It has been said here on CPO Rising and in Ardent’s research that there is an inherent link between contingent workforce management (CWM) and the Future of Work, attributed to the fact that, in this evolving world of work, the convergence of both talent and technology represents an innovative means of optimizing how work is done. However, in order for this link between CWM and the Future of Work to actively contribute to the ultimate goal of work optimization, today’s contingent workforce programs must master many of its traditional innerworkings.
In addition to the overarching pressure to become truly agile and thrive in a more globalized and competitive marketplace, there is one major operational piece of CWM has not been standardized, much less, optimized: services procurement and SOW management.
A new Ardent Partners research report, sponsored by Workforce Logiq, finds that SOW-based labor and services procurement represents the biggest opportunity for the modern CWM program when compared with traditional staffing (i.e., staffing suppliers) and self-sourced talent (e.g., freelancers and independent contractors). For even small- and mid-sized businesses, this opportunity can equate to millions of dollars of savings.
The new report, available here, finds that the majority of organizations do not have the necessary oversight to ensure cost control and compliance on what is considered the largest part of their contingent labor spend; in fact, Ardent’s research has discovered that 55%-to-65% of the average company’s total external workforce spend is part of the SOW/services category.
For many years, SOW and services procurement has been the “next frontier” for contingent workforce leaders. Yet, even as newer and innovative shifts in the talent acquisition industry transformed how businesses manage other parts of their workforce, SOW and services management has significantly lagged behind. Even today, there are multiple, significant opportunities for organizations that dedicate the time, resources, and technology to transform this strategic piece of the modern non-employee workforce program.
The new research report also discusses:
- Why SOW management and services procurement remains an incredible area of focus for any business that prioritizes work optimization.
- The role of Managed Service Providers (MSP) in enhancing the average company’s overall reach, control, and impact of SOW and services.
- The procurement-led approaches that have proven to drive cost, compliance, and visibility benefits.
- How Vendor Management System (VMS) technology is actively assisting businesses in transforming how SOW/services is managed, and;
- Why extending spend management efforts into services tail spend is a beneficial strategy for any contingent workforce program.
Ardent’s recent research has shown that nearly 45% of businesses believe centrally-managing SOW/services under their CWM program is “too much work” for their current teams; furthermore, 93% of companies cite strong internal stakeholder resistance as a major barrier to tackling this area of CWM. As the new research study discusses, there are many major benefits to expanding CWM programs to include SOW and services, especially in the face of the evolving world of work.
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