Understanding the SOW Opportunity
In today’s increasingly complex IT services market, firms must evolve beyond traditional staffing to stay competitive and meet rising client expectations. One of the most effective ways to do so is by expanding into SOW — statements of work. Rather than just filling seats, SOWs are about solving problems and delivering measurable business outcomes.
As Anna Frazzetto, CEO of AFM Strategic Partners, and At-Large Director of TechServe Board of Directors, noted, “It’s not just about higher margins. What happens with SOWs is that you start becoming a trusted advisor to your client, and therefore they’re going to start coming to you even when they have staffing requirements.”
She emphasized that this shift also helps staffing firms stand out in an increasingly commoditized marketplace. “Clients are looking for more than just bodies. They want partners who can solve problems,” she said. SOWs give you a chance to reposition your firm—from a staffing supplier to a strategic business partner.
Additionally, Frazzetto pointed to the growing divide between procurement and business units. “The business unit wants more of a solution, not just candidates,” she explained. “Meanwhile, procurement wants to make sure that everything falls through the MSP.” Offering outcome-based services is a way to satisfy both sides—delivering results to the business while maintaining commercial discipline.
From Staffing to Solutions: A Gradual Spectrum
Transitioning to an SOW-based model is not an overnight shift. It’s a strategic journey that spans a spectrum—from traditional staffing, to staffing with a bow (a team covered by an SOW), to managed teams, and finally to fully outsourced solutions. Each step upward requires increased technical expertise, project management capability, and risk assumption.
Kip Wright, CEO of Wright Path Advisors, and Vice President/President-Elect of TechServe Board of Directors, explained, “You are often able to get that business at slightly higher margins… but you’ve got to bring a different level of expertise.”
He also emphasized that SOW work carries a different level of responsibility. Fully outsourced solutions require the provider to scope and define deliverables up front and assume all associated risks. “The implications rise in terms of benefit,” Wright said, “but the expectations also rise.”
Risks, Rewards, and Readiness
While the rewards of SOW work include better margins and longer-term client relationships, the risks are real. Clients expect more than candidates—they expect partners who can deliver.
“You need to bring the how, not just the who,” Frazzetto said. “It’s not like you just show up with somebody and magically scope and size an opportunity.”
Mis-scoping a project, both she and Wright warned, can wipe out your margin or worse. That’s why it’s essential to develop strong project scoping capabilities and to ensure technical depth within your team. “Clients expect industry and technical expertise,” Frazzetto added. “If you miss scope, you could be in the red.”
Another challenge? Your sales team may not be equipped to sell SOW services. Selling solutions is less about transactional speed and more about consultative engagement. “This is a different level of sale,” Wright said. “It’s not about coverage and price. It’s about really building the relationship with the client so that they trust you to support their needs.”
How to Get Started the Right Way
For firms eager to explore SOWs, the key is to start small and smart. “Begin with the clients who already know and trust you,” Frazzetto advised. “Land your first referenceable project, then build the muscle to scale.”
Wright added that clarity about where you want to operate on the SOW spectrum is crucial. Are you ready to manage a team? Or deliver turnkey solutions? Your decision will influence what you need to build internally—sales expertise, project managers, technical SMEs, or all of the above.
“You’re likely to find that only 10–20% of your sales force is truly ready for solution selling,” Wright explained. “That means you’ll need to invest in structure, training, or even new roles to support the transition.”
Frazzetto also emphasized the value of internal assessment. “Evaluate your sales team’s capability. Are they curious? Are they asking the right questions? That’s what it takes to sell solutions.”
Ultimately, success in SOW requires careful planning, strategic hiring, and a clear understanding of your organization’s strengths. By beginning with your best relationships and focusing on specific technical areas where you already excel, firms can develop a solid foundation and grow from there.
“It’s a journey. It doesn’t happen overnight,” Frazzetto concluded. “But when done right, it’s absolutely worth it.”
For more details on this topic, TechServe Alliance members can watch the first in a three-part series webinar on SOW here.
Check out our next two webinars on SOW:
Part 3: Launching An SOW Offering: Next Steps – Thursday, July 24th, 2025 at 12:30 PM
