No matter what industry you’re in, the one constant throughout the life cycle of a project is paperwork. There is always plenty of paperwork to create, have approved, file and finally archive. All of those documents are important, but the Statement of Work (SoW) is easily one of the most important because it’s made at the outset of a project and outlines everything that needs to go into your project.
Using effective project planning tools and a thorough and well-written statement of work will set you up to successfully lead a project over the finish line on schedule and within budget.
What Is a Statement of Work?
The SoW is the document that captures and defines all aspects of your project. You’ll note the activities, deliverables and the timetable for the project. It’s an extremely detailed document as it will lay the groundwork for the project plan.
It’s one of the first documents you’ll create to lay out the entire landscape of the project before you plan and execute. Because of the great amount of detail required, the prospect of writing one can be daunting. Therefore, let’s break it down into more digestible parts.
What Makes Up a Statement of Work?
There are as many parts in a statement of work as there are in a project. If you start by focusing on the parts, you can work yourself up to the whole. For a full understanding of a SoW, first note the major aspects of the project it addresses.
- Intro: Begin with explaining what work is being done. Also, who is involved in the project? State these parties. This will lead to a standing offer, which cements prices for products or services purchased for the project, and a more formal contract that goes into greater detail.
- What Is the Purpose of the Project: Start with the big question: why are you initiating this project? What’s the purpose of doing the project? Create a purpose statement to lead off this section and provide a thorough answer to these questions, such as what are the deliverables, objectives and return on investment.
- Scope of Work: What work needs to be done in the project? Note it here, including what hardware and software will be necessary. What is the process you’ll use to complete the work? This includes outcomes, time involved and even general steps it’ll take to achieve that.
- Where Will the Work Be Done: The team you employ will have to work somewhere. The project might be site specific, at a central facility or some, if not all, the team members could work remotely. Either way, here is where you want to detail that and where the equipment and software used will be located.
- Tasks: Take those general steps outlined in the scope of work and break them down into more detailed tasks. Be specific and don’t leave out any action that is required of the project to produce its deliverables. If you want to, break the tasks down into milestones or phases.
- Milestones: Define the amount of time that is scheduled to complete the project, from the start date to the proposed finish date. Detail the billable hours per week and month, and whatever else relates to the scheduling of the project. Again, specificity counts. For example, if there’s a maximum amount of billable hours for vendors and/or contracts, note it here.
- Deliverables: What are the deliverables of the project? List them and explain what is due and when it is due. Describe them in detail, such as quantity, size, color and whatever might be relevant.
- Schedule: Include a detailed list of when the deliverables need to get done, beginning with which vendor will be selected to achieve this goal, the kickoff, what the period of performance is, the review stage, development, implementation, testing, close of the project, etc.
- Standards and Testing: If there are any industry standards that need to be adhered to, list those here. Also, if there will be testing of the product, list who will be involved in this process, what equipment is needed and other resources.
- Define Success: Note what the sponsor and/or stakeholder expects as a successful project completion.
- Requirements: List any other equipment that is needed to complete the project and if there is a necessary degree or certification required of team members. Also, note if there will be travel or other aspects of the project not already covered.
- Payments: If the budget has been created, then you can list the payments related to the project, and how they will be delivered, up front, over time or after completion. For example, you can pay after the completion of a milestone or on a fixed schedule, whichever is more financially feasible.
- Other: There will be other parts of the project that are not suited to the above categories, and this is the place where you can add them so that everything is covered. For example, are there security issues, restrictions around hardware or software, travel pay, post-project support, etc?
- Closure: This will determine how the deliverables will be accepted, and who will deliver, review and sign off on the deliverables. Also, it deals with the final admin duties, making sure everything is signed and closed and archived.
What Is the Use of a Statement of Work?
As noted, the statement of work is a detailed overview of the project in all its dimensions. It’s also a way to share what the project entails with those who are working on the project, whether they are collaborating or are contracted to work on the project. This includes vendors and contractors who are bidding to work on the project.
It’s also helpful to the project leader, as it provides a structure on which the project plan can be built on. The statement of work will also help to avoid conflicts in the project. With detail and clarity, the SoW helps keep everyone that’s involved in the project on the same page and works to leave confusion to a minimum.
Different Examples of a Statement of Work
A SoW can be broken down into categories. There are three main types, which can be basically defined as follows.
- Design/Detail: When you’re writing this SoW what you’re doing is conveying to the supplier how you want the work done. What are the buyer requirements that will control the supplier’s process? These requirements can run the gamut from quality, to measurement of materials. In this SoW it’s the buyer who is being held responsible for the performance as they are the one who is directing its course.
- Level of Effort/Time and Materials/Unit Rate: This is an almost universal version and it can apply to most projects. What it defines is hourly service as well as those materials required to perform the tasks. It tends to find use in short-term contracts.
- Performance-Based: This is the preferred SoW of project managers as it focuses on the purpose of the project, the resources and the quality level expected of the deliverables. It does not, however, explain how the work is supposed to get done. This allows a great deal of autonomy on how to get to an outcome without requiring a specific process.
How to Write a Statement of Work
When you’re writing a statement of work, it can help to use a template because of all the various aspects of the project that it must capture. Most templates will include things such as a glossary of terms defining what you’re referencing in the SoW. There will be a place for you to write the statement of purpose, as well as administration information.
There’s a lot of information to describe in the SoW. You can create this on your own if you want, but any measure to make sure nothing is left out will prove helpful. You only have one chance to create this document, and you want it done right.
In terms of writing the proposal, you’ll want to be specific. You want to clarify the terms used to make them universally understood. Also, clearly define who is going to do what and by what time those tasks must be completed. Doing this avoids confusion later in the project when you can’t afford any miscommunications or disputes.
Besides writing clearly, you should include visuals in the SoW. This will help focus the lens on the various aspects of the project. Including visuals, be they charts, graphs or other illustrations to help you clarify the project, will make the SoW more digestible. Remember, some people are more literate and others more visual, while most are some combination of the two. You want to speak to all types with this document.
After all the work you’ve done in detailing the specifics of the project, you don’t want to neglect the final, crucial step — getting the work signed off. You can’t proceed if you don’t have the authority to do so. Or, more accurately, you can, but it might cost you the success of the project. Therefore, make sure that those in authority have signed off on the statement of work. That includes the schedule, milestones and deliverables. By having the SoW signed, then you can deliver on it. You have the boundaries in which the work can be done, how it will be done, the duration of that work, etc. If there’s a dispute, you can show the signed document to support your actions.
The statement of work is a foundational document of any project. Once created and approved, you’ll have to create a plan and implement it. That’s where ProjectManager.com comes in. Our cloud-based project management software provides real-time data to help you manage and track your statement of work. Take it for a test spin and see how it can help you with this 30-day free trial.