SMART TRACK: CHAMELEON FOR SOW MANAGEMENT

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1 SMART TRACK: CHAMELEON FOR SOW MANAGEMENT

2 Continuous innovation, world-class customer support and signature solutions are at the forefront of what sets DCR and Smart Track apart, allowing us to create a technology for you that transcends the Vendor Management System (VMS) marketplace. Nowhere is this more evident than in our unparalleled Statement of Work (SOW) solution. For years, professionals like you have been able to harness the technology and innovative future-forward solutions of Smart Track to conquer spend, master visibility and oversee your entire contingent workforce with ease. You may be among the many companies struggling to understand why you haven t seen the anticipated doubledigit cost savings when using your VMS to manage your SOW projects. After all, that s what you experienced when you first implemented the VMS to manage your agency-supplied contingent workers. The reason is simple it wasn t designed to handle SOW. Smart Track is! Now it s time to leverage the effortless way to manage non-employees through an authentic, complex, chameleon-like SOW project management system that allows you to eliminate scope creep, track non-employees and eradicate double-dipping while simultaneously harnessing the power to provide a deep-dive into analytics as well as react like a chameleon by instantly changing to meet your needs as the project fluctuates and mutates. THE BIG DISCONNECT You hear it every time you turn around: The workforce is evolving. Nearly a third of today s total workforce is considered non-employee. In just a few short years, 45%-50% of the total global workforce will be considered non-traditional. According to Ardent Partners, automation has long been a catalyst for enhanced management of non-traditional workers, but organizations must take advantage of the next-gen level of contemporary solutions if they are to generate long-term success from workforce management programs, particularly because the need for talent with specialize skill sets has grown and companies are evolving to place quality ahead of cost, especially in SOW engagements. Additionally, Staffing Industry Analysts (SIA) estimate the global SOW market at nearly $1.1 trillion which is three times greater than the traditional contingent market and growing. SOW projects are complex, intricate, fluid and often intimidating since they carry with them multiple sub-categories and specific types of services that require subject matter experts who are then tied to business objectives, instead of just providing a service. On top of that, many organizations fear losing control because a Statement of Work project can easily take on a life of its own with the infamous scope creep. And while it s estimated that 92% of organizations perceive the contingent workforce as a key component of their overall business, only 45% of the company s contingent workforce is accounted for in budgeting and planning. That s a big disconnect. To engage these vital workers, companies often participate in project-based work that s billed by deliverables, milestones, schedules or fees such as Statement of Work projects.

3 SOW REQUIRES A UNIQUE SOLUTION While SOW is on the rise, understanding it and properly managing it is tricky. Companies that use SOW arrangements often realize higher returns on their investments, gain access to specialized talent pools and produce better results than those that don t. Yet as SOW projects swell, the disparity grows. Nothing has quite as many opportunities for cost-control, risk-mitigation and project-tracking as SOW; however it seems as if nothing is quite as much of a grey area. Staffing firms are stepping up to the plate to satisfy workers, but organizations often aren t poised to handle tracking and managing the complexity SOW entails, including complete visibility, easy reporting and multi-layered analytics. Overseeing a SOW-based project presents vastly different challenges than controlling a traditional contingent workforce. For example, with SOW projects, communication and negotiation processes can take place at multiple levels of the engagement process. That s why SOW requires its own unique solution. Using a standard VMS just won t do it justice and will only lead to extreme frustration. You can t just take a standard VMS and use it for SOW. It s like cramming a square peg into a round hole. SOW management requires a more fluid and elastic solution; a VMS that can recalibrate quickly, is configured easily to react to changing needs and can accommodate complexities associated with multiple layers projects entail. A RECIPE FOR DISASTER? Integrating SOW non-employees isn t for the unprepared. In fact, if you try to mix SOW non-employees with the rest of your already-blended workforce of employees and contingent workers without plenty of planning and forethought, and with the right tools, you have a recipe for disaster not only functionally, but fiscally. Do you know how much money you spend on outsourced projects? Or how much exceeded the initial budget? Or even how many projects were actually completed?

4 The failure rate of projects not properly managed is downright frightening: Pricewaterhouse Coopers found that only 2.5% of companies successfully complete 100% of their projects. The Harvard Business Review reported that 83% of the more than 1,000 projects examined had a cost overrun of 200% on average and a schedule overrun of almost 70%. They estimated the average cost overrun of all projects to be 27%. Gartner said that the failure rate of projects with budgets over $1 million is 50% higher than the failure rate of projects with budgets below $350,000. The 2015 Pulse Study conducted annually by the Project Management Institute found that organizations continue wasting $109 million for every $1 billion invested in projects and programs. Aberdeen reports that 30% of web development projects fail, and the number rises to 50% when using offshore developers. They delved further into the root causes of the failure rate: 76% of companies experienced higher than expected vendor management effort and costs. 30% reported inadequate governance and conflict resolution protocols. 51% reported dissatisfaction with the performance of the outsourced vendors. While much attention has been given to the challenges faced when outsourcing IT projects, the same issues occur in any outsourced SOWbased project. A FORMULA FOR SUCCESS A solid blueprint, combined with significant planning, is necessary to deal with the complexities associated with managing project resources and spend. Success is dependent on the following: Clear definition of project objectives and scope tied to realistic budgets, schedules and resource plans. Ability to assess, select and establish contractual agreements and Statements of Work with all suppliers. Execution of successful change management and communication programs. Risk management procedures to verify supplier credentials, protect intellectual property, comply with government regulations and adhere to corporate policies. Solid process for managing work activity toward project completion. On-demand access to budgeting, spend and progress data in order to proactively make course corrections.

5 SOW SOLUTION BUILT FOR YOUR NEEDS Every Statement of Work project is unique in its requirements, and most are dynamic and unpredictable, some are also global in nature requiring an even more agile management structure that can continuously anticipate and adjust to not only job specifications but time, language and monetary concerns. That s why we developed the world s best SOW solution that deals with multiple levels of complexity easily. Project complexity is not going away. In fact, at DCR we re seeing an increase in SOW project management as companies outsource more non-core - and even core - activities. The inability to manage project resources and spend can be catastrophic because enormous budgets are at stake. Only Smart Track is designed explicitly for SOW project management to provide the foundation, agility and controls needed by project owners to keep projects on track. The management of a SOW project requires an agile and dynamic approach that can factor in the unpredictable developments and unique challenges, especially when you re in an industry that lives and breathes regulatory and compliance issues. There s no room for error. Here are just a few areas of concern: Co-employment Data privacy Overtime Payroll With Statement of Work projects, you have to manage: Desired outcomes, milestones and performance standards Measurements with technical standards and reporting systems Timelines and performance-linked payment terms for the project, with applicable penalties for any deviations or failure to deliver to expectations Global capabilities including language and currency conversion All compliance-related tasks measured and tied to certain outcomes Any other deliverables deemed necessary for project benchmarks and completion

6 At DCR, we help our clients increase the importance and contribution of their non-traditional workforce by offering exceptional solutions. No one else even comes close to managing your complex SOW in an easy, intuitive interface including: Complete life cycle from - RFQ to SOW to fulfillment. RFQ management form creation to evaluation to blanket contracts. Multiple suppliers working on a single SOW project. Multiple CWs working on multiple SOW projects and charging hours accordingly. Ability to carve out multiple task orders from a single SOW with different payment schedules. Fixed price as well as time-and-material projects, with multiple deliverables and sign-offs. Integration to Project Portfolio Management Tools with seamless synchronization of projects, phases, tasks and spend allocation, actual spend and completion. Universally acceptable job specifications. Universal time, language and monetary systems: Technical standards and reporting systems Management of outcomes, milestones and performance standards Scope of work and smaller sub-projects with specific skill sets Service provider responsibilities tracking and progress against the SOW and deliverables Social structure of suppliers and direct, continuous communication Complete visibility into the interrelationships involving multiple suppliers and the participation of numerous internal groups that each play various roles in each sub-project with simultaneous approval cycles and levels needed for multiple buyers and project owners Numerous financial models applied to each supplier agreement depending on the type of work being done or the exact service being performed within a single project such as manage time-and-materials, fixed price and/or fixed deliverables arrangements where payment is authorized when milestones are met along with payment authorization tied to approval of deliverables or milestone achievements Geographically-distributed project resources involving onshore and offshore suppliers (or both) and tracking different rates, engagement structures and compliance requirements based on where the supplier is working at any given time Tracking non-billable resources not paid through the system Complex financial tracking tied into multiple systems, with all systems integrated, delivering a holistic view and overall control Managing suppliers across multiple projects with each project carrying unique requirements, rates, levels of effort and contractual terms, all of which have to be managed individually while the company also manages the vendor s overall performance across all projects with all items accurately and properly charged to the right project and the right cost codes to avoid supplier double-dipping Your average VMS simply can t compete with all of these variables and complexities.

7 KEEP YOUR SOW PROJECTS ON TRACK Smart Track s SOW solution plans, automates, measures, controls and tracks your projects, ultimately eliminating the administrative effort and complexity of contract lifecycle management. Plan - SOW-based projects can be priced and managed as either a time-and-material model, fixed-price model or a combination. Automate - With our VMS, you can automatically design and issue a Request for Quotation (RFQ), evaluate vendor responses against your criteria, incorporate selected RFQ responses into Statements of Work (SOW) and then issue binding contractual agreements with each selected vendor. Measure - Our Earned Value Management (EVM) reporting provides accurate forecasts of performance problems, enabling early course corrections that avoid scope creep. Control - SOW solutions allow you to define tasks, establish milestones for completing deliverables, incorporate service level agreements (SLAs) and assign key performance indicators (KPIs) for measuring program and vendor success. Track - Monitor the progress of selected suppliers via scorecards and performance reports, enabling the enforcement of contractual terms. SOW PROCESS DIFFERENTIATORS Statement of Work facilitates the communication and tracking of project milestones, including changes in time and materials. Smart Track helps maintain clear and consistent understanding of project deliverables, budgets and timelines. It also supports consolidated invoicing and assists in keeping projects on schedule while eliminating extraneous expenses known as scope creep.

8 Our SOW solution includes: SOW that starts at sourcing with supplier qualification and selection for specific projects based on their strengths. Ability to easily track and report on non-billable services. Resources on multiple projects, with different reporting and varied rates, but a single login. Multi-subproject enforcement of independent budget approvals while allowing total project costs to roll up. Resources on one project with multiple responsibilities, each with different rates. Payments on a different schedule than deliverable with multiple payment line items. Bid awards to multiple suppliers. Multi-level approval processes and ad hoc capability. Consolidated invoicing using integrated solution. Ad hoc reporting that allows for client-customized report creation. For several years, DCR Workforce has been quietly redefining the VMS solution space by applying leading edge technologies (such as machine learning and predictive analytics) and developing next-generation contingent workforce supply chain models (like Smart Track xchange), said Andrew Karpie, Research Director, Services and Labor Procurement at Spend Matters. DCR is certainly one of the top innovators - and may be one of the best kept secrets - in the space today. At DCR, we ve experienced a steady increase in customers engaging in Statement of Work projects, and we only anticipate those numbers to increase. To eliminate your frustrations and to see the power of a true Statement of Work solution in action, sales@dcrworkforce.com today to request a demo of Smart Track. For more information, call DCR-4VMS blog.dcrworkforce.com trendline.dcrworkforce.com 2016 DCR Workforce, Inc. All Rights Reserved. DCR Workforce and Smart Track are Registered Trademarks. CCO