As straightforward as it sounds, getting a statement of work (SOW) right is no easy task. But nothing is more fundamental to the success of a project. If the statement of work is too vague, broad or generic, it can leave room for various interpretations, which will lead to trouble down the road. It’s true for an internal project, and doubly true when there are vendors involved.
“The failure to properly execute a statement of work is often the reason parties end up in a dispute,” says David Greenberg, an attorney in the technology, media and telecommunications practice group at Greenberg Traurig.
To get your project right the first time, follow these guidelines for writing an effective SOW.
Understand what a SOW is.
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A SOW defines the scope of work required and the time in which it’s to be performed. “It’s the cornerstone to an agreement,” says Nick Scafidi, IT procurement manager at energy supplier National Grid US. “It sets expectations, deliverables, what’s acceptable, the price, the pricing schedule. Without that, it’s like saying to a contractor, 'build me a house,’ without telling him when, what kind or how big.”
Know what to include.
Bruce Russell, who signed off on numerous SOWs when he was COO at a software development company, says a good one includes:
- – Major deliverables and when they’re expected.
- – The tasks that support the deliverables, as well as which side – the hiring company or the service provider – will perform those tasks.
- – The project’s governance process, along with how often governing committees will meet.
- – What resources are required for the project, what facilities will be used and whose equipment will be needed, as well as testing requirements.
- – Who will pay which costs and when.
“The statement of work pulls together all the elements at the beginning,” says Russell, now an executive professor at Northeastern University’s College of Business. “The more precise you can make it, the more quantitative, the better.”
A SOW should clarify for all parties what constitutes success or failure, says Melise Blakeslee, an attorney in the intellectual property, media and technology transactions group at McDermott Will & Emery.
“You have to adequately describe what the work is and the criteria for how you both will agree that something is successfully completed,” says Ruth Anne Guerrero, standards manager at Project Management Institute and a former IT project manager.
For example, she says, if you expect your vendor to develop user requirements, your SOW should state that the vendor must interview specific user groups and have them approve the requirements before the job is considered done. That defines success better than simply writing, ‘vendor will produce user requirements’.