Why 2022 is the year to add visibility to your Statement of Work engagements
As thoughts turn to 2022 the prospect of addressing your Statement of Work (SOW) spend as part of an overall contingent worker programme can be a daunting prospect, however, a new programme does not need to consist of wholesale changes, can be straightforward to implement, and can help you rest easier knowing that your business is protected against elements such as worker misclassification, loss of IP and regulatory requirements for contingent workers. But what is SOW engagement management?
SOW Engagement Management Programmes
Most organisations will engage with at least some suppliers on a SOW engagement management basis, whether this is the procurement of a set of skills (i.e. the design of a new webpage) or a large enterprise-scale outsource (such as a major software development project). The type of suppliers that you engage with on SOW engagements can differ hugely, from large IT consultancies and BPO providers to individuals and small to mid-size firms.
SOW engagement management services (otherwise known as SOW Management or Services Procurement) are an increasingly popular way to monitor and administer your SOW spend as well as in some solutions being the team who procure and source your services from a pre-set panel of suppliers or in fact, creating and administrating a supplier panel from scratch.
Ultimately SOW engagement management can be a service that provides the full end-end solution of your organisations SOW engagements, from requirements gathering, through to sourcing, milestone / deliverable management, supplier payment and reporting. It can also involve certain segmented elements of the SOW process where this suits your organisation’s maturity level, such as just milestone management and reporting.
Why add more visibility to your Statement of Work engagements?
Due to its de-centralised nature within organisations, SOW spend and SOW engagements can typically be much larger and fail more often than is initially thought.
Aside from wanting to bring spend levels under control, adding visibility to your SOW engagements through a Services Procurement or SOW Management programme has significant benefits to your business:
Visibility of your SOW engagements provides you with more data
This means that will be able to break down your SOW spend across different departments, capabilities and projects enabling data driven decisions. Not to mention, visibility of all of your live and upcoming engagements and detail of every consultant (including contingent workers) engaged on your organisation’s live projects.
Visibility of your SOW engagements mitigates your risk
Knowing the consultants engaged on your programmes means that you have a helping hand in preventing worker misclassification (especially in the post IR35 world) and incorrect screening (financial services requirements for example). Knowing and having access to all the suppliers who you have live engagements with means that you can provide consistent contract terms that protects you against IP loss and against poor quality of deliverables.
Visibility of your engagements increases their quality
Being able to see all of your past, current and future engagements means that you are in a better position to understand the status of live programmes. Not only will this help prevent any issues before they occur, but it will also put you in a position to better mitigate scope creep or supplier extension. This also gives you assurance that any milestones and deliverables have been achieved before processing payment to a supplier, and also enables you to enforce any potential service credits where applicable. By being able to view detailed engagement data, you will also be better placed to undertake improved requirements gathering and therefore increase the quality of project deliverables.
Visibility of your suppliers ensures you have the right panel in place
By knowing who your suppliers are and by seeing the detail of their engagements you will have a better understanding of those who perform best against your projects (and those who do not). Actively being able to manage your suppliers through a data-driven approach means that your supplier panel will be the right size and shape to support your business objectives.
Visibility of your spend can provide you with cost savings
Although cost savings alone should not be the reason for you to launch a SOW management programme, of course, having the visibility of what you are spending and where provides you with the fantastic opportunity to benchmark rates and services leading to hard cost savings, and provide efficiencies and speed leading to soft cost savings.
SOW Management by Lorien
Lorien are experts in running outsourced SOW Management or Services Procurement programmes. Reach out to me for an informal discussion, even if just to determine the opportunities that a SOW Engagement Management programme could add to your business.
You can also read more about our SOW Management services here.
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