Automating Your Scopes of Work and Service Level Agreements

Scopes of Work and Service Level Agreements have repeatedly proven to be a vital element of high-yield contracts and commercial relationships.  Yet, most respondents to our current surveys and recent interviews admit that they do not pay sufficient attention to these elements.  Why is this?

We are undertaking further research into the question, but some of the initial findings are worth sharing.

Finding 1:  Users find themselves disconnected from the SOW and SLA.

• We have all heard our colleagues exclaim, “once I get this contract signed, I am putting it in a drawer and never looking at it again!” This aspiration has been fulfilled.  Many never look at their contracts, and the related SOW’s and SLA’s again.  This is somewhat of a self-inflicted wound.
• Others contend that they were excluded from the SOW/SLA development, drafting and/or negotiation process – and so they are disconnected from the fulfillment and delivery phase. This logic would not serve as a reason for one to not visit the office (since they were not involved in the office lease) nor log into their computer (since they were not involved in the licensing agreement).  Stakeholders must embrace whatever agreements, especially the related SOW’s and SLA’s, their co-workers and peers have developed.

Finding 2:  Users find the SOW and SLA difficult to understand.

• There tends to be a lot of shuffling through various pages and files to understand the service levels, the related fees, the credits if thresholds are not met and the actual performance provided. On a manual basis, this is time consuming.  Plus, there is often a sense of uncertainty over whether the data and the agreed upon arrangement are aligned.
• Often, the most objective measurements are open to subjective interpretation. An example can be found in “on-time delivery”.  Does the “delivery” occur when the supplier’s truck arrives on the customer’s property, or when the truck is unloaded, or when the paperwork is stamped as “received”?  Unless the language is explicit, there is a significant chance that the parties will interpret the “delivery” with the definition which serves them best.
• With the advent of pc-based “dash boards” and scorecards, tools that make data easy to digest have spoiled many of us. When we are forced to use manual methods to analyze data, the task seems quite difficult.  The automated visual, live-time displays have spoiled many of us.

Finding 3:  Users find the commercial contracting arrangement to be rapidly changing and quickly making the SOW and SLA irrelevant.

• In a recent conversation, a commercial manager voiced the following concern: “I would stick with the plan, if I only knew what today’s version is”. This seems to be more of the norm than an exception with most commercial officers.
• Broader research has repeatedly shown that alignment between enterprise strategies and supporting actions and tactics is essential for successful projects and contracts – yet, that linkage is under continuous strain.
• Yet, in this world of VUCA (volatility, uncertainty, complexity, ambiguity) there is an increased need to be flexible and to hone one’s skills which enable that flexibility.
• One party’s failure to stay abreast of the change will erode the yield rates for all involved parties.

A solution?  One option that seems to be emerging as the leading candidate as a solution is automation.  With the proliferation of ERP systems, Contract Lifecycle Management software, Big Data, Blockchain and Artificial Intelligence, there has never been a more opportune time for commercial officers to improve the value yield from their SOW’s and SLA’s.  Those who have harnessed the automation technology have reported the following benefits:

• Increased connectivity and visibility of details for users with the commercial documents
• Greater understanding of otherwise complex and complicated commercial arrangements
• Improved adaptability and responsiveness to change

As we continue our research, with our latest survey at https://www.surveymonkey.com/r/9JKM2DP, we will share the results.  Please participate in the ten-minute survey in order to receive a copy of the report which will be published on Monday 3 September 2018.

Plus, we will be conducting a webinar on this subject in early October 2018, in which we share for full set of findings and analysis.  For more information on the study and the webinar, please contact us at cco@commercialofficers.com.