The Statement of Work (SoW) provides an additional level of detail that does not include project plans and cost estimates. They are used to accurately describe what is being done in great detail. This is a big, painstaking job that needs to be done to save more time in the future, should any difficulties arise with the client. It will also help keep you on the right track, because you can use it as a guideline all the time throughout the duration of the project.
Having a document with a high level of detail also serves as a strong argument for the client that the work will be completed on time at the proper level. It also saves the parties from unnecessary and superfluous conflicts. Uncertainty and ambiguity create tension, so the statement of work creates a clear understanding of what is expected. But it is very important to make it qualitative, because the slightest mistake can have serious consequences.
The Main Content of the SOW
The statement of work is the project contract. It sets and agrees on future expectations and provides comprehensive information about the high-level project and defines detailed deliverables, standards, criteria and requirements for each phase. The terms of reference contain all the details of the project in one document. If a project plan or timeline and estimate has already been created, the terms of reference is the final chord: it has all the details tied together. It can contain all sorts of details:
- practical results;
- understanding of what you can use and what you cannot;
- billing procedures.
The document should be clear, concise and as compact as possible. At first glance, it may seem that there is nothing complicated about drafting a document. Unfortunately, this is an incorrect opinion. The process is very painstaking and voluminous, which requires maximum attention, knowledge and time.
There is no single, clearly designed and established way to make SOW. Today on the Internet you can find a variety of options for working templates, but, unfortunately, not every one of them may be suitable for you.
It is very important to find a balance between sufficient detail and the development of a scope of work that can be completed quickly. It should be reliable, flexible, without creating something big that will take a lot of time. A great template option can be found in the pandadoc CPQ software package. This SoW template provides an instantly downloadable, fully detailed statement of work that is ready to be filled out and important information entered.
Who Prepares the SoW
In reality, it all depends on the type of project and its complexity. The more complex and larger the project, the more people participate in it. Ideally, there should be five participants:
- Coordinator. His main task is to plan and create a common SoW document template, send copies to the appropriate internal parties for their input and obtain signatures.
- Author. The person who is responsible for writing the SoW. Depending on the complexity of the project, SoW can have more than one author. Different departments (marketing, finance, engineering) may assign their own author.
- Reviewer. Its main purpose is to review the SoW project, leave appropriate comments and make suggestions for the editor. Depending on the complexity of the project there may be several reviewers.
- Editor. Receives feedback from the reviewer, works and makes necessary edits and changes to the document.
- Approver. Executes final approval and signs the SoW.
Writing this document is a team effort, which should bring a positive result in the future, and the availability of the document positions the company as a professional, helping to become a starting point for long-term business relationships.
The Main Types of Statement of Work
You can find three different categories of SOWs, some of which may be more popular than others in different industries. But the basic types remain the same:
- Project/Detailed Statement of Work. It provides information to the vendor, contractor, or supplier exactly how to do the work and what processes to follow. It clearly defines the requirements of the buyer, customer or organization, whether materials, dimensions, quality control requirements. It is often used in government contracts where contractors must follow certain rules, and is the preferred SOW for manufacturing or construction projects. Here, the buyer, client or organization assumes most of the risk because the contractor is required to follow the standards that are set for them.
- Level of effort/time and materials/price per unit, job description. This is a flexible SOW that is often used for hourly service workers. It is based on the labor hours and materials required to perform the service. A SOW describes a service performed over a given period of time in general terms. It is often used for temporary or contract workers or for supply contracts.
- Outcome-based job description. This is the preferred type of SOW for most government agencies and government procurement. It covers the purpose of the project, the resources and equipment to be provided, and the quantifiable deliverables. However, it does not tell the contractor how to do the work and offers maximum flexibility by focusing on the results rather than the processes. Here, the primary responsibility lies with the contractor or supplier.
A clearly formulated statement of work is the first step to creating and implementing a successful project. It eliminates any possibility of misunderstanding or miscommunication. It makes both parties feel at ease.