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Overcoming Challenges of Project- and SOW-based Solution Adoption – Part 1

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If you read the media and analyst headlines surrounding services procurement, it appears that statement-of-work (SOW) and project-based services spending program management has done more than capture the imagination of the profession – it has become an all consuming focus for some. Yet media, analyst and even vendor claims, predictions and coverage to the contrary, most organizations (including those with more advanced VMS deployments) have weak to minimal actual penetration of project- and SOW-based capabilities of services procurement technology (not to mention associated MSP and third-party advisory services).

Throughout the course of recent interviews with a variety of practitioners and providers, Spend Matters discovered a number of reasons for a surprisingly broad and divergent range of project and SOW-based capability inside procurement organizations. While some are clearly doing SOW right, pushing hundreds of millions of dollars in annual spend (or more) through VMS platforms that have been extended to manage all of the intricacies required for SOW enablement, the majority of companies do not find themselves as fortunate. Indeed, many are lagging behind in terms of implementation and even platform evaluation. The impact SOW enablement can have (relative to contingent workforce automation through the same VMS) can be highly, highly variable.

Yet based on the successes we see, it is our assessment that companies can often achieve results from SOW solution investments (for savings, compliance and risk reduction) that outshine the great majority of procurement technology programs. The greater savings, productivity improvements, and services results from project and SOW-based procurement initiatives that even core contingent workforce platform automation can sometimes deliver, especially in industries where SOW volume (managed or unmanaged) is increasing as a percentage of total services spend. This is for both the right and the wrong reasons, mind you. For example, using SOW to address worker classification issues is not an optimal strategy.

This Spend Matters Compass explores today’s SOW-based adoption patterns, starting with how the environment is changing. We’ll also explore SOW suggestions for overcoming adoption, collaboration and process hurdles in adopting these services procurement platforms and enabling third-party management services. Looking at the changing SOW adoption landscape, Spend Matters has observed a historic evolution of the recent market and certainly, the start of a new inflection point – if not select rapid adoption in certain market segments. To learn more about SOW adoption trends, best practices and expectations for 2013 and beyond, read this research brief.