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SOW Management and Outsourcing with Spend Analytics

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Seeking to control procurement costs and improve vendor performance, employers often look to statement of work (SOW) labor suppliers to help staff specific projects. SOW is becoming more attractive because it allows companies to accurately forecast costs associated with particular outcomes rather than estimating the time and materials required and factoring in everything that could influence scheduling, productivity, inputs, etc. As a comprehensive, integrated solution for a variety of industries and tasks, SOW demands management expertise that companies often choose to outsource to external workforce providers.

Defining Statement of Work

A statement of work documents a work assignment’s scope, worker expectations, financial arrangements, scheduling, processes, and acceptable outcomes. Though not a contract per se, the SOW ensures the workers, supplier, and the hiring firm understand and agree on what is expected of each party. It helps mitigate risk and make costs and results more predictable. Outsourcing the task to a trusted provider brings the extra benefit of value-added services such as fulfillment, onboarding, and regulatory compliance competence.

Whether you opt to oversee SOW management in-house or delegate it to a trusted vendor, some of the complexities associated with coordinating scopes, contract workers, assignments, and processes can be simplified and visualized through dedicated spend analysis.

The Purpose of SOW Spend Analytics

Spend analytics uses your organization’s self-generated data and third-party data enrichment to make sense of cost centers and total spend on a per-hire, per-task, and per-project basis. Spend analysis informs labor decisions by presenting and reporting results throughout the workforce supply chain. Decision makers receive a true representation of how their workforce strategies contribute to bottom-line performance. They can compare these reports against forecasts, create what-if scenarios, and constantly fine-tune labor procurement procedures. Spend analysis may uncover that hiring a full-time project manager to lead certain types of projects would be more productive than using SOW contractors. On the other hand, it might point to significant cost savings you could accrue by using SOW in departments and on tasks you have always hired freelancers to handle.


If you’re like most companies, your labor-procurement, service fees, onboarding, and compliance processes associated with SOW are mired in inconsistency, obscurity, and waste. Conducting a thorough spend analysis can shed light on the mechanics and help you regain control, making the operation more strategic and less transactional.

Spend analytics points out potential cost savings and productivity improvements that can be realized by optimizing the procurement workflow and enabling data-driven decisions. The weapons spend analytics gives you can be deployed to achieve results in several areas:

  • Centralized control – Collecting and aggregating spend data from throughout the organization facilitates analysis of each step of the external-workforce engagement procedure. You can see how much you’re spending on identifying labor sources, procuring workers, qualifying them, tracking their activities, rating their performance, and rehiring top workers. Centralized spend and performance data and decision-making allows you to mandate consistency in the use of SOW workers and strict adherence to contracts, use of prequalified suppliers, and comprehensive reporting.
  • Resource allocation – When you know exactly where you are spending money, time, and effort, you can accurately calculate return on investment. This empowers your company to confidently allocate greater funding to suppliers, projects, and worker segments that deliver the best results.
  • Process visibility – Visualizing spend by department and task shows where off-contract and other rogue spending on labor is happening. Longitudinal and cross-section analysis of organizational spend will identify trends and allow comparison of vendor fees, company functions and worker deliverables at specific points in time. You can use this information to adjust tactics and establish controls.
  • Supplier leverage – With the visibility spend analytics provides you can compare suppliers and rate their performance against industry benchmarks on such performance metrics as fulfillment, compliance, cost, and risk. You can expand and strengthen relationships with vendors that score well on important KPI, relegate to secondary status with those who don’t, and issue RFQs to replace unresponsive and incompetent ones.
  • Plan for continuous improvement – By comparing past strategies to the results they produced, you can adjust the decision-making process to achieve better performance. A spend analytics program that collects all data from all sources within the organization will create comprehensive views of vendor relationships, contingent worker classes, cost-cutting opportunities, and more.

With spend analysis, you can more readily see, report on, and act on information regarding much more than how much you’re spending on statement of work contractors and other contingent workers. You will also understand who you’re paying, what you’re getting in return, and whether that represents the best allocation of your workforce resources. Properly implemented and synchronized with a managed service provider, spend analytics empowers the procurement office to overcome labor challenges to the point the function becomes strategic, eliminating many of the transaction costs associated with bringing in external workers.

The spend analytic reports Metasys delivers enables our clients to visualize their entire workforce function. They can use this information to cost-effectively uncover opportunities to consolidate suppliers, centralize and consolidate procurement, add value, and mitigate risks. We provide insights into total spend, also giving clients the ability to drill down to the granular level to analyze cost centers, potential risks, and supplier performance.

Metasys offers a full range of out-of-the-box and customized spend analysis solutions to fit any organization and any budget. Contact us to discuss how we can help you get a handle on your spend and add value as you engage statement of work contractors.


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