Including statement-of-work (SOW) management within a contingent workforce (CW) program’s scope of responsibilities is not a new trend. According to our 2015 North America Buyers Survey, 51% of respondents’ programs said they already include some management of SOW spend/activity while another 39% were considering it over the next two years. What value they bring and what value their MSP solution partner can bring is definitely a newer, undefined development.
Most program managers find bringing SOW spend into their program’s scope a normal progression for program maturity and services enhancements. Easily identifiable drivers such as visibility to the resources (who has access to buildings and systems) and potential cost savings can help “sell” that to the organization and key stakeholders. However, bringing SOW spend management within the scope of a CW program is a very risky move — one that can take an extremely successful CW program and turn it upside down if not handled correctly.
Here’s why. When a staff augmentation resource does not work out, the program office can usually replace them with minimal disruption and minimal visibility. But with a SOW project/service, it can be very different. Having a project go south does not afford the same opportunities for the CW program office to replace the SOW solution provider/talent with the same minimal visibility and disruption.
The CW program office and the MSP support provided to manage SOW engagement spend activity and the SOW solution providers can have quite a range. What started out as very tactical processes such as on/offboarding of resources has emerged to more sophisticated support, such as professionally sourcing qualified solution suppliers and negotiating SOW contract terms and solution pricing. More extensive SOW engagement management requires special solution management skills and expertise that are not normally required of MSP providers. These new management skills instead require hands-on services procurement experience. In order to provide this, MSP providers are investing in senior procurement specialists who have direct service procurement management experience and know-how. This is not a cheap investment; if you request it of your MSP partner, you should expect to provide additional funding.
With such a diverse offering of services, how does a program manager and MSP solution provider know what SOW management services they should and can provide? To start, knowing and admitting the actual capabilities of the program office and the MSP partner is imperative. If neither has SOW management expertise, admit it. Taking on a task that neither you nor your MSP partner is not capable of providing will not benefit anyone. Nobody wants to be set up to fail.
Be strategic. Defining a strategic plan will begin with determining how best to approach the addition of services procurement management to an established program that primarily focuses on vendor management of temporary, staff augmentation services. This requires somewhat similar but very different engagement management skills. For example, is there a role for the incumbent MSP partner in SOW management or even the internal CW program office? Does it make strategic sense to use a completely new MSP that specializes in both the end-to-end management of SOW solution providers, but also can directly deliver end-to-end SOW engagements themselves? Strategic questions of operational symmetry will have to be considered depending on the comprehensiveness of the SOW management program being considered.
Pick your battles. A key driver for implementing a change within your program should be adoption. It’s possible that not taking on particular complex steps of the SOW management process will help to drive the adoption of the SOW service initiated. If your procurement organization does not like the idea of giving up its responsibilities for the professional sourcing or negotiating of SOW engagement pricing/contracting, then let them keep it. Allowing procurement to continue to be involved can create an effective partnership and potential cheerleader for the CW program. After all, professional procurement functions are similar to other corporate functions, whereas, program resources are limited and do not necessarily meet the growing activity demand levels generated by the organization’s SOW engagements. Simply, incorporating the CW program in some type of SOW management process/activities might be an effective corporate partnership to leverage in defined circumstances.
Understanding factors such as this will very likely determine what engagement management services the CW program office will provide for SOW management in its infancy stage. Even if the end goal is to manage the entire SOW engagement lifecycle process for a specific set of SOW spend; from identifying and sourcing the qualified SOW solution providers all the way through milestone management, invoicing and paying. Gaining the buy-in of the organization and your SOW engagement stakeholders is imperative for this CW program expansion success.