SOWs: Get More from your VMS (Part 1)
By Peter Parks, Director Product Strategy
One of, if not the, hottest topics in the VMS / MSP world is SOW (“Services Procurement” or “Projects”). (Click here for definitions.) It appears to me that the primary driver for the excitement is the considerable spend in this category. Customers and providers recognize that it is like “leaving money on the table” to implement a VMS technology and leave a significant share of your services spend outside the system.
So, we are starting to see more companies incorporating services procurement / SOW spend into their MSP or VMS program. But too often the vision is limited to getting the spend into the system. Unlike the traditional contingent workforce process, where over a decade of focus has resulted in best practices, process improvement and innovation, SOW spend remains largely a sacred cow, not an area where innovation is welcome or even allowed.
When planning to introduce SOW into a program, companies often document precisely how the process is run today and send it to their providers with the message, “call us when you have enabled this exact process in the technology and program”. In most cases, this is not one process but a lengthy list of processes by department, or even down to the individual project manager level.
Why do organizations fail to apply the same scrutiny to the existing SOW processes that they routinely apply to their own contingent or T&M (time and materials) spend? A few reasons I have experienced are:
- The user communities in SOW and traditional contingent workforce do not overlap.
- The programs are often initiated by stakeholders primarily responsible for contingent spend only.
- SOW has been a “black box” and has developed an almost mystical reputation; “their processes are so complex and so specialized – they do things in there that no one else understands”.
Well, it is possible to review SOW spend before it is introduced into the program and apply the same examination of process, supply base, rates and best practice to be performed across the board. Instead of using your VMS as a repository for deals that have already been struck through the mystical process, use it as the tool it is designed to be used. In my next post in this series, I’ll share some practical ways for you to stop leaving money on the table and inprove your services procurement process.