ServiceNow’s President and COO, Chirantan “CJ” Desai, has left the business following an internal investigation found violations of the company’s hiring policy.
Company policy was deemed to have been breached when Desai hired the former US Army CIO Raj Iyer as the company’s Head of the Public Sector.
Desai resigned immediately from all his positions at ServiceNow, while Iyer also left the business.
The departure of Desai was disclosed during a recent regulatory filing, which otherwise highlighted the company’s financial health for the second quarter of 2024. While the company reported robust financials — with a revenue surge to $2.6 billion, marking a 22 percent increase compared to the previous year — chair and CEO Bill McDermott chose to address Desai’s departure directly instead.
The inquiry was initiated after a complaint “raised potential compliance issues during the procurement process related to one of its government contracts”, as outlined in a regulatory filing in March.
In December 2022, when Iyer was the US Army’s CIO, the military branch awarded ServiceNow a contract valued at up to $432 million. This contract consolidated existing expenditures and included new acquisitions, granting authorisation for 1.2 million licenses for ServiceNow’s portfolio of products and services, encompassing technology, operations, and customer service management.
ServiceNow’s official statement wrote:
As a result of the investigation, the company’s board of directors determined company policy was violated regarding the hiring of the former Chief Information Officer of the US Army.”
Iyer started his role at ServiceNow in early 2023, and McDermott commented on Iyer’s appointment during an investor event that May: “In the public sector, Raj Iyer led the biggest digital transformation effort in the history of the United States Army. He did his service to the country — he served the time in his agreement with the Army, and he chose to come here because the transformation was on the ServiceNow platform.”
Following his departure from ServiceNow, Iyer released a statement stating that his “leadership in the digital transformation of the Army was driven by a genuine dedication to service, with no intent of personal gain”.
“I am confident that my conduct has been beyond reproach,” Iyer continued. “My resignation from ServiceNow was voluntary and aligns with my personal values, and I do not wish to have my integrity questioned as a result of a potentially compromised hiring process.”
Desai hasn’t yet responded to Bloomberg’s request for comment, but ServiceNow’s regulatory filing stressed that he’s fully cooperating with the investigation and maintains that he didn’t deliberately breach company policy.
McDermott was interviewed by Bloomberg Television on Thursday, July 25. In the interview, he described Iyer’s appointment as “ill-timed”. He added that ServiceNow would “make sure we have express written consent from various organisations that may have people available to be hired by ServiceNow in the future”.
ServiceNow says it has proactively communicated with the US Justice Department, the Department of Defense Office of Inspector General, and the Army Suspension and Debarment Office about the ongoing investigation. The company affirms its commitment to full cooperation with the Justice Department, which is also conducting an investigation into the incident.
ServiceNow emphasises this was “an isolated incident” and that its C-Suite can cover for Iyer and Desai’s departures. Meanwhile, former Chief Digital Information Officer and Chief Customer Officer Chris Bedi has been named Chief Product Officer.
BT Group Taps ServiceNow to Bring GenAI & Automation Into Its Contact Centers
Last month, BT Group signed a multi-year agreement with ServiceNow to “improve customer and employee experiences”.
The partnership will entail BT extending its use of ServiceNow’s Service Management portfolio across all BT Group units.
BT will adopt new capabilities within this portfolio, including ServiceNow’s Now Assist for Telecom Service Management (TSM) solution. Now Assist for TSM uses NVIDIA AI, including Gen AI, to help customer service teams summarise customer conversations, case activities, and work notes.
Additionally, this telecom-specific offering provides agents with recommendations for next best actions.
