When procuring services, we must first approach this process in the same way as a
project, and, as in any project, defining the scope is the most critical aspect
Any oversights in breadth or level of detail can lead to unpleasant consequences regarding costs, timelines, communication, and risks. In a survey conducted by Level Group with 30 contract managers or heads of service procurement across diverse market sectors, 80% stated that the lack of a clear and well-defined scope is the biggest challenge in Strategic Sourcing projects for service contracting.
Two aspects that the buyer or service procurement project manager must consider regarding scope deficiencies and their potential consequences are:
Incomplete scope
Often, the services or sub-services subject to contracting are not properly identified. To enable accurate scope definition, project leaders must ask themselves whether all components necessary for a complete understanding of the scope's composition are sufficiently described.
Incomplete descriptions subject to multiple interpretations end up hindering accurate budget planning by bidding companies and, consequently, result in significant distortion in the technical and commercial proposals submitted.
Lack of clarity
A major mistake made by buyers or service procurement project managers is assuming that the scope is clear to everyone simply because it is complete. This is a traditional pitfall in competitive bidding projects for service contracting that can be easily proven: simply ask questions to stakeholders with different profiles to check their understanding and interpretation of the provided service information or descriptions.
To mitigate the risk of scope ambiguity, the buyer or procurement project manager can take several actions, such as:
- Develop a template with specific closed-ended questions for each service category, so that,
through these answers, the procurement scope can be conceived; - Never fail to secure formal approval for documents and deliverables.
- Conduct regular reviews alongside the contracting team to ensure stakeholder perceptions do not shift as the project progresses.
- Effectively manage changes so they do not turn a clear scope into something ambiguous and incomplete.
The scope development model varies considerably according to company type, project type, and the buyer or manager's
style and authority. Therefore, determining the best way to develop the scope is not an easy task.
Even so, as a high-performing and assertive practice, we established the gradual development of the scope. This model usually delivers excellent results in scope development for Strategic Sourcing projects.
Below, we highlight four reasons why it is not worth over-detailing the scope right at the beginning of a Strategic Sourcing project for service contracting:
- Requirements will be overinflated
- The scope will not remain complete
- Rework will increase
- Unrealistic expectations will be created
Having outlined the reasons why developing the scope gradually is best suited for Strategic Sourcing projects, it is up to the buyer or procurement project manager to determine the precise level of scope required for contracting. What matters is that the scope for later stages is defined more broadly and at least allows for:
- Properly guide the activities that represent the service to be contracted;
- Estimate the total cost and timeline of the services to be contracted, using preliminarily quoted values or current benchmarks as a reference;
- Identify high-probability or high-impact risks that should be addressed from the beginning of the Strategic Sourcing project.
In reality, there are no fixed rules, but common sense must always prevail. No two service procurement processes are alike, and the project manager, together with their team, must seek the best paths toward contracting success. Learn more!
