Visibility is usually why a CW program wants to include statement-of-work management in their services scope. Visibility comes in many shapes and sizes from the visibility of who has access to systems and buildings to who the SOW solution delivery providers are and how much they are getting paid. So no matter what visibility you hope to achieve, you need to build a business case and strategy to support it.
Although generally looked at as the next capability phase of contingent labor management, bringing SOW management within the scope of your CW program is not as easy as just saying “next act please.” Often, CW program managers find themselves having to comprehensively convince stakeholders — such as business unit, SOW engagement managers, procurement — to even have the consideration to manage some SOW spend in the organization and the support to move forward. How do you even begin?
Utilizing Staffing Industry Analysts’ performance management model, the “QECR Framework Methodology,” to organize your strategic approach for this journey could be an excellent place to start.
The QECR Performance Framework focuses program management on key dimensions that ultimately define a program’s overall performance. SOW program management is about coordinating a company’s contingent workforce and associated supply chain/SOW solution partners for the betterment of the company’s operations and corporate mission. It is helpful to think about this coordination management across four key performance dimensions: quality, efficiency, cost and risk (QECR). Exactly how you define and measure these categories depends on your organization, but this basic performance framework is useful for assessing your performance and formulating a desired state or goal in each of these performance areas.
Being able to create visibility across all four dimensions of the QECR Framework can not only provide a strong business case foundation, it can also provide justification to various stakeholders as they will be impacted by a CW program taking on some elements of SOW engagement management.
Let’s take a look at each dimension of the QECR Framework individually and ways in which visibility and value can be derived by incorporating SOW management within your CW program service scope.
When thinking of quality, we almost always go to the “quality” of the contingent worker’s skill/output, especially in the staff augmentation engagement. However, with SOW, there are other quality metrics that can be gained, such as:
Quality of the suppliers. Gaining visibility to SOW solution partner quality can be extremely beneficial and a requirement for the organization stakeholders and the SOW engagement manager. Whether utilizing the technology to obtain the SOW engagement manager’s feedback on a milestone/deliverable or having the SOW MSP reach out and survey is something that very likely is not currently being done on an aggregate basis. Think of the benefits that can be obtained by awarding only quality SOW solution providers additional project/service work, and at a minimum, the headaches that can be avoided by not engaging mediocre SOW solution providers.
Quality of the resources. This particular visibility could not only ensure the right skills, experience and expertise is being provided but it can also identify if possible misclassification exists especially if a time-and-materials resource is being engaged. Identifying hidden staff augmentation can provide visibility to unknown risks and unnecessary cost burdens.
Quality of invoice accuracy. Is the SOW solution provider invoicing accurately, timely and is the project on budget/time? How well does your organization track negotiated milestone compliance? We usually see limited, timely visibility in this SOW engagement, quality management area — excessive change orders, additional budget requests to complete projects and delivery delays are many times recognized only at the completion of the project.
We are not only thinking of the efficiencies of our internal processes but also those external resources, such as:
Supply chain capabilities and utilization. Are we using the right SOW solution partners for the right type of SOW project/service engagement? Utilizing a SOW solution provider based on a relationship and not delivery capability can cause risks to costs project management, and overall, the SOW deliverable management.
Time to source/Speed to engagement. How efficient is the supply chain partner with sourcing the right resources/SOW solution provider? Having visibility to their sourcing processes can save time, money and SOW project delays.
Time to contract. Valuable time can be wasted when a SOW solution partner is difficult with the standard agreement process.
On-time delivery. Being able to track if the project was delivered on-time is almost as critical as on-budget. Partnering with SOW solution providers that have a track record for on-time delivery is a great statistic to share when consulting internal stakeholders/engagement managers on optimal SOW solution providers.
Visibility to various costs across some portion of SOW spend is many times as much of a selling point for bringing SOW management into the program as the resource management visibility. Understanding if you are paying the right price for the right service skill set and/or project deliverable is critical to a well-managed organization.
Rate visibility. Whether it’s a time-and-materials or a milestone project, having the visibility to track rates can not only possibly bring cost savings but can also provide insight to marketplace pricing trends with particular SOW solution providers partners.
Pricing changes/Budget vs. actual. Visibility to change orders (overall budget impact) and rate changes as they are presented as opposed to once the project is complete can provide huge opportunities for project scope evaluation and or cost savings.
Project/services pricing negotiations. Having the ability to track and compare pricing negotiations between competing SOW solution providers can be a telltale sign. Is one SOW solution provider priced much higher than the others? Do they see something within the scope that others do not?
Risk avoidance/mitigation is usually a driver for any organization but not always for the SOW engagement manager making the SOW project/services decisions. Being able to minimize the risk with processes, policies and procedures is an invaluable management service the CW program can bring to SOW management.
Contract standards. Ensuring that the same language, insurance, indemnifications, no suspension clause, etc. are consistent across all engaged SOW solution partners.
Structured negotiations. Utilizing requests for information and requests for proposals with scoring as opposed to a stakeholder/engagement manager engaging independently with a SOW solution provider.
Strategic risk. Following set processes, policies and procedures can ensure that the right SOW solution provider has been engaged to deliver critical projects and services.
Misclassification. Are the engaged resources classified correctly or is there hidden staff augmentation or engagement with misclassified independent contractors?
As you can see, visibility to SOW engagement activity can bring more benefits than just who has access to our buildings and our systems. Taking the time to create your business case — being able to provide why certain levels of SOW management should be included in the CW Program services scope can help “convince” even the toughest skeptic.