The SoW (statement of work or scope of work) is one of the best, and worst weapons in a project manager’s arsenal of tools. It’s the best because a statement of work (SoW) is so often the one piece of documentation that saves you from a world of trouble. And a statement of work is the worst, because it’s a lot of work to produce – and even just a tiny mistake, can have massive repercussions.
In this statement of work guide, we’re going to help you create a SoW that will be your best weapon. We’ll provide you with a scope of work template and statement of work example so you’re set with everything you need to create your own statements of work.
Keep reading to understand our scope of work definition, a statement of work definition and the differences between the two. We’ll provide a scope of work sample, that’ll help you define your own statement of work format. This is a complete guide to writing a scope of work that works.
How To Create Statement of Work Overview
- What is a statement of work? A SoW definition
- Do you really need a statement of work?
- What should a statement of work contain?
- Statement of work example
- How detailed should a statement of work be?
- How to create a Statement of Work in 7 steps
- How to use a statement of work
- Scope of work template
- Further reading on creating a statement of work
What Is A Statement Of Work? A SoW Definition
Let’s start with the basics; what is a sow? And why do we keep switching between these different terms – statement of work, scope of work and SoW?
In project management, SoW is an acronym for Statement of Work. Alternatively, SoW (sometimes written SOW or sow) can also be used as an acronym for Scope of Work.
Put simply, a SoW, or statement of work is an agreement between a client and agency that defines what’s included within a project, and what’s not.
The statement of work is the project contract. The statement of work sets and aligns expectations. It can contain all kinds of detail to help with that alignment including detail around deliverables, process, defining what’s acceptable, what’s not, clarifying the price, timeline, invoicing schedule and much more. In fact, you could put all kinds of things into a statement of work if you wanted – it’s just best to keep it as lean as possible.
A Statement Of Work Defines The Work To Be Done
SoW’s provide the extra layer of detail that cost estimates and project plans usually don’t include to describe exactly what’s being done and delivered – and what’s not. The statement of work (SoW) provides high level overarching project information and defines detailed deliverables, standards, criteria and requirements for each phase.
It’s where you put the meat on the bones of the project, and as you do, you get an opportunity to flesh out the details of what you’re going to deliver in your project.
It’s a lot of work, but that’s not necessarily a bad thing as it’ll help refine your approach. In creating a statement of work you’ll probably end up adjusting your estimate and your timeline as you remember things that you should have added but forgot to.
This level of detail provides reassurance to the client as to what will be delivered and ensures that there really is a shared understanding on what the project will deliver and achieve.
This is about as close as you’ll get as a project manager, to being a lawyer! For both the agency and the client the statement of work becomes the bible in determining what’s ‘in scope’ and what’s ‘out of scope’. That matters because ultimately the statement of work serves as the reference point for determining what’s included within the project cost, and what’s not. If you’re able to get your statement of work (SoW) right, it’ll save you a world of pain later in a project
The statement of work contains all the project details wrapped up in one document. If you’ve already created a project plan or timeline and a project estimate, then the statement of work is the icing on the cake, it’s got all the juicy detail, and ties everything together.
What Is Project Scope And Why Does It Matter?
Project scope describes what’s being done, and critically – how much of it. Project scope is the extent, range, breadth, reach, confines, dimension, reach, realm, gamut, spectrum or spread of the work that’s to be done.
To illustrate why it’s important, take the example of a website build. Suppose you agree with a client that you’ll create them a new website for $100k. That’s great but what exactly will the client get for their $100k. Is it just a one-page site, or are there 100 pages? Who’s creating the content for the site? And who’s loading it? Who’s hosting it and who owns the code? The project scope defines all these questions and more so that there’s a shared understanding of a project.
Statement Of Work Or Scope Of Work – What’s The Difference?
Let’s clear this up. What’s the difference between a statement of work and a scope of work – are they the same thing? Pretty much – a statement of work usually refers to the document itself, whereas the scope of work is the extent of work that the document codifies and defines.
So the terms SoW, statement of work, and scope of work can be used interchangeably; they all describe the agreement of work to be done. Hereafter, for simplicity, we’re going to use the term statement of work.
Do You Really Need A Statement Of Work?
Please do. It’ll save you a world of pain later. Ultimately, a statement of work is about managing and documenting expectations. And as with any agreement, it’s always best if those making the agreement, know exactly what they’re agreeing to.
I get it – it’s tempting to not bother with a statement of work; after all, who likes paperwork? Particularly if you subscribe to an agile approach to documentation – as little as possible and only where really necessary – doesn’t that mean that the days of producing a statement of work are over?
Nice try, but no.
As a project manager, it’s in your best interest to have something that enables you to say, ‘But this is what we agreed…’ – when you’re having a debate with a client over about whether your estimate for a banner ad campaign was also going to include a campaign landing page.
The failure to write (or properly write) a statement of work is all too often the reason clients and agencies end up in conflict. When there’s uncertainty or ambiguity it creates tension because it creates the potential for there to be a gap in understanding over what’s been agreed. The idea of a statement of work is not to catch a client out, but to level set on exactly what’s being done, how, when, and how much it’ll cost.
So assuming you need a statement of work, when should you produce it?
Producing a statement of work is a lot of work so you don’t want to create it prematurely when a client is still trying to decide if they want to do a project. But equally, you don’t want to start writing a statement of work (SoW) when the client has approved your estimate – you’ll hold up the project and have forgotten lots of the detail.
In our previous guide on estimating projects we talked about three phases of estimation; ballpark, budget and SoW estimation. It’s a good idea to start making notes for your statement of work in the ballpark estimation phase, then beginning the process of documenting as you’re creating the budget estimate so that by the time you’re creating the final statement of work estimate, you’ve got all the information you need ready to send the statement of work to the client quickly for signoff.
What Should A Statement Of Work Contain?
While creating a statement of work might sound reasonably simple, getting it right is not. If the statement of work is too vague, too broad or too generic, it can leave room for multiple interpretations, which leads to trouble later in a project. And if it’s too detailed, it can artificially constrain the project, so that you end up doing pretend work that’s not really needed, just because you said you would.
So what should a statement of work contain? What are the bits of a statement of work that are important? And what’s really a waste of time and redundant? There’s no one way to produce a statement of work (SoW) – but whether they’re five or fifty pages, they’re doing the same things, setting the parameters of the project so everyone knows the boundaries of the project.
As a minimum, it should clearly detail:
- What the project is, why it’s happening, and what it will achieve (overview)
- Who has approval (governance)
- How the project will be completed (approach + phases + tasks)
- What will be produced (deliverables)
- When it will be delivered (timeline + milestones)
- What it will cost (estimate + payment schedule)
- What is and isn’t included (assumptions)
Should You Use A Master Services Agreement (MSA) Or Statement of Work (SoW)?
Depending on what previous legal contractual agreements you have in place with the client. It’s worth remembering that if this is the first project with a client, it’s likely that there needs to be an accompanying MSA (Master Services Agreement) in place which you’ll need to reference in your statement of work.
The MSA is a contract between an agency and a client in which both parties agree to the terms that govern future transactions or future agreements – like the statement of work. The idea of a MSA is to agree some basic terms so that any future transactions can be agreed more quickly. The MSA provides a strong foundation for future projects, and defines as many generic terms as possible so that they do not need to be repeatedly renegotiated; you only need to negotiate details of the project.
An MSA will typically address high level topics such as:
- General Services— The kind of work you’re going to do for the client (strategy, service design, web design, content strategy, media buying etc.)
- Payment Terms —How you’ll get paid, when you’ll get paid, the rate you’ll be paid at, what expenses are covered and which aren’t
- Audits—How the client can ask you to prove you’re doing your job such as reviewing timesheet reports
- Confidentiality—What you can and can’t say about the work you’re doing, to whom, and the implications if you say something you shouldn’t
- Proprietary Rights—Who owns what when the job’s done (usually the sticking point is who owns the layered design files and code)
- Term and Termination—How long the agreement lasts, who can end the agreement, for what reason, and what the implications or costs are
- Representations – Ensures you can do the work, you’re not in conflict with other agreements
- Warranties—What you’ll fix if whatever you make is broken and your fault
- Indemnification—To guarantee against any loss which another might suffer
- Insurance—The types and amount of insurance coverage you have to carry out the work
- Project Management—What the roles for project managers on both sides will be
- Support/Deployment—What assistance you’ll provide the client with implementation, and what additional support you’ll provide moving forward.
So while a MSA is the governing document for the entire relationship, the SOW usually deals with the specifics of a single project. If you don’t have a Master Service Agreement in place, you’ll want to include the kind of details outlined above in your statement of work. Obviously, if you do have a MSA in place, you can leave these out of the statement of work.
Statement Of Work Example
Scope Of Work Examples
So a statement of work should contain; an overview, governance detail, the approach, phases and tasks, deliverables, timeline and milestones, estimate + payment schedule and assumptions. But if you’re looking for a statement of work example, you’re probably wondering how should you structure all this information so it doesn’t become totally overwhelming?
Sample Statement Of Work Breakdown For A Digital Project
For most projects your statement of work then, should have two distinct parts. The first section outlines the over-arching project information (which you can often borrow from a previous project); the second section defines the detail of each phase of the project.
Here’s a sample statement of work breakdown:
- Project Summary
- Project Process
- Project Milestones
- Overall Project Governance
- Terms and Conditions
- General Assumptions
- Phase [n]: [Phase name]
- Phase description
- Deliverables and Assumptions
- Milestones + schedule
- Budget + payment
- Appendix A: Deliverable Descriptions
How Detailed Should A Statement Of Work Be?
The challenging question for project managers when writing the statement of work is deciding how much detail to include.
If you’re too scant in the details, it leaves a lot open to interpretation so there’s flexibility to manoeuvre and pivot, but also opportunity for a client to try their luck in getting things included within the project scope that weren’t included.
But include too much detail in the statement of work (SOW), you’ll find that you’re stuck with an inflexible process and deliverables that might not be adding to the overall value of the project. We rarely know exactly how a project is going to go at the beginning of a project, so overly-defining it not only takes a long time to write and get approved but you’ll find it makes it difficult to pivot the project when necessary as you’ve defined away any flexibility.
So you need to strike the balance of making sure the statement of work get signed off quickly while still ensuring that you’re raising the questions and covering off potential problem areas.
Of course, there are lots of other things that you could put into a scope of work like – definitions, project team, resource plans, supplier and client responsibilities, acceptance criteria, specific service levels, reports, and that’s just the tip of the iceberg.
So how detailed do you need to go? Well, if you think that there could be any doubt or disagreement about anything in your statement of work, you probably need to clarify if further. When projects go bad, the first place that the client will reference is the statement of work – so if it’s not detailed enough, add in the detail. You don’t want to bring up the statement of work, but when you do, it’s worth having done it properly.
How To Write A Statement Of Work (SoW) In 7 Simple Steps
1. Break it up
Don’t scope what you don’t know. Rather than trying to create a statement of work for an entire project, split the project into phases and develop separate statements of work for each phase as the project progresses.
2. Make a plan
Decide what you’re doing and how. Define the deliverables, and the process required to produce them so you can clearly articulate what’s in and what’s out of project scope.
3. Put it into context
Explain why you’re doing it. Make the purpose of the process clear so even if the specifics of the plan evolve, the statement of work is clear on how you’ll know if the process was a success.
4. Be specific
Set the project’s boundaries. Minimise the risk of misinterpretation from your client by defining the extent of the work to done, and quantifying it wherever possible so they don’t expect more than they’re paying for.
5. Make assumptions
Lay the ground rules. Use project scope statements to explain mutual expectations and what has to hold true to properly execute the project, being clear about what’s included, and what’s not.
6. Make it simple
Be clear and concise. Make it as short as possible, avoid words with multiple interpretations, and ensure it’s easy to understand.
7. Share it
Make sure everyone knows. Keep it close, and know the statement of work yourself – making sure your client and team are clear on what’s in and what’s out by providing helpful reminders throughout the project.
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How To Use A Statement Of Work
So you’ve finally got your statement of work (SoW) signed off – now the real fun of keeping the project on track with the statement of work really begins. If you don’t stick to the statement of work there’s a high possibility you’re going to end up not quite delivering on the project goals or what the client needed as well as late and over budget too. So how do you stick to it and keep your SoW on track?
Whether you wrote the statement of work or you inherited it from one of your colleagues, you need to know it well – if you don’t, how can you be sure your team is doing the right thing? And it’s always embarrassing it the client