Statement of Work (SOW) and outsourced services are emerging as essential business strategies for companies of every size. These
engagements are typically deployed to augment the core skills of internal teams or to complete projects that require bandwidth beyond
the capabilities of an in-house workforce.
Because SOW projects are measured and monitored through deliverables rather than time-and-expense, many companies approach SOW
projects differently than traditional contingent workers. A 2014 survey of contingent workforce buyers by Staffing Industry Analysts reveals that
only 54% of buyers report managing SOW as part of their contingent workforce program. Based on that sampling, nearly half of contingent
buyers are missing key opportunities to further the value of their SOW projects. Many of these same buyers are currently working with an MSP
provider to manage their contingent workforce, creating an opportunity to leverage their most powerful contingent workforce management tool
to manage SOW projects and outsourced services.
Companies often select the vendor for an SOW project based on a previous engagement, a process that potentially limits the vendor pool and may even eliminate the most qualified vendor for a project. Even companies that insist on rigorous competition among their temporary staffing vendors will often enable managers to single-source the vendor for an SOW project, bypassing Procurement’s ability to secure the best work for the best rate.
Are your SOW projects being bid upon by the most qualified vendors? Are these projects subject to any bid review at all?
While an SOW contract specifically defines the parameters and costs of a project, unexpected circumstances or post-contract changes can require amendments to the agreement. An MSP provides the rigorous tracking necessary to maintain visibility for internal stakeholders while increasing accountability for your chosen vendors.
How does your company manage adjustments to an SOW project when circumstances require a change to the contract? Who has visibility of the changes when they are made?
It’s essential to consider all critical criteria when assessing your vendors: subject matter expertise, quality of work, consistency of delivery, compliance with your business rules, and more. The analytics provided by a comprehensive MSP enable you to consistently measure and compare the value each vendor brings to your business in each of these areas before the contract is executed. This not only ensures the contract is awarded to the best vendor, it also enables you to reward your top vendors with more projects – a win/win scenario for your vendors and your business.
What process is your organization using to determine SOW vendor selection? Can you remove “impressions” and accurately compare outsourced service vendor performance?
The status of one project often has a cascading impact on other projects and deadlines. Companies that manage concurrent projects should expect access to real-time data on project status in order to maximize efficiency and productivity. Establishing measurable milestones in each of your SOW contracts and monitoring these milestones enables stakeholders across the company to monitor progress.
How is your company defining specific, measurable project milestones that allow real-time monitoring of project status?
Smart decisions start with relevant, reliable business intelligence. Tracking your SOW through an MSP delivers both immediate data about project status and long-term, strategic information about project performance. While a powerful vendor management system (VMS) is a great source for the raw data to determine what is happening with regard to your outsourced services, an MSP uses that data to identify why it’s happening.
Are your teams able to compile and report specific, quantifiable data in order to make a business case about SOW project success?
Every company is continually pressed to weigh quality against cost, and improving the efficiency of your operations has a positive impact on both goals. From accelerated processes to dedicated oversight to consolidated invoicing, an MSP makes it easier for your team to focus on your core business because the MSP is managing the administration of all of your vendor relationships.
Is there a single point of visibility for all SOW projects currently being performed and scheduled for deployment?
Anticipating and addressing potential challenges in the transition process from a legacy SOW
management strategy is essential to the smooth integration of SOW and outsourced services
into an MSP program. Working with an MSP partner that has experience converting these
types of contracts will enable you to more easily manage these situations:
Individuals accustomed to the “old way of doing things” may
be frustrated, but a comprehensive communication and training plan will enable you
to set expectations, foresee problems, and demonstrate the value the MSP brings to
Some vendors that have historically defined the rules of
engagement will prefer to maintain the status quo. It’s important to clearly communicate
that managing the project with the MSP may have no impact on the number and value
of their contracts. Moreover, vendors that demonstrate successful, efficient project
completion may be more likely to earn additional opportunities.
Just as the regulations that apply to traditional contingent staffing
engagements vary from country to country, the rules for outsourced services projects differ
as well. Having an MSP partner with experienced in regions where you want to include SOW
in the MSP is critical for efficient incorporation of these projects into any global program.
Managing SOW projects and outsourced services through your MSP delivers end-to-end advantages to stakeholders across your company:
While the contracts and scopes of SOW projects and outsourced services may differ from those
with traditional staffing suppliers, they can still be managed within a comprehensive MSP program.
If your MSP program isn’t managing SOW and outsourced services, your company could be
missing out on opportunities to improve the cost, capabilities, and results of these projects.