There has been significant discussion for some time about the incorporation of SOW engagements into contingent workforce management programs. Management of traditional staff augmentation engagements is well-understood today, leaving many programs looking to new areas to grow their capabilities and add more value to the organizations.
Large organizations plan to increase their use of SOW fairly significantly compared with other types of contingent workforce talent, according to Staffing Industry Analysts’ research. Hence, it comes as no surprise that more than 50% of large CW programs currently incorporate SOW engagement management. Additionally, program managers say they will incorporate the management of SOW engagements over the next two years. In other words, the engagement management of SOW talent is becoming a common standard practice in CW program management portfolios.
But to what extent? When it comes to what level of support services are being provided in the SOW management practice, they tend to fall in three areas: SOW talent and project tracking; SOW vendor administration and management; and finally, SOW project management.
SOW talent and project tracking. This is the most common area or grouping of SOW management services for CW programs to engage. The most common SOW management-related service programs provide is tracking of SOW talent and potentially the projects they are engaged in. An estimated 75% of CW programs involved with SOW management only offer a management service that tracks SOW talent and project activity at this time.
There are many reasons for this limited SOW expansion phenomenon in the marketplace, the most significant of which is the convenient leveraging of installed VMS technology tools to create informative visibility on the current activity levels of SOW engagements, types, locations, spend, pricing information, length of project, project content/skills used and the talent/vendors being engaged. This is actually a discovery step that enables the program to create some baseline knowledge concerning SOW engagement activity that can be analyzed and shared with key stakeholders without ruffling too many feathers. With this knowledge, a CW program is positioned to create an informed value proposition for the SOW engagement process that is based core stakeholder needs and requirements.
This visibility also creates some risk mitigation opportunities for misclassification events or rogue staff augmentation spend. But it is probably best that the knowledge and visibility created here should be used to educate stakeholders on how to best engage CW talent as SOW workers and safely optimize that CW talent leverage versus rushing in to apply control and compliance. Win over SOW expansion clients with knowledgeable support and then later codify the control and compliance practices with their willing agreement and support.
SOW vendor administration and management. This can be considered the next step in SOW management services provided by those CW programs that are already tracking SOW talent and projects. It is also a natural set of management services that CW programs, in general, know how to execute and competently deliver. CW programs execute vendor management best practices every day in the staff augmentation arena. An example is payment for vendor services rendered, a vendor management service that is core to CW program staff augmentation service practices. VMS technology tools can offer various levels of automated SOW vendor management service support. Vendor management services can include vetting SOW providers, managing engagement compliance issues, vendor payment for services rendered, vendor optimization practices and service performance reviews.
Not all vendor management practices for staff augmentation are applicable or transferable to SOW engagement activities. Different vendor management strategies and approaches will have to be fine-tuned in the execution of this management practice. An estimated 25% of CW programs offer some level of vendor management services in their SOW management practice.
SOW project management. The final step of SOW management services provided by CW Programs. SOW engagements are the procurement of a result; hence, one can offer a services management engagement focused on the management of the result more so than just on the talent/vendor executing the project. Project management is very rarely delivered in programs’ SOW management services, typically only found at some level of delivery less than 10% of the time. But when it is provided, the services can include sourcing of the provider to deliver the project requirement and ongoing extensive milestone management as the project is executed. Some CW programs add a service procurement specialist to the staff, someone with experience in the major content spend categories that engage SOW talent and projects. Full-blown services procurement practices are not in the mind of many CW program leaders when they first envision supporting SOW management engagements. But there is a natural evolution of value creation that will eventually lead many to this level of SOW management services.
Along with what SOW management services a CW program will provide, program leaders will have to decide where they will fit in the overall picture of managing SOW engagements in their organizations. Services procurement is a well-established and professionally successful function in most organizations and operates very competently. Hence, building a close partnership with service procurement and deciding how the program can add value to overall SOW management is a best practice. In many cases, there is opportunity to add value.
Finally, the decision on what level of SOW management services and support to provide can affect many current processes, policies and management technologies that administer and manage SOW engagement activity. So, program managers will also need to decide how it will be incorporated and compliment current SOW engagement management practices and culture.