Defining clear deliverables and expectations is key to the success of a project. Organizations often use a Statement of Work (SOW) when working with outside vendors and contractors to outline agreed upon outcomes for a project. SOWs are the documents within a contract that include all the responsibilities and deliverables associated with a specific project.
SOWs are often accompanied by:
- Request for Proposal (RFP): Includes technical requirements, specific functionality, timelines and deadlines. They are usually submitted before an SOW, with the SOW finalized once the project has been awarded.
- Master Service Agreement (MSA): Establishes what terms and conditions will govern all current and future activities and responsibilities.
What are the benefits of an SOW?
By creating an SOW, clients and vendors can stay aligned and ensure that all project expectations are met. The SOW gives a birds-eye view of the project and creates an outline of what needs to be accomplished. It helps avoid uncertainty and establishes structure for your projects.
SOWs typically include:
- Scope of work: what will be done, how it will be done and the volume of work expected
- Definitions: what is and is not acceptable
- Timeline and due dates: when must actions be completed
- Deliverables, processes and invoicing schedules: what is being created and how will it be created
- Price and invoicing schedule: what are the costs, and when will they be reconciled
The scope of the SOW
The SOW scope describes what will be done, how it will be done, and the volume of work expected. While the statement of work and scope of work can be used interchangeably, it’s important to note that the statement of work usually refers to the SOW document. In contrast, the statement of scope sets out the parameters of the project and the documents related to it.
Writing an effective SOW
With SOWs, most issues arise due to ambiguous language or confusing structure. When creating an SOW, establish a straightforward hierarchy of information that includes the scope of the SOW, all the technical tasks and subtasks that will be covered by the SOW, and any documents related to the SOW.
To start writing an SOW, establish your objectives. Focusing on the outcome helps ensure that you include the correct details in the document. Define what constitutes success and failure in terms of the project and use precise language so that all the parties easily understand these benchmarks. Timetables and milestones ensure the project remains on track and help minimize risks and costs associated with missed deadlines, like late fees or legal penalties.
SOWs are simple to define but difficult to execute. Here are ways an SOW can go astray:
- Vagueness: Using broad or generic language muddies the waters and makes it easy to misinterpret scope and expectations.
- Inflexibility: If too many details are included in an SOW, the project becomes too rigid and constrained
- Meticulousness: Details are essential but over-indexing on every single step can lead parties to focus on lower priority actions or responsibilities, rather than the significant work needed to complete the project
- Complexity: Because each SOW is unique and requires research and expertise, avoid delegating it to an inexperienced colleague. Because of the risks involved — both legally and financially — assign a qualified writer who understands the ins-and-outs of the project operations, finances and contractual requirements. An expert can also handle those occasions when an SOW must be crafted quickly due to other business factors, like procurement processes.
That said, there is no one way to write an SOW. While SOW goals are always the same — to cover the parameters of a project — the execution depends on the individual project. Nevertheless, there are essential elements every SOW needs:
- Summary: An overview that defines the project and lays out what will happen and how all expectations and goals will be fulfilled.
- Approval: Defining who will govern the project and provide final approvals.
- Work breakdown structure (WBS): Defining each task and phase and explaining how those tasks will be completed.
- Final Product: Defining the deliverables (what will be produced or promised) along with what is and isn’t needed to complete the project.
- Timelines: Defining the period of performance and establishing the milestones, deadlines and other important dates.
- Cost: Defining both the project’s costs and how those costs will be reconciled and paid.
- Work requirements: Defining any additional needs or requirements, like tools or skills needed to complete the project.
The SOW timeline
When and how do you create and finalize an SOW? Because of the detail that goes into an SOW, don’t start until you finalize plans for the project, but before your bid is accepted. Make SOW creation go smoothly by taking notes from the outset and note details you know must be in the final SOW. Flagged details can include specific costs, tools staffing, complicated procedures that require special attention, and other significant elements.
Keeping the SOW in mind as you prepare for a project makes the drafting process faster and easier. As you plan your SOW, the following timeline can help:
- Identify the flow: Break your project into distinct phases: what needs to happen first, what needs to be accomplished during the project, what’s required at the end to ensure the project is satisfactorily completed.
- Create a strategy: Once you identify each project phase, you’ll be able to fill in details. What are the deliverables? The cost? The milestones? List these details for each phase.
- Define your purpose: Once you have a timeline and a strategy, ensure these actions connect to the project’s ultimate goal. How does each task contribute to the final outcome? How will each action lay the foundation for the activities and processes that will follow? Does each step make sense and have a demonstrable effect on the final outcome?
- Set the rules: Review your processes and strategies to make sure you have all details needed to lay the ground rules. Use them to establish the duties and responsibilities of all the parties involved. Use simple and straightforward language to avoid miscommunication about what is expected.
The impact of an SOW
By creating an SOW, you ensure your projects with contractors and vendors are successful. An SOW sets clear expectations from the start, giving you increased control over the outcome of the project. Following the plan laid out in the SOW will help you track progress and mitigate any issues that may arise. With clearly defined SOWs, your organization will build lasting relationships with contractors and accomplish project goals.
Learn more about how to easily manage all of your SOWs in one place with a digital contracting platform.
Ironclad is the #1 contract lifecycle management platform for innovative companies. L’Oréal, Staples, Mastercard, and other leading innovators use Ironclad to collaborate and negotiate on contracts, accelerate contracting while maintaining compliance, and turn contracts into critical carriers of operational business intelligence. It’s the only platform flexible enough to handle every type of contract workflow, whether a sales agreement, an HR agreement or a complex NDA. The company was named one of the 20 Rising Stars on the Forbes 2019 Cloud 100 list, and is backed by leading investors like Accel, Y Combinator, Sequoia, and BOND. For more information, visit www.ironcladapp.com or follow us on LinkedIn and Twitter.
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