What is a Statement of Work or ‘SoW’?
A Statement of Work, or ‘SoW’ is a document containing binding conditions that an organisation agrees on with a service provider, outlining the scope of work that needs to be done. It also includes details like how it should be done, when it should be done and how payment is made. Typically, an organisation would look to implement a SoW service to ensure the smooth running of a key project, holding the provider accountable to the outcomes and meeting significant milestones.
SoW refers to a way that an organisation outsources a task and can also be referred to as services procurement, consulting and outsourcing.
What advantages can my organisation gain from implementing a Statement of Work solution?
Statement of Work solutions and outsourced business services have long been used to deliver expertise rapidly, to typically non-core business operations and projects. Under a Statement of Work, business leaders can acquire services that augment their current expertise, as well as reduce the burden of managing a specific project to completion in as close detail. In many cases, SoW arrangements are leveraged by organisations as part of a robust, agile contingent workforce strategy.
However, the engagement of SoW services has often been controlled at a tactical level, with no standardised process, technology or cost control mechanisms. This has the ability to lead to uncontrolled spending, compliance risks and inefficiencies across the buying process. Working with an experienced service provider to produce a thorough and well written SoW can mitigate these risks and has many organisational benefits. Below are four of the key areas in which a SoW can set your business up for success.
Visibility
Utilising a Statement of Work solution gives your organisation a single source of spend, performance and clear deliverables-related data. It is from this position of strength that organisations can start to build one single view of all of their entire contingent workforce population. From supplier performance metrics and contract management data, to invoicing and payment information, adding SoW to your portfolio or services, or even in addition to your existing MSP is a crucial first step in understanding what needs to be done and how.
Cost
When you consider that SoW spend is typically 65% of all contingent labour spend (which is largely hidden), understanding and controlling it represents an enormous opportunity to cut costs. Uncontrolled and unpredictable spending can only be controlled if you know where it is happening. By leveraging a well-drafted SoW solution you will be able to optimise spend across the entire buying lifecycle. From requisition and SoW automation, through to engaging suppliers, tracking deliverables and invoicing and payment, double digit savings are more than achievable in year one.
Compliance
With legislation like IR35 and GDPR impacting organisations, ensuring your workforce (on and off payroll) is compliant and classified correctly is mandatory not only for legal, but also for commercial reasons.
Delays in onboarding service suppliers due to misclassification for example can lead to both legal problems and commercial disruption. By having a SoW in place, your provider will be responsible for ensuring the correct governance and controls to prevent these things from happening.
Efficiency
We all know how easy it is for Hiring Managers to use the familiar or favourite supplier, who has delivered for them before and is already approved by procurement. But if you don’t have a structured framework against which you assess the effectiveness of suppliers, then how can it be certain that you are acquiring the best possible capabilities, to achieve key project milestones to a high quality on time, at the best price point? Implementing a SoW ensures suppliers are held to account, and encourages a culture of efficiency across not just spend, but all stages of the buying lifecycle. Across sourcing, acquiring and maintaining supplier relationships, adding a SoW makes it easier to identify and improve inefficiencies.
Why work with Randstad on an SoW solution?
Randstad's Statement of Work offering has been designed according to data and insights gathered from hundreds of large-scale clients over many years. Our SoW solution is tailored to the specific needs of your project, based on three guiding principles:
1. Data driven decisions
For accountability, insight and transparency. Be it transaction led invoice analytics, supplier capability modelling or resource demand forecasting, we let the data lead the way. Our goal is to empower you and your organisation to understand and leverage key SoW performance metrics to create an approach and delivery model bespoke to you.
2. Digital delivery mechanism
For speed of delivery, value and ease of access. Using cutting edge mobile and desktop technology solutions, we put the user experience, transparency and accountability of our solution at the heart of our offering. Our partner for talent strategy puts our focus on being a partner for our clients, ensuring they receive the specialised skills and expertise their organisations need.
3. Modular methodology
For agility, a personalised approach and simple implementation. We have designed our SoW solution to fit around the needs of your organisation, not ours. This means you can pick and choose elements of our solution that you need the most to ensure the fastest possible route to a tangible return on investment.
Helping you build a business case for SoW
To help you establish whether a SoW is the best solution to enhance your business goals, we offer a free audit and analysis of all, or part of your organisation's SoW landscape. Our specialist cost modelling team will be able to bring to life the potential savings to be made, whilst our workforce tracking technology will offer you visibility and confidence in where your off payroll labour sits, and how they are classified.