Managing statement-of-work spend involves numerous moving parts and requires some level of automation. But how do you choose the appropriate technology to manage SOW? Here are some things to consider:
Nail down definitions. First, the basics of engaging any management/process-enabling technology is to define the SOW management process being considered, define the types of SOW engagements and deliverables that will be managed, delineate the roles of management process responsibility and determine the management standards of SOW solution delivery partners. Some important work and thought need to be considered in describing and defining the management of the SOW activity that a contingent workforce program will engage.
Another consideration is the fact that professional services procurement currently operates in every organization and has established many standards and requirements for the management and engagement of SOW solutions. However, these standards and requirements most likely had been created based on past organizational dependencies and circumstances and might not be completely relevant to the contingent workforce program’s SOW management strategy designs. Hence, this is an opportunity to re-engineer some processes to enhance the contingent workforce program’s SOW management standards to align them with the program’s talent/skills access mission and goals. But another consideration is designing a process management alignment with the best practices currently implemented by the professional services procurement team.
Current technology. The second technology strategy consideration is leveraging and incorporating the organization’s current technology investments. Now that you understand the what, who and how of your SOW management process, look to your current tools to see what SOW management functionality is already available to you. Many of the leading VMS technology providers have been adding SOW process management capabilities to their platforms for a number of years now, and some of those offerings are fairly advanced. The key here is not only to define the current automation support capabilities for your SOW management strategy, but also to determine whether your technology choices support the process management growth in your SOW management strategy.
The fact is many contingent workforce programs are experimenting with managing SOW spend. Initially, most implement a tracking process and may provide some payment support for an SOW management activity. From that data visibility, they then expand their SOW management process further where they can offer enhanced value and process management impact. They start out small with the intent to grow and scale. The management technology support decision will have a very distinct present and future SOW management solution consideration.
Most organizations already have an SOW/services procurement management process in place, and in many cases have a technology in place that is supporting that SOW engagement management process to some degree. What leverage is available of that corporate partner technology investment needs to be investigated and considered. These corporate partner technology investments can be found in procurement, obviously, but also possibly financial/legal management system functionality.
Integration. Once a contingent workforce program chooses its SOW management-enabling technology, integrating that tool with the organization’s other established SOW management systems needs to be addressed. The program’s initial SOW management spend will be in opportunistic areas where the organization’s professional services procurement will elect not to formally participate, hence, all SOW engagement actively will not solely run through the contingent workforce program, if ever. This presents some potential integration requirements to support enterprise management visibility standards and other process management integration needs with other corporate functions concerning SOW engagements management process.
Funding. A funding philosophy for this technology investment should already be established. Most options are supplier-funded, buyer-funded or a blend of sharing management-enabling costs. Determining what is fair and competitively acceptable for your SOW solution partner community to contribute should be an explicit strategic decision made by contingent workforce program management. Some programs will engage an SOW-specific MSP solution that incorporates their own SOW management technology infrastructure. Consequently, the MSP for the SOW may charge management fees to participating SOW solution providers they are managing on behalf of the buyer organization. Again, this funding strategy decision needs to be made distinctly by the buyer organization in accordance to their philosophy on what is fair and in alignment with competitive contingent workforce program goals and objectives.
Data visibility. A final consideration is potentially building an SOW engagement activity/talent data warehouse visibility of some kind. It has already been mentioned that the contingent workforce program will not directly manage all the SOW spend in an organization as it begins its journey into the SOW management arena. Some of the SOW spend will be managed by services procurement and some by a standard purchase order administrative policy. Depending on the organizational definitions of SOW engagements, some SOW spend will be managed as outsourcing engagements. However, the organization still needs an enterprisewide view of all SOW engagement activity to provide opportunities to leverage best practices and drive SOW engagement standards in effective cost control, risk mitigation and engagement quality management. This is more easily said than done, but with multiple players managing SOW engagements across the organization moving forward, the best benchmarking insight will be found internally with the right visibility.