Managing SOW Through VMS Delivers Better Results

analyticsVMS analytics and reporting have the power to turn even the most cynical CIO into a believer. Look at what the VMS gets you: cost savings driven by using only authorized vendors,  the leverage gained by negotiating rates based on quality and volume, and clear comparison of competitive supplier bids are just some of the compelling data that can convince even the most hardened skeptics.

And when it comes to bundled statement-of-work (SOW) contracts, most procurement professionals could use a little bit of help. The fact is that IT teams like SOW because it’s easier to bypass the perceived “obstacles” of standard procurement processes — but in fact, it simply makes it more difficult to measure the project status, manage compliance with business rules, and monitor completion and payment of deliverables. The challenge for procurement is to clearly demonstrate the benefits of aligning your SOW projects with other proven procurement processes —and that’s where the right VMS can help.

IT teams notwithstanding, the reality is that many companies are recognizing the advantages of incorporating project-based and deliverables-based spend into their VMS. A September 2012 study by Aberdeen Group reports that nearly 35 percent of all contingent work is tied to SOW agreements. The study also states that VMS users (compared to non-VMS users) saw a 53 percent higher frequency of SOW projects meeting or exceeding goals and objectives, and VMS users are 44 percent more likely to perform real-time reviews of milestones against agreements, allowing stakeholders to accurately gauge SOW services performance against project milestones.

PREMIUM CONTENT: Harnessing SOW Spend: Critical First Steps and Lessons Learned

In other words, managing SOW through a VMS provides easier access to the information you need to make informed business decisions.  VMS users are also more likely to use a competitive bid process, which often saves money versus going directly to a preferred supplier.

You know that procurement can add value and efficiency to SOW projects, helping to get the project done — and get it done right. The best way to convince people who want to do it “the old way” is show them numbers that prove managing SOW with a VMS delivers better results. Where can you get those numbers? Directly from your VMS. (If your VMS can’t do that, I know one that can.)

MORE: You Reap What You SOW

Carolyn Nolan
Carolyn Nolan is COO of ProcureStaff Technologies LTD. She can be reached at cnolan (at) consolvms (dot) com or on LinkedIn.

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