An SOW documents a project’s tasks, deliverables, requirements, and expectations of everyone involved. When everyone is on the same page, work can be done according to the client’s expectations.
This article explains the key elements of a statement of work and how to create a high-quality SOW for any project using a template. A ready-to-fill template, like the one we offer, simplifies the writing process.
It guides you on what to consider when creating the final SOW, from defining your mission and objectives to specifying the scope of work, milestones, deliverables, resources, and budget, among other things. Feel free to download this template and use it to prepare a professional and thorough SOW that guides your team.
What is a Statement of Work
A statement of work defines the work or services one party will offer to another. It clarifies aspects like the scope of work, timeline, and budget. Once signed into effect, it serves as a contractual arrangement between the parties, confirming that they understand their pledged obligations.
The primary purpose of the SOW is to guide the entire project life cycle by specifying expectations and indicators of success in writing. Therefore, it facilitates communication between the service provider and the client. You have to reference it throughout the project.
Depending on the nature of the project, you will refer to the SOW to determine work, materials, or time needed for the project, design specifications like measurements or work quality, and project deliverables.
Key Elements of our Statement of Work Template
This template has a premade layout of a statement of work. It serves as a starting point when writing your project’s SOW. To make sure you get the most out of this template, here is a guide explaining why you need to include each key component:
Preliminary details
The first four sections contextualize the SOW by identifying the parties involved and the type of work the project entails. In the ‘Project Details’ section, specify details like the project title, start and end date, location, and project manager.
In the ‘Contractor Company Details’ section, provide the contractor’s identification information.
Use the introduction to give the reader an overview of what the project entails – whether it aims to create a product or deliver a service.
Then, use the ‘Background Information’ section to discuss the rationale behind the project and what need or problem it addresses.
Mission and objectives
The mission statement outlines the core values of the team and stakeholders associated with the project. The objectives indicate what the project aims to achieve. Objectives are the intended outcomes of all the actions you and your team will undertake. When filling out this section, provide a high-level project overview while giving its specific benefits; be informative. A transparent and clear mission statement and objectives determine the direction of the entire project.
Current environment
Before you embark on the project, you first need to understand the environment in which the project operates. This component is essential in identifying opportunities the project can leverage, managing risks, and minimizing disruptions.
Under this section, you can define the current environment by reviewing the technology, constraints, and stakeholders. List technologies that can significantly help your operations, such as an AI platform.
Then, list the budget, technology, resources, and time constraints that may impact the project’s progress. Under the ‘Stakeholders,’ identify all the key stakeholders and their involvement or respective roles during project implementation. Specifying roles enhances collaboration and, consequently, timely project execution.
Scope of work
This section documents the work/labor that must be done, broken down into manageable and actionable tasks. This is a highly detailed section that clarifies what and how (process or method) each activity will be done. Defining the project’s boundaries helps the team focus only on key activities and reduces scope creep.
To fill out this section, list the tasks, their scope, resources needed, outcome, duration, assignee, and budget details. In addition, you can include specifications and steps for completing the tasks.
Milestones
Milestones are time-bound indicators of progress. The indicate points (checkpoints) in the project timeline that you target to have completed a predetermined amount of work. To fill out this section, determine how long the project will take and break down this duration into realistic milestones/phases. Record each milestone, describing what will be done during that phase, and indicate the estimated deadline.
Deliverables
Deliverables are outputs (products or services) resulting from the tasks outlined in the scope of work. You need to document the agreed-upon deliverables to make sure there are no conflicts about what the client needs from you. The type of deliverables will depend on the type of project – a construction project will produce a house, while the deliverable of a software development project will be an application.
In addition, deliverables can be broadly categorized into process deliverables, which are intermediate and do not complete the project, and product deliverables, which are the final outputs that mark the end of the project. They are quantifiable and can be defined using quantity, number of designs, color, size, and format, among other specific specifications.
Examples of outputs you can outline in this section include mockups, strategies, reports, prototypes, adverts, and guidelines. When filling out this section, order the deliverables and associated deadlines sequentially.
Project resources
Project resources are the inputs needed to undertake the project as planned. This section prevents a lot of back-and-forth with the client and guarantees that resources are available when needed. List here all the technical, functional, and performance resources you and the client need to make available throughout the project.
This section divides these inputs into 3 categories: those by the agency/contractor, client, and equipment. The first two sections indicate the human resources needed from the contractor’s and client’s camps.
Specify the person’s name, role, and description of their contribution.
Under the ‘Equipment Resources’ section, indicate the equipment or material, quantity needed, its description, and specific use.
Applicable standards
Each project must meet a certain threshold of quality standards, testing procedures, or compliance requirements. Use this section to state and define each standard, relevant regulation, and guideline the project must adhere to. These will vary based on the type of project and industry. Standards may range from safety to environmental, quality, best practices, and technical aspects.
Budget and pricing
The budget breaks down the overall project cost into individual expenses. It is important to clarify the financial commitments and constraints to avoid disputes. To fill out this section, specify the estimated cost of each deliverable.
Payment Schedule
A payment schedule clarifies when various installments should be made throughout the project cycle. This is a crucial step in making sure funds are available when needed and demonstrates transparency in handling the client’s finances.
When filling out this section, indicate the work each installment is associated with and the specific payment amount. Note that you can schedule payments based on deliverables, milestones, fixed dates, and retainer.
Change control procedure
The change control procedure is a framework for initiating, reviewing, approving, and implementing project changes. This provision is added tyo make sure there is a systematic way of communicating and addressing proposed changes to the project scope, timeline, or resources.
Terms and conditions
The terms and conditions define the obligations, rights and limitations of parties to this statement of work. They are added as clauses addressing different aspects of your arrangement with the client.
Under this section, you will find terms for various aspects such as project execution arrangement, payment terms, confidentiality, protection of intellectual property, liability and confidentiality, dispute resolution, and issuing notices.
Point of contact
A point of contact is a liaison between teams, departments, or external parties. Each project will have one or more points of contact to assist with information flow, decision-making, addressing concerns, and tracking progress. List all the points of contact by their name and contact details.
Acceptance criteria
The acceptance criteria define what constitutes a successful outcome and project. They are client-defined conditions that the client, stakeholders, or end users will use to consider the project deliverables acceptable. As a result, the criteria may include tests, evaluations, approvals, quality standards, budget, and timeline.
Authorization
The authorization section indicates the official approval of the project as described in the statement of work. Make sure both parties (you and the client or their representative) append their signatures and date the SOW. Once signed, the stipulations of the document take effect.
Who is Responsible for Managing Statements of Work?
Typically, the project manager prepares the SOW in collaboration with other teams. The legal team comes in when drafting the arrangement’s terms to make sure they are enforceable. Also, you should consult the technical team when preparing the scope of work as they are well-informed on project execution. However, the project managers, sales, and finance teams are typically responsible for managing the SOW and making sure it is adhered to.
Statement of Work Vs. Scope of Work
Though often used interchangeably, a statement of work and a scope of work are separate but related internal documents. Scope of work is a highly detailed breakdown of all activities that need to be done to achieve the intended outcome. It is part of the statement of work.
It discusses operational details like methods and processes for project execution. Conversely, a statement of work is a high-level document that outlines all the aspects of the project, from objectives to legal provisions and budget.
Statement of Work Vs. Request for Proposal (RFP)
Whereas the statement of work defines the project requirements and agreement between you and the client, a Request for Proposal invites suppliers and service providers to bid for work. Therefore, an RFP solicits multiple proposals from different bidders to assist you in choosing the best offer.
A SOW is drafted during the contracting phase, while an RFP is used when procuring services or products. Another difference is the SOW outlines the project tasks, deliverables, budget, and timeline, whereas an RFP provides enough project details that bidders can rely on to respond with accurate bids.
Such information may include project scope, requirements, performance period, selection criteria, and explicit request for pricing. Finally, a SOW outlines the entire project cycle and can thus serve as a project roadmap.
Also, once executed through signatures, it meets the legal threshold to be a contractual agreement between you and the client. However, an RFP is a correspondence meant to assist in evaluating and selecting the most suitable contractor or vendor.
Closing
We offer this statement of work template in multiple formats, including Word Document, OpenDocument Text, and Google Docs, to make it functional for diverse users. Each version is editable, making it possible to personalize the SOW per your project’s unique requirements.
You can modify labels, adjust text font, design colors, and add your company logo. To realize the benefits of this template, always create the SOW in the early phases of the project, ideally in the planning stage. Include only things you have agreed on with the client. Also, be precise when giving descriptions and acronyms. Consult your legal team to verify that legal clauses are enforceable as given in the template.
Lastly, involve your team when writing the SOW; have them review it and provide feedback, then update accordingly.
