What is SOW Spend, what is its importance and where does it fit inside the contingent workforce ecosystem?
Until recently Statement of Work (SOW) spend has been left out of MSP/VMS programs and not classified as Contingent Labor. Instead it has been left as the MAVERICK SPEND PLAYGROUND, allowing Staffing Firms to go around the MSP, bundle their workers and create risk for the enterprise.
Contingent Labor, represents all forms of Human Capital that is non-permanent in nature, inside any given organization. It comes in the form of temporary employees, independent contractors, consultants and freelancers. Additionally, this form of human capital is typically sourced either directly, or through third party service providers, such as pure staffing agencies or specialized service providers.
What organizations often forget, is that these workers are not exclusively sourced under time and material (hourly rate) engagements. Instead, they are often packaged, and hidden, inside agreements known as a Statement of Work (SOW).
Organizations looking to truly optimize their contingent workforce management programs, need to ensure that all non-employee workers are visible, managed and accounted for. Depending on the maturity of your contingent workforce management program and objectives, it may be the right time to build or expand your program to centralize and manage your Statement of Work (SOW) engagements for contingent labor.
By developing a comprehensive SOW strategy you ensure an end-to-end human capital solution of contract controls, management of supplier performance and population, strategic sourcing, reduced spending, compliance, improved security and risk mitigation.
Having full visibility in your entire contingent workforce with SOW spend management will allow you to maximize productivity, make informed hiring decisions, and see performance issues ahead of time before they affect your bottom line.
Statement of Work (SOW) spend often overshadows traditional contingent labor spend by multiple factors.
With ‘Services Procurement’ being one of the largest indirect spend categories for organizations, a large portion of your total spend is going into these different forms of labor. To have a truly effective contingent workforce management, SOW spend needs to be included.
Managing SOW spend is much different to a traditional contingent labor spend (time and material).
It's important to understand how the SOW landscape differs from traditional temporary labor (staff augmentation). There are many different types of SOWs, with many responsibilities across different parties. It's therefore important to establish a viable framework from the onset, for the successful management of Statement of Work engagements for all organizations.
GRI will support you in differentiating your approach to managing SOW spend versus traditional temporary labor spend (time and material staff augmentation).
Technology/VMS platforms offer a strong foundation to support the successful management of SOW spend.
Simultaneously planning, selecting, designing and implementing a strong SOW management program with technology requires a knowledgeable MSP-Partner who has successfully done it before (GRI currently has 22 referenceable programs, and continuing to grow rapidly within the SOW space.)
Many, if not all, large corporations are finding themselves with a recurring need for the improved management of SOW services. As a result, GRI is seeing an increase in organizations bringing their SOW spend into their contingent workforce programs through a VMS technology platform and managed by a MSP, to ensure accountability, visibility, and quality.
If you would like to learn more about GRI’s SOW offerings please contact a Sales rep in your area.
West- Tiffany Bulowski - TBulowski@geometricresultsinc.com
Central- Angie Hewitt - AHewitt@geometricresultsinc.com
East- Jeff Hildreth - JHildreth@geometricresultsinc.com