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Statement of work - dealing with uncertainties vs absolutes

Statement of work is not new so why in the current market does it sometimes feel like it is?

Episode highlights


Service Procurement's role as a critical friend
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Defining outcome-based work models
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Win-win for procurement and suppliers
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IR35's role as a catalyst for change
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Approaching outcome-based projects holistically
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Posted by: ZivioReading time: 82 minutes

With Sue Waller, Partnership Director for outcome-based services at Page Outsourcing

00:00:00 - Outcome-based solutions as an added-value MSP service
00:11:00 - Services as a 'critical friend'
00:15:15 - Defining outcomes as an absolute
00:26:20 - The uncertainties in the market around statement of work
00:39:05 - A global perspective on varying levels of understanding of SOW
00:46:20 - The spotlight on the value of outcome-based projects
00:53:00 - Approaching outcome-based projects holistically
01:01:40 - Predictions for the next 12 months

Transcript

Jonny Dunning:        0:00     I’m very pleased to welcome Sue Waller from PageGroup to the podcast today, many thanks for joining me. Sue how are you?

Sue Waller:          0:07       I’m good. Thank you. Thank you for having me. Real, nice to be talking to you today.

Jonny Dunning:   0:12       Excellent stuff. Looking forward to it. So we’re gonna be focusing on statement work. And there’s obviously lots of topics we can cover around that. And specifically, we want to focus on looking at the kind of the uncertainties and also the absolutes and the kind of tradeoff between the two. Before we get things started, your official title is Partnership Director for Outcome Based Services at Page Outsourcing. And can you just tell us a little bit more about what that actually involves? Obviously, outcome based services is a fairly broad range. It’s quite a rich set of scenarios. But if you can just give us a bit more background on that, that’d be fantastic.

Sue Waller:          0:50       Yeah, sure. So, PageGroup, for the last 45 years has been focused [unclear 0:57], for probably about 40 of those on recruitment. And then there was a lot of conversations that we’ve been having with our clients, that tend to be additional services that would be largely outside of that space. And typically, that’s where I was brought on board a couple of years ago to come and support them, to look, how can we offer more value to our clients, who allows them have a bit more flexibility when they’re looking within their supply chain of the items that we can offer. So anything outcome based, which could take months of work and but there’s other areas that we’re doing terms of ad hoc projects based on analytic, services, and that will range within that, that field. I know, they were focusing on [unclear 1:49] work.

Jonny Dunning:   1:51       And so in terms of your remit within that, if you look back across your career, what are the sort of paths that have converged to lead you to this point?

Sue Waller:          2:04       I think in terms of conversion paths, so I started my sales career in [unclear 2:10]. And with [unclear 2:12], though, really that kind of, [unclear 2:15], let’s understand, what is the strategy going to look like? How are we going to go to market? How are we going to side what we’re selling? And what value can we add to our client? So it’s always really key for a lot of sales people to believe in what they tell, because I think it’s really disingenuous. And you can tell people that are just trying to hit numbers. So the real value element behind the services that we offer, and when we go in, deliver those projects, with a number of items that we’ve delivered in either HR, ideal finance, in the last couple of years, it really has been added value we want to bring to our clients. So also offering something a little bit different from what is available within the market base, carry on value, key, a conscious team built around DNI. So, in terms of making sure we build an inclusive team to bring that diversity of thought for an organization, I think is really... Along with trying to approach projects with a slightly different idea. And one is textbook, it was certainly not a copy and paste consulting the outfit, or spinning out trying some good would be some leaf, that piece of legislation.

Jonny Dunning:   3:44       Yeah, so one of the things you mentioned there was around diversity and inclusion. And I think when you put that in the frame of outcome based services, it’s quite an interesting opportunity and an interesting conversation, possibly something we can come on to in a bit more detail later. But I think a lot more organizations now are waking up to the fact that obviously, they need to consider diversity and inclusion within their organization, but actually more and more starting to look at it within their supply chain now and kind of expand that remit out. And even just the idea of engaging with a more diverse set of suppliers, if something that comes up a lot at the moment around supply chain resilience, innovation, but it’s also that diversity of supply chain, diversity within suppliers and diversity of supplier types, which naturally leads to more diversity. And then the inclusion side of it of getting smaller suppliers involved in bids and in conversations and opportunities. I think that’s really starting to come to the fore. And is that something you’ve noticed come up at all with customers? 

Sue Waller:          4:47       Yeah, definitely. I mean, I think actually, in some ways, the public sector given the remit, a good few years ago, that sort of anti [unclear 4:57] taking you back a little bit, in terms they set up an SME panel. And actually I was one of the members that sat on the SME panel, look at how we could really make some more practices within the UK public sector a lot fairer. And not just, it’s large business, as well as small businesses, they were trying to move away from this or than them case, and that panel of volunteers, it’s still continuing to this day, it obviously, a different minister, because I joined a larger organization. And now step away from that. But I think it really is important that you start to look at the supply chain that you’ve got within the organization, where are you pulling resources in from and where are your suppliers pulling resources in? Because it really important, there was a team that we put together. And it’s actually within the public sector, there was a team that we put together to support an organization. And we actually know that there is a lack of diversity within that organization, it’s very stereotypical white, middle class that’s at the top. And whilst initially, I would say there’s no think, fundamentally wrong with that leadership, it’s really about bringing alternative view, it doesn’t really take people along the group think, “We’re going to continue to do what we’ve always done with work, and the path that we have,” but having where we work quite often with our clients is a critical friend. And we’re brought in support projects or program pride to get them up in a project management, program management, really support some of the governance and advocate for the systems that they need to get set up and get some of those foundations in place. But we’re also trying to support building the capability and capacity within an embedding that within our programs of work, because what I don’t want to be seen as an organization that comes in what, no disrespect, they feel, they can come in a piece of work and then leave again. And then it was like, “Okay, you kind of know what you’re gonna get on the thing with that organization or another organization,” really coming in and supporting that organization. So it’s in a better way and a better shape. And there’s been some active learning as we’ve developed the project or program, but we’ve been involved in, to come back to your point, diversity is really, really key. And it’s not rocket exercise, Page have actually been winning awards in the various like, 12 years. So it’s not something we’re trying to advocate on one hand, and then score really behind the team is something different, that is something that is, is part of our DNA, and part of our values around changing people’s lives. And the number of different initiatives that we’ve got, we could probably have a whole new question on talk about, rather than here, in this particular piece on statement work. But it’s increasingly important. And increasingly, we’ve seen a marked difference on the recruitment side, when people want to positively advocate for having that diversity mix come into their organization. But I would say in kind of, a word of caution, it’s not about that, get them through the door, it’s actually once they land in an organization, how are you going to support them? Because if you’re attracting different groups of people into an organization, that kind of like one piece of the puzzle, but it’s certainly not the end goal, it’s a bit like learning drive [unclear 8:53]. But that doesn’t mean to say that you’re going to be the best driver in the world, it’s kind of a first step. And then you will mostly go and learn once you kind of in the car by yourself. And it’s trying to pick up too many bad habits. And I think it’s really important that once somebody lands in an organization, it’s always that person, supported within the organization. And we’re all, I think every person that’s an employee really wants to be the best person that they can be within an organization and supporting people of different cultures, different backgrounds, different capabilities, I think, it’s almost like coming back to the procurement point, it will level the playing field for everybody, because everybody will get that additional support. At the end of the day, we’re all individuals.

Jonny Dunning:   9:42       Yeah, and I think it does directly apply to the supply chain, in the sense that, some organizations will already be saying, “Well, we want to have a diverse supply chain,” but what are they doing to encourage that? What are they doing to actually have visibility of that? And probably most importantly, what are they doing to take advantage of that? Because of the benefits of that diversity of thought, the diversity of background, people coming at problems from different angles, like you say, otherwise, you can just end up in a groupthink scenario. And if you’ve got visibility and a practice of engaging with your suppliers with the same mindset, then I think the same benefits can apply. And creating that level playing field of fairness allows for that kind of proliferation of ideas and innovation and agility that most companies are looking for. 

Sue Waller:          10:32     Also there’s been so many reports around, typically they [unclear 10:35], because that’s a bit more measurable. But, where you’ve got diversity at the senior level as well, in terms of on the board. It’s hits bottom line. But it’s not just a case of, “Oh, it’s a great idea. And Let’s all jump on the bandwagon.” It’s more about actually, if you look at the bottom line, to also impact businesses and impact profit.

Jonny Dunning:   10:57     Yeah, absolutely. And I like the phrase you used, critical friend, I think most of my friends are fairly critical. Maybe that’s just me. But yeah, I like that. Because I think particularly if you look at it from a consulting angle, I always think that procurement have got this amazing view of the business, where they just have this external view. And so they can see what suppliers are doing? They can see, what’s happening internally. And they can see what the suppliers think of what’s happening internally, if they’re involved in QBR, and stuff like that, and they can see what the internal teams think of the suppliers, because, I’ve been involved in consulting type activities, where, actually, for the consulting firm, what’s happening within the business is really holding back what the consulting firm are trying to do. And it could be vice versa. But I think procurement of this amazing kind of viewpoint. So that idea of being able to be a kind of unbiased observer. I think that’s really interesting. And there’s a lot of value to that.

Sue Waller:          12:01     And I think you’ve also got to recognize, as consultant we go in, and we put the organization, try and drive their agenda, drive that operating model, things that operate the model and something new, because they’re doing a change and transformation program of work or their specific departments that they really need to ensure the productivity changes, when there’s a new system that needs to be embedded within the organization, because it’s really impacting and hindering people’s day-to-day activities, because the system isn’t been configured properly, or it’s need some work or it needs an upgrade. And I think it’s really important to be able to have that independent perspective, but also understand where is the maturity level? So quite often we build [unclear 12:53] assessment for our clients to show where they are? Not necessarily, kind of within the department, where they are in the marketplace, where they are from a cultural perspective? Because it’s all very well having the ideas to come in and say, “Okay, we’ve seen this type of issue before. We can help you.” And we used to put particular model when we go into our clients that look a bit more holistically, what we’re trying to do? So it might be a transformation and analogy piece, they want to do, but actually, unless you look at the processes, unless you look at the people that are doing that piece of work, unless you look at the information flows in the workflows, you’re actually, yes you can change the system, but then [unclear 13:44] might not happen and quite often, we would see that, investment has been given for a piece of technology. But it’s almost forgotten that processes need to be mapped to information flows and workflows and processes, will need change as a result of this. So actually, there’s some organizations, it would pick all the boxes, and they put in a piece of technology. But actually nobody spent the time planet properly to understand what each department need, in order to get the information out of that system to make sure that productivity is improved, rather than just a legacy piece of technology. And we’re going to change that. Because it’s ultimately work and we’ve got something shiny and brand new over here. It’s actually what are the steps and what the planning that is so important to do? And then it’s a case of how do we embed that technology and make for that or the investment that we’ve had in it, how do we make for it and things fundamentally works once we’ve put in that new piece of technology?

Jonny Dunning:   14:48     Yeah, 100% agreement. We see that all the time. And typically the organizations that are willing to do the upfront work, get the user groups together and get the various stakeholders involved and plan it out properly are the ones that get the most success from using software, certainly in our experience, and if we just go back to outcomes, so I think outcomes, it’s more on the kind of, there’s obviously some uncertainties about it can represent a whole range of different things, an outcome could be anything, but it’s still an outcome. So for me, that feels like an absolute in the sense that, “I’m a company, I’m paying a supplier to deliver X,” a thing, something, a piece of work. And it has lots of kind of applications in the sense that it could be somebody going onto Upwork, and engaging a freelancer to design a logo for them for 100 pounds, for example. What would your definition be of that kind of outcome based model, if you could kind of encapsulate that?

Sue Waller:          15:52     Yeah, I think a really good question. In terms of you’ve done a really good thing, explain it really with the logo, it’s basically your organization understand what they’re paying for? So the value is derived from the outcome that they want, you can understand what the cost of that was to achieve it? Quite often, statement of work is a prime example of that, because it’s driven on as the key [unclear 16:26] at the end of the peak of work that somebody wants to achieve, and then that we break that down into the milestones, an introduce step, to achieve that goal, and that gives an organization, an opportunity to understand, first of all, what’s involved in reaching that goal? Sometimes people don’t know. And also, it gives them a more realistic stance of, just not what has to happen, but all also the practice that might take into account, what are the department and what are the systems and what other processes need to be in an order that can happen? Quite often very easy that we see in larger organization, and smaller, but there’s very siloed approaches. For example, I go back to the IT usage, could it’s quite a nice example. Finance one put in a new finance system, but they forget to involve technology. And they forget to involve legal and they forget to involve all the other partners that might put that finance system from a different viewpoint and a different perspective. And having an organization that could come in and bring some of that internal understanding together in a central kind of way, your remit can be really helpful for an organization and an auto, most people don’t like to talk about, but there’s often internal politics that make bigger organization as well, mid sizes, as well, they’re not immune to it. But it’s really about how we support what the overall objective and the business drivers of the organization, but how do we get everybody else on board to understand the roadmap of where this department wants to go? Even though, it’s not their departments, but they have an influence, or an impact on the delivery of that program.

Jonny Dunning:   18:31     Yeah, definitely. I mean, I think the nice thing about outcomes, and as you say, typically in a statement of work type example, and there’s a fundamental structure to it, “We’ve agreed that you are going to do X, and we’re going to pay you y. So when you’ve done it, we’ll agree that you’ve done it, and then we’ll pay you.” But I think so it’s fundamentally structured. But it’s also able to operate in a fluid manner when it’s done properly. In the sense, you can have an iterative process where you might have changes along the way, IT projects a great example where you might have, sprints for example. But every step of the way, if the information is captured correctly, and the process is followed correctly, then everyone knows where they are, even if things are moving? And there’s this kind of collaborative, iterative process that supports it. And so I think, as you say, does allow organizations to understand what they’re paying for and what they’re getting? But it also allows them to be adaptable to the fact that you might not 100% be able to define at the beginning, what ends up being the outcome at the end?

Sue Waller:          19:37     Absolutely. And, I think it’s important that you also make them kind of like the change control process and IT systems are a classic example, other projects, work with HR projects, and they’re the same. You might be wasting on a piece of information from a third party supplier or from another internal team, and there might be a delay in that which means that actually play something... Playing change that, it’s really important to have a really good and strong change control process. Also that you can audit as well so you can understand when senior lead, connects just four weeks or connects six weeks, why was this delay? If you’ve got a full audit processing, you can go back through, and you’ve documented and a lot of the work that we do is documenting the signatures that have been made, and the options that were put forward to the organization of which they then chose which option to go forward. And IT can be a classic example where with discovery work, we’ve gathered the requirements from the organization and the users to understand what they ultimately want to get out of the new system, we would then present some of the options for the organization because whilst we’re critical friend, [unclear 20:57], what they do, we provide the platform in which they’ve got the opportunity that understand what the pros and cons are of the different options, and then they can then move forward. And it might be that we can do initial pieces of rework. And then that’s okay, they want to go off in, not themselves internally, because they’ve gathered enough knowledge, they’ve got the foundations, and they’ve actually got the people that have come up with a project that can now then go and deliver that project. And that’s absolutely fine, fundamental piece around outcome based is that we are providing value at the points the organization needs it and bringing the skills and expertise, and then they can pick and choose where they want to utilize that resource from ourselves?

Jonny Dunning:   21:45     Yeah, absolutely. And I think what you’re talking about with regards to auditing the whole process, it’s good for buyers, but it’s also good for suppliers. Because, it’s going to highlight good work as well as not so good work. But it’s also going to highlight where on the surface, it might look like the supplier hasn’t done a great job. But actually, if you’re tracking a process properly, it might be because there are internal problems that have delayed it, maybe it cost more, or people haven’t prepared or like you say, one team haven’t considered other stakeholders until further down the line then knocks it back. So I think, there’s a real benefit on both sides around transparency, because ultimately, outcomes, “I’ll pay you X, you do X, I’ll pay you Y,” it’s all about that clarity. And I think the other thing about it is, it also just the very nature of having to consider an outcome or an output at the start means that the person who’s buying that piece of work or that service is having to think about what it is they actually really need to achieve and their own department and how that links to the overall strategy, which is there’s always got to be good.

Sue Waller:          22:49     Yeah, absolutely. And I’m smiling, because quite often, we have clients that come with that, “I’ve got a natural pause,” in the sense that they either know that there’s challenge, they know there’s a problem, but don’t quite know the size and scale of that at the moment, and they need a bit more investigation in terms of that particular area. So it’s definitely, it’s really helped gain clarity from the client and quite often we will go through that recovery phrase, and they will actually then have eyes open to a lot more areas that they’ve not thought about. Or they will have greater clarity at the end of that exactly what they want. And that allows them to reduce the overall cost spent on that time planning and preparing for that.

Jonny Dunning:   23:42     Yeah, I was gonna say one of the things that we see quite often is, and some organizations don’t like doing it. And some organizations do like to take advantage of this, which is actually using your supply chain to help you shape requirements effectively. Particularly, if they’re doing in a competitive process where they can take input from different sources. It can be hugely useful, but again, it’s this whole thing of addressing your supply chain and seeing them as part of your extended capability as an organization. And they are critical partners, the suppliers that are consulting to you or working with you as an organization. And I think they should be treated as such in the sense of really kind of collaborating but I think a lot more organizations are getting on to that.

Sue Waller:          24:21     I know; I did a lot of work. When I mentioned about teaching on the SME panel, I did a lot of work around advocating for organization to come out and not necessarily pre-defining what they want. It was the saying, “I want X DRM, or I want Y ERP system,” [unclear 24:42] those challenges that you’ve got, because that enables the supply chain to give you more holistic understanding of what the [unclear 24:51] possibility is, rather than driving down a predefined, “I need X, Y or Z,” because somebody in performance, somebody in the business, as previously in another organization, we’ve been a bit more open with your supply chain about what are the challenges that you’re facing? What ultimately you need to resolve? And if you’ve got a good fit, also cheer that because then that enables the suppliers to be a bit more open with you, in terms of what the often the possible is on fully understanding all of that.

Jonny Dunning:   25:24     Yeah, I mean, it’s funny as, a lot of companies are cautious about sharing budgets, but even if they’re sharing, like a kind of target expectation, which might not necessarily reveal their actual budget. I think, sometimes companies can be too defensive. Where, again, as I say, it’s about this collaboration, particularly if you’re involving in any kind of competitive process, with your supply chain, or you’ve got a decent kind of scale within your supply chain and decent breadth within that, you can have a more open conversation, and it doesn’t have to be just about beating the suppliers up. It’s about collaborating to solve a problem. I think there’s a lot of value in that. But just coming back to kind of one of the early points that we discussed around kind of uncertainties. So in some ways in the market, people tend to get a bit confused about statement of work and about outcome based services and where they fit and what they are, and where the crossover and where one thing ends and another thing starts? What do you think of the uncertainties? And what do you think are the kind of reasons for why they’re out there?

Sue Waller:          26:37     I think there’s a lot of confusion and uncertainty when a piece of legislation comes or is seem to be on the horizon. And people look for options, as how they can continue to do what they’re already doing. Or maybe look for alternative avenues to continue that current line of operation. And I think it’s really important. A piece of legislation coming on board, really allow organizations to stop and think about where the spotlight has been [unclear 27:11]? Where it’s going to shine on that particular area? And then turn it off, stop and do a bit of stop take in terms of, what is it we are trying to achieve here, rather than try and skirt around a piece of legislation? And we’re certainly not advocated, but how can we look at this as an opportunity. And we address some of the imbalance that mine taken place, because it’s almost like a bit of small kick in terms of Bob trying to feed as an organization, I think a lot of things definitely come from new legislation, or either being super over protective and compliance gets involved. And then everything gets locked down. And there’s an almost like a bull size cap fits all and an organization is trying to control. And I think it’s looking at what are the options and what stability you have as an organization? And how do you educate each of the different people that are involved, bringing in new talents were an organization particularly around statements of work, statement of work is certainly not new? Either in the UK, or globally, looking at examples that we use of IT, it’s been used in the IT industry for a really, really long time. So I think it’s really important that organizations, maybe stop and think about how they’re using talent within the organization and what talent they need? Because actually, looking at a value based project, it might not be a cheaper option when comparing into bringing in somebody in full time, bringing in a project team full time, but there may be many other challenges within an organization, why they can’t support bringing on a team for six months or 12 months? And that usually comes back to clarity and understanding. And to having the support network have a team massively grow, and then [unclear 29:20]. And that’s why they lean on many [unclear 29:24] players to be able to bring in that flexibility.

Jonny Dunning:   29:28     Yeah, or it might just come back down to headcount. There might be a PLC, they’re reporting on headcount, and there’s just there’s no way they can do anything with that. And I think some of these sort of issues ties into why there have been changes in certainly the i35 legislation around stopping malpractice effectively, which the various reasons why that would have been happening. I like the idea of what you’re talking about with regards to a kind of a strategic, taking stock of the situation, because it is that kind of opportunity. I’d love to think that most companies took it as that. But I feel like too many companies, it was [unclear 30:13] panic, just cover the initial risk. And maybe now, people are starting to think a bit more strategically, because it’s all about this workforce mix. I had a really interesting chat with Georgina Jones from the Court recently talking about workforce optimization and looking at capacity and capability across all of the available workforce channels whether it’s engaging a consulting firm under a statement of work, whether its permanent hires, upskilling, contractors, etc. And the company needs to understand what resources it’s got, and how it can utilize them? And so, getting to a point where there’s something as big as the i35 reforms in a UK, which forces companies to stop, take notice and have to do some hard work, I think it’s the perfect opportunity to really look at that and say, “What is it we need to do? What’s our internal capacity? What we want our internal capacity to look like moving forward? We’re going to have all these new areas popping up, do we want that to be our permanent capacity? Or do we want that to be trusted suppliers, contract workforce?” All these things can be considered. But it’s the hard work of taking a step back and strategically assessing it.

Sue Waller:          31:22     Isn’t it? And like you say a lot of it was knee jerk reaction, because it’s something that has to be done very quickly, we saw a number of organizations that advocated a one size fits for all, which was quite on note where they pick a hard line and either say, “We’re not going to use anybody within our team that’s not limited company contractors that are delivering pieces of work,” which is unfortunate. And I don’t believe that that was particularly advocated. from the government or anywhere else to take a particular single stance, but you can understand why organizations who will introduce a blanket over section would choose that option. I think, some organizations, we saw that they take a bit of a stock sack in terms of what they’re doing on or where they want to go? But I think, as you said, it’s actually over the last, I mean, I also [unclear 32:22] legislations been in the public sector for a good number of years. So they’re fairly familiar with the approach of outcome based opportunities, they’re not always with the smaller dependency lesson in local authorities, for example, but certainly across a department across NHF, they’re fairly familiar with that anywhere where there’s big IC transformation, changes that are taking place, any project based work, they tend to be a little bit more familiar with statements of work. In the private sector, again, if you’ve been involved in IT, they tend to be fairly familiar, but I think it open the eyes to a number of organizations that weren’t familiar with it, in terms of how they could utilize skills and expertise that’s required much more favorably, and also, it was good for the government to bring something in like this because it allowed organizations [unclear 33:26], also not to look at kind of what are they doing as an employer, or looking at kind of like the value P, I mean, I think, and this is generalizing, I appreciate this is not all organizations, there’s been generally a lack of investment to training existing staff. And not withstanding that, in terms of the pace of change, so for IT scales with massive forces in the UK, and we’ve also had quite a reliance from Europe, until Brexit occurred. And so I think, the number of different factors, which has impacted the UK from a policy perspective, kind of almost simultaneously or one after another, where it starts to creek a little and we’ll see some of that coming out of post pandemic, and lots of companies during the pandemic initially turned most projects off, and then all of a sudden, that seemed overnight, over the last 12 months or so, all the [unclear 34:33] new project have gone, and then they all wonder why they can’t necessarily get access to talent? I think, working with companies that can apply in statement of work, has got teams that can come in and support the organization’s specific projects. I think that’s better utilization, flexible aspect to utilize resources and outcome based activity compared to that, next, I’ve been trying to find somebody who... I know the core of the business often get asked for magical unicorn, somebody’s got X, Y Z skills, but they also need to be able to do A, B and C. And we’re not quite keen on the market rate. So actually, we need to pay him a little bit less, as well as, like, you’re trying to make too many rolls together to try and get, that magical person, this is actually two separate roles or three separate roles, actually, you do need, it’s working with organization, you need the three people full time, if you let us manage the project, we can bring those people in and utilize those resources much more effectively. But it’s not all about bringing them in for three months, six months, 12 months on a full time basis, like to utilize the fields where we need to at appropriate points within the project, rather than having a huge overhead and cost for these people time that you really don’t need.

Jonny Dunning:   35:58     Yeah, and I guess it puts the onus of responsibility and the opportunity to manage these kind of flexible resourcing models on you guys as a supplier in terms of people do job sharing, people are doing flexible working, that’s happened and much more, some people have decided to a bit more of a work-life balance, COVID just kind of thrown everything up in the air, hasn’t it? So it opens up the door to that flexibility. But sometimes companies aren’t necessarily in the position themselves, because they’ve got so much to do internally, to really be able to manage that additionally, they just need the work done.

Sue Waller:          36:32     Yeah, absolutely. I think coming back to our earlier points on DNI, it also opens up the candidate pool a lot wider, you might get somebody with amazing expertise, as returned from paternity leave or maternity leave, and then they’re not looking to go back full time. Because they’ve got caring with responsibility for younger children, or they want more flexible hours, where they’re quite happy to be paid on the outcome that they’re going to deliver. Or it’s actually it’s up to them, to decide when and how they’re going to work? But they actually want a fair and decent rates of giving that as well. So it’s really about, where we can look at bringing resources in and extending that [unclear 37:16] to bring in additional skills and expertise that ordinarily might have been lost from the employment pool, because 9 to 5 being in an office, even with more hybrid and flexible work, being in office three days a week, it is quite a big commitment for some people, if you’ve got issues with, transportation and travel, and accessing that, it can be quite difficult, it’s quite onerous on top of a normal phase, also, then, have that travel or have that commute, particularly if you are from a vulnerable group, where you want to travel at peak time, or you’ve got issues accessing public transport, or even, getting in and out of buildings, it’s just an extra thing. Whereas their expertise might be coding or fasting and they can do that from home and with the right setup and the right support and the right environment and the right output, they can do that. They’re not confined to this traditional 9 to 5, X number of days in the office. But they’re still delivering out.

Jonny Dunning:   38:31     Yeah, it’s amazing. I have been involved with some kind of gig economy stuff, a few years ago, the pandemic has just speeded all of this up so much. It’s incredible. It’s just absolutely shortcut, the changes that were kind of already happening. And one thing I thought be interesting to touch on was just globally, what does the picture look like? Because, for example, in the US, this demarcation between 1099 and W2 kind of working arrangements or service delivery arrangements means that, in some people’s point of view, they would say that the US is much more ofay with outcome based, statement of work type activities, and obviously, things like i35, the kind of triumvirate of i35, Brexit and COVID, all perfect in the UK at the same time and Europe. And this kind of legislative overflow of the UK doing something about it, which is causing other countries in Europe so well, they’re already looking at it as well, not just the UK, but what’s your opinion from an outcome based kind of statement of work approach? What do you think the global picture looks like? What are the differences?

Sue Waller:          39:52     I think, well, interestingly, back in 2019, the staffing industry analysts that the global Statements of Work economy was worth 500 billion. And that is huge, that’s in dollars, the majority of that is split around the world with US taking around 250 billion of that, then after age 70, that’s about 51 and then 14 billion in the UK. So, I mean, we’re not looking at a small, kind of like 2-million-pound kind of industry that sort of jumps up overnight, this is a huge industry, it split across many, many different areas, in terms of the makeup, so I think it’s understandable that the US kind of got a bit more of a handle on this type of work. I think it’s important that we separate statement of work and gig economy. And for me, I think the gig economy whilst being flexible, and to be associated with low value, low skilled work that requires, [unclear 41:08] and low skilled, but it’s drivers, it’s people that can find a bike and deliver your food, it’s that sort of very short term pieces of, that still paid for the time. And I think that’s important to kind of recognize the things from within the gig economy and kind of outcome based, that still paid on time. Whereas within statements of work, it’s not about the time, but it’s about the added values that you can have within an organization and the outputs that you can deliver. So I think coming back to your point in terms of globally, I think it’s certainly a trend, is definitely been around for a long time, it just maybe not been in everybody’s consciousness as a way that they can work. And some organizations and some people, it’s a way of working, they’re not used to it. They’re a little bit apprehensive, and they won’t understand what value are they going to get out of it? And actually, if you compare a time and material contract to the statement of work contract. Statement of work, typically to be more expensive. And then the reason why it’s more expensive is because you’re passing the risk of delivery, to the organization that you’re asking for that statement of work to be undertaken. If you’re paying somebody is time, you then have to oversee them, but you’re paying for their time, you are paying for them to turn up in the office between 9 and 5 [unclear 42:44] at work, whether it’s [unclear 42:46] but you’re paying for that time that they’re there, not necessarily the help, what they do. There’s a mindset change as well, when they’re looking at comparing the two, you’re not comparing a bunch of apples with a bunch of apples, you’re comparing a bunch of apples with bananas. It’s not the same thing.

Jonny Dunning:   43:09     Yeah, and I think I’d like to come on to that value conversation in a bit more detail. Because I think, firstly, I agree with what you’re saying about kind of separating out statement of work and outcome based work delivery, from the kind of slightly hazy thing that is the gig economy. Because the gig economy, the fundamental difference makers, the gig economy is typically a lot of it is dealing with an individual. And if you’re using a freelancer marketplace, or something like that, and getting someone to make you a logo for 100 quid, whereas the statement of work, the level of contract and level of sophistication, it’s a b2b interaction. And it’s a professional engagement. And it could be a project worth, 1000 pounds, 10,000 pounds, or it could be a project that’s worth millions or 10s of millions of pounds. It’s a much more sophisticated contract and delivery mechanism. But, yeah, I mean, different countries have tried to harness it in different ways. And there’s different understandings in different areas. But I also think that it depends which part of an organization is trying to look, to address this. And so, for example, procurement, or people who are working as a consultancy category manager or professional services category manager, are very much used to this is how they structure all of their contracts, how the suppliers are engaged, whereas on an HR and talent function, it’s not. So again, going back to what I was discussing with Georgina, it’s kind of this bringing together of the capacity across the organization. And that’s caused bringing this kind of meeting of minds between talent functions and procurement to get to more of this kind of more holistic approach. And I think it feels to me that that’s, as you said earlier, statement of work is not new. It’s been around for a long period of time. It’s a contract mechanism. So why does it sometimes feel in the market that it is new? I feel like it’s people addressing it for different things. And its maybe different people addressing it as well. Would you agree with that?

Sue Waller:          45:14     Yeah, I would agree with that, I think, with anything new always brings a bit of confusion, I don’t think that’s always been helped necessarily, by some of the supply chain that have seen it and taking it as an opportunity to do things slightly differently things. I think it’s important to engage with an organization that really understands what statement of work is there to do and it’s really not there as a foot to get around any particular kind of constraint that you’ve got in the organization, it should be used as a flexible as you say, it’s a contracting tool, it should be used as a flexible way of utilizing resources and when you need it, and understanding the value you’re getting out of the piece of work and the skills and the experience that you’ll bring into the organization.

Jonny Dunning:   46:09     Yeah, and just to touch on another point you made about value. And someone’s bringing in a contractor or a team of contractors to work on a TNM basis. You were saying if you’re agreeing a statement of work, and you’re passing on the risk in theoretically, that should be more expensive, but on the surface, I think it often would appear to be more expensive. But I would question whether it ends up being more expensive, all of the time, even though the risk is passed on. Because it all depends how effective that time and materials team, or individual are in actually getting to the end of the task.

Sue Waller:          46:48     You make a really good point, actually. Because this rule, if you compare it against, having people into other materials to do the same project, ultimately it can be team work. Because you will have on the piece of work and the planning piece of work, either as part of the statements of work or as part of [unclear 47:12] you’ve got more clarity over what you want to achieve, and what you do in the process in which we’re going to filter? The methodology that you’re going to use, it’s going to work in your organization. So actually, if you need to compare and there’s other elements as well, that would also mean that it’s cheaper overall, because you’re giving this when it should be delivered by through another organization delivered by that base as well. So ultimately, we will be as paid, we are taking best to deliver that. And if we don’t deliver it, we need to fix it or ensure that it delivered on time, on budget. That’s what we’re ultimately all trying to work towards. So I think it’s an important point that you make that whilst on the surface, it may, if you’re comparing the natural talent pool that you may be utilizing, it may look slightly more expensive. But overall, it should have defined outcome that you’re trying to get to either on time or within the timeframe to haven’t slick because you’ve got that change control process as well within the project to ensure that any changes are calculated understood by the business.

Jonny Dunning:   48:29     Yeah, and this is where it ties into that overall value return on investment type conversation, which we’ve spoken about that before. And I think it’s something that it doesn’t get enough spotlight really, does it? And when you look at how that has to tie into the business’s overall objectives, it’s ultimately the critical factor. But all too often people are looking at rate cards, or surface costs. But even when you’re going through a competitive bidding process, you might have two consultancies, one of which is offering a set, certain rate card, which is cheaper than the other consultancies rate card, but the one with a cheaper rate card might take twice as long and ultimately sit around to understanding what was actually done and what was actually and if they do a good job and what happened along the way? So again, it comes down to tracking milestones, understanding on time on budget, scope changes, and also the qualitative elements of it, whereby, what was communication like? You might be assessing diversity within that supplier, or sustainability or something like that, but the value really adds the meaning to it. And, we can come on to kind of where it fits in a minute, as another error I’d like to look at but that value part of it, unless you measure it, I think a lot of that just gets kind of drifts away and people just tend to look at price.

Sue Waller:          49:56     It does. It’s unfortunate because you look to how procure, you mentioned procurement a little earlier, and you mentioned in terms of procurement will ultimately, as much as they find say, “It’s about value,” value quite difficult to measure, I understand why they take an abstract point around, “Well, this price is cheaper than this price.” But does that mean you’re getting a better deal? From on your point you’ll have, no contractors that have worn pieces of work at corporations or as in the supply chain, of calling with a really low value one a piece of work, and then you speak to the organization afterwards, they say, “Oh, how was that big project?” And they were like, “Oh, it’s a nightmare.” Either they didn’t turn off, or it was really the cold, it ran over a time. Everybody else that maybe bid against that piece of work but, you can’t possibly do it for that price. That’s not realistic and, sometimes quite often pointing to other fires that kind of look at that and go, “Yeah, you don’t mind losing against somebody, that’s probably not a fair price to be able to feel piece of work.” But when somebody’s massively on the court, and then we’ll use change control actually, in a wrong way, maybe drive up the price, or extend the piece of work or bring the contract out, that’s not really a partnership. And it’s not really offering value, since anybody because nobody wins when the contract gets pulled out of the drawer to try to take over the detail, it’s really important that you kind of fuse upon that you’re going to work with, I think the statement of work that got more of that partnership approach, in terms of looking at what is it you’re trying to achieve in the organization? Because there may be other ways that we can achieve it that you’ve not thought about when, typically, we will start our engagements with a piece of chalk for free, whether that’s three weeks, four, week, six weeks, for three months, depending on the height and the scale of the project, it’s really important to understand and not repeat work that’s already been done within the organization. So you’re certainly not going to come in and repeat anything that’s been done, but maybe kind of, what has already been undertaken within the organization, cost a bit of an independent eye over kind of like, “Okay, we understand what you’re trying to achieve, is this the best way and the best roadmaps to be able to get you there, or is there something else that we can look at? You’ll get the same outcome. But actually, you might have to change the way that you work, you might have to change your process, you might have to engage with your supplier slightly differently.” And that can be different in terms of the exceeding pain, because quite often, you can put in a piece of technology, the technology is never the issue. It’s always the people working around the technology in terms of trying to change and adapt the new way of working, which is where some of the challenges will come from. It’s just not calculated on a piece of procurement paper when they received that from the supplier, the internal pain that an organization has to go through is often overlooked. And quite often, back there kind of like an earlier point that was made. That can be where some of the pain points are around information flows, about communication, around ways of working. That’s why we take a bit more of a holistic approach when we’re doing our projects, because it’s really important that the majority within the organization is understood, because if you don’t understand how much for the organization is, you can suggest a lot of changes. But actually they either won’t be embedded or the organization will kind of look at them, they’ll think, “That’s difficult. We’re not going to touch that, that involve thinking way too much too quickly.” So it’s about building realistic roadmaps with clients to understand you might want to achieve the gold standard. But is that where you really need to be as an organization? Yes, it’s a nice operation to have. But let’s look at what you need to at a minimum to improve your organization. And we’ll start to bring you more in line with what is in the marketplace? And it’s important to go at the pace that the organization you talked earlier, Jonny about the kinds of consultants come in, and kind of give some ideas to an organization, but they struggle to implement them both with [unclear 54:31] and in fact, can quite often be a complete mismatch with the timescales that have been given a few [unclear 54:39] for the organization. Some organizations really, especially in the startup world are quite quick. They’re quite dynamic and quite flexible. Lots of organizations are quite risk adverse. Yes, they want to do a massive step change and actually pandemic prove that you can change, you can get hold organizations suddenly working from home within a relatively short amount of time, unless you’re in manufacturing, and you have to physically go through it, to build into produce something. But the majority of options within an organization, you can do that and get those sets up quite quickly at home, I think it’s how you prime sustained some of that momentum that we had point of pandemic, to view as a good area, but then support the organization, and support the individuals within that organization to go on that journey with the department or with the new system or with the organization as whole, to really try and change all line up that meet this new future direction or future transformation that they want to achieve.

Jonny Dunning:   55:41     Yeah, and let’s face it, the speed at which challenges are arriving, and the speed at which challenges impact the market just seems to be getting faster and faster. And it’s partly just like the pace of technology change, and the pace of market change. And then it’s global factors coming into it, companies have just got to be more and more adaptable. And they’ve got to be able to change quicker. The pandemic has proven that, that is possible, when absolutely, you’re up against it, and you have to do it. But companies just aren’t going to be able to compete otherwise, because everything’s changing faster.

Sue Waller:          56:23     Absolutely. And I think coming back to one of the points I made earlier, around training, one of the skills taught is organization haven’t really invested in people as well as could have done and hindsight was a wonderful thing. But areas like digital transformation, new technology, the rate and pace that that is changing, we have new prescriptions, new job families are being created all the time. I mean, you go back, maybe 20 years, nobody knew properly, what a social media manager was? Nobody knew that the marketing expertise needed to look at Power BI and understanding what metrics and what [unclear 57:09] is going to drive the business forward? Now, we start to see a lot more into managers, a lot more data analysts, starting to be required, but to find it, if people go through university and come out with that expertise and skills, is quite a long period of time in relation to when they’re needed in the workforce. And then you have the same or similar types of organizations all competing for the same type of individuals. So how can we look to make sure, particularly with in the UK, that we started to train people with the right skills, and also have this mentality of kind of lifelong learning, how do you continue to learn as an individual? Because I think, learning is a personal responsibility as well as an organizational responsibility, how can we continue to train and access this talent with the mindset so we can be a little bit more agile? And I’ve worked with for the bigger organizations who are looking at where can we get our samples from? On a global perspective, where’s the next talent pools because we’re fishing in the same pool as some of the big Silicon Valley organizations, and we don’t have the ping pong tables, or the tennis courts or the beanbag kind of lifestyle. 

Jonny Dunning:   58:37     Slide going into a ball pit. 

Sue Waller:          58:39     Yeah, we can’t offer that as an organization. That’s not our culture. And it isn’t for everybody, but it’s how you then get the right skill set? And actually, it paid, we’ve started a new initiative around hire, train and deploy, which is how can we take people and bring it back to advantage? How can we look individuals from potentially under representative groups or advantage backgrounds? And how can we ensure that we can actually start to try and train them with the right skills that organizations are looking for today, tomorrow, next week, and make sure that we can then work with our client and make sure they’ve got access to the right talent pools and having a flexible approach whether they take them on as permanent employee, whether they take them as a temporary, or whether they take them through a consultancy engagements into the supply chain, but it’s about having the flexibility to access the right talent at the right point in time.

Jonny Dunning:   59:40     Yeah, and it comes back to outsourcing, it comes back to outcome based in the sense that, especially for very large organizations, it’s always difficult for them to move quickly and do these sorts of things. And like you say, training is particularly kind of like cross skill. Adaptation is something that’s been neglected in a lot of organizations. But that’s where more agile suppliers that’s coming, because they’re doing that. And they’re saying, “Okay, well, you’re not going to hire those people, but we can do the work for you.” We’ve done the effort in training people cross training or upskilling people or rescaling people, and actually, we’ll take the risk. And we’ll deliver that for you. And we’ve got that capability. So I think the whole supply chains kind of working it out. But organizations need to be able to embrace the different ways they can do things, because they can’t necessarily just solve the problem through a permanent hire, they can’t necessarily just solve the problem by throwing contractors at it. And they can’t necessarily always solve the problem by utilizing something like a statement of work. And it kind of brings on to the last key topic I really wanted to discuss with you, which is something that I know you brought up in conversation with me before in the sense of, there’s no such thing as a one size fits all. And you’ve got this, this complex workforce mix, and it’s about the right thing at the right time really, isn’t it?

Sue Waller:          1:00:58  It is absolutely, it’s about hiring, the right talent, the right skills, the right competencies, at the point in time that you need those, live the outcomes that’s going to drive the business forward.

Jonny Dunning:   1:01:16  So one of the things I wanted to ask you just to kind of a little bit of a wrap up here. In terms of the things that over the next, say 12 months, 24 months, whatever time period you choose, what are the things that you’d like to see change in the market?

Sue Waller:          1:01:36  Really good question. I’d like to see, I think, more open conversations around the challenges that people are facing, rather than often, I understand the cautiousness of some people or individuals not wanting to share some information with what is perceived as a salesperson, because it’s almost, they feel like they’re in a quarter room, and they’re going to get told to. And then that’s a really old school way of thinking actually about sales and about working together with another organization. It’s about having a new way of thinking of, if I have a challenge. There’s lots of organizations out there that can support me to deliver on the challenge that I’ve got, how can I engage with the right organization? Have those difficult or open conversations about where my vulnerabilities are, in my departments, in my organization? In terms of what’s your vision? What do you want to achieve? What are the challenges within the organization to be able to achieve those? And working with a partner that can understand what I really advocate is that we are an extension of the organization’s department in a hopefully more reformed way, in terms of bringing some of the governance, [unclear 1:03:06] controls, but not controls in a way, we’re going to see who controls? Controls, in terms of giving them a structure around the way that they can operate so that people understand who is the owner of the system, understand, who owns the process, the process need [unclear 1:03:22], because it’s not working. [unclear 1:03:25] go through, and you can then operate within understanding what are the rules of engagement with this new piece of technology or with an organizational change. We’ve helped number of, [unclear 1:03:41] quite a lot. But we help on organizations as well, where they’re [unclear 1:03:45] they’re either the whole organization into making sure there’s different levels within the organization that are clear, that helping organizations to put in pieces of software that can help direct the career paths within an organization. Retentions also really quite key, whilst the majority of our business is driven by recruitment, we also support people to retain staff, because having a really super volatile market is really not great for anybody. It’s not great for an organization that wants to bring stability, you really need to retain the organizational knowledge within that organization. And we can help organizations to do that. It’s not always about salary and what you pay people? It’s about the wider flexible benefits. But what it comes down to and it’s quite often reported is, people leave a job, they leave their manager, or they leave the organization. They don’t like the culture. There’s lots of things that you can support an organization to help retain the staff that they’ve got and improve the knowledge that they’ve got and make for the career path within the organization’s because everybody wants to, you’ve got contractors that might want to have the flexibility to come around and access different contracts and work with different industries and that’s great, if you’re utilizing statement of work, you can bring in that wider expertise, you do need to have a core stable work within your organization that can support a lot of these projects as well. So we get involved in those aspects as well. 

Jonny Dunning:   1:05:22  It kind of comes back to the workforce mix size side of it, where we, as you said, it’s not a one size fits all. And there’s no magic bullet, that there is always the same answer in every question. It’s just the thing about having access to a range of resources, or resourcing channels or capabilities and capacity, and being able to access all of them effectively. And when it comes to the supply chain, statement of work, services procurement, that does require that, as you said, that partnership approach that collaboration on both sides.

Sue Waller:          1:05:54  It working with an organization that has got the right tools and systems in place as well, if you’re going to look at organizations that are managing those milestones, what visibility do you have of those milestones? How easy is it see that change control process? Do you have visibility of that, at the point that you need to have visibility of it? Or is it all hidden or is all on paper? And I know, most organizations start with a paper based process. But moving to digital channels is obviously a best way to go. Because you can have visibility, and it links into data and EMI, that is really important. It’s really needed within organizations, you want to be able to demonstrate very easily the value that’s been derived for the work that you’ve actually outsourced, you can outsource the project, you need to have confidence that people can deliver, you need to have understanding the right systems and processes in place to be able to deliver those and you want visibility and openness and transparency with that partner, so you can have those conversations, it’s quite a rainy day here at the moment, but it’d be nice to sit in, you’re going out and, “God, it’s beautiful. It’s a wonderful,” projects can be challenging, it can be difficult things, get in the way, everything changes or moves or suddenly new direction that taking place, how do you then change what you’re doing with that? You mentioned tractability, by a lot during this conversation, you got to be able to adapt, whether that’s insight in the project, you’ve got to be able to not respond, but also anticipate as well, and look and be that critical friend today, “We’re going to do that there. But actually, that’s probably not the best, put the finance system, and you probably don’t want to do it a year ends.” It might sound really obvious, but there’s quite a lot of organizations, that would be like, “Nope, it has to be changed at year end.” Okay, now we know all the constraints, what you’re working towards, let’s see how we can look at de-risking a lot of the project to be able to give you the outcome that you want? We need to do all of those enhancement, before that switchover, actually, is a really busy thing, to getting ready for that go live? Can we move some of that into further down the line to just make sure that we manage the risks?

Jonny Dunning:   1:08:22  Yeah, I totally agree. And, also, with what you were saying about kind of the use of technologies, sophistication with their organizations that are actually delivering this work? How is it being measured? Is it visible? Absolutely. I mean, mandraulic is a phrase that we tend to hear quite often, where people are basically talking about manual processes with the old Excel spreadsheet thrown in there. You chuck in like data security, and efficiency and ability to share information and scalability, is just not. But that’s where I think tying into another point that you mentioned, which I think is a great point, is about open conversation. And I think it’s critical. Open conversations are helpful. I made a note to myself, it’s helpful. It helps everybody. And I think that’s something that’s really very much needed in the area of services procurement, where kind of, there isn’t necessarily like a central place to go to get all the answers. But best practice, this is an area that’s growing, outcome based services are growing, the world is moving more towards outcome based procurement of services, often under, majority are under a statement of work. And people need to talk about it. And people need to be honest about the fact that they haven’t solved all the problems because nobody has. And so it’s that open conversation that I think is very useful between clients and suppliers. It’s very useful within the industry. And actually, I think it ties into, from my point of view, this type of conversation and because I think it’s really useful, it’s certainly useful for me, but hopefully for other people as well to hear you talking about the challenges that come up, and how you work around them and what the market is actually doing at the moment, and whether it’s things are doing right or whether it’s things that market isn’t maybe doing as well as it could be, to evolve and move with the times? So I think this type of open conversation is also extremely useful. And yeah, I really appreciate you taking the time to come and have a chat with me. And there’s some great points there. I think possibly lots of other stuff that we could cover at a future date.

Sue Waller:          1:10:21  Yeah, we could probably go on forever. Well, I could go on, Jonny, quite a while, I’m on my soapbox. Yeah. I mean, it’s been absolutely great to chat to you today. And I hope people listening have really taken from some points in terms of, I hope it’s been useful for people to understand and hear about the flexible approach that people can consult, they can maybe think about how they’re utilizing skills, and talent within their own team, their own department and how they can start to look to the future and the plan for utilization of that and what might be pasted a little bit further down the line.

Jonny Dunning:   1:11:01  Absolutely. Well Sue, thank you very much for joining me, really appreciate it. I hope you have a good rest of the day; may the rainbow stop for you. And I look forward to catching up with you again soon.

Sue Waller:          1:11:10  You too. Thanks, Jonny.

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