In considering the full scope of how to potentially leverage SOW solution capabilities, there are several program design decisions IQNavigator suggests should be made up front. These include whether or not to leverage existing sourcing processes or the RFX capability in the VMS/SOW toolset (or potentially, as Spend Matters has also observed, to use the capabilities in a dedicated strategic sourcing solution that might include sourcing optimization capabilities). Beyond what RFX process and solution type to deploy, there are program design questions that need to be asked, which we'll dive into in this post.
Other areas IQNavigator suggests are how best to enable requirements with suppliers through collaboration, what type of guidance to provide on contract types (within the application itself) and whether to rely on electronic of physical signatures. In addition, procurement organizations must consider the degree of flexibility they want to provide vendors with, including the ability for suppliers to initiate change orders. One of the more important questions that companies need to decide on at the outset of a program is whether or not to leverage supplier or buyer funded approaches (a topic worthy of an entire series on its own).
This topic of program design reminds us of one of the recommendations from the Spend Matters Perspective Services Procurement Spring Cleaning in 2012: Ten SOW Resolutions to Get Ready For a Lasting Savings Summer. In it, we suggest that companies shouldn't "let the perfect be the enemy of the good when it comes to process and contract templates – after all, each SOW is unique by definition. The usual key to any good resolution or spring cleaning program in the area is to get to 80% as quickly as possible and refine and iterate from this point as the category is increasingly under management and influence."
Further, we observe, "The same is often true of what tools to apply as well in give areas. For example, a VMS SOW extension might suffice to a certain point in the legal area, but specialized billing and matters management capability ultimately integrated with SOW/project-based VMS capability usage might be a strong secondary objective to achieve – down the road!"
Indeed, SOW program design can – and should – have a phased approach to it, category-by-category.