Getting things done differently with statement of work contracts and engagements shifts a business' mindset about work delivery from filling roles with headcount towards procuring outcomes from suppliers and service providers.
Increasing the focus on outcome-based delivery has obvious benefits for improving productivity in the short-term but there are also benefits in the longer term such as, becoming more resilient to change and improving business agility.
In other words, whereas hiring, onboarding and managing headcount-based teams is perfect when tasks or processes are repeatable and predictable, using an outcome-based statement of work engagement model is better suited for a fast-paced, ever-changing environment with increasing demands on innovation.
At the today's pace of change and innovation, the importance of being able to adapt and flex a business' access to skills and expertise is just as important as being able to maintain the day-to-day.
Huge potential in engaging SMEs
Clear focus on desired outcomes
Using statements of work forces businesses to be very clear on their vision for a successful outcome, along with clear timelines, deliverables and costs. This clarity of vision makes budgeting and resource planning far simpler.
More predictable resourcing costs
The defined nature of the SoW engagement gives clarity on total cost, cost timelines/milestones and removes the associated unpredictability of ongoing time + materials contracts.
Increased short term productivity
In addition to these strategic benefits, SoW engagements provide a very practical short-term productivity solution for resourcing projects whereas businesses may struggle to find the skills and expertise they need through other work delivery channels.
Reducing time to start projects
One of the major delays in large projects where a tendering process is involved, is the administration of tendering process itself. Each stage (RFI, RFP, etc) requires sufficient time for the project/procurement teams to create the requirements and for the shortlisted vendors to respond.
Pre-vetting suppliers for projects of a given type (size, location, type of deliverable), allows this administrative effort to be front-loaded. This means, once vetted, suppliers are primed and ready to start delivering work.
In addition to pre-vetting suppliers, businesses can speed up the process by:
· templating the creation of statements of work
· providing structured templates for supplier responses, including milestones
· using software to automatically match suitable suppliers with requirements
The new trend of large organisations choosing to work with SMEs
The availability, scope and abilities of the SME business community are all factors behind an emerging trend of large organisations choosing to increase the amount of work they do with SMEs as part of their core resourcing strategies.
How to manage smaller suppliers and service providers
Of course, as a business increases the number (or frequency) of statement of work engagements with smaller suppliers and service providers, there is a correlating increase in the need to manage these engagements effectively.
Controlled growth is the only way to realise the benefits of engaging suppliers and service providers and delivering more work through statements of work. Without control, the fast pace and number of moving parts involved would quickly make manual no-tech management methods confusing and chaotic.
As mentioned in our
guide to engaging a large network of suppliers, there is a solution in modern statement of work management software, which allows proven relationship management practices to be applied to developing, growing and strengthening relationships with suppliers, ensuring the business continues to have a supplier network ready to respond to its ever-changing requirements.
Summary
In conclusion, there are significant advantages to delivering work through statements of work, using the flexibility and skills of a network of small suppliers and services providers. However, to realise them, business' have to rely on modern, scalable, statement of work management software.
