Are you aware that it’s estimated that more than half of all Statement of Work (SOW) projects are never fully completed? Or that of those that are completed, many are not considered successful? What a drain on company resources. SOW projects can be a blessing or a blind spot for your organization. How can you avoid the blind spot trap?
With a SOW project, much of the success or failure of it just depends on how well you manage it. So getting a handle on it from start to finish is imperative. You need to invest in a Vendor Management System (VMS) that has the ability to handle the added complexities, need for insight and better analytics a VMS that is specifically built for SOW can give you.
Additionally, companies are taking their data to the next level to help them make strategic plans, so you’ll need a robust, progressive, flexible VMS and one that can change on a dime with your SOW’s shifting priorities, or sub-project additions, like a chameleon changing to match their environment. SOW has multiple levels and layers and must be able to function in a global economy with ease.
Compare this with searching for a VMS that only needs to handle the day-to-day requirements of contingent workers, and you’ll see that there are many more considerations on what to look for in a VMS that will manage your SOW from RFQ to completion. After all, you don’t just tack on a document or spreadsheet and think that you can manage all of the complexities a SOW entails.
With Statement of Work, you need to carefully consider finding a feature-rich system that manages the entire SOW lifecycle, starting with the RFP process to milestone compliance and from onboarding to offboarding. Additionally, it should be able to handle payments tied to milestones, time-and-material, fixed-price or fixed-deliverables. And for global businesses, it should be effortlessly configurable to handle multiple languages, currencies, time zones and date formats.
Several studies have shown that by 2020 approximately 50% of the workforce will be comprised of some form of contingent worker – be it a temp, a contractor or 1099, a freelancer, a non-employee or just a worker who floats from gig to gig. Of those, a significant amount will be performing under a Statement of Work that defines the entire scope of the project for a supplier and clarifies the deliverables, costs and timelines.
That’s why it’s imperative that the Statement of Work is crystal clear to all stakeholders so that the metrics for success and failure are presented in detailed, plain language to avoid disputes with the “who-what-when” of deliverables, budgets and timelines. And then you stick to the guidelines to avoid the ever-present scope creep that can take a reasonable project and turn it into an unwieldly project.
Since your project’s ultimate success or failure is determined by adhering to the established guidelines, it’s important to ensure they’re well-constructed so they must be laid out incrementally, be as specific as possible as well as be attainable.
If you try to add all the necessary specs required for a SOW project into your standard VMS, you’ll not only be disappointed, you’ll be setting yourself up for failure. The cold, hard truth is that most Vendor Management Systems aren’t designed to handle the complexities and global nature of Statement of Work, even if they tried to create a workaround.
Why can’t they handle it? Because a traditional VMS is built on the notion that a business relationship between a customer and a supplier is fairly straightforward and simple – the company requests contingent workers at a specified hourly rate, for a specific period of time, and the supplier delivers for that need. There are not multiple layers, nuances nor projects within projects. There’s a single buyer and a single supplier who ends up fulfilling the need per worker. It’s pretty straightforward.
Conversely, with SOW project management, your VMS must be able to track and manage the various phases of the project, ensure their successful execution on time as well as confirm that the project is completed per expectations of all stakeholders.
Basically, a Statement of Work lays down a set of clearly defined terms and conditions, specifying the expectations for each phase of the project in perfect detail. They could be the desired outcomes, milestones and performance standards, incorporate measurements with technical standards and reporting systems applicable.
The SOW establishes the timelines and performance-linked payment terms for the project, with applicable penalties for any deviations or failure to deliver to expectations. So as you can see, a traditional VMS just isn’t cut out for the complexities, intricacies and even obscurities that can come with a Statement of Work project.
Now just think about a global organization with several SOW projects and within those, numerous sub-projects and some may even have sub-sub-projects! It could be a blessing or a blind spot. Honestly, it can get out-of-hand rather quickly. Rare is the Vendor Management System that can truthfully handle all the demands a Statement of Work entails.
Smart Track has SOW capabilities that were built specifically to handle all of the complexities that SOW entails. And if you’re in an industry that is compliance-heavy, you know that there’s no room for error.
A word of advice: Find out now if your VMS provider can handle the complexities a SOW project brings with it, because project-based work is only going to increase in use as companies farm out more of their non-core, and even their core competencies, to non-employees.
Check out our whitepaper, “SOW Projects Need a VMS That Can Change with the Times” that includes a handy checklist on what to look for in a VMS.
Learn how to find a VMS that can deal with the changing parameters and multiple layers of complexity a Statement of Work project entails! The way you manage your SOW project can make or break your results!
Mail (will not be published) (required)
+ 2 = four
Thanks for Subscribing to DCR Blog.