Step 1. Centralize the management of contingent labor and independent contractors.

Step 2. Centralize the management of statement-of-work contracts.

Typically, centralizing statement of work management would be a logical next step as companies try and bring these contracts into their CW program. It can be assumed that the culture of the company would support such an endeavor. However, it is best if there is an underlying problem to solve that supports centralization and tighter processes around SOW contracts. A quick look at some of the advantages.

Visibility. There are immediate benefits that are realized with the use of the program’s vender management system (VMS) to manage SOW contracts because of the visibility the technology can provide into the SOW spend.  SOW contracts come in multiple flavors, and visibility of a VMS supports categorization of the spend, process improvement, supplier consolidation and the ability to better manage costs.  Once you have the data readily available, you can analyze it for continuous improvement.

Misclassification. In many cases, companies centralizing SOW management uncover contracts that could easily fall under their contingent staff augmentation programs. However, this is rarely the justification used to centrally manage a program. Companies need a bigger, more compelling reason to centralize SOW management.

Risk mitigation. Perhaps the most compelling reason for companies to undertake the sometimes-daunting task of pulling SOWs into a managed system is to mitigate risk — using the system to track resource allocation and systems and facilities access. Security often will have its own system to manage buildings and systems access; however, that system often isn’t tied to actual contract completion dates, which create holes in what should be a closed-loop process. If your company has a low risk tolerance, and you are seeing an increasing use of SOW contracts, you may choose to use resource tracking as your primary driver to bring the SOW spend under a centralized management and tracking with your VMS. The argument to close the loop on systems and building access will be one that would be difficult to argue against and longer term benefits will continue to be realized as you analyze the data and business intelligence for future decisions.