Sean Dawson: That’s awesome. So for the—and I want to frame this to be, I guess, outside of Avalara for you—is what would be your advice for those that are watching this and they’re going, “Gosh, Derek, you’ve got all this stuff you’re excited. But what about those that have to think about, you know, pace of change and how the culture might impact that?”

What would you advise those listening and have them consider when they’re thinking about pace of change and how the culture impacts? You’ve done an awesome job at Avalara and other places you’ve been. 

Sean Dawson: What are your tips and tricks, and what are your thoughts on that for those watching?

Derek Nohr: Well, you have to inspire excitement. Okay. And, like, that’s the number one thing. And you have to be able to show them that, you know, life can be better, okay, you know, by changing the way that you’re doing these things. And I always, like—I always look around, and as I hear people saying, “This is the way we do it. This is the only way that we’ve done it,” and I’m like, “That’s interesting, because I don’t know anyone in your organization has written books about how to do these sorts of things, so maybe they’re not the best, and there’s other things that are out there.” And this is where I love Cask, and this is where I love ServiceNow, because they’re sourcing all the best practices about how people are using their products and then giving it out in run books and things like that.

So, I’m very lucky that I work at Avalara because we are a very change-friendly organization. Okay. Like, we are so fast because we have to be in this financial technology space that everyone’s willing to embrace change. So that’s the one thing. So, you have to make sure you paint a really good picture, talk about the art of the possible, show them how things are going to work, connecting with other people that have done these sorts of things and to get them more comfortable in making this sort of change. So, it’s pretty awesome that way, and you’ll have good success with that. 

Sean Dawson: And if I’m reading between the lines here, too, is that you’re excited. You’re kind of saying your excitement and being passionate about it can change the culture and get people thinking versus “I’ve got to change this. I’ve got to do this.” And getting them excited about the art of the possible, essentially, and then backing into it that way.

Derek Nohr: Yep. One hundred percent, Sean. I mean, you have to paint a perfect picture for them and then decompose it into how we’re going to do it. And, I don’t know, that’s something that, like, we might be talking to stakeholders and about what they want their future state to be. I just map it to what we have—what, certain, what we have deployed, and what we’re going to deploy, and what we may potentially deploy. So that’s the way that shows in the map of how to get to their good. 

Sean Dawson: So, the last thing that I wanted to get your view on was, really, what are some things that are exciting you? What are you keeping your eyes on regarding up-and-coming ServiceNow features? I know you mentioned a couple of things you want to get into, but is there anything you can call out, like things that you’re really excited to see come about?

Derek Nohr: Sean, I am so excited about this sort of thing, because Avalara was one of two companies of all of ServiceNow’s customers—I think they have, what, 7,000, 8,000 customers—to be part of a generative AI, like, I’m going to call it prototype. It’s called Task Intelligence. It’s not available. You can’t buy it. No, it’s going to—we’re refining it and stuff like that. But what it is it’s generative AI in the ITSM space, which comes up with field recommendations based on your data.

So, like, we have our own LLM. That’s great. We’re tweaking it, getting really great success results, and it’s going to really, like, supercharge our help desk because they no longer need to think about which group this needs to, which assigned to this needs to go to, what business services, what configuration item it is, because the model is sourcing from our data and presenting that to them.

So that is one thing that I’m super excited about. And that goes hand in hand with that—and I pretty much was falling out of my seat at Knowledge this year—was the Now Assist stuff. Like, I gotta tell you, the text-to-code case summarization, that is going to be absolutely amazing for adopters of this sort of thing. I’ll tell you, like, when I was talking about it to my team, one of my amazing developers, Arpit, said he might as well just quit because you don’t need him anymore. So, I’m like, “No, we still need you.” But, so, the text-to-code stuff was super great for scripting. And, you know, Sean, all that stuff makes the platform even more accessible. Okay. Because, like, all of the work that ServiceNow has done over the last couple of years for the low-code/no-code tools, combine that with Now Assist. Like, you don’t need a computer science degree to do this. You just need to be an expert in your practice and know how to use the tools to set up really powerful workflows in a short period of time.

So, Sean, those are the, like, so AI and maybe just AI I’m excited about. How about that? So, nut yeah, our entry with Task Intelligence is going to be great. And hopefully we can just see it maybe in Xanadu. I don’t know. We’ll see. So we’ll see. Yeah. 

Sean Dawson: Yeah. That was all we have time for today, but thank you, Derek, so much for coming on and taking time out of your schedule. Like I said earlier, it’s a pleasure to have you on. It’s been a pleasure to get to know you. 

And for those of you listening, if you could do me a favor, do us a favor, and rate, share, like these conversations that we have on however you’re watching these, it helps the algorithm push this to other people that are interested in the material. Also, let us know if there’s something that you want to see. 

But for now, that’s it for this episode of the distillery. And thanks so much. Take care of bye bye.