Avoiding Digital Demise: Waving goodbye to the dreaded Statement of Woe [Work]

Consumption "as-a-service" for everything Digital, AI, low-code automation, and sophisticated data intelligence are revolutionising market dynamics with increasing numbers of organisations taking full control of their digital destiny. Gartner, 2020 suggested 25% of outsourcing tech-contracts are being terminated before end of term. Deloitte follow suit suggesting 30% of client-organisations have terminated outsourced contractual engagements well before any hope of renewal.

Thus, accelerated by the urgencies to reevaluate digital strategy approaches, and organisational models, due to COVID and Hybrid-working, the pace of client-organisations consolidating and shedding low-value partner choices underpins research indicating 75% of IT professionals believe their projects are doomed from the start, with 80% admitting to spending more time salvaging projects than advancing them.

Accordingly, where the global-revenue from IT-outsourcing continues to grow at a modest level, for those seeking to survive and thrive in the shift towards the eNaaS era, recognising that the dreaded “Statement of Woe [Work]” is more of a client attrition or separation agreement than an engagement to-do-something document, with it’s impact upon client-engagements and the MSP-SR-CIT themselves, is one of the key steps to renewal for a MSP-SR-CIT.

Introduction

AI, low-code automation, and sophisticated data intelligence are revolutionising market dynamics with increasing numbers of organisations taking full control of their digital destiny.

This seismic shift is empowering client-organisations to design and drive their own digital strategies, finally bridging the oft-elusive gap between strategy, outcomes and digital game plan. Driving this, in sidelining reliance on the traditional approaches of contract-pursuant third parties, are the built-up frustrations of receiving human-centred value and outcomes through the near 3-decade winter of capital expenditure, lease and subscription IT stemming from the dot-com and Enterprise systems era. As such, the contemporary managed support era never really resolved this. This, in the warm spring of pure meter-based consumption IT, such break throughs and shifts in market dynamics are a real wake-up call for the contract hungry MSPs CITs.   

MSP-SR-CIT | Managed Service Provider – Solution Reseller – Consulting Tech or IT Firm

In entrenching MSPs CIT’s into break fix IT, high-margin product sells, an SOW or two are often dropped into transition and deliver projects the unsuspecting client. However, SOWs often bamboozle; becoming increasing problematic engagement instruments to wield as the value, outcomes and effectiveness, upon organisational strategy, remain elusive and draw attention to services considered unfathomable cost lines (and shed). The response to this, for MSPs CIT, means moving the engagement conversation upstairs to c-suite to deliver a fresh, real and tangible organisation-enabling proposition that shines of genuine customer-centricity or risk obsolescence. As such, the legacy model time and materials, margin-based product selling, rebates and clipping-tickets, are replaced by as-a-service consumption based margins, derived upon deeper trust-based long term engagements.

Integral to such a shift, as well as sending to the shredder relics of legacy-engagement and ICT practice, RFI's and RFP's, it’s time also to wave goodbye to the outdated and debilitating practice of the 'Statement of Woe' [work] and embrace more dynamic, service-centric instruments befit of the Enablement-as-a-Service (eNaaS) era in order to fundamentally transform and support high value, high outcome client engagement and project experiences.

Seen as a separation agreement, more than a client or project engagement document, SOW's are increasingly seen as:

• A symbol of legacy, transactional and contract-centred approaches

• A fixed document that lacks alignment and ability to align to dynamic organisational strategy

• an instrument that shifts engagements from client-centred to a peculiar service-provider

• unwieldy complexity of SOW’s, such factors not limited to the inherent lacking elasticity to adjust to evolve and fluid client-situations

• Another indecipherable document that is hard to pin any value to generates cost-line perceptions and time-wieldy difficulties; increasing the reasons to shed contracts of the provider

That being, rather than aligning or defining engagements, advice, projects or solutions to benefit a clients organisational strategy, SOW’s have become a weak instrument that attempt to align a containerised view of the project to the sales and business strategy or objectives of the MSP-SR-CIT’s provider – however, in this era becomes a hinderance to either the engagement, sales-engagement, trust, even commitment to proceed at all and most certainly odds of success with whatever is contained in the SOW specification. Following warm early and pre-sales engagements, this shift is often easily evident when a commitment to proceed to an SOW occurs alongside changes in sales tactics, tone, engagement resource availability, engagement-processes, messaging &\or communication style from MSP-SR-CIT’s.

In lacking attention to the value-quotient of the over digital strategy, as the SOW construct plays out, issues often quickly arise as Digital projects, especially those involving technology, often require adaptability and flexibility to accommodate evolving human-geared requirements and emerging technologies. With the complex, and often indecipherable terms and conditions, escalation methods and exception clauses, SOW’s tend to incentivise inefficiencies, scope creep and delivery-performance issues. Exceptions and overruns in a time and materials world are lucrative economic variances that benefit MSP-SR-CIT’s. With these challenges, SOW's lead or contribute to a variety of damaging Effects on Customer Engagement and the MSP-SR-CIT business including:

• Decreased Satisfaction and Loyalty

• Potential Loss of Future Business Opportunities

• Instances of Customer Disappointment Due to SOWs Over Digital Strategies

As the success and trajectory of digital engagements are often susceptible to unforeseen challenges, ranging from changes in market conditions which affect both the client-organisation or MSP-SR-CIT, change management challenges, personnel changes, budgetary shifts, through to technical issues, SOWs, once finalised, more often than not make it exceptionally challenging to incorporate necessary changes (and certainly without efficiency). With messy and time-consuming escalation processes to address such shifts, which often invoke penalties, exclusions or exceptions, this fundamental lack of agility contributes to project delays, increased costs, and frustration among stakeholders. SOW’s, as a result, being invariably short term in focus, stifle the type of client engagement, innovation and hinder the ability to respond to changing circumstances – characteristics of today’s modern world.

In practical terms, recent examples, witnessed by this author, include clients and executive stakeholders responding to a providers SOW (who were warned not to produce an SOW):

“I feel a sense of utter dismay reading these lengthy monologues that simply fail to reflect or meet any of the discussed needs and, in not doing so actually creates for me a massive amount of work in working out what the **** do I do with this now’’?”  

and

“...creates time and agony trying to manage the vendor and project participants with the delays trying to decipher what amounts to meaningless gibberish…creates a new set of problems that no body wants. We didn’t ask for an SOW, we asked for engagement, outcomes and participation as was agreed in the first place.”

Given this, SOW driven situations of this nature are all too common and lead to a mix of reactions built upon a loss of trust and confidence. Integral to this, feelings and frustrations, perceptions of being misunderstood, mistreated, undervalued and even deceived are common symptoms expressed.

The inherent issue is, from an MSP-SR-CIT’s perspective, excessive and persistent reliance on SOWs is counter to business success and market cut through as they generate perceptions that the MSP-SR-CIT operates with a traditional IT or a transactional mindset. With clients-organisations increasingly opting to and able to take charge of their own digital world, as engagements and projects in the digital space become unnecessarily hard won and hard fought, SOWs become a reason for client-organisations to disengage, shine a light on, review and shed high-cost contractual engagements.

Alternative approaches

To pivot towards successful eNaaS engagements, different instruments are required. There is no set document. However, frameworks which include a variety of engagement documents which are created in the process of engaging, collaborating, learning and evolving client-organisation experiences. This symbotic discovery/document creation process helps the MSP-SR-CIT approach, align with or be drawn from client-organisational strategy with improvement efforts or mechanisms that maximise opportunities for value creation and eNaaS programme development.

Created and presented in a variety of digital forms, different views enable viewing of the varying eNaaS perspectives via “one pane of glass” and at varying levels of abstraction. The MSP-SR-CIT doesn’t create a document on their own. Both the client-organisation and MSP-SR-CIT do collaboratively.

Overall, with examples of the collaborative works expressed in the full paper, such approaches encourages a culture of learning and adaptation which underpin the mapping, adoption and investment approach of new technologies to that of the value, outcomes and capability roadmaps. The synchronisation of relationship between these documents shows how technology implementations lead to specific benefits; enabling tracking the deployment and integration of technology solutions.

SUMMARY

Reliance upon traditional and overly rigid SOWs can have destructive effects on client engagements project outcomes, hindering adaptability, collaboration, and creativity. In an era where digital landscapes are constantly evolving, its vital, to avoid demise, for MSP-SR-CIT to embrace a more dynamic and collaborative approach, such as eNaaS, as this proves more beneficial in achieving successful long-game multi-stage, multi-programme or project outcomes.

While Statement of Work document once played a role in providing structure to digital engagements, eNaaS approaches means it is now possible for MSP-SR-CIT to renew by striking a balance between clarity and flexibility. Accordingly, linking contractual conditions to the outcomes of a client journey is a fresh approach that occurs by aligning a portfolio of “as-a-service” offerings, with the objectives and expectations of the client throughout their journey. Digital dashboards enable backed in “as-a-service” offerings that also aligns the MSP-SR-CIT to forecast and evolving market conditions, yet with deep and deepening engagements which contributes to a strengthening the relevance of the MSP-SR-CIT as a credible market player.

Read the full paper here