Managing Statement of Work through Services Procurement Management

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In an interview with David Gay, Global Director of Implementation at TAPFIN, we discussed considerations for managing Statement of Work and Services Procurement Management within, or in addition to, an MSP program.

1. How does Services Procurement Management (SPM) differ from a traditional MSP solution?

David Gay: SPM solutions are designed to drive efficiency for organizations as it relates to very specific tasks within their workforce. More specifically, SPM focuses on additional procurement requirements related to SOW workers and outsourced projects and services beyond the traditional solutions staffing agencies utilize for contingent workers within an MSP program. A full SPM solution is generally leveraged across the entire life cycle of a project focusing on specific nuances such as:

  • Creation of RFPs
  • Posting to suppliers
  • Response analysis
  • Business award
  • SOW creation
  • Payment term definition
  • Tracking milestones and deliverables
  • Invoice and payment processes
  • Supplier performance management

While TAPFIN has been delivering full SPM solutions since 2007, the majority of growth in this space has been in the back-half of the process. Once the business has been awarded, the MSP works with the client to execute an SOW and then manages the treasury management portion of the engagement.

Contingent workforce management, in comparison, is more general and provides support more administratively to facilitate the procurement, onboarding, and offboarding of resources through supply chain and process management. The primary difference between MSP and SPM services are based on the distinction between SOW workers and contingent workers themselves, with SOW workers generally being contracted and paid to deliver on a project or other specific deliverable, while a contingent worker is more often contracted for a specific period of time and paid in relation to that time. The variance between these two engagement and payment models necessitates a different set of processes and policies in order to yield the desired outcomes in a compliant and effective manner.

While both MSP and SPM programs can be run independently of one another, organizations are finding that additional cost efficiencies and performance can be gained from integrating the two programs within their business to provide a more consistent user experience and a higher level of results for internal stakeholders. This integration of MSP and SPM programs is even more critical for a global organization looking to establish or support corporate standards and guidelines through increased visibility and control over their entire non-permanent workforce.

2. When should an employer consider SPM? (e.g., when headcount hits a certain level, or when non-compliance becomes an issue, etc.)

David: This is a question of both volume and complexity. An organization should consider the use of SPM if they traditionally outsource high volumes of work. Their pain points, and the benefit they can gain from implementing SPM, will vary based on how their managers currently use or don’t use vendors to procure SOW workers, and what processes and controls may or may not be in place for payment and management of those resources. Often an organization can measure the savings and process improvements in the contingent workforce management model through an MSP program, and use these measurements to set expectations about how SPM can drive similar results with the oversight of their SOW processes.

More holistically, it’s important to realize there is no magic number when deciding whether or not an SPM program is the right solution for an organization. Rather than trying to quantify the potential value of an SPM solution based on spend or headcount, it is generally more useful to understand the number of projects that are typically engaged annually, as well as the number of transactions involved in an average project. It’s with this understanding that we can project the potential value of improving a client’s SOW-based procurement processes through a managed solution.

3. What are the benefits realized through deployment of SPM?

David: The value proposition is the same as it is for contingent workers – to gain visibility into this area of spend, to put controls in place to better manage the procuring of that spend, and then utilize best practices and technology to optimize the process of managing that spend and drive significant ROI through the ability to “smartly” manage the process. Implementing an SPM program drives improved efficiency, quality, and cost management. Along with that automation is more successful project milestones as well as efficiency in screening, onboarding, managing and offboarding SOW workers.

Establishing control over these components for the workforce management cycle can yield greater cost efficiencies, higher quality candidates, and increased productivity within the business. The value proposition is especially appealing for organizations who have already invested in their MSP solution for contingent workers and are looking to leverage their solution to drive value across other spend categories. Implementing SPM as an expansion of a contingent worker MSP program can be done much more quickly and efficiently than a “from scratch” deployment.

As the Global Director of Implementations at TAPFIN, David manages implementation activities relating to TAPFIN MSP programs. This includes assessing customer goals and objectives, managing deployment deliverables and all deployment phases, training and orienting the Operations Team and all program users, and ensuring a seamless transition from the sales process through operations launch. He previously ran the Solutions Design Group and contributed to the design and continuous improvement of TAPFIN’s solutions offerings and services to meet evolving client needs, with a special emphasis in Services Procurement Management. Areas of special interest include cost savings, risk mitigation, and program management.

Prior to joining TAPFIN, David was responsible for Spherion's Vendor Management Service program, including many large VMS programs.

David has extensive background in software development, software project management, software process improvement, operations management, and vendor management - having worked for industry leaders such as Xerox and Kodak on improving software delivery maturity and service operations capabilities.

David received a Bachelor's degree in Computer Information Systems from Binghamton University and a Master's degree in Software Development and Management from Rochester Institute of Technology.