This post references material from the Compass series report: Overcoming Challenges of Project- and SOW-based Solution Adoption. This paper is available in the Spend Matters Research Library and is free to qualified practitioners.
One of the most vexing challenges of SOW enablement is building consensus and motivation for adoption outside of procurement and HR programs. This is due to the fragmentation of "spend ownership" with the business. As one organization we interviewed suggested, while the SOW contracts may be centralized, "the spend owners are distributed across the BUs, thus making it very difficult for procurement to achieve buy-in." The logical corollary to this is the need for broader education and change management at all levels of the business around what buying professional services really entails -- and the costs, risks and potential benefits it can bring depending on how it is managed.
This raises another important item around measuring SOW success -- when someone buys a widget or an hourly worker, it is relatively easy to quantify the outcome of a given negotiation and receipt/delivery, which we might more broadly describe as the value associated with a given procurement. But in the case of SOW spend, how one judges purchasing performances can be much more nebulous.
A head of corporate development, CFO, or CEO might be upset with negotiating McKinsey or BCG down in price because they know, for example, that their preferred partner will have less of a role overseeing the relationship or engagement. Yet the actual PowerPoint presentation with the strategy may be just as good (or better). The measurement of the services delivered is one of the major challenges in this regard.
Those we've spoken to on all sides of the SOW market have noted a range of unexpected roadblocks tied to this lack of true comprehension of understanding the given value measurement to which services delivery is held to. One of the major challenges here is that truly investing the time to explore and know the business requirements around each category of services can be a full-time job by itself. All of the expectations, requirements, processes and procedures for examining service delivery and provision for a given category can be immense, especially to an outsider. Moreover, the lack of consistency across both services spend categories and even the same vendors in terms of management expectation, reporting, etc. also contributes to a situation where the only norm is variation.