Congratulations. You have convinced the C-suite that folding statement-of-work contracts into your contingent worker program creates huge opportunities for savings, risk mitigation, and that creating more specific categories of spend under statement-of-work contracts allows for more streamlined contracts too. Moreover, you have implemented the program with pockets of success and, as expected, some continue to challenge the change in process and control. Getting this far is more than half the battle.
Your solution provider is a big part of your continued success. Both your vendor management system and your managed service provider have distinct roles that could tilt the delicate balance of perceived success or failure.
VMS. How you utilize the VMS to manage your SOW contracts depends on the extent to which you want to manage the SOW process itself. SOWs can be managed with compliance tracking only, typically following the agreement once it has been awarded, handling the setup of the billing parameters, worker onboarding, milestone tracking/approvals, invoicing and ultimately, offboarding of the workers — and finally, managing some sort of feedback loop to rate the provider.
This level of management is very effective to get a program off the ground or even to fold in new departments. It creates a contract compliance trail that is very useful for reporting purposes. The data acquired in this scenario enables your organization to provide financial and performance data to better evaluate categories of spend by department and engagement type, thus, an opportunity to give more work to the high-performing providers and phase out those that perform at a lower level. Everything described above can typically be managed through an expansion of your existing team that handles your other non-employee labor.
Management. Whether your program is managed internally or externally, the level of the team handing the engagement after it has been awarded is generally the same. Managing the relationship with the VMS provider should be status quo; the system’s capabilities of managing SOW vs. contingent labor typically are simply activated as required and configured to meet your organization’s terminology and process flows. When an external MSP is involved, management should establish similar service-level agreements as the contingent program management after the SOW is awarded.
When the program is expected to manage the process from request for proposal through contract signature, the VMS and MSP providers would be expected to provide a higher level of service, business acumen, and contract negotiation along the way.
Contract negotiation. Depending on your risk tolerance and/or time required to take a contract from inception, through multiple revisions to signature, you may prefer to manage that process outside the VMS. You need to evaluate your own company’s risk tolerance and contract culture before you create a situation where your perfectly good VMS provider believes it has to jump through hoops to meet your specific configuration needs.
The complex process from RFP through contract award for an SOW project requires a different level of expertise to manage. You and your MSP may consider separating the higher-dollar-value SOWs from those of a lesser value that are often repeatable projects. With the higher-value RFPs being managed by a higher-level SOW engagement management expert (potentially with a services procurement background) that is more comfortable with the business acumen associated with the department and complexity of project resulting in a higher success rate of keeping the SOW engagement moving through the redline process in the most efficient manner.
Regardless of how far in the process you involve your MSP, the measurement of their added value and success in should tie 1. to the objectives you set out to achieve by pulling SOW business into your CW program and 2. to the level of cost-effective and quality management impact they have in the process.