Before deciding how to best manage your statement-of-work (SOW) supply chain and solution delivery providers, you need to fully understand what is actually meant by managing an SOW provider in the first place. This cannot be underestimated in terms of its complexity of process, challenges of gaining visibility and the expertise necessary to carry out the various management functions.
Second, you need to understand the differences between the four key SOW solution delivery provider types, and grasp the factors influencing how each type needs to be managed.
Finally, develop a program to monitor and encourage performance of your SOW supply chain and solution delivery providers in terms of quality, efficiency, cost and risk. Certainly, the engagement manager of record for an SOW project or service initiative is intimately engaged in the SOW initiatives progress, but SOW solution providers are also interested in ongoing business, so some attention will be paid to overall program performance metrics/policies designed to mitigate risk, enhance speed to deliverable, produce at high-quality levels and provide cost-effective SOW projects and services. Implemented effectively and used to rank and execute future business engagement decisions could lead to some interesting SOW program management gains toward goals and objectives.
If we look at the first point, you need to map out all of the tasks associated with managing your SOW providers. What is it that you want to enhance the management thereof and what areas do you need to gain visibility into so that you might influence performance going forward?
Management tasks could include such things as:
- Tracking — As the old saying goes, if you can’t see it then you can’t manage it. Decisions need to be made as to what elements of an SOW project or service need to be tracked and how. Are you going to use your vendor management system (VMS) or some other method to automate the engagement management process/program?
- Reporting/Visibility — You have tracked it, so what is it that you need to report, to whom and for what reason? Do not collate data that has little purpose or no value; rather, collate data that can be genuinely acted upon and used to improve the service provision against the quality, efficiency, cost and risk (QECR) framework in some way.
- Invoice Management — SOW invoicing can be complicated as they are often billed against pre-agreed milestones. You need to have a process in place to ensure that deliverables/milestones have been met at a high quality level and to resolve any invoice disputes and change order fees.
- Project Management — Does your SOW partner management need to include some form of expert oversight into the project itself. If not directly then does project management oversight need to be provided indirectly through informed and qualified conversations with your own project/engagement managers. Does the delivery against pre-agreed milestones need to be managed, reported on and corrective actions taken to reduce the possibility of future scope creep as part of improvements against the QECR framework.
- Sourcing and Provider Optimization — Does your provider management require some form of provider optimization (that is creating an ongoing list of preferred SOW solution providers that are best able to meet the needs of your business) which may include some kind of sourcing of those organizations that are best suited to deliver against the SOW engagement needs of your organization.
There are a lot of variables in defining one’s SOW management services program scope along what Staffing Industry Analysts calls the SOW Management Business Operation Model. The operation model of program structure elements will have a direct impact on what type of SOW solution partners will be engaged in your SOW business activity. This operation framework will also impact what kind of supply chain partners (MSP, VMS, and others) might be sourced to manage some elements or your entire SOW management program.
The second point of making sure you have a focused SOW partner management strategy deals with the type of SOW delivery partner you might be looking, or capable, of managing in your contingent workforce program. SIA has categorized four key types of SOW solution delivery providers as follows:
- Major Consulting Organizations — These consultancies might operate in the IT and business management sectors, such as Accenture and Capgemini.
- Smaller Consulting Organizations/Niche Players — companies that typically (but not necessarily) provide services in a niche industry and focus their services to a limited number of vertical sectors. Brightfield Strategies in the contingent workforce management marketplace is an example.
- Independent Contractors — These are often individuals who are performing SOW activity directly to the organization with or without an intermediary.
- Staffing Organizations — Typically contingent workforce recruitment organizations that provide SOW project and “small outsourcing” services as a complimentary approach to their staff augmentation service offerings. More and more we are seeing staffing providers create an SOW consulting practice in their business to meet this growing client need and requirement. This is especially true in the IT staffing and solution space.
You will need to be mindful of the various complexities and challenges involved in managing each of the four distinct SOW solution provider types. Each of these SOW solution providers come with different levels of engagement risks and costs management methods.
Finally, you need to put in place a management process that will deliver improvements across the entire QECR framework. This will require a high level of SOW management service acumen by the organization providing the management oversight, if they are to have impactful interaction to the benefit of your organization, engagement managers and the SOW solution deliverable partners.