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.
In discussions focused on SOW enablement, we typically observe several common adoption tips and strategies across best practice procurement organizations. To start, organizations that master SOW enablement and management typically start with a data-driven approach, putting spend analysis and category strategy development at the foundation. For those coming from a pure VMS/contingent world, this may sound anathema to services procurement enablement. But spend data, including understanding how much an organization has at stake in given categories and with given suppliers – and how this is changing over time – along with understanding the value delivered through this spend is such a crucial enablement component of prioritizing overall SOW management and vendor engagement.
Any type of spend analysis and category management strategy as part of a broader SOW framework should include modeling the potential return on investment – and all of the drivers factoring into an ROI model – for the different categories at hand. This requires having a solid visibility into underlying spend data and requirements. ROI-driven engagements should go beyond just the numbers and take full consideration of any related change management considerations of the programs under consideration. Procurement and line-of-business stakeholders should never discount the impact on the business, stakeholders and suppliers of introducing new SOW management and automation approaches.
Procurement should acknowledge and confront (along with any financially driven business) all considerations, cultural norms, risks and potential disruptions that may occur as a result of installing a new platform (both programmatically and technologically) for SOW support. Top performing organizations think about financial modeling and change management for buying professional and related services on a project and SOW basis not just around generic specific processes and templates, but on a category specific basis.