concurrent session: and building the sow business · 2020. 6. 6. · rate this session by accessing...

21‐22 April 2015Hotel Okura, Amsterdam© 2015 Crain Communications Inc. All rights reserved.

Concurrent Session: Leadership and ExecutionBuilding the SOW Business Case Facilitator: Kirsten Hastings, Associate Editor,

Staffing Industry Analysts Speaker: Tom Mason, SVP EMEA, Pontoon

WEDNESDAY 13:30‐14:30 OTTER/ESPERANCE

Sponsored by:


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Building the SOW Business Case

April 2015Statement of Work Solutions

• | SOW

• | SOWCapabilities and Experience

SOW PROGRAM COVERAGE |

• Current Run Rate: $1.8B Spend

• Annual Volumes: 50K SOWs

• 106K Workers

• | SOWDefined

Financial rewards or penalties tied to milestone, project success and Service Level Agreements

Deliverables governed by SOW contract with billing tied to performance completion,

often fixed or event based invoicing –Time and Material (T&M) can also be used

but more difficult to hold to deliverables based work

SOW Supplier provides project/resource direction and owns delivery risk

Purchasing a delivered service by engaging project based talent (consultants or services) from a third-party supplier

(AKA SOW Supplier) through a Statement of Work (SOW) contract

• | SOWGlobal Market Trends

• SOW managed by MSP’s increased worldwide• Up 61% Globally• Up 74% in the US

• Largest MSP Programs overall dominated by SOW scope

• SOW programs are likely to grow ~100% as contractor spend management will evolve to include reviews of outcome based contracts, as the market matures

13%

61%

10%

74%

0% 20% 40% 60% 80%

Temp/Contract

SOW

GROWTH (2012 TO 2013) IN MSP SPEND BY WORK

ARRANGEMENT

United States Global

Staffing Industry Analysts CWS Council 2014 VMS and MSP Supplier Competitive Landscape

• |

• Companies reliant on MSP for SOW program development, routines, and VMS design

• Traditional % of spend / Supplier funded models common in SOW VMS / MSP fees…interest in activity pricing with large $ spend programs

7.3

11.7

5.6

9.7

0 5 10 15

2012

2013

MSP SOW SPEND IN $ BILLION (2012 TO 2013)

United States Global

SOWGlobal Market Trends

Staffing Industry Analysts CWS Council 2014 VMS and MSP Supplier Competitive Landscape

• | SOWMarketplace Drivers

Compliance Assurance

Spend Optimization

Service Quality

Spend Visibility

• | SOWSpend Visibility

Lacking holistic, dedicated view to SOW procurement

Existing ERP/PO systems limited in active project oversight and controls around budgeted spend/ scope expansion

“60% of companies profess SOW projects received the most organizational attention but only 14% have high visibility into their SOW spend.” (Aberdeen)

• | SOWCompliance Assurance

Lacking visibility of SOW Supplier workers assigned to projects; transient staff leading to poor controls on facility/systems access and company asset return

“Visibility and compliance into worker tracking is often the first interest area (in SOW mgmt.)… the client’s exposure to risk often accelerates their adoption speed” (Spend Matters)

“The majority of contingent programs suffer from classification non-compliance, both due to confusion and managers purposely going against policy” (Staffing Industry Analysts)

Loose qualification of SOW vs. Staff Augmentation; open environment for tenure policy violators

Limited pre-engagement vetting of SOW Suppliers for insurances, active contract status, etc.

• | SOWSpend Optimization

Disparate/ non-existent competitive bid environment

“It is common to see about 20% of misclassification of SOW consultants, with bill rate inflation typically in the 20% -70% range” (Staffing Industry Analysts)

“Companies deploying a service procurement program can achieve positive ROI in <1 year and reduce cost by 5-10%...” (Forrester Research)

“The majority of contingent programs suffer from classification non-compliance, both due to confusion and managers purposely going against policy” (Staffing Industry Analysts)

Overpriced Staff Augmentation buried within non-vetted SOW’s

Weak project budget controls; out of scope/ cross charging on mismanaged purchase orders

Lost volume/ early pay discount opportunities

• | SOWService Quality

Relationships driving Supplier selection; not quality or price

Limited ability for oversight of SOW Supplier performance and milestone delivery throughout engagement lifecycle

Executives cannot rely on vendor provided reports to gauge performance & effectiveness… rather internal benchmarking data to gauge the quality of the vendor's work” (Spend Matters)

• | SOWIn the Driver’s Seat of SOW Management

YOUR BOTTOM LINE SUFFERS WHEN YOUR SOW PROGRAM LACKS

SEASONED PROGRAM MANAGEMENT TEAM

VISIBILITY AND CONTROL

CONTRACTUALRISK AND MISCLASSIFICATION PREVENTION

REPORTING AND ANALYTICS

• | SOW Program

• | SOW ProgramBusiness Case Drivers PAIN POINTS

• Service Procurement/Statement of Work (SOW) spend $ annually

• # of SOW engagements created annually

• # of SOW Suppliers engaged on projects annually

• # of SOW Supplier workers engaged annually (with access to systems/facilities)

VISIBILITY VISIBILITY

COMPLIANCECOMPLIANCE

SPEND OPTIMIZATION & COST SAVINGS


SERVICE QUALITYSERVICE QUALITY

OPPORTUNITY ASSESSMENT AREAS |

• |

FUNCTION/FEATURE PROGRAM BENEFITS

RFX• Sourcing Effectiveness, RFx Bid Cycle Time and Attained

Savings

SOW• SOW Scope, Clauses, Deliverables, Budget/Timeline

Performance, Negotiated/Rate Card Savings, Negotiation Cycle Time

SUPPLIERS• Program Spend, Service Competency, Performance,

Budget Adherence, Savings

WORKERS • Worker Roles, Rates, Location and Tenure

Program BenefitsSOW Program

VISIBILITY

• | SOW ProgramBusiness Case Drivers

• Strength of SOW Suppliers pre-qualification coverage prior to project engagement

• Strength of controls to ensure SOW agreement conformity, risk prevention & assess misclassification

• Timeliness of your SOW approval process & SOW Supplier Onboarding process

• Strength of onboarding screening process of SOW Supplier workers

PAIN POINTS







• |Program Benefits

SOW Program


WORKERS• On/Offboard Admin Oversight• Worker Tenure Linked to Billing Activity (T&M)

SOW AGREEMENT

• Controlled SOW Template, Enforced Clauses and Proactive Staff Aug Vetting

• Enforcement of Contract Rate Cards and Remittance Tied to Delivery/Budget Approvals

• Committed Spend Visibility for Finance/Accounting Accruals

SUPPLIERS• Enrollment Vetting and Qualification Controls/Process• Remittance Linkage to Program Enrollment, SOW

Agreement and Manager Approval

COMPLIANCE


• Strength of competitive evaluation process (bidding) of SOW Suppliers on new engagements

• Strength of volume pricing leverage with higher tier SOW Suppliers

• Strength of process to capture negotiated and delivery spend savings per project

• Strength of process to secure spend approvals (engagement budget, scope changes, invoicing, etc.)

PAIN POINTS






• |


COMPETITIVE BID & RATE CARD MGMT.

• Controlled RFx Bid Forum & Promotion (Preferred Strategic Advancement/Service Competency Linkage)

• Ability for Enforced Contract Resource Rate Cards

STAFF AUG REDIRECT• Pre-executed SOW Vetting for Broader Savings

Attainment

SUPPLIERCONSOLIDATION

• Consolidated Spend and SOW Terms Reporting

SPEND/BUDGET ENFORCEMENT

• E-approval of Budget, Deliverables, Invoicing and SOW Amendments w/in VMS


SAVINGS


• Strength of project managers (buyers) ability to actively manage SOW Supplier performance

• Ability to use past SOW Supplier performance to influence future selection

• Accuracy and timeliness of SOW Supplier invoicing

PAIN POINTS







• |


SOW CONTRACTING & INVOICING

• Standard Bid/SOW Templates, Workflows; Expediting Build, Negotiation and Approvals

• Accelerated Invoice Initiation and E-approvals

SUPPLIER PERFORMANCE MGMT.

• RFx Bid Competitiveness and Responsiveness• SOW Contract Rate Competitiveness, Cycle Times and

Qualitative Performance Capture • Budget and Timeline Performance Monitoring


EFFICIENCY AND QUALITY

• |Lifecycle

SOW Program

VMS PROJECT CREATION

WORKER ONBOARDING & PROVISIONING

SERVICE DELIVERY &

INVOICING

PROJECT CLOSE & WORKER OFF-BOARDING

PROJECT SCOPING & SUPPLIER SELECTION

SUPPLIER QUALIFICATION & ENROLLMENT

MSA & SOW CONTRACT ADMINISTRATION

SUPPLIER MANAGEMENT

• |Common Adoption Hurdles

SOW Program

AREA STAKEHOLDER CONCERN POV MESSAGING/MITIGATION APPROACH

Adoption& Program Escapes

SOW Suppliers• Push back on

MSP/VMS fees (added cost to serve)

• Fee/rate compressionwith visibility

• VMS admin burden

• Preferred Supplier tiering increases spend share; pulling from one-off/non-program vendors

• Bidding environment increases market share opportunities on prior “sole-sourced” procurement

• Faster reimbursement cycles with automated invoicing and approvals within VMS

Business Continuity Disruption

Engagement Managers

• Added cycle time delays through MSP/VMS

• Preferred SOW Supplier de-enrollment

• Utilize MSP high touch to ease VMS and process controls navigation ~ Buyer focus on Supplier capability and project oversight

• Graduated deployment approach enabling short term continuity

• MSP supplier management to gauge longer term capability/viable alternative options

• |

TRANSACTION VISIBILITY PROMOTION |

• Focus solution and deployment on solving for greatest need first…Visibility enables strategic management; without knowledge and data, program policies stall

REPORTING AND ANALYTICS DESIGN-BUILD WITH THE END IN MIND |

• Invest time upfront to build reporting needs into the VMS… especially cost savings capture to strengthen campaign for continued adoption

CAMPAIGN ON BENEFITS BY STAKEHOLDER GROUPS |

• Cost savings is a primary business driver but not always the burning platform for all stakeholders… perceived burdens promote escapes around mandates

Best PracticesSOW Program

SPEND VISIBILITY AND ADOPTION

• |Best Practices

SOW Program

REDIRECT STAFF AUGMENTATION WITHIN SOWs |

• Often largest savings missed due to non-qualification procedures

• Establish expectations via communications and enable VMS/ Program controls

• Build mechanisms to quantify savings… (i.e. resource categories/ rates crossing SOW and Staff Augmentation)

DRIVE COMPETITIVE COST PRESSURE |

• Require resource schedules on fee based projects; promotes price pressure and enables comparative cost analysis

• Use transaction history to create “expected” rate cards for competitive guides

• Promote RFx bidding whenever possible, leverage RFQ’s to gain insight

RATIONALIZE SUPPLIER BASE |

• Leverage program data to consolidate spend with strategic vendors, to achieve volume pricing and reduce risk… configure VMS to push buyers towards preferred

COST SAVINGS

• | COMPLIANCE ASSURANCEAND EFFICIENCY

CONTRACTUAL RISK AND MISCLASSIFICATION PREVENTION |

• Utilize SOW template capability within VMS; enforces scope build into deliverables based format with fixed/un-editable provisions

• Leverage VMS “Resource Guides” to steer buyers to proper channel and MSP counsel for eligibility verification

• 1099/Freelancers are vendors; require SOW’s to affirm relationship separation beyond initial entity qualification

SOW WORKER COMPLIANCE –BEYOND T&M |

• Leverage tracking and onboarding compliance for all engaged workers; offsite/fee based resources may still access systems and intellectual property

PROACTIVE SOW SUPPLIER MANAGEMENT |

• Establish expectations, standards and rogue policy up front with strategic suppliers… they influence project buyers more than anticipated

Common Adoption HurdlesSOW Program

Questions?

Tom Mason | Head of Sales, EMEA

[email protected] | +44 7710399437

• | Full Cycle SOW Procurement ServicesSOW MSP/VMS Program Capabilities

PRE-ENGAGEMENT SUPPORT

ENGAGEMENT TRANSACTION SUPPORT

SUPPLIER MGMT.,

VETTING & OPTIMIZATION

VMS PROJECT FRAMEWORK

CREATION

WORKER ONBOARD & PROVISION

PROJECT DELIVERY, INVOICE &

REMITTANCE

PROJECT CLOSE & WORKER

DEPROVISION

PROJECT SCOPING & SUPPLIER SELECT

(RFX)

MSA & SOW CONTRACT

ADMIN

Spend Visibility | Compliance Assurance | Spend Optimization | Service Quality

• | Deployment Considerations

POPULATION DEPLOYMENT

PILOTPros-lower risk deployment, smaller change mgmt. effortCons-slower savings realization, differing concurrent processes for users, size can restrict proof of concept establishment

PHASED ROLLOUTPros-quicker adoption/cost save gains vs. pilot, with tollgate points for “go/no go ” continuationCons-more change management effort and integration coordination than pilot

BIG BANGPros-consistent policy adoption and accelerated transparency/cost save gainsCons-significant change mgmt. effort, potential issue resolution on a grand scale with large exposure

PROJECT TRANSITION

IN-FLIGHT ENGAGEMENT CONVERSIONPros-accelerates adoption and transparency/cost save gainsCons-data conversion load complexity and cut off timing coordination

NEW ENGAGEMENT STARTUPPros-eases users into new program/ process, no data conversion complexitiesCons-slow adoption progress; requires users to jockey between legacy and new process for existing and new engagements

Affirm primary program goals (Cost Save, Visibility, Ease of Use, etc.)

Analyze current user/spend populations: Largest spend/saving opportunity, process strength, system usage and proficiency

Identify/rank gains and risk of approach methods (Business disruption, change mgmt. effort, integration complexity, savings)

OVERALL STRATEGY

Thank you

Statement of Work SolutionsApril 2015


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DIGITAL SURVEYS

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Building the SOW Business Case

concurrent session: and building the sow business · 2020. 6. 6. · rate this session by accessing...

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