Project Management Guide
What Is Statement of Work (Sow) in Project Management?
As a project manager, you may feel that documents and paperwork are taking up too much of your time.
Creating them, getting approvals, and then revising them can take days. Meanwhile, you could be impatient to get the project started.
A Statement of Work (or SoW) is one such document that is important at the start of a project. Here, the more time and thought that is given to it, the smoother the actual work on the project will be.
The time spent on creating an effective Statement of Work, then, is never wasted.
To help you understand the role of this document and how to prepare one, we’ve outlined the important aspects below.
- What is a Statement of Work?
- What goes into a Statement of Work?
- Why is a Statement of Work important?
- How to write a Statement of Work
- Some examples
Let’s get it off the ground with a simple definition.
What Is a Statement of Work?
A Statement of Work can be looked at as the cornerstone of your project. It contains all the tasks, activities, and deadlines involved.
As such, it’s a detailed overview of what you’re setting out to accomplish. It captures the project scope: everything that needs to be done to bring the project to a successful conclusion.
More specifically, A Guide to the Project Management Body of Knowledge defines a Statement of Work as “a narrative description of products or services to be supplied under the contract.”
The contractual element is important. It means that the Statement of Work is a charter that’s agreed upon between client and contractor. It defines what has been decided by both parties relating to the specific tasks at hand.
A Statement of Work aligns expectations and provides a strong framework for work to proceed. It sets out the work, the methods to be employed, and the criteria for measurement.
What Should a Statement of Work Contain?
Now let’s get into the nitty-gritty of what goes into an effective Statement of Work.
Every Statement of Work will differ according to the details of the specific project, but in general, it should contain the following:
- Scope: A breakdown of the work involved and the methods and processes to be used in completing it.
- Schedule and Duration: This refers to the start and finish dates of the project, as well as the important milestones to gauge progress.
- Deliverables and Standards: Here, there should be details of what exactly is to be delivered, as well as particulars of testing, research, and any industry or client standards that the project has to meet.
- Other Acceptance Criteria: Other quality standards and conditions, such as the number of tests needed.
- Location: This can be important when it comes to global contracts. Basically, it outlines the geographies where the work will be done. If there is more than one location, it specifies what will be executed where.
- Special Requirements: This could be related to the specific nature of the project. For example, any specialized software or hardware, or trained personnel.
Why Is a Statement of Work Important?
As you can tell, a Statement of Work isn’t just another document that comes in the way of getting work started. Instead, it is an important method to gain clarity on what exactly the client is expecting, as well as a simplification of complex elements.
It is also an effective instrument of communication. All stakeholders have access to it and can be clear about what the project manager is setting out to do.
This can facilitate discussion, highlight aspects that need to be emphasized, and align expectations.
When work begins, the Statement of Work can be a touchstone to check whether it is progressing properly, in ways that have already been agreed upon.
In this way, it can also save time as well as minimize risks of the project expanding into unnecessary directions.
Studies show that almost 50 percent of projects experience scope creep, and only 57 percent finish within budget, while only 51 percent are finished on-schedule. A good Statement of Work can be your safeguard against such cases.
How to Write a Statement of Work
In general, a Statement of Work should be both specific and simple. It should be specific to the nature of the project, and it should be simple in that it outlines the main processes without going into unnecessary detail.
Learning to balance the two is largely a matter of skill and experience. To make it easier for you, we’ve laid down the main points that you should keep in mind.
- Start with a definition, and the parties involved. Here, include details such as the broad nature of the project, and who is doing the work for whom.
- Then, spell out the purpose. Now, move on to the purpose of the project. What is the task that the project is setting out to achieve?
- Move to the requirements. To complete the above, what resources and requirements are to be used?
- Define the scope. This is an important step and it clearly lays down the amount and nature of work to be done and what is outside the scope of the project.
- Assign deadlines. Include the overall time estimated for the project, as well as the time for important tasks that are connected.
- Allocate resources. Mention the way in which resources are going to be used.
- Create a schedule. Outline the dates when the work will begin, when it will end, what the milestones are, and when they will be reached.
- Payment estimations. You also need to touch upon when payments are to be made: whether it is all at one time, or in installments after the successful completion of project milestones.
- Finally, share and revise. Once you have a draft of the above ready, you should circulate the same among key decision-makers, get their inputs, and then revise the Statement of Work, if necessary.
Some Examples of Statements of Work
Because the nature of projects can be so varied, the nature of Statements of Work is varied, too. However, here are two brief illustrations.
If there is a digital project to improve a customer feedback mechanism, the Statement of Work can have two sections. The first, to outline the broad purpose of the project, and the second to go into further detail about the processes.
The date and scope can be mentioned, as well as the specific objective of increasing customer satisfaction and reducing feedback response times.
The specific software and processes can be outlined, the location where the work will be carried out, as well as the platform deliverables.
Tests can also be specified: will they be in real-time or in a sandbox environment? Finally, acceptance criteria and payment schedules can be mentioned.
Take another example: if there is a project for a water treatment plant, it can start with the current environment. Where is the location and how is the water being treated?
Then comes the project scope: what is the nature of the project, what reservoir will the water be drawn from, what treatment facilities will have to be constructed and what pipelines will have to be laid down?
Special equipment, production facilities, and testing methods should also be included, as well as the common aspects of deadlines and payment schedules.
All of the above should have convinced you of the importance of a Statement of Work. Take as much time as you need to create one. Then, go ahead with confidence towards actual project execution.