How To Write a Solid Statement of Work

A well-written Statement of Work (SOW) protects all parties in a relationship in which one or more parties are rendering services. It should set clear expectations as to deliverables and timelines, outline roles and responsibilities, and establish terms for pricing and payment. An effective SOW provides a roadmap for a project management team, helping to avoid misunderstandings as an initiative unfolds.

A solid SOW can smooth the way for a successful project. To write an effective one, it’s important to understand its various components, what should be included, and what is better expressed in other documents. In this article, we’ll cover all the fundamentals that define a good SOW, helping you lay a foundation for successful project engagements.

What is a statement of work (SOW)?

A Statement of Work (SOW) is a detailed, formal document between a service provider and a client outlining the specific tasks, deliverables, and milestones required to complete a project. A good statement of work should accurately define the scope and KPIs of a working arrangement, clearly defining responsibilities and expected outcomes. It is frequently used with independent contractors, agencies, governments, and other organizations that provide B2B services. For project managers, the SOW is a critical document for defining and managing relationships with project participants from outside the organization.

A good SOW includes a high-level description of the project, including its objectives, timeline, and expected outcomes. It outlines the work to be performed including specific deliverables, tasks to be completed, and assignment of primary responsibility for each of those tasks to specific parties. It also defines the criteria that will define whether or not the work is acceptable, and how acceptance will be communicated.

A statement of work may also incorporate guidelines for the location(s) where work is to be performed, what kind of equipment or facilities may be required, and who will provide those.

Finally, the SOW will include pricing, payment terms, and the signatures of the parties to the agreement. This document therefore serves as an important legal agreement to which all signatories must adhere.

Are SOWs legally binding?

Statements of Work (SOWs) can be legally binding documents when they are incorporated into a contract, signed by and properly executed by all involved parties.

Why you need a statement of work (SOW)

First and foremost, a good SOW exists to provide clarity. By outlining roles, responsibilities, deliverables, and timelines clearly, a well-written statement of work protects both the service provider and their client. It safeguards both parties against the problem of “selective amnesia”, in which one or another project participant seems to remember prior conversations differently. Oral agreements can easily lead to misaligned expectations. For complex projects, that kind of problem is almost certain to arise at one point or another.

A Well-Crafted SOW Prevents Scope Creep

An SOW also guards against one of the most common pitfalls in project management – scope creep. A good statement of work will carefully define the deliverables that are “in scope” versus those that fall outside of the specified project parameters. In other words, a good SOW will make it clear which work will not be performed. That helps organizations avoid an ever-expanding definition of what is to be accomplished. After all, when the target keeps moving, it’s much harder for the project team to reach its objectives.

What’s included in the statement of work (SOW)?

The key elements of an SOW can vary, depending on the industry, the nature of the project, external regulatory requirements, and the nature of the services to be provided. Nevertheless, there are some common elements that play a role in virtually every well-written statement of work:

1. Project objectives: 

This provides a big-picture perspective on the overall purpose and goals of the project. It usually offers some context for the role this project will play in achieving the client’s strategic objectives, as well as the tactical steps needed to achieve success. Ideally, it should articulate how success will be measured.

2. Scope of work: 

This section defines the exact work to be performed, including timelines and deliverables. Very often, this will include key milestones and interim deliverables, rather than a single all-encompassing project description with a single date of completion. If it’s useful, the parties may also choose to define a more specific list of tasks to be performed, as well as the detailed business processes to be followed. 

3. Deliverables: 

Whereas the scope of work describes the work to be performed in slightly broader terms, the list of deliverables outlines the actual products of that work. This may include documents, drawings, or other intellectual property. It may also describe the successful completion of certain events such as presentations, focus groups, or meetings.

4. Roles and responsibilities

This section clearly defines the roles and responsibilities of all stakeholders involved in the project. Spelling out the responsibilities of both the client and the contractor here is essential. This ensures everyone knows who is responsible for what aspects of the project, minimizing confusion and miscommunication.

5. Location and time of execution: 

Many SOWs provide details as to the time and location where work will take place. If remote work is to be permitted, it is useful to include that detail here, including the specific conditions under which such remote work may occur. If on-site work is required, and especially if travel may be necessary – then the SOW should specify that requirement.

6. Milestones and dependencies: 

For anything but the simplest projects, it’s likely that there will be milestones along the way. These serve several different purposes. First, they provide some assurance that the project is on track, giving the client ample opportunity to review work during all stages of the engagement. Second, milestones provide important information to ensure that wherever dependencies exist, predecessor tasks are performed on time so that things keep moving according to schedule. Finally, milestones may serve as key dates for acceptance and billing. When a working proof-of-concept has been successfully completed, for example, the service provider may be entitled to a certain percentage payment.

7. Project schedule: 

A vital element of any good SOW is a clear timeline that includes the milestones, tasks, and resources necessary to make the project a success. In complex projects with multiple dependencies, it is especially important to outline vitally important dates and specify the consequences for missed deadlines.

8. User testing: 

The SOW should also describe any proposed testing parameters. This is especially relevant if the SOW relates to product development or software technology, for example. Testing should be covered in enough detail to ensure that all parties will have confidence in the product once the test plan has been completed successfully.

9. Acceptance criteria: 

This section covers the expected outcomes and measures of success for a project. What does success look like? This section should outline the overall outcomes that are expected, along with the specific means for measuring success. The SOW should also include information about acceptance of completed work. This often takes the form of a signoff document in which a party designated by the client formally acknowledges that the work has been completed to their satisfaction.

10. Assumptions and constraints:

This section lays out any assumptions both parties are making about the project and any constraints that may affect it. For example, if the project assumes that a certain technology will be available or that certain approvals will be granted by specific dates, those assumptions should be clearly stated. Constraints could include budget limitations, resource availability, or time restrictions.

11. Payment terms: 

This section should clearly describe the payment structure, including how much the service provider will be paid, when payments will be made, and any conditions that must be met before payment.

12. Terms and Conditions:

Additional legal or business terms may need to be included, such as how changes to the SOW will be handled (change management), intellectual property rights, or confidentiality agreements. These terms may be linked to other contractual documents that are part of the business relationship.

7 steps to a solid statement of work

Although creating a statement of work may sound like a complex undertaking, it doesn’t necessarily need to be. Here is a seven step process to get you started:

1. Write the introduction: 

Begin with a simple statement outlining the project’s overall with a brief description of work performed. This section should give your audience a high-level understanding of what the project is about.

2. List the key activities and requirements: 

Start with the biggest, most important activities, and add as much detail as you find necessary. This section should include a list of activities to be completed, criteria for acceptance, and any particular methods or constraints for completing the work.

3. Create your project timeline: 

Begin mapping out the overall timeline, including the project starting and ending dates, plus the most important milestones along the way. This should include key milestones for specific tasks to be performed by the service provider. If the project involves a direct mail campaign, for example, a key milestone for a creative agency might include signoff on final proofs prior to sending the job to print.

4. List required resources: 

If the project requires that internal client personnel be available to the service provider, specify that in this section. Also outline any equipment or materials that may be necessary to complete the job. It may also be useful to clarify the role that third parties will play in the process.

5. List project deliverables: 

Get specific about the work products that will be provided to the client, including quality, quantity, and timing. Describe expectations and deadlines as clearly as possible.

6. Highlight dependencies: 

Some milestones are especially sensitive because successor tasks depend on them. If a task lies on the critical path for project completion, that should be highlighted in this section. If such deadlines are missed, it can put the entire project at risk.

7. Define project tracking and communication: 

Clients appreciate frequent status reports. A good SOW will outline the timing of such updates, as well as the form they will take.

An SOW is focused on the work to be performed, but it doesn’t necessarily address all of the terms and conditions of the business relationship in their entirety. Confidentiality, intellectual property protections, limits on liability, and arbitration provisions, for example, are typically included in other contracts such as nondisclosure agreements and master service agreements (MSA) rather than in an SOW.

Although writing a statement of work may seem like a daunting task, – it doesn’t necessarily need to be that way. By following the steps listed above, along with the guidelines we covered earlier in this article, you can ensure that your SOW covers all the essentials, helping you achieve success with your projects.

Statement of Work vs. Scope of Work. What's the difference?

An SOW may sometimes be referred to as a “scope of work” document. The terms may be used interchangeably, although the latter is typically less comprehensive than a statement of work. A scope of work description is often included as a subsection within the SOW. 

Statement of Work

A Statement of Work (SOW) is a crucial document that acts as a roadmap for a project. It outlines the project's overall objectives, what deliverables will be produced, the timeline for completion, and the associated budget. Essentially, an SOW defines the "what, when, and how much" of the project.

Scope of Work

A Scope of Work is a subsection of an SOW. This section dives deeper into the "how" by detailing the specific tasks, activities, and deliverables required to achieve the project's goals. It's a granular breakdown of the work that needs to be done to ensure everyone involved is on the same page.

SOW and MSA. What's the difference?

A Master Service Agreement (MSA) and an SOW are both important documents often used together some business agreements, but they differ in purpose, scope, and duration. MSAs are typically designed for long-term relationships and may have renewal options, while SOW contracts are specific to a single project and end once the project is completed. MSAs provide a broad framework, while SOWs get into the nitty-gritty details of a specific project.

Statement of Work (SOW):

The SOW is a project-specific document that dives into the details of a particular service engagement. Imagine it as a specific chapter within the MSA rulebook that focuses on one project. An SOW outlines the specific scope of work, deliverables, timelines, costs, and acceptance criteria for that particular project.

Master Services Agreement (MSA):

This is a broad agreement that establishes the overall framework for a business relationship between two parties, especially for ongoing services or long-term partnerships. Think of it as the rulebook for the entire relationship. An MSA typically covers general terms like confidentiality, payment terms, dispute resolution, warranties, and limitations of liability.

Real-world examples of an SOW

Uses of an SOW abound in real-world business engagements. Below are some common examples. 

Software development:

In software development, an SOW often outlines the creation of a custom application, including features, functionalities, timelines, and budget.

Cybersecurity services:

An SOW in IT services defines the scope of security services, such as threat assessment, penetration testing, incident response, and ongoing monitoring

Digital marketing campaign:

In digital marketing, an SOW outlines the target audience, marketing channels, key performance indicators (KPIs), and deliverables, such as landing page traffic, lead generation, and social media engagement.

Event planning:

An SOW in event planning outlines the planning, organization, and execution of an event, including venue selection, catering, entertainment, and guest management.

Building renovation:

In construction, an SOW defines the scope of work, materials, timelines, and budget for a renovation project, including specific details about demolition, construction, and finishing.

Consulting services:

An SOW defines the scope of consulting work, deliverables, timelines, and fees for a specific project, such as market research, business analysis, or strategic planning.

These are just a few examples, and the specific content of a SOW will vary depending on the nature of the project and the relationship between the parties involved.

Manage your SOW contracts at scale with Icertis

If your organization develops statements of work as a routine course of doing business, it may be beneficial to deploy technology to help you streamline and automate these kinds of processes - from contract creation, negotiation, review and approval and post-signature management. Icertis Contract Intelligence is a contract lifecycle management (CLM) solution for companies of all sizes. We help organizations manage their agreements and optimize the business value they get from their relationships with customers, vendors, and business partners. To learn more about Icertis Contract Intelligence, request a free, no-obligation demo.

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