Solid and thorough project planning is essential for avoiding disputes and wasting time and effort. A statement of work does just that by outlining the work to be done for the project and the timeline for the work to be completed. A statement of work, or SOW, lays out the expectations and requirements of the project, including deliverables, timelines, terms and conditions, as well as the pricing.
The name of an SOW may vary by industry. It is sometimes called a scope statement, terms of reference or a project scope statement. However, regardless of name, the agreement is vital to proper planning and the success of a project.
A solid SOW should always be completed before a project begins to avoid disagreement or complication. It can be used by businesses (both internally and when working with third parties), as well as any other organization or individual that wants to officially outline the expectations of a project as well as a timeline for these activities.
What It Includes
The essential goal of the statement of work is to establish responsibilities for everyone involved and the key activities that need to be done to reach the set goals. A solid SOW will include these things:
- The key deliverables for the project and when these results are expected.
- Timelines for when the vendor will do the work for the client, when certain tasks are expected to be completed and when performance reviews will occur throughout the project.
- A thorough outline of the activities and tasks that need to be completed to reach the expected output and details on whom will perform these tasks.
- A description of the requirements of the project from all parties involved. This includes listing all the resources needed and the providers of these resources, such as facilities, equipment and other materials.
- A comprehensive pricing schedule, including who will pay for what and when they will pay. Determine what the expected costs are, such as the cost of materials and who will cover those costs. If unexpected costs arise, you should outline how those will be handled and by whom. Also, outline any potential penalty fees (for example, if a project is completed late).
- The regulatory terms and conditions of the project.
- An outline of the administration and management process and when the responsible parties will meet throughout the project. Specify any requirements for regular reporting, meetings or check-ins.
- A complete definition of what indicates success and failure in terms of the project. This means determining what criteria are required for an acceptable completion of the project and its tasks, as well as how this success will be measured. Goals must be specific and quantifiable.
How to Write It
When writing your SOW for your upcoming project, it is important to keep other factors in mind as well. Once the details of the project are broken down and outlined, be sure to keep up the momentum by being thorough and clear. Keep these other guidelines and tips in mind as you are writing and planning with your team:
- Become familiar with what a statement of work is and what you should include (see the list above). If you are missing an element common to statements of work, consider addressing and including it before proceeding with the project.
- Use language that everyone involved can understand to avoid problems and misunderstandings. Be sure not to use industry-specific jargon without providing definitions; remember that vendors and clients may not be familiar with these terms, and that could cause your agreement to be unclear and hard to understand.
- Be specific and straightforward. Vague goals will often result in inadequate outcomes. Make sure you use very clear language and quantifiable goals. For example, don’t state that the completed project “must be finished to satisfaction,” as different people may be satisfied with different results. State exactly what the qualities of the completed project should be, when it should be completed and what standards you will use to measure the quality of the outcome.
- If you don’t know where to begin, consider using a template to ensure that nothing is left out and that your requirements and activities are thoroughly defined.