Why SOW Isn’t Being Fully Embraced in Contingent Workforce Programs

Coming off of the recent tour of 2022’s conference season, I was very surprised to hear the elementary messages continuing to be pushed in various forums regarding services spend management and the adoption of services procurement related to contingent workforce programs.

I was encouraged that at SAP’s SpendConnect, the keynote presentation contained the message (paraphrasing here) — if you’re not looking at how you’re managing your services spend, you should be! Imagine services spend management is getting the attention it deserves on a stage of this magnitude! Finally!

Risking heresy in this forum, I was very disappointed that at this year’s CWS Summit in Dallas, there was only one session focused on services procurement. With no disrespect intended toward the presenters of that session (who did a nice job), the topic was very elementary for how far we’ve come in attempting to promote services spend management as part of the contingent workforce. I think the session title, “Building the Business Case for SOW,” was on a CWS agenda ten years ago and probably every subsequent year since! While I realize there are many organizations just getting started here, I am extremely aware of how many organizations have been trying and either failing or not getting the desired traction with bringing services into their CW programs. These people need more than SOW 101 on why they should be bringing it in and using the same talk track about executive support and VMS expansion. They — and so many others — need the compelling case of why it’s critical that it be included and why it is not living up to the expected promise to this point.

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I have strong opinions here:

It’s a spend management play before it’s a contingent workforce. Sure, services are labor-based at their core and are a key cog in the total talent wheel. But almost every procurement organization owns the process for sourcing and/or contracting for services, and it’s dispersed across various category owners. Only when we start addressing the potential for better spend management in these areas over workforce management and collaborating with the right level of procurement owners (i.e., CPO), will we start gaining momentum.

Headcount tracking is not services spend management. Across countless surveys of contingent workforce programs, a majority indicate that SOW is in scope of their programs, or they’re seriously planning to incorporate it soon. But then we continue to have debate and discussion about how to increase adoption of SOW. When you peel back the layers, you typically find that most of these programs are simply tracking heads of the SOW-based workforce, which has its value and could be a gateway to broader and better spend management, but its value alone will not drive adoption and won’t excite those who need a better procurement experience for sourcing and managing the services spend.

Technology can’t be a one-size fits all solution. A panelist in one of the aforementioned conference sessions boldly stated, “VMS technology cannot effectively handle SOWs.”  While I disagree with this position, I think part of the issue in gaining increased adoption is that contingent workforce programs are built on VMS at the core. The sourcing capability of VMS tech falls short of competent when it comes to building and managing RFPs for complex services, and most organizations who implement VMS don’t fully configure it to take advantage of the SOW management functionality that exists within it. As evidenced by the plethora of procurement technologies on the market, along with shared perspectives from many thought leaders, organizations should not be afraid to embrace the best point solutions for the different aspects of the procurement process — from intake to requirement definition, through to sourcing, contracting and then effectively managing the SOW details and the associated workers.

Let’s turn the talk track for 2023’s conference season towards how to change the operational and delivery model so that there is a better experience to be offered and in doing so accelerating the joint value proposition of a total workforce program that satisfies procurement and HR/TA.

Jon Kesman

Jon Kesman
Jon Kesman is the global practice lead for QuantumWork Advisory. He can be reached at jkesman (at) quantumwork (dot) com.

Jon Kesman

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