Guest Blog – The Reality of SOW Management | DCR Workforce Blog

Guest Blog – The Reality of SOW Management

(Author: Christopher J. Dwyer from Ardent Partners)

By now, we all know the stats:

  • Nearly a third of today’s total workforce is considered “non-employee,” a far cry from the days (only a few years ago) when less than 25% of all workers were considered contingent or contract-based.
  • The average business, on average, maintains only 45% visibility into the non-employee workforce and its attributes, including spend impact, suppliers, project budgets and milestones, etc.
  • The realm of “SOW management” has become a hot-button issue for all executives in regards to their contingent workforce management (CWM) programs

Coming out of Ardent’s landmark State of Contingent Workforce Management research study (2014-2015 edition) last year, one thing was very clear about this industry: it was moving (quickly!) into a “talent-oriented” direction. This meant that the days of putting cost savings and bill rates ahead of quality and effectiveness were over; in the “talent wars,” skillsets are the primary pressure to full business gratification when it come to the non-employee workforce.

While this notion is quite progressive and speaks to just how far flexible workers have come in terms of perception over the past few years (and, from the analyst world, it’s quite the exciting development!), there’s a major problem: too many organizations today believe that they can move forward to a talent-oriented, talent-led approach towards contingent workforce management without first mastering other key aspects of the CWM program…particularly SOW management.

Many of today’s non-employee workers and services are linked to an SOW or similar agreement. In fact, it’s often the foundation to any relationship between a business and its non-traditional talent. The problem? Too many companies today actively to fail to apply robust procurement, supplier management and workforce management principles to this area (which Ardent refers to as “complex contingent labor”).

The reality of SOW management is this: many companies understand how critical an attribute it is in regards to their CWM programs, but not enough are treating it like so in regards to true SOW management capabilities and competencies. Ardent’s research has found that Vendor Management System (VMS) solutions have evolved mightily in recent years, so much so that these can become ideal platforms for tracking progress, managing budgets, enacting true workforce management and supporting deep supplier management capabilities. However, most traditional Vendor Management Systems (VMS) are not equipped to handle the complexities of SOW based solutions.

Simple aspects such as onboarding and offboarding, deep-dive analytics, full requisition and project management, links to talent networks…these are all basic capabilities that VMS do bring to the table to manage SOW-based labor and services. As these platforms continue to progress and become “stronger” in regards to its intelligent reach across all non-employee workforce management aspects, businesses will find that, before they make that leap into a talent-oriented CWM frontier, they will have mastered a critical component of today’s consistently-shifting contingent workforce.

However, management of non-employees who are tied to SOW based engagements requires more than the traditional approach applied to contingent workers. The same non-employee is often tied to multiple SOW projects, each with completely different rates, responsibilities and management structures. In today’s world of offshore outsourcing, project teams are often staffed with non-employees and teams working in multiple locations. Team members are frequently assigned to different locations as the project progresses, requiring the VMS to handle the same worker with different business rules, reporting, rates and charging as they move. Projects also require additional technology support. While a VMS does not need to offer project management capabilities, it does need to integrate with project portfolio management systems (PPM) so that the project reporting, cost accounting and charge backs are all managed through the VMS.

Upcoming Webinar on August 26

On August 26, join me for a webinar hosted by DCR Workforce that will dive into the above aspects and discuss not only the evolutionary nature of today’s non-employee workforce, but the right approach towards SOW management. During the event, we’ll discuss the best strategies, solutions and capabilities for tackling this complex component of contingent workforce management. Click here to register.


Disclaimer:
The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Christopher J. Dwyer is a Research Director at Ardent Partners, a Boston-based supply management research and advisory firm. He is considered a thought leader in the contingent workforce management industry with recognition from HRO Today as an “Analyst and Advisor Superstar” in 2013, 2014, and 2015, as well as from Supply and Demand Chain Executive Magazine (named as a “Pro to Know” in 2013). He is a premier thought leader in this industry, authoring hundreds of research studies and evangelizing the evolution of the non-employee workforce, its technology platforms, and the concept of the “future of work.” He welcomes your comments at cdwyer@ardentpartners.com, on LinkedIn or Twitter (@CJD_Ardent). Visit www.cporising.com to read more of his research.