Outcome based delivery crucial for getting things done in the post COVID-19 world

Alongside the human story of COVID-19, the Coronavirus epidemic has also put the business world on pause. Thousands of companies and millions of people in a furloughed state of uncertainty and confusion. We are told the current crisis will be temporary, but it has undoubtedly changed the way businesses operate forever.
 
When the hard reset happens, businesses will face a new set of challenges and opportunities in their return to prosperity.

Accelerated digital transformation

Covid-19 has accelerated digital transformation for many businesses, forcing through the introduction of automation, self-service, remote teams and a raft of other new norms.
 
Remote working, digital collaboration and virtual meetings are now widely accepted – Zoom, the cloud meeting app, has reported a 20% increase in active monthly users. This has changed the widespread believe, that to be productive, a business needs to have its resources in a single place of work. 
 
Now businesses accept the viability of remote, virtual project teams composed of employees, contractors and suppliers, it expands the range of work delivery models at a business' disposal.

New supply chains

Ecommerce is another area of business that's changing as a result of the Covid-19 crisis. Supply chains are having to evolve to include a more diverse supplier network, including an increased importance of working with smaller, nimble, and in some instances, local suppliers.
 
For example, the B2B events industry is having to rapidly adapt to include virtual events, exhibitors and conference speaker content.
 
The shift in supply chains required business to have better visibility over their supplier networks and modern tools to improve their engagement and control over their long-tail suppliers.

Radical changes to short-term skills requirements

The skills and experience businesses require in the short-term will also vary significantly. Continuing the B2B events industry example, an events business that has successfully delivered in-person conferences for the last decade will need short-term consultancy and hands-on operational support as they learn how to shift their business into virtual conference experiences. Of course, these short-term change management projects are perfect for the outcome-based nature of statement of work engagements.

Changes in how businesses deliver projects

The Coronavirus crisis has also created new customer demands and reshaped infrastructures meaning there is a need to rethink how work is done.
 
Businesses around the world are showing amazing transformative traits, with logistics organisations making hand sanitiser and Dyson making ventilators, but despite the encouraging levels of innovation there are still a large number of businesses who are likely to face the sad prospect of having to make skilled people redundant as their business models adapt.
 
The new business environment creates two fundamental changes to how things get done:
 
Job titles, and to some extent job descriptions, could become more fluid – As businesses rapidly adapt, their resources will need to adapt too, which could reduce the importance of how people's jobs are 'labelled' and shift thinking to from 'what do you do' to 'what needs doing'.   . Businesses will have to focus on delivering outcomes and this may push them to look at alternative, more agile, flexible outcome-based delivery models like statement of work contracts.
 
Some businesses could lose large parts of their pre-Covid-19 workforces – Despite the efforts of Governments around the world, who are flexing some serious financial muscles to protect businesses and jobs, the financial predictions are not positive for everyone. Businesses that survive the immediate crisis will need rapid, flexible access to a diverse range of new skills and experiences in the mid-to-long term. Even those businesses who rebound quickly will find they need to operate in new ways.

Outcome based-work delivery

Outcome based work delivery models could be a solution for businesses to get things done in the unpredictable, rapidly evolving return to prosperity.
 
Delivering projects on-time and on-budget will need to be a major focus of the business leadership team. As shown during this crisis, delivering successful outcomes is what really matters. For example, no one is talking about how personal protective equipment is being sourced, only that it is being delivered to those on the front line who need it.
 
Forecasting/controlling project cost in the economic turnaround will be important. As economies start to get moving again, managing a business' cashflow will be critical. Statement of work contracts with defined deliverables and milestone-based payment schedules could present a far less risky alternative to an open-ended time + materials contracts.
 
Skills shortages will need addressing with other work delivery models. EY warn that pandemic related skills shortages can last many months. The pre-pandemic permanent resources will be slow to return or will have moved on. 

IR35 is still planned for April 2021

An additional consideration for businesses operating in the UK is the IR35 reforms are still planned for April 2021. 
 
Rishi Sunak, Chancellor of Exchequer in the UK, referenced the need for freelancers and contractors to pay their 'fair share of tax' in his Coronavirus announcement on the 26th of March 2020. This suggests the IR35 reforms in the private sector remain very much part of his long term strategy and businesses will need to shift their thinking around work delivery models from 'temporary workforces' to include  'services provision'.

Summary

The unpredictable environment following the immediate Coronavirus crisis will present businesses of all sizes with challenges and opportunities of equal magnitude. In the short term, work delivery will need to be flexible, outcome-based and agile but this could create a new way of getting things done that may turn out to be much more resilient in the long term.

Useful resources

Overcoming the challenges of tail spend statements of work

This guide looks at tail spend statement of work engagements and how businesses can use technology to overcome some common challenges.

The big problem with small statement of work engagements

This guide looks at what the SOW is and how smarter technology can help improve the management of this critical resourcing model.

Enabling professional services procurement to innovate as well as control cost

In today's dynamic business environment, professional services procurement must enable innovation as well as control costs.