You may be among the many companies struggling to understand why you haven’t seen the anticipated double-digit cost savings when using your vendor management system (VMS) to manage your SOW projects. After all, that is what you experienced when you first implemented the VMS to manage your agency-supplied contingent workers. The reason is simple – it wasn’t designed to.
We all know that it is possible to pound a nail into a piece of wood using a rock, but a hammer is more efficient, and a pneumatic nail gun is even faster and more accurate. When it comes to managing the third-party project services firms that you engaged to deliver SOW-based services, your hammer turns into a rock!
Traditional vendor management systems are based on the notion that the business relationship between a company and each supplier (i.e. staffing agency) is fairly standard – the supplier delivers temporary workers at a specified hourly rate for a specified period of time. There is a single “buyer” who requests and utilizes the supplied resource. The terms and conditions are fairly consistent across all suppliers that the company engages. Many companies hire a Managed Services Provider whose role is to act as intermediary between the company in need of resources and the suppliers of those resources. Regardless of the number of temporary workers used, skill sets employed, or hiring locations, the overall business arrangement remains the same.
Project services are far more complex. Every project is unique in its requirements, and most are dynamic and unpredictable, requiring an agile management structure that can continuously anticipate and adjust. Dimensions of complexity that must be managed through the VMS include:
Project complexity is not going away. In fact, it will most likely continue to increase as companies outsource more non-core activities. The inability to manage project resources and spend can be catastrophic, as large budgets are at stake. The right Vendor Management System – designed explicitly for SOW-based project management – will provide the foundation and controls needed by project owners to keep projects on track. When considering the use of a VMS, do your homework. Ask to see a demonstration of how the VMS will handle multiple projects, suppliers simultaneously working on different projects, onshore and offshore resources, and the efforts of billable and non-billable resources.
Tell us about your SOW management experiences, and forward this blog to colleagues considering or engaged in SOW management. Tell us what works, and what doesn’t. Through this blog, we’ll continue to share our readers’ experiences and suggestions.
Mail (will not be published) (required)
× six = 36
Thanks for Subscribing to DCR Blog.