Based on our annual survey results, statement-of-work management is a fundamental component of mature contingent workforce program management. Typically, more than 50% of respondents in our surveys say they include some level of management of SOW workers in their current contingent workforce program and another 20% say they plan to include SOW coverage in the next couple of years. But what level of SOW management is being delivered?
Through interactions with the buyer community, we know some of these respondents are just beginning in SOW management. They are primarily tracking SOW spend and the workers engaged in SOW engagement activity for SOW management development purposes. Others might offer organizational support with SOW worker on- and offboarding requirements and SOW milestone payment support. Finally, some CW programs will participate in the full SOW management lifecycle by participating in the sourcing and contract initiation through execution of the closing and final payment of an SOW engagement.
These support services are inherent capabilities found in a traditional CW staff augmentation program. They center on vendor management expertise, a well-understood, common comfort zone where a CW program can deliver sustained value in terms of costs management, risk mitigation and operation visibility.
What most programs do not participate in is the actual management of the engagement itself, at least to an impactful degree. One can argue that this is also the case with staff augmentation engagement management, where the program sources a cost-effective talent resource, while the engagement manager controls the resource during the actual engagement. The level of engagement knowledge for staff augmentation is fairly straightforward, and understanding what remediation actions would be needed if an engagement goes poorly are also typically clear. But that’s not necessarily the case for an SOW engagement; it can be more complicated because of the planned resulting deliverable and the development methods being deployed to obtain that result.
- What is the engagement project management method being engaged — e.g., Waterfall, Agile, Critical Path, PRiSM? How does a project management methodology impact contract design, payment procedures, milestone acceptance policy and IP protection processes?
- What domain expertise is required to understand the validity of excessive change order requests and budget overruns, and what is the supportive role of the CW program when an SOW engagement has had numerous change orders and has exhausted its budget? What percentage of the engagement effort has been completed compared to what dollars have been invested in the SOW engagement at the point of distress or pending failure?
- What is the level of risk to the engagement manager’s business and ROI objectives if the SOW engagement fails or must be discontinued?
Sometimes these engagement management considerations can become unbalanced based on poor milestone evaluations and acceptance practices. How does one provide meaningful partner management support without some basic project management knowledge and/or engagement domain expertise?
The point is the requirement to build a working knowledge of engagement management/project management, not just be satisfied with executing in the comfort zone of traditional CW vendor management best practices. The engagement manager will naturally be the primary SOW project/service lead. But the program office can deliver an enhanced SOW program management value by being armed with project management and/or some level of domain expertise. It places program management value delivery on a level playing field when executing its SOW partner management. Adding project management and/or domain experts to the CW program team can reap significant advantages in the execution of SOW program management support.
Detailed engagement management and/or SOW domain knowledge enables a higher level of SOW solution partner management execution. This can lead to more effective solution sourcing, enhanced SOW agreements and mitigating the failure risks of SOW engagements due to scope creep, underfunded projects, lack of competition and acceptance of an incomplete, poor quality deliverable.
Taking on an administrative tracking and visibility role for SOW engagement activity is an important, and in some cases, a critical, strategic program development step. But understanding how to positively impact the best practices of optimizing the execution and value of an SOW engagement is where program management can deliver real competitive advantage.