Spend Matters welcomes this guest post from Leslie Marsh, vice president of channel partnerships at HireTalent.
Statement of work (SOW) has become a fast-growing component of contingent workforce management (CWM) programs. While SOW has been much discussed, there has been little conversation around acquiring the actual skills and knowledge needed to make SOW work and manage it effectively.
In a previous role, in which I had responsibility for management of a program with annual spend considerably over $50 million, my organization needed to hire an experienced SOW operations professional. Even with nearly 10 years in the industry and both a strong personal network and an internal recruiter to support this process, I was surprised to face a much more daunting challenge than originally expected.
Requisite skills for the SOW operations role included a solid understanding of which resources are appropriately engaged in managing an SOW arrangement versus a traditional contingent worker relationship, the ability to articulate a project analysis to internal stakeholders and gain buy-in and strong relationship skills that supported a successful working relationship with SOW consultants and vendors.
Unfortunately, our recruiting efforts returned few candidates with the desired skills, and those that possessed the skills had little interest in the compensation range being offered for the role. So, we quickly learned that compensation had to be recalibrated to attract and retain the appropriate talent to the role. I came to understand that a unique compensation package was needed to attract and retain this different breed of contingent workforce professional (in effect, one size did not fit all).
SOW operations professionals must possess a very high level of broad management skills, including the ability to quickly build relationships with internal stakeholders in order to be viewed as a strategic business partner and not just as a category manager or just the administrator of the SOW module of a vendor management tool. To be successful and drive costs and risk management around these managed engagements (still new to organizations), SOW operations professionals must spend time proactively educating and supporting the business stakeholders.
A key component to the SOW Operations role is the need to be effective in partnership with vendors. Given the different nature of the SOW arrangement, these services suppliers tend to vary significantly in terms of their management of their sales, operations and communications approaches than do traditional staffing vendors.
Naturally, there is a learning curve in terms of establishing an effective working relationship. There is often an adversarial dynamic in the first phase of SOW program absorption, "cost capture" (versus second phase, using a VMS for RFX and realizing cost savings) that diminishes over time as trust is established. Fortunately, since it is quite common for CWM programs to have at least absorbed the cost capture of their SOW populations within their programs, there is a growing familiarity and level of trust between these two teams. But it is important to note that there are often exceptions and carve-outs from the standard process established by the organization to SOW operational approach that must be clearly defined and articulated to all parties.
At this stage of the game, the SOW modules of vendor management tools tend to be most commonly used for cost capture despite tool functionality offering the ability to support the RFX/RPF process. Ultimately, we can expect to see an increasing use of the bidding functionality already available to realize deeper cost savings and vendor optimizations. It is critical to achieve proper pairing of SOW operations talent and organizational strategy toward the engagement of the full suite of tool capabilities will support the realization of full life cycle SOW program absorption.
In summary, appropriate SOW operations professional talent is critical to the success of an enterprise’s absorption of SOW into the overall CWM program. SOW professionals are not only masters of the execution and technical aspects of SOW, they are also masters of organizational engagement and change management. They play a decisive role in both the start-up an SOW program and the absorption and optimization of it. Organizations beginning to move down the SOW path must reckon with these two realities before going too far: (1) a special SOW operations professional is absolutely critical to success, and (2) acquiring such talent is a challenging and time-consuming activity must be pursued as a first stage of launching the program. As the old saying goes, “but for want of a nail…”