How to begin managing Statement of Work (SoW)
‘Change is the only constant’ - this phrase has never been more appropriate than when applied to the evolving world of work today. We’ve seen flexible working breathe new life into the 9 to 5 and witnessed the death of the ‘job for life’.
For many companies the use of a contingent workforce (e.g., temporary PAYE or contracting limited companies) to supplement and enhance their permanent workforce was a natural first step.Great progress has been made in workforce planning and strategic direction to ensure this proportion of workers are fully engaged, valued and utilised with spend monitored and compliance enforced.
A majority of organisations now have a defined approach to their contingent workforce but they now need to turn their attention to the next growing area of loosely controlled workforce spend: consultancies.
Where to start with consultancy spend?
Consultancy can range from C-suite strategic support to basic time and materials, with every shade of grey in-between. The one thing that is crystal clear however, is that consultancy spend is rising in most advanced economies, and that companies will need to bring their consultancy provision into the fold of strategic workforce planning if they are to embrace the opportunities it provides, whilst mitigating some of the risks. But where to start?
SoW what now?
If the homogeneous block of consultancy spend looks too big to swallow – then start with a small bite. Ask yourself the following:
- Which areas are liable to have misclassified, or ‘disguised’ contractors?
Each organisation has its own reasons for ending up with contractors incorrectly hired through the consultancy route to deliver on Statement of Work projects: avoiding headcount restrictions, quicker start dates, less administration. Whatever the reason, it’s an expensive way to complete work with a host of regulatory risks attached. If you suspect a division of your business has this problem, it should be your first port of call – there is a simple route to low-hanging cost savings.
- Where are my highest risk areas?
If you have highly sensitive projects with large numbers of rotating consultancy staff it should be first on your list. Which area keeps you up at night? Given than any regulatory chain is only as strong as its weakest link, this is a sensible place to start.
- Who are my allies?
Identify a select few stakeholders who can empower you to make the changes. Ideally these stakeholders will have a desire for change and be prepared to push through communication and face down initial resistance.
- Where is the low hanging fruit?
The more complex the SoW, the harder it is to audit, manage and control. When you are thinking about the foundations of services procurement, pick an area with easily definable work and clear objectives. This will drastically reduce the risk of scope creep and improve your chances of early success.
- Where in the world do I start?
Pinpoint sensible geographical limits – starting with multi-jurisdictional, multilingual business areas is going to be complicated, far better to start with a one country focus.
Once you’ve decided where to start, take it one step at a time. From initial audit to implementation, and if you are thinking of embarking on this transformative journey, or simply have some initial questions on the area, contact us.