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Navigating ITSM Costs: ServiceNow vs Jira Service Management

Servicenow vs Jira Service Management: Cost Breakdown

ServiceNow and Jira Service Management: Cost Comparison

Enterprise service management is crucial for mid-to-large-sized companies to service internal stakeholders and to drive business outcomes. Two major players in this arena are ServiceNow and Atlassian’s Jira Service Management. The ESM Forrester Wave™ Report, which gauges both market presence and strength of product strategy for service management, has ServiceNow and Atlassian in leading positions as echoed in their market share, particularly with Fortune 500 companies.

Choosing the right tool involves a comprehensive understanding of total cost (licenses, implementation, adoption, administration, and support). In this blog post, we will delve into the total cost calculations for these tools with a company use case involving 250 IT staff.

What is Jira Service Management?

Hypothetical Use Case

Let’s take these tools to task with a real use case. To build a like-for-like comparison, we’re considering a mid-to-large-sized company with mature IT Service needs including Problem, Incident, and Configuration Management Database (CMDB, with discovery and orchestration), in addition to robust reporting.
This hypothetical company has:
  • 250 IT Fulfillers/Agents (receiving and responding to tickets)
  • 1000 Approvers (official stakeholders with inputs on tickets)
  • 1250 Objects/Assets to track
The total cost analysis will be cover 4 categories:
  1. Core Licenses (Modules + Add-ons)
  2. Implementation and Configuration
  3. Training and Resources
  4. Administration and Ongoing Support

Note

ServiceNow costs shown are mainly from non-ServiceNow public sources (published cases, discussion forums, testimonials).
Unlike Atlassian, ServiceNow does not publicly share license costs, which vary by use case (industry, size, etc.).
Each of these cost calculations is backed by either direct source information (ServiceNow/Atlassian) or by public sources. See below for an extensive list.

ServiceNow Licenses

Metering

  • 250 fulfillers
  • 1000 approvers
  • 1250 assets

Modules

  • IT Service Management
  • IT Operations Management (CMDB and Discovery)
  • Performance Analytics
  • Orchestration (Automation)

$400,000 – $500,000 *

Jira Service Management (JSM) Licenses

Metering

  • 250 fulfillers
  • 1000 approvers
  • 1250 assets

Modules / Add-ons

  • Jira Service Management (Cloud Enterprise)
  • Scriptrunner ((Adv. Automations / Logic)
  • eazyBI (Enhanced Reporting)

$152,350*

Implementation & Configuration Cost (One Time):

ServiceNow Implementation

Project Inclusions

  • Define objectives / scope / team
  • Assessment & planning
  • Design workflows & processes
  • Configuration & customization
  • Data migration
  • Testing / UAT
  • Pilot implementation / refinement
  • Full deployment
  • Change management
  • Reporting & analytics
  • Documentation
  • Security & access control
  • Integrations
  • Compliance & governance
  • User training

Man Hours / Project Duration

  • 1200-1600 hrs / 12-24 months

$210,000 – $245,000 **

JSM Implementation

Project Inclusions

  • Define objectives / scope / team
  • Assessment & planning
  • Design workflows & processes
  • Configuration & customization
  • Data migration
  • Testing / UAT
  • Full deployment
  • Change management
  • Reporting & analytics
  • Documentation
  • Security & access control
  • Integrations
  • Compliance & governance
  • User training

Man Hours / Project Duration

  • 400-600 hrs / 6-9 months

$60,000 – $90,000 **

Training Cost:

ServiceNow Training

Metering

  • 250 Fulfillers
  • Administration

$50,000 – $75,000 ***

JSM Licenses

Metering

  • 250 Agents
  • Administration

One Time: $20,000 – $25,000 ***

Administration and Ongoing Support Cost:

ServiceNow

Administration/Support Costs

Basis:

  • Payroll for two FTEs, Administrator and Developer

$270,000/yr ****

JSM

Administration/Support Costs

Basis:

  • Payroll for FTE, Jira Administrator
  • Baseline managed services from Solution Partner represents low estimate.

$24,000 – $145,000/yr ****

The Takeaway:

While costs can vary dramatically based on use case, particularly when considering the number of modules required from ServiceNow, the numbers presented show that ServiceNow licensing AND implementation costs are +60% higher than Jira Service Management. Training and support costs are similarly divergent.

Some costs aren’t quite so simple. ServiceNow contracts are 3 years, as opposed to Atlassian licenses, which can be, and often are, month-to-month. Combine that with the impact to culture and process re-engineering with ServiceNow deployments and costs can start to pile up.

Further, ServiceNow is an enterprise tool, commensurate to deploying an Enterprise Resource Planning Software(ERP) solution, whereas Jira Service Management can be configured for large/complex and small/simple use cases alike. If you are currently a ServiceNow customer, and need to lower costs, Jira Service Management is certainly an alternative worth considering.

Sources & Cost References:

* Cost projections are for a Mid-to-Large size company, with 1,250 IT staff. ServiceNow and Atlassian meter their respective tools differently. Between Fulfillers (ServiceNow) and Agents (Jira Service Management), and Approvers (additional cost for ServiceNow solutions). Sources and Assumption Calculations:
  • Jira Service Management Cloud Enterprise cost for 250 agents is $144,000/yr, Scriptrunner is $5000/yr, and $3,350/yr.
  • ServiceNow contracts begin with a 3-year commitment. Numbers shown are for 1-year licenses/subscription + Implementation.
  • Public sources set a ‘rule of thumb’ for ServiceNow’s ITSM Solution (without ITOM, HR Service Delivery, Analytics, or other modules) as $100 per user per month. Assumption is that larger organizations get volume pricing benefits as more modules and users are added, and an annualized cost of $1,200 per user is higher than what enterprise level ServiceNow customers actually pay. Sources:
  • A Nexio IDC Whitepaper investment analysis titled “Delivering Enterprise Value with Service Management” compiled the cost data of several ServiceNow companies, averaging a total employee based of 24,117, an IT Staff of 1,934, and seven (7) in-house ServiceNow Administrators. The 5-year ServiceNow contract investment of these companies averaged $6,710,000 with licenses, implementation, and managed services. All responding companies had enterprise L4 business unity deployments, with ITSM, CMDB, and likely other modules HR Service Delivery, Business Service Management, others. None of the participating companies called out legacy data migration to ServiceNow as a cost in deployment, so this cost projection maintains that assumption.

Source: https://www.nexio.com/files/whitepaper%20ServiceNow.pdf 

  • Pricing projection assumes 25% of total solution investment/cost over 5 years is attributed to implementation and support costs (by 3rd party). Under this assumption, the ServiceNow customers from the aforementioned whitepaper would be spending roughly $1M for the annual subscription, $775,000 for implementation and YoY maintenance/support. The responding companies’ ServiceNow solutions, for an average, had ~1900 users (fulfillers, approvers), at a calculated ~$57 per user per month (blended fulfillers and approvers), or, ~$685 per user per year. The sample solution for this exercise is projected for a smaller organization (~1250 total users, of which 250 are fulfillers), which would mean a higher per user cost.
  • Fulfillers are priced differently than Approvers in ServiceNow. There are other rights-based tiers, but a baseline of a 1:11 cost ratio of Fulfillers to Approvers is assumed for the sake of this sample. This will vary with every use case and does affect cost. ServiceNow does not openly explain how this affects cost.
  • The blended cost per user per year for the responding ServiceNow customers (Nexio) was ~$685 per user per year (1900+ users (fulfillers+ approvers), ITSM solution plus multiple modules (HR Service Delivery, ITOM+, ITBM+, Performance Analytics, more). The sample solution for this comparison assumes a less complicated implementation (Base ITSM + three (3) additional modules). Fulfiller cost is $100/mo and Approvers is 12.50/mo. With those assumptions, the cost assumes a blended cost (fulfillers + approvers) of $360 per user per year cost for licenses, thus reaching $400,000 to $500,000 in annual licenses for this 1250 total user use case.
  • Pricing will change per region and industry of the company. Pricing is also affected by expected ROI presented by ServiceNow along with quotes. ROI benefits (NPV, calculated) include expected process improvements, payroll savings, and productive velocity, which ServiceNow makes as part of their “product pitch.”
** Implementation cost assumptions: ServiceNow – Resource costs estimated at an average $175 per hour (3rd Party ServiceNow Partner). An enterprise implementation of ITSM and 2-3 additional modules (ITOM, Performance Analytics, Orchestration) is estimated to be 1200-1400 hours. Jira Service Management – Sample solution implementation assumes 400-500 effort hours over 9+ months. Blended rate of $150 per hour estimated from average enterprise ITSM solution implementation with hybrid onshore / offshore execution (US/India). Total hours are completely dependent on the size and complexity of the JSM use case. Average JSM implementations are 2-4 months.
*** ServiceNow Training – Varies depending on the implementing Partner and the number of training modules required for the user base size. Many ServiceNow Partners publish training pricing, ranging from $800 per attendee per module to $2500 per attendee per module (multi-day). The costs presented in the sample assume $1000 per module per attendee, for 50-75 total sessions. Jira Service Management Training – Companies have options to self-train, to have a solution partner provide training, or to receive Atlassian Certified Training. Cost reflected, assumes a Solution Partner provides 8-10 live training sessions (recorded) covering user level and use case training, and 1-2 Jira Administration training modules.
**** Publicly available salaries put ServiceNow Consultants, Administrators, and Developers in the $129,000 to $170,000 range. Variability exists depending on region. $270,000 is a conservative estimate for 2 resources. Use cases this large may require up to 5 dedicated resources for ongoing support/customization.
Sources:
Depending on the stability / complexity of the Atlassian/Jira Service Management solution deployed, the organization may use a Solution Partner for Managed Services/Support (varying tiers of support, starting at roughly $2,000 per month) or hire an Atlassian Administrator (Average market rate of $125,000).
Other Sources: 
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