ServiceNow (NYSE: NOW) recently announced the acquisition of Quality 360, an AI-powered quality management solution from Advania, in a move to bolster its capabilities in the manufacturing sector. The acquisition strengthens ServiceNow’s Manufacturing Commercial Operations (MCO) platform, providing manufacturers with proactive, data-driven insights to manage quality control, reduce costs, and mitigate operational risks.
The manufacturing industry faces increasing pressure to maintain high-quality standards while navigating complex global supply chains. According to the American Society for Quality, quality-related issues can account for as much as 15-20% of sales revenue, highlighting the critical need for advanced quality management solutions. By integrating Quality 360, ServiceNow aims to streamline quality control across production and service delivery, ensuring manufacturers can identify and address defects at every stage—from detection to corrective action and resolution.
Originally developed by Advania on the ServiceNow platform, Quality 360 leverages artificial intelligence to provide root cause analysis, automated issue detection, and structured resolution frameworks. The solution includes a centralized Quality Workspace, standardized playbooks, and real-time communication tools, enabling manufacturers to proactively manage quality issues and maintain compliance with regulatory standards.
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“Manufacturers are under increasing pressure to maintain high-quality standards while managing complex supply chains,” said Rohit Batra, vice president and general manager of Manufacturing, Telecom, Media & Tech Industries at ServiceNow. “By integrating Advania’s Quality 360 into the ServiceNow platform, we’re providing manufacturers with the AI-driven insights and automation they need to proactively manage quality issues, drive operational efficiency, and enhance customer trust. This acquisition exemplifies our commitment to partner-led innovation and delivering industry-specific solutions that drive meaningful transformation.”
The acquisition also aligns with ServiceNow’s broader strategy of fostering co-innovation in the manufacturing sector. The company has made significant investments in digital transformation initiatives, including industrial cybersecurity collaborations with Siemens and the acquisition of 4Industry from Plat4Mation to drive operational efficiency across industrial ecosystems.
ServiceNow has steadily expanded its presence in AI-powered enterprise solutions, with a focus on industry-specific use cases. The acquisition of Quality 360 represents a significant step toward reinforcing its position as a trusted technology partner for manufacturers. By integrating the solution into its MCO platform, ServiceNow aims to help manufacturers manage complex partner ecosystems, including OEMs, resellers, and dealers, with real-time visibility and automation-driven insights.
Advania executives expressed confidence in the transition, emphasizing the long-term benefits for manufacturers. Hege Støre, Group Chief Executive Officer at Advania noted: “As quality management becomes a critical differentiator, Advania is excited to see Quality 360 join ServiceNow’s Manufacturing Commercial Operations. ServiceNow’s AI capabilities and scalable platform will empower manufacturers with a proactive, data-driven approach to quality management, helping them mitigate risks and strengthen their competitive edge.”
Beyond manufacturing, ServiceNow continues to expand its AI-driven workflow automation across multiple industries. Recent partnerships with Visa and Genesys demonstrate the company’s commitment to co-innovation, leveraging AI to improve operational efficiency and customer experience.
What this means for ERP Insiders
ServiceNow’s MCO platform is not without limitations. The addition of Quality 360 certainly bolsters the depth of ServiceNow’s MCO platform, but some challenges remain. ServiceNow’s subscription-based model can be expensive, especially for small and mid-sized manufacturers. And the platform requires significant upfront investment in customization and integration, increasing the total cost of ownership. While the platform is highly flexible, customizing it to fit specific manufacturing needs can be complex and time-consuming. Some manufacturers report long deployment cycles due to the need for deep integration with existing ERP and MES systems. It’s also worth noting that the platform’s full potential is realized only when used within the broader ServiceNow ecosystem, which may require additional investments in modules like IT Service Management (ITSM) and Asset Management. Limited native integrations with non-ServiceNow third-party applications can create challenges for manufacturers already using other ERP or PLM systems. While MCO excels in quality management and supply chain visibility, it lacks direct manufacturing execution system (MES) capabilities for shop floor automation and real-time production monitoring. As such, manufacturers may still need to rely on third-party MES solutions for real-time machine data collection and production tracking.
Quality is a non-negotiable for manufacturers. Effective quality management is crucial in manufacturing, as it directly influences financial performance, operational efficiency, customer satisfaction, and brand reputation. Conversely, inadequate quality control can lead to significant costs and risks. Quality management issues can result in substantial financial losses, averaging around 15% to 20% of sales revenue, with some companies experiencing costs as high as 40%. These losses encompass various factors: expenses related to raw materials, labor, and overhead used in producing defective parts; costs associated with disposing of rejected parts and reworking them to meet quality standards; expenses incurred in determining if parts meet quality standards; rejected parts can cause delays, resulting in lost production time and negatively impacting the bottom line. AI systems have achieved a 90% accuracy rate in detecting product defects, resulting in a 35% enhancement in overall product quality. As of 2024, approximately 35% of manufacturing firms have implemented AI technologies, focusing on areas like predictive maintenance and quality control.
ServiceNow executing a blended organic and inorganic growth strategy. As of January 2025, ServiceNow has completed 33 acquisitions, averaging nearly two acquisitions annually over the past three years. The average acquisition amount is approximately $136 million. From 2016 to 2024, ServiceNow’s revenue increased from approximately $1.39 billion to $10.98 billion. While acquisitions have contributed to ServiceNow’s expansion, the company emphasizes organic growth. Under CEO Bill McDermott’s leadership since 2019, ServiceNow has expanded its workforce and capabilities without relying heavily on large-scale acquisitions, maintaining an organic growth strategy. Specific data on the success or failure rates of ServiceNow’s acquisitions is not publicly disclosed. However, the company’s sustained revenue growth and market expansion suggest effective integration and value realization from its acquisitions.
