As industry advisors, we at Staffing Industry Analysts have a unique visibility into SOW program management initiatives’ maturity levels and adoption challenges — and the significant role the MSP organization plays in its success. The MSP must have the right people with the right skills sets in place in order to do its part, yet most MSPs do not.
The fact is the skills and knowledge needed for SOW program management differ from traditional staff augmentation initiatives. And those skills for successful SOW management delivery differ even further based on the complexities of the SOW initiative. So first, one must understand the varied demands of SOW programs.
We have identified three buckets into which most SOW management initiatives tend to fall:
Basic SOW visibility/monitoring. The bulk of existing SOW programs supported by an MSP fall into this category. It includes project and resource tracking, basic data capture within the specified reporting technology and analytics. It does not include engagement manager interaction, billing or milestone tracking.
Moderate SOW management. This includes light interaction with the engagement manager after the engagement manager has completed the RFP and finalized the SOW contract inclusive of milestone payments. Data entry into the enabling management technologies is included at this level as well, which could include milestone data entry in accordance with the contractual requirements and administrative payment service from the CW program.
This bucket typically does not include selection decisions about the SOW solution partners, nor does it include contractual requirements and adherence management. It also does not include change request management and ownership and the associated approvals.
Expert SOW management. Here, the MSP program office works alongside the engagement manager to support SOW solution partner vetting. This level of service also covers contractual design inclusive of milestones and delivery requirements, and could include full creation and ownership of the SOW, including the RFI/RFP process. The MSP would also track milestones and payments as well as facilitate approvals for change request and manage scope creep. This support will be all-inclusive, for the most part.
Individuals require specific skills to manage these various levels of program expertise, SOW spend management ownership and proposed SOW services portfolios successfully:
Basic. The MSP staff should be lightly trained on SOW engagement management best practices, have strong SOW technology expertise, and be able to multitask with an attention to detail.
Moderate. The MSP staff should have a clear understanding of SOW engagement management best practices and services procurement management methodologies, as well as in-depth knowledge of the buyer organization’s policies and procedures.
Expert. This level of service requires having a strong understanding of SOW engagement management practices and experience with specific organizational functional area business requirements. Strong services procurement expertise.
Invest in SOW Training
Securing or developing talent and skill sets required to deliver these different levels of SOW management capabilities can be challenging. The typical MSP has robust training to support best-in-class staff augmentation delivery models and have reached high maturity levels. Most of today’s staff augmentation management professionals have a full understanding of required process, policies and procedures. But there is a gap in today’s MSP program teams when it comes to SOW process management. Skill sets and process understanding among individual contributors are typically non-existent, and shallow at best if they do occur.
There generally are two reasons for the lack of adoption and expansion in CW programs’ SOW program management opportunities: Clients are slow to adopt beyond the comfort zone of their staff augmentation program expertise, and MSPs have not provided a value proposition and capability to deliver real solutions beyond tactical administration value. Some may disagree with this statement but we point to recent research that indicates the slow adoption and maturity of SOW within contingent workforce programs with just 57% of organizations having a SOW strategy [1]. Development investments in solutions and expertise for MSPs could lead to substantial opportunities to support full SOW expert management, beyond basic visibility and engagement/talent monitoring support.
What does the future hold? As contingent labor within staff augmentation management matures on a whole; meaning there are very few Fortune 2000 companies left that do not have an MSP or internal program in place to manage staff augmentation spend. Thus, the next frontier should be to support SOW management at a value proposition beyond what the CW program can do on its own.
To accomplish this, MSPs or internally managed programs should train and develop [2] existing staff or obtain SOW management experts. Improving their individual contributor skills sets will go a long way in making an impact with CW programs’ emerging role in managing the talent and elements of SOW engagement spend.