A Statement of Work (SOW) is a document that details project/engagement specific activities, pricing, deliverables and timelines for a supplier providing services to their client. During the past few years the expression ‘SOW’ has evolved from its origins as a project management term to becoming a catch all descriptor for a particular type of spend.
In my previous post entitled Does your Talent Supply Chain work? I explained how resourcing providers were seemingly on a path to make the talent acquisition process more complicated for their clients, rather than simpler. SOW is a perfect example of this with many in the resourcing industry now using the term SOW to describe a ‘product’ that they supply.
But organizations do not buy an SOW, they buy the services covered by the SOW. There is not a single business owner for SOW spend within an organization because so many different types of services are covered by this type of contracting mechanism. For the same reason there can never be a single procurement category owner for SOW spend.
In KellyOCG we get that. So rather than kid organizations that SOW ‘success’ merely lies in controlling this type of expenditure through a Managed Service Provider (MSP) programme we are focussed on what really matters, which is to apply a range of good business practices that will ensure that the right blend of SOW talent is deployed in the right way to maximize the return on investment.
In our new white paper we describe the four key stages in the SOW buying process. To maximize value organizations must think holistically across each stage:
There is a very broad spectrum of SOW projects. There are those where organizations know exactly what they want to achieve and they have a very good feel for its corresponding value. Alternatively there are projects where the outcome and its associated value are more uncertain. It is also very important to appreciate that the wants, needs and expectations of the available talent options will vary by type of project too.
The Planning stage governs the rest. If you get this wrong, then it will undoubtedly lead to problems throughout the rest of the process. You could end up deploying an unsuitable type of talent — they may not deliver to the level expected and you might end up paying more because you will need to take corrective action.
When selecting an SOW service provider there are many variables to consider across the supply and demand equation. You need to consider what part of the work, if any, should be competitively bid. You need to identify the most appropriate qualifying and adjudication criteria. You need to ensure that the decision takes full account of the complexity of the requirement and how challenging it will be to achieve the stated outcomes. You need to select from the right supplier network, one that has the best access to the right kind of talent. Most crucially it is critical to apply the most applicable commercial model and contractual terms.
Skillful management of the contract and the talent is the crucial ingredient in maximizing results and value for money; however, the reverse is also true. Poorly executed contract management will increase the chances of a sub-optimal outcome.
Once an SOW engagement completes, it is essential that the learning is passed back upstream to inform the ‘Planning’ stage of future projects, thus ensuring there is a 360 degree feedback loop in place.
70+ years ago Kelly Services pioneered the temporary staffing industry. We are now on a new pioneering mission - to bring the world's resourcing landscape back down to earth! By guiding our clients in how to most effectively manage their talent supply chain, we help them take the best route to operational and competitive excellence.
When it comes to labor based SOW services we know that by anchoring their approach to the achievement of business outcomes, an organization will dramatically increase its return on investment (ROI) – and it is always ROI that ultimately makes the biggest difference between success and failure in the marketplace.
For KellyOCG, SOW effectiveness is about maximizing results, delivering the best economic value, and establishing a cohesive way of working between Procurement, Operations, and HR.
We call it the Strategy of Winners