why is it important?
Whether they are IT, finance, HR, marketing, management consultancy, legal, engineering or or facilities services, your organization is likely becoming increasingly dependent on third-party service providers for its overall success.
Yet few companies consistently realize the best possible value when procuring these services. That’s because too much emphasis is often placed on the cost of their inputs rather than the ROI of their outcomes. Best practice SOW management is rarely about finding lowest cost resources. It’s about engaging them in a way that ensures the right suppliers are used for the right work, their speed to productivity is as fast as possible, and they deliver their contractual obligations within the agreed timeframe and within budget.
Here are four common pitfalls you may encounter:
four common pitfalls
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1. The work and deliverables need to be better defined in the SOW contract.
If the project requirements are too vague or ambiguous, then your service providers will not clearly understand what they are being asked to deliver or what their success measures will be. Well-written SOW contracts will clearly define the project, milestones and key deliverables to set clear and actionable expectations.
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2. The commercial terms are not equitable.
Your engagement managers and the SOW service providers both need to feel good about the fee structure. Engagement managers want to be sure their budget is going as far as possible, while service providers want to make a reasonable return on their time and resources.
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3. You don’t select the service provider that can best deliver the work.
The worldwide market for outcome- and milestone-based services is worth several trillion dollars, and the SOW workforce encompasses all types of service providers in the supply chain, from the largest global players to individual consultants. Instead of choosing the service provider who is best placed to deliver the work, however, organizations will often default to whoever is the cheapest option on paper, whoever they may have used before, or whoever is considered the most politically expedient.
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4. You seek to control rather than optimize SOW services.
and in this respect organizations who have large in-house procurement teams can be just as inefficient and ineffective at buying external services as those with no in-house expertise at all. The key is how you view your SOW workforce.
If you principally view the SOW workforce as a cost or a risk to be minimized, then the result will be an approach that is far too rigid and controlling. You may overly focus on definitions, rules and uniformity. You may add unnecessary time and complexity across the end-to-end process, leaving you with a very frustrated supply chain.
Alternatively, if you view the SOW workforce as a competitive asset, then you will adopt an approach that is much more likely to succeed in the long term. You will focus on the work that needs to get done and consider all potential engagement options. You will deploy sourcing strategies that facilitate and empower the people with the need and the budget, and you will have an invested supply chain that’s dedicated to delivering results.
the SOW engagement life cycle.
a holistic procurement workflow
Services Procurement 360 is a holistic procurement workflow that delivers benefits at every stage of the engagement life cycle. This comprehensive SOW management solution supplements your existing processes and offers benefits to all key stakeholders — especially those who have the need and the budget for the SOW services themselves.
pick the services procurement support you need
Every organization has unique support needs across the SOW engagement life cycle, for varying categories and levels of spend. Services Procurement 360 is an adaptable solution that allows you to choose different or multiple combinations of support across each of the 20 steps across the services procurement life cycle, depending on where we can add the most benefit to your current approach.
Services at each step are quick to implement and ready-made with lower-level processes, tools and templates — all underpinned by analytics and technology. Your highly configurable, modular Services Procurement 360 solution will be ready to strengthen existing expertise, close gaps and deliver value right away.
not your typical SOW management
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built to benefit all users
Higher business adoption. Invested stakeholders. Happy procurement leaders. Yes, it’s all achievable.
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a global SOW team
Get instant access to a dedicated team of SOW management experts who focus on services procurement excellence and innovation all day, every day.
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simple, modular, customizable
A highly adaptable model: choose where we can add the most value.
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more than transactions
A solution that focuses on your business results, not just program KPIs — powered by AI, analytics and human expertise.
Services Procurement 360 will help you:
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1. gain complete service life cycle transparency.
You may already enjoy clear visibility of contingent spend through your existing MSP staffing solution. By adding SOW, you can gain a full view of your non-permanent workforce who are deployed on and offsite. Whether combined with an existing MSP program or as a stand-alone solution, Services Procurement 360 provides visibility into all aspects of the SOW life cycle. You can gain insights at both an individual engagement level and aggregated across your organization.
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2. realize greater value from your third-party service providers.
Stay within scope of work and payment agreements with improved financial and contractual oversight. Increase ROI by developing and applying rate card benchmarks within your vendor management system (VMS). Our market advisors provide insights on rates, sourcing and supplier utilization and ensure you’re using the best work arrangement to meet your needs.
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3. improve supplier performance.
Services Procurement 360 significantly improves supplier delivery accountability and performance by tracking project and milestone achievements, SLA performance, change order/budget adherence and more. Performance tracking allows you to quickly identify reliable suppliers, reduces the vetting process for future engagements and helps eliminate poor performers from consideration.
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4. reduce risks through improved compliance.
We ensure suppliers and SOW contract agreements adhere to your company’s defined success terms and delivery expectations. The onboarding and offboarding of supplier personnel is validated with timing linked to prevent unauthorized access to your systems and facilities networks. Detailed project tracking confirms that milestones are delivered accordingly and your suppliers comply with company policies, and deliver to stakeholder expectations and outcomes.
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5. facilitate SOW sourcing and commercial validation.
Get proven sourcing support from procurement specialists who are experienced in your service categories. Services Procurement 360 provides process advisory or hands-on help for sourcing events and negotiations, bid forum administration and supplier rationalization. We support sourcing and negotiation efforts based on your needs — whether we lead on your behalf or enable others in your company — to ensure you get the very best value from your suppliers and VMS technology.
Watch the five-part "SOW what?" video series to understand what SOW management is, why it’s so important, how to get started and more.
contact us for a diagnostic to learn more about your maturity.
visit our sow delivery partners hub
Randstad Sourceright has developed a vendor community of more than 4,500 partnerships across the globe. As needs arise, we leverage these key relationships with quality sow delivery partners to support and meet the expectations of our shared customers. Building collaborative and mutually beneficial relationships between Randstad Sourceright and our sow delivery partners is essential to ensuring long-term success. You can contact us here or visit our hub.
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