This post was updated on October 25, 2018 to note the significant development of the scope of work approach for agency fees. In fact beyond differentiating Scope of Work from Schedule of Work here, we have recently differentiated the difference between Scope of Work and Scope of Services here. So while the predominant agency fee model is still resource based, such as retainers and project fees increasingly important for both advertisers and their agencies is a measure of productivity and value. Therefore the ability to measure and manage the agency scope of work has become increasingly important beyond the basics and how to start measuring scope of work shared here. If you would like to read more on Agency Scope of Work you will find it here.
This post is by Darren Woolley, Founder of TrinityP3. With his background as analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.
About 18 months ago I posted “The world’s worst advertising agency scope of work defined by a marketer” where I highlighted the lack of specificity in the scope of work provided. However, recently I was challenged to question my opinion on this approach to providing a scope of work. The procurement person concerned had read the original post from May 2012 and told me I had confused the “Scope of Work” with the “Schedule of Work”.
This is the first time I had heard the phrase “Schedule of Work”. Previously I have only ever used “Scope of Work”. In fact I had previously provided a fairly comprehensive approach to “Defining the scope of advertising agency services to determine agency compensation” here.
So exactly what is the difference between a “Scope of Work” and a “Schedule of Work”?
Well lets look at the definitions from dictionary.com of the two words: scope and schedule.
1. extent or range of view, outlook, application, operation, effectiveness, etc.: an investigation of wide scope.
2. space for movement or activity; opportunity for operation: to give one’s fancy full scope.
3. extent in space; a tract or area.
4. length: a scope of cable.
5. aim or purpose.
1. a plan of procedure, usually written, for a proposed objective, especially with reference to the sequence of and time allotted for each item or operation necessary to its completion: The schedule allows three weeks for this stage.
2. a series of things to be done or of events to occur at or during a particular time or period: He always has a full schedule.
3. a timetable.
4. a written or printed statement of details, often in classified or tabular form, especially one forming an appendix or explanatory addition to another document.
To put this simply, the scope is the WHAT in breadth and depth. The schedule provides additional dimensions including WHEN, WHO and HOW MUCH.
So what are the implications for marketers, procurement and agencies?
Using a Scope Of Work
For marketers a scope of work can literally just be the scope of the tasks and services they require of the agency. The agency is to provide strategic thinking to develop campaign ideas, creative concepts, to follow these through to manage and deliver the required production, etc. It defines the scope of the agencies’ responsibilities.
For procurement this will provide a definition of roles and responsibilities of the supplier, important for the contract, but it lacks specificity to be able to assess either the resources required to deliver the scope of work or the value of the cost against the delivery of outputs.
For the agency, if they have entered into an ‘all you can eat’ retainer (with the associated issues defined here) the scope of work is completely acceptable. After all, they have accepted an arrangement where they will provide all services within the scope for payment of the retainer. Irrespective of the volume and complexity of this work.
Using a Schedule of Work
For marketers a schedule of work means that they not only have to provide a definition of the services to be provided by the agency, but also the quantity (How many and what type of outputs are required, eg. 6 Multichannel campaigns, 24/7 community monitoring etc.) but they must also schedule this across the year providing timing indications, (When will these activities be required. eg. Q1 4 TVCs, Q3. Website e-commerce commences, Social Media Monitoring 9am – 9 pm seven days a week etc.) and provide an indication of the level of complexity of the task (Providing the scope of the individual task eg. Managing a 1.6 million participant community, regional television campaign of six executions across 14 markets etc).
For procurement this provides a more detailed understanding of the actual requirements of the supplier and means they are better able to assess the resource requirements and associated cost. While the schedule of work is likely to change throughout the contract, it also allows procurement to develop processes within the contract for capturing this schedule of work and to adjust supplier compensation where required. The specific schedule of work also makes the management of the supplier relationship more accountable and transparent as there are very specific deliverables.
For the agency the biggest advantage of the schedule of work is the visibility into not only what specific resources are required, but also when they will be required. Agencies have very defined resources and managing the peaks and troughs of the client’s requirements can be costly stretching agency resources or even requiring freelance resources to manage the peaks. The other advantage for the agency is the fee is set against the schedule of work. If the schedule increases or there are particularly high peak periods the agency can manage these with either the marketer or procurement.
Scope of Work (SOW) or Schedule of Work (SOW)?
If you want flexibility and the associated lack of transparency and accountability, then I would recommend sticking with providing a Scope of Work. But if you want to be able to make your agency fees more accountable, manage the agency resources more efficiently and provide a work schedule to co-ordinate all of your agencies, then I would recommend transitioning to a Schedule of Work.
The fact is that we have always recommended that marketers should provide details into their Scope of Work, including timing, volume and complexity. From now on we will be able to distinguish between a Scope of Work (here are the type of things I want my agency to do) compared to a Schedule of Work (here is a specific work plan and schedule for my agency).
Which one would you prefer?
Interested in knowing more about managing agency scope of work? You can download a free TrinityP3 White Paper on the topic here.
Find out more on how TrinityP3 can help you manage your agency scope of work and associated fees here.