For more than a decade, the management of spend has been high on the agenda for both managed service providers and organisations. Yet, despite its prominence, too many programmes fail to gain meaningful traction, and in many cases, it becomes little more than an administrative bolt-on to existing processes rather than a value-generating function.
At the heart of the issue is a fundamental lack of clarity about what SoW services entail. The term itself is a misnomer - are we talking about services procurement, consultancy delivery, or simply capturing the ‘grey area’ between skilled day-rate contractors and independent consultants operating under a professional services framework?
Without a standardised definition, approaches vary widely, and many enterprises include SoW in managed service programme tenders with little more than an aspiration that the solution will be “developed post-award.” This lack of consensus and strategic planning continues to limit progress.
Challenges, questions and the lack of a unified approach
Several key challenges persist, preventing organisations from fully optimising their SoW programmes. First, who truly owns SoW within an enterprise?
Procurement teams, contingent workforce programme managers, and managed service providers all have a vested interest, but alignment between these stakeholders is often missing. Is SoW management about capturing tail-end spend of independent consultants, or does it extend to the broader professional services category?
Some organisations view SoW as a way to reduce misclassification risk and ensure compliance with regulations like IR35, while others see it primarily as a visibility and cost-control exercise for procurement and finance functions. Others view it as a tool to measure service provider performance and maximise value from consultancy engagements. While all these things can be true, and no organisation will have the same challenges or strategic objectives, all too often a statement of work is added to a managed service programme remit without having fully scoped out what it is that the organisation is seeking to achieve or having gained any consensus from stakeholders.
This may well be because most businesses are essentially at the start this journey. Organisations know there are several problems to be ‘fixed’ but aren’t yet in full agreement on what these are, the size, or scale, of these problems, and just as importantly, what an effective solution looks like.
A further consideration is that a SoW will often be at the discretion of the line management stakeholder, emboldened by the promise of the compliance a master service agreement (MSA) provides. This can be a highly-personal procurement – as people are being selected to work as part of your team for a set period, therefore not dissimilar to the relationship between hiring manager and solutions provider that preceded the wide adoption of managed service programmes. Gaining control over this spend, not just having a contractual MSA, is key to a high-performing SoW programme, whatever the objective.
The role of the managed service provider in SoW programmes is also unclear in many cases. Are clients expecting them to take full control of SoW supply chains, or do they simply want additional procurement expertise and compliance support? Should managed service providers directly deliver statement of work services, or should they act solely as facilitators of external consultancy procurement? Who owns the contractual relationship with service providers, and how do clients ensure that SoW spend is captured effectively upfront? These questions highlight the ongoing struggle to define and execute an effective statement of work strategy for many.
Adding to the complexity is the challenge of technology and workflow integration. While vendor management systems have largely streamlined contingent workforce management, SoW procurement remains difficult to standardise. Why does technology that works efficiently for contractors often struggle to provide the same level of visibility and control for SoW? And how can organisations align professional services categories with HR when trying to manage SoW under a single managed service programme? These technical and operational barriers make it difficult for organisations to implement a scalable and efficient solution.
The path forward: moving beyond the ‘bolt-on’ approach
The industry needs to move beyond treating SoW as an afterthought or an administrative add-on to contingent workforce programmes.
For organisations to truly benefit, there must be a shift in mindset - it should be seen as a strategic procurement function, not just an exercise in compliance or cost-cutting. This requires clear ownership within organisations, better alignment between procurement and HR, and technology solutions that are fit for purpose.
Managed service providers, in turn, must evolve beyond passive administrators of SoW transactions. They need to bring expertise in consultancy management, supplier selection, performance measurement, and contract governance. Without this shift, SoW programmes will continue to struggle to gain traction, and the industry will remain stuck in a cycle of limited impact and missed opportunities.
The key to unlocking real SoW value lies in experience, expertise, and flexibility. Organisations that take a more strategic and structured approach, recognise the nuances of services procurement and move beyond traditional contingent workforce models, will be the ones to gain the most from their programmes.
The elephant in the room isn’t going anywhere, but with the right approach, it can finally be addressed.
Delivering tangible SoW value
Through our dedicated consulting experts in the UK, Europe and internationally, we offer a different approach that goes beyond simply administering SoW spend.
Reed Talent Solutions offers a unique perspective, backed by real-world experience. Having delivered contingent workforce solutions for over 25 years.
Our in-house ecosystem of international multilingual workforce experts, and our fully-owned international service centres deliver integrated solutions locally, leveraging the depth and breadth of our consulting expertise with a proven track record in consultancy management, change management, services procurement, project delivery, PMO, and contract risk management.
Crucially, we recognise that a one-size-fits-all approach does not work for SoW. Our solution provides structured governance while allowing your organisation to retain trusted supplier relationships where necessary. By balancing control with flexibility, we help you gain visibility over your spend and ensure service providers are held accountable for delivering measurable value.
Through our specialist change consultancy, we deliver IT and healthcare consultancy including advisory services, strategic support, implementation, and delivery. Find out more on our dedicated webpage.
