Statement of Work (SOW)
What an SOW Is
A statement of work, or SOW, is a document that outlines the scope, objectives, and deliverables of a project or contract. It is used to define the expectations and responsibilities of all stakeholders and serves as a guide for completing a successful project. It is important to remember that an SOW should be clear, concise, and easy to understand. By including all the necessary elements, you can ensure that your project is completed on time and within budget. Creating an SOW is an essential step in any project that should be reviewed, documented, and agreed upon in detail by all stakeholders before the project begins. It is the who, what, when, where, and how of every project.
What an SOW Isn’t
While it is important that an SOW is signed and agreed upon, it is different from a service agreement. A service agreement is a contract covering the relationship between an organization and the client’s organization. An SOW is the document that specifically outlines the terms, deliverables, and resources required to complete a specific project.
Why an SOW is Important
The scope of the project is what ultimately drives the execution of the project. Defining the scope is a process where the project’s requirements are more thoroughly understood and documented. A large, mission-critical project will perform this process very thoroughly, while a smaller project, or one that is highly similar to a project that has been performed previously, will be less formal and detailed. Likewise, a project that has extremely high material costs will spend more time and effort on the scope than a project with less risk.
When an SOW Is Made
Throughout the lifecycle of a project, there are a number of processes that are completed. The SOW is done relatively early in a project's lifecycle. An SOW is made after developing the project charter, identifying stakeholders, collecting requirements, and defining the scope but before work on the project begins. The SOW should be updated throughout the project as there are changes.
What an SOW Includes
Introduction – Overview of the project and its purpose including a product description of the scope.
Scope of Work – Outlines the specific tasks and deliverables that are included in the project, as well as any exclusions, limitations, and assumptions. It is important to document what is out of scope with the project.
Objectives and Deliverables – Outlines the specific goals and outcomes of the project and the corresponding deliverables. Deliverables are clear and measurable descriptions of what the product will look and feel like.
Requirements – Outlines any specific requirements or constraints that must be met to complete the project (i.e. technical specifications or compliance requirements).
Schedule – Outlines the timeline and milestones for the project. Includes how often meetings will be held and who is expected to be present.
Resources – Outlines the resources that will be required to complete the project (i.e. personnel, authorization, access to platforms, software, licenses, and other materials). Set expectations on response times. Detail what our support and training responsibilities are versus the client’s, especially regarding third-party platforms.
Budget – Outlines the budget for the project, how your invoices will be paid, when they will be paid, billing contact, and what happens in the event of a dispute or unpaid invoice (i.e. materials, labor, and other expenses).
Risk Management – Outlines any potential risks or issues that may arise during the project and how they will be managed.
Quality Control – Outlines the quality control measures that will be put in place to ensure that the project meets the required standards. Goes through the acceptance criteria procedures and who will approve the deliverables.
Change Requests – Document what the change request process is so that changes and any subsequent fees are disclosed and agreed upon.
Termination – Outlines the circumstances in which the project may be terminated with any consequences or fees.
Appendices – Includes documents that are relevant to the project (i.e. MSA, licenses, contracts).
Signatures – The name, signature, and date of the parties that are authorized to enter the contract from your company and your client’s company.
Closing Thoughts
An SOW can be used for any project in any industry. The information included can vary depending on the project details and industry standards, but will always include these fundamental principles. Download our free SOW template and get a head start on your proposal process. Contact us for information on how we can help you streamline your business.
