If managed manually, delivering outcomes via statements of work can add quite a bit to the professional services procurement workload.
But what's really exciting is when the benefits of outcome-based, statement of work delivery can be achieved using automated processes, powered by smart software.
The issues with manually managing statements of work in lean procurement teams
To effectively manage a statement of work engagement, the following are just some of the things to consider (and these assume service providers have already been sourced, onboarded and terms agreed):
Defining the scope of the SoW
Before the project can begin, the statement of work needs creating: what is the desired outcome? What are the outputs/deliverables? Who is responsible? How much? External stakeholder roles? There is a lot to consider and negotiate with the service provider.
Milestones
These are the key,
landmark moments in a statement of work. They are control devices to ensure a statement of work keeps moving in the desired direction. As the statement of work gets underway, the service provider's performance against these milestones is another element that needs management or oversight.
Variation orders
Handling these contractual change requests is another area where procurement may need to be involved to formalise the specification of the additional/different outcomes and associated commercial terms.
Signatures / Approvals
Getting documents signed and approved in theory sounds straightforward, but in practice distributing, following-up and organising the paper chase can be very extremely time-consuming.
Understandably, the management overhead of manually managing a statement of work can result in lean procurement teams focusing on a small subset of the larger SoWs.
Of course, the business still needs things to get done, and the absence of procurement's involvement can lead to business units managing their own professional services spend – with the result being an increased risk of
non-compliant or rogue spend.
Solving the management overhead issue with SoW automation
The solution for lean procurement teams with limited bandwidth to manage an increasing number of statement of work engagements is automation – powered by smart software.
Scope can be created in partnership with the service provider and the business unit
Providing a compliant framework with templates and guidance, within which the service provider and business can co-create the statement of work, can reduce the manual procurement involvement in each time an SoW is scoped or defined.
Milestones and variation orders can be created, approved and tracked automatically
A full audit-trail of milestones and variation orders eliminates a significant amount of paperwork. As does using automated prompts and alerts to manage the performance of delivery against agreed milestones.
Automated document management and eSignatures
Handing the approval process off to automation presents a huge potential time-saver. Procurement teams (and service providers) can save valuable time and effort by getting contracts and other formal documents signed electronically. No more chasing signatures the old-fashioned way!
Summary
Manually managing professional services and consultancy spend through statements of work is not a scalable solution for today's lean procurement teams. For a business to truly realise the benefits of outcome-based work delivery, especially when working with a large network of service providers, it must ensure the day-to-day management of statements of work are automated with smart software.
