A Statement of Work, or SOW, is a well-known document for anyone involved with project management. An SOW is the first step toward collaboration between two companies. It is a legally binding document; as such, it’s imperative to ensure that the statement of work is as detailed and accurate as possible. The slightest mistake or misunderstanding can cause undue risk catastrophic to your company and proposed project.
The Statement of Work is a contract between the client and the vendor. It defines what will be delivered by the vendor, how long it will take, and how much it will cost. In other words, it’s a detailed description of a project’s requirements. It includes specifications and requirements of the final product or service and all other information required by the customer. The Statement of Work describes the roles and responsibilities of all parties to the contract and establishes a commitment on behalf of all parties to the proposed project.
An SOW can be broken down into three distinct categories:
A Statement of Work is a formal document that details the outcome you want your project to achieve. An SOW documents every step along the way, from the scope of work to deliverables, costs, and any other items needed to complete the project.
The Statement of Work is simply a way of communicating expectations from both sides of a project. The SOW details the expectations from a vendor to a client and is the standard against which contractor performance is evaluated.
Because of this, a procurement team must take care to ensure that a Statement of Work conveys the following elements:
A Statement of Work must communicate an organization’s expectations from a prospective service provider. The SOW is a living document that changes as the project progresses.
As previously stated, a Statement of Work is a detailed overview of the project scope. It’s a way to share the project requirements, acceptance criteria, and payment terms with everyone working on the project, whether their roles are collaborative or contracted. This can include stakeholders like vendors and contractors bidding to work on the project.
An SOW helps contractors stay organized and manage projects effectively.
The first step in writing a successful SOW is introducing the project and what it entails. Introduce the project and ensure the client understands that the SOW is a formal agreement. Your client will want to know very detailed information, so give them as much information as possible about what they’ll be receiving throughout this project.
Identify all the stakeholders involved in this project—their roles, interests, and concerns, and how they will be involved (if at all). This will help potential clients decide whether they want to move forward with you as their provider of choice.
To ensure that everyone understands the nature of the deliverables, you should begin your Statement of Work by defining the project objectives. The objective is the ultimate goal of the project. It is a statement that explains what you want to achieve andt often includes a timeframe.
Once you’ve established your project’s objective, you can outline its requirements. These are the specifications that describe how you will achieve your objectives.
After defining your project’s objectives and requirements, include them in clear terms within your Statement of Work so that everyone involved knows exactly what they entail.
When starting a new project, one of the most significant matters to establish is project scope. The scope is a list of everything included in the project (in scope) and everything that isn’t (out of scope).
Expenses that could be considered “out of scope” might include travel expenses and accommodation costs for your team members, legal advice, or other professional services unrelated to your team’s work on a project.
Tasks are activities and milestones to be completed to accomplish the contract objectives. Milestones, deliverables, or processes may structure the tasks.
This section of the statement of work (SOW) should include:
In addition to specifying to be completed, it is also important to specify any dependencies among tasks. For example, if you plan to create a prototype before analyzing requirements, you should outline the dependency between these two tasks.
You should specify how much time each task will require to complete and how much time each task will require overall by combining all tasks into one large project estimate.
You’ll want to ensure that you have an appropriate timeline for completing your project. That means setting a deadline for when you expect it will be completed and determining how much time it will take to complete the work. The length of time will depend on factors like how much work there is left to do and whether any additional resources are needed (i.e., if you need help from someone else).
It would help if you also established what deliverables are expected as part of a project so that everyone involved knows what is in the project’s scope.
In any business relationship, there are always associated costs. You must ensure you’re as straightforward as possible about how much money is being exchanged for what service.
Be sure to include specific obligations and responsibilities in the Statement of Work.
The Statement of Work should include any specific requirements for the project. This includes meetings, calls, conferences, or other “soft” deliverables. If any requirements are not a product of a specific task but are required of the performing party, these must also be described in the administration section of the SOW.
All parties involved should sign the SOW before implementing any changes or modifications to the contract. This will help ensure everyone is on the same page and no one feels like they are being taken advantage of during their work.
When signing off on this document, it’s important to remember that it does not just serve as a legal contract; it also works as a formal document and practical action plan for initiating and implementing your project.
This Statement of Work (SOW) template will help you get started with MS Word automation! When you’re ready, we would love to show you how we can fully automate your SOWs!
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