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SOW – Statement of work

digital contract management

What Is a SOW?

A statement of work, or SOW, is a document that attempts to specify the obligations, responsibilities, and work agreements between two parties, most commonly a customer and parties such as:

  • An organization
  • A businessperson who works as a contractor
  • a provider of services
  • When you can describe work according to explicit instructions or directions, you’ll normally use a statement of work. When establishing a SOW, you should include tasks, conditions, and requirements that are easy to grasp by both parties. Overall, the statement of work specifies what is and is not in the project.

What Are the Benefits of Using a SOW?

The following aspects of a project are described in the SOW:

  • requirements for work
  • Expectations for performance
  • Expectations for design
  • When working on a project involving collaborators or contractors from outside the company, SOWs are frequently of use. A SOW can also be of use to provide information to contractors or vendors who are bidding on your project.

For project managers, creating a statement of work offers various advantages, including:

A statement of work can also be of use in conjunction with other papers like a master services agreement (MSA) and/or a request for proposal (RFP). A well-written statement of work specifies a contractor’s or vendor’s deliverables and tasks, therefore it’s a suitable starting point for these kinds of agreements. However, you should only write your SOW after you’ve agreed on the project’s standards and requirements. This will assist you avoid problems later on while you’re negotiating a contract.

  • What Should a Work Statement Contain?
  • While the format of a statement of work varies based on the industry in which your company operates, good SOWs adhere to a few essential principles.

To minimize misinterpretations of standards and words, make sure your SOW includes exact language appropriate to your line of business. Although the SOW is a detailed document, it is only a general description of work that should be supplemented with additional documentation to further specify specific tasks.

A decent statement of work will outline the project’s scope as well as the agreement’s key performance metrics, or KPIs. These indicators can then are of use to determine if the SOW’s conditions are getting done. The following are common sections found in a statement of work:

Introduction to SOW

Begin by describing the work that will be done and who will be participating in the project. You can then move on to other paperwork like a standing offer to determine prices for services or products acquired, as well as a formal contract that goes into greater detail than your SOW.

The Project’s Goals

Explain why you’re starting the project and why you’re hoping to finish it. This can be accomplished by beginning the section with a purpose statement and then providing meaningful responses to the following questions:

Deliverables\sObjectives

Investment return

In this part, write down the tasks that must be completed in order to complete the project. Include information about the software and/or hardware used, as well as the process utilized to complete the work, such as:

  • Outcomes
  • The amount of time it takes
  • Steps to achieving the goals in general
  • Working Environment The project’s team may be based in a central location. You may also require site-specific work, or team members may work remotely. Include this information, as well as the location of any required software and/or hardware.

Tasks of SOW

Break down the broad actions you mentioned in the scope of work section into smaller, more specific activities. Make this part as detailed as possible, including any actions necessary to complete the project’s deliverables. You can also want to divide work into phases or milestones.

Deliverables

List all of your project’s deliverables, stating what each one is for and when it is due. Include specific details pertinent to your project’s kind, such as:

Schedule

Make a schedule of when the deliverables must be finished. The following are some examples of details to consider:

  • The provider you’ve chosen to help you achieve each goal
  • Kickoff
  • Stage of performance evaluation
  • Development\sImplementation
  • Testing
  • Milestones at the end of the project

This section should specify the amount of time allotted to accomplish the project, as well as the project’s projected start and conclusion dates. Include information about billable hours each week and/or month, as well as any other specifics related to the scheduling of your project. The importance of specificity is crucial in this case. You should, for example, keep track of the maximum number of billable hours for contracts or vendors.

Standards and Testing

Make a list of any industry standards that the project must follow. If applicable, you should additionally include details concerning product testing, such as:

Who participates in the testing procedure?

  • Testing equipment is a must
  • Additional resources
  • Success is defined as the successful completion of your project should be made out in your statement of work by the stakeholder and/or sponsor.

Other Prerequisites

If your project has any additional requirements, make a list of them as well. Here are several examples:

Other tools you’ll need to finish your project
If any team members are required to have certain degrees or certificates,
prerequisites for travel

Payments

If you’ve already generated a budget, you can enter payments related to your project. You should also specify how payments are going to work, such as upfront, once the job is complete, or over the course of the project’s duration. Payments are made once each milestone is completed in certain projects, whereas payments are made on a set schedule in others.

Additional Information

You may have additional pertinent material to include that does not fall into the categories listed above. In this area, you can make a list of them. Here’s some more information you may include:

  • Security concerns about travel pay
  • Restrictions on software and/or hardware
  • After-project assistance

Closure

Finish your statement of work by describing how deliverables will be accepted and who will be responsible for delivering, reviewing, and signing off on them. Final administrative tasks, such as ensuring that everything is signed, closed, and archived, should be included in your conclusion.

When preparing a document like a statement of work, it’s crucial to engage with an experienced lawyer who can guarantee you use particular wording to accurately define your project in a way that everyone understands.

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