August 21, 2018

Project Statement of Work| Download Statement of Work Sample

What is a Statement of Work?

The project Statement of Work (SOW) is one of the most important documents in a project, especially when vendors are involved in delivery. In fact, one can even say that if the Project Management Plan is the bible of the project for the project team, then the SOW is the bible of the project for suppliers!

statement of work example, Statement of Work template, Statement of Work Sample
Statement of Work Sample

The SOW is a formal document which is issued by the project manager as part of the planning phase of the project and provides the context for engaging with third parties, detailing all the deliverables and activities to be carried out by the supplier, expectations regarding standards, methods and tools to be used, as well as constraints and assumptions regarding the scope of work, and performance targets to be achieved. As importantly, it details the time, resources, man power and price of a given project, serious business!

Due to the comprehensiveness and the high level of detail of this document, the statement of work is usually part of the formal contract between the project organization and the supplier organization and a thorough review by the legal and procurement teams is therefore advisable.

What should it contain?

As a minimum, the SOW should contain enough information to make it meaningful, concise and, most importantly, clear. The following are recommended sections to include:

Background: 
This section sets the scene for the scope of the project by providing the context that explains why the statement of work is needed.

Objectives: 
The objectives of the overall project should be listed here to provide the big picture of the project and where this specific piece of works fits.

Expected Timescale: 
The definition of the intended start and finish dates for the delivery of the scope stated in the document.

Payment Schedule: 
When should payment be released and what triggers it? Is payment going to be linked to the achievement of milestones, based on time and materials or something different? These are just some examples of considerations to include in this section.

Specifications: 
This is the meaty part of the SOW as it is intended to define, with as much clarity and detail as possible, what is in scope to be delivered by the supplier, in the form of requirements. Any standards, constraints, or additional notes that will help the supplier to better understand what is expected should be included here. Likewise, the acceptance criteria for each requirement/deliverable should be clearly identified here.

Location of Work: 
Stating the location of work is an aspect that might sound trivial but should not be neglected. If the supplier is expected to be working on site, additional arrangements might need to be considered (e.g. desks, laptop, licenses, etc.).

Contractor’s Obligations: 
This section describes any contractual obligations as well as expected behaviours of the supplier, from the obligation to comply with organizational standards and procedures to ethical considerations that should inform their actions.

Performance Reporting Requirements:
To ensure proper monitoring and control, the SOW should identify the metrics that are going to be used to measure the performance of the supplier as well as any requirements identifying for that progress to be reported in an appropriate manner back to the project.

Change Requests Procedure: 
Despite the best intentions, changes to the project scope are likely to happen. To ensure that these changes are managed according to what has been defined for the project overall, this information should also be clear to the supplier by including it in the SOW, in this way ensuring a standard approach.

Relevant Documentation: 
Any supporting documentation which might be useful to clarify the scope of the project should be listed in the document, with clear mention of its version and location.

So, do I need one?

Not necessarily. However, if you are engaging a supplier or have a medium-high complex project in hands, then having a project Statement of Work is highly advisable. Some of the benefits of producing a SOW include:

Saves you time: 
Producing a SOW is a time-consuming exercise, let’s be honest; yet, starting with the right foundations and ensuring that you haven’t missed any key requirement will save you time in the long run.

Saves you cost: 
Most of unplanned costs in projects come from scope changes, either controlled or uncontrolled (scope creep). By clearly writing down what the scope should look like, its boundaries, and requirements to be met, the likelihood of scope change requests is reduced, and cost savings can be gained. 

Sets clear expectations: 
Putting the definition of the project scope down on a piece of paper is a great way of setting expectations, not just for the suppliers, but even internally. Have your project board and key stakeholders reviewing the document and use it as an opportunity to reinforce what the project is and is not and what it is set to achieve.

Removes ambiguity: 
It is too easy to get confused about the order of a certain deliverable or understand the point of a certain feature without guidance. Clearly stating all the project scope requirements in a SOW enables a complete view of the objectives of the project and provides an opportunity for questions to be clarified, ambiguity removed.

Assigns accountability: 
By listing the performance criteria and performance targets by which suppliers are going to be measured, as well an any other contractual obligations, accountability is more easily generated, enabling better chances of delivery to those targets.

Saves your reputation: 
In a SOW, compliance to organizational procedures and standards can be mandated, including ethical concerns and, therefore, the company’s reputation is better protected.

At the end of the day, if you can have a document which saves you time, cost and even your reputation, why not doing it?


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