Are you a project manager stumped when it comes to writing a statement of work (SOW)? Do you struggle to capture and communicate all the steps necessary to complete large projects within your organization? If so, then you're in the right place because this is the only guide you'll need to write SOWs for all your projects successfully.
Unfortunately, many PMs shy away from using these valuable tools because they're large and cumbersome to create. But don't worry, we've got you covered. Keep reading to learn everything you need to know about what a statement of work is and isn't, along with how to write one.
We've included examples and an exact template you can copy and paste to use the next time you're tackling a large project. Ensure yourself and your team's success and wow your next client by making the most of an SOW for every project you complete.
Below is everything we will cover. Feel free to skip ahead.
- What is a statement of work?
- Benefits of a statement of work
- How to write a statement of work
- Statement of work examples
- Statement of work template
- Who needs an SOW?
- What an SOW is not
What is a statement of work?
The most straightforward work definition is that it's a written document outlining the agreement between you and your client. It will define what is included in the project and what isn't, along with a timeline, budget, and scope.
This vital document will save you countless time and headaches throughout the project. Both you and your client will be able to reference it and ensure that you're on the same page regarding what should be happening and when.
Unfortunately, when done wrong, a statement of work could forget to outline a vital project component. Or it could underestimate the amount of time or money needed to complete the project. So, you don't want to forget anything when drafting your next SOW.
Later on, we'll share an example and template you can follow not to miss a critical step or section within your SOW.
Benefits of a statement of work
At its base level, a statement of work sets the expectations between you, your team, and your client. This ensures that everybody is on the same page throughout the project. Everyone can reference the SOW and know if they're staying within the scope or starting to creep out of bounds.
Avoiding scope creep is what makes the statement of work importance so crucial. Some other benefits of the SOW include:
- It helps project leaders to build a framework for everyone to follow.
- It gives team members a clear outline they can follow.
- It offers clients peace of mind knowing what they can expect at the end of the project.
- It fleshes out the details so everyone can reference and remember them.
- It saves time, so there are fewer questions and misconceptions later on.
These are just some of the many benefits you will see once you start fully utilizing the statement of work. It might feel like much work initially, and you want to jump right in and start working, but don't.
Take the time to figure out the details now. This will save much confusion later on as everyone will know what is happening and when. Your team members will plan out their schedules better because they know where they stand within the project and their expectations.
How to write a statement of work
Before we jump into a specific example, let's set some clear expectations about how to write the statement of work. Remember, while this isn't a legal document, it is a written contract between you and your client. So you want to get it right and be sure that everyone agrees upon everything in it before you begin.
Tackling an SOW can be daunting at best and overwhelming at worst. But we're here to help guide you through the process and give our best advice for getting started. Here we have the top six tips we suggest you use for every SOW you write.
1. Be specific
This isn't the time to gloss over the details. It's imperative to map out specific information when creating the SOW. Don't leave any room for guessing at any point in the SOW; ensure that everyone is on the same page and understands each milestone and deliverable.
When you're tackling a large project, the devil truly can be in the details. You must be very clear and very specific as you outline your plan. Take the time now to analyze different scenarios so you can plan and be ready for any contingency.
The tricky part of this step is to watch out for the Goldilocks effect, so find the balance. You don't want to get so wrapped up in the details that you don't leave any room for your team's changes or ingenuity. But you also want to ensure that anyone reading the statement of work understands precisely what is expected of them and how they should complete their tasks.
You must partner with your client as you create your SOW. Doing this step now will save countless uncomfortable meetings when the final product is delivered, and it's not what the client expected. Additionally, it would be best to keep them in the loop as you work through each milestone of the document, so communicate with your client regularly throughout the project.
Take the time to listen to what your client is asking for. Then take the time to understand where they're coming from and what they need to ensure success at the end of the project.
When you sit down with your client and listen to what they're asking from you and your team, then you deliver that at the end, you will have happy clients who will come back to work with you on future projects and they'll share with others the great experience they had working with you.
3. Be clear on the total cost
Budget is an integral part of every business. Staying within budget on your project is essential to your client and will ensure repeat work with you when they can trust you remain within the cost outlined in the beginning.
It would help if you outlined the total cost of every step within the project before you start so that you can adequately cover them with your given budget. Be sure to consider if you need to outsource any part of the project, as you will need to account for this in the budget. And also, account for any facilities that you will need to lease to manufacture the final product.
When you consider all the possibilities, you can better plan for any contingencies that might crop up mid-project. This is why so many projects far exceed the initial budget. And it's why a detailed statement work can save your company from absorbing the cost of any budget overage you might incur.
4. Detail the project timeline and each milestone
Just as with the cost, be detailed in creating a timeline everyone can follow. When everyone is on the same page, you avoid unnecessary meetings and long email threads with hundreds of questions.
Again, this isn't the time to guess or gloss over the details. You must be specific and clear about the exact timeline everyone will follow. Everyone must know when each milestone and deliverable will be expected so they can plan their schedules accordingly.
5. Outline each milestone in a robust PM software program
Get rid of all email threads completely when you use a robust PM program to outline each deliverable and track your timeline. When everyone from the client to the designer can see where the project stands in real-time, you can avoid confusion and questions.
A great program will allow you to run reports and see where the project stands and what needs to be done. Additionally, you must be able to tag different stakeholders on specific tasks.
Not everyone needs to be cc'd on every email. And by tagging specific tasks to certain stakeholders, you not only minimize the onslaught of emails but can eliminate them.
6. Be ready to revise
Your statement of work will become your bible for you and your team to follow throughout the project. However, as things change and as the client sees the project unfold, be ready to revise. It can be impossible to predict the future when creating your SOW ultimately, so treat it like it was written in stone at the top of the mountain.
Schedule time to meet and review the statement of work with your client. It's okay to say we've changed this one section, so that will affect these others. As mentioned in tip two, open communication is vital to a successful project.
Statement of work examples
There are different types of SOW documents you could create based on what kind of work you do or what industry you're in. Creative freelancers will create very different statements of work compared to those in the software industry. The latter even find themselves hiring technical writers to assist in their SOW due to their importance and level of required detail.
In the service sector, independent contractors or hourly workers will use an SOW based on the effort or time needed to complete the project. At the same time, creative services such as graphic designers, writers, or agencies will create their SOW based on performance.
Their statement will include design requirements and creative briefs that will need to be approved by the client. In contrast, other industries will be able to create an SOW that gives them much more autonomy. A government contract will need to be incredibly strict in stark contrast, and details will need to be followed to the letter by everyone on your team.
Depending on whom you ask, a statement of work will have anywhere from ten to fifteen sections. For our example, we will use twelve sections.
The first section will give a brief introduction to the project at hand. It will outline exactly what work needs to be done for the project to be completed. For example, it will determine whether the project is to create a deliverable product or a service contract.
Additionally, it will introduce the stakeholders within the project. Remember, this needs to be detailed; list everyone that will contribute or be affected by this project. Who will need to be kept in the loop, and who needs to know their role and responsibilities?
2. Purpose or objectives
The second section will outline the goals and purpose of the project. Why was this project initiated? Who will benefit from it?
This section will answer these questions and more. You will outline the goals and the strategy that will take your team towards those goals. Then outline each of the deliverables that will be sent to the client and when.
Break the goal down into phases and then milestones, and finally tasks. Clearly show who will complete each section and task to avoid confusion. Specifically, show what will be produced and how you'll achieve the final goal.
The project's scope will make the introduction and goals and mold them into the details about what steps need to be completed throughout the project. The scope will outline what needs to be done and how long each step will take.
Be sure to include what approach your team will take when completing the project and what steps they'll take to complete the project. Lastly, include who will report to whom and who will sign off on the work done.
Not only will the scope outline what needs to be done, but it will also detail what won't be covered in this project. This is just as important as what will be done. Including this section will ensure that you won't have scope creep throughout the project when the client asks for more to be added to the deliverables.
Here you'll outline any special requirements that need to be taken into consideration. What infrastructure will be needed to complete any given step? Do you have all the tools and specialists in place to complete each step, or will you need to outsource anything? Answer this now so that everyone knows what will be required throughout the project.
This section could, and should, get very granular in completion. This isn't a high-level overview. Get extremely detailed so that everyone knows what is needed to ensure timely delivery to the client. Don't wait until you're half-way through a project before you realize that you don't have the proper computer hardware to finish.
And don't find yourself in a bind if you don't have the right level of expertise in the last step to ensure that it is done correctly. Plan ahead so that these pieces in the puzzle are accounted for and arranged ahead of time.
Creating your schedule at the start is imperative to reaching the finish line on time. You must know when each piece of the puzzle needs to be put into place. Outline when each task and milestone need to be completed so that you can see at a glance if you're on schedule or not.
You must establish critical dates to make certain that there isn't a domino effect part-way into the project if one milestone isn't reached. Each deliverable is contingent on the one before it to be completed on time. Your timeline is essential to guarantee to your client that you will do the work on time.
The tasks section will outline the general steps that need to be taken to complete the project. Break down each task into as many subtasks as necessary to ensure complete detail in this section. Don't leave out a step or consider any step too common to mention.
You need to create every statement of work with the assumption that anyone could take over the project midway through and know precisely how to complete it. If you find yourself needing to outsource any task within the project, you need to hand over the task with directions quickly. Now is the time to map out precisely what needs to happen at every step along the way to project completion.
To successfully complete any project, you must complete vital milestones along the timeline. And to complete each milestone, you must have a way to track your progress. This will allow not only your team to know when they're expected to complete specific tasks, but your clients can also see at a glance where their project stands.
Milestones are different from tasks in that they are the general markers along the path, assuring you that you're going the right way. As you reach each new feature along the course, you know that you're making progress and will reach your final destination.
When you created your timeline, you mapped out when each deliverable must be ready to present to the client. As you look at the many tasks outlined in the previous step, break them down into grouped milestones. And then assign when each milestone is due.
As you reach each milestone, you'll know that you're on track and will be ready when it comes time to deliver the final product to the client on time.
Whether you create a product or deliver a service, you must quantify what you will deliver to your client and when. This might be one final product. Or it could be a list of deliverables created in iterative cycles.
Again, details are essential so that everyone is on the same page about exactly what you will present to the client at the final completion. Describe in detail the size and color of the final product. Determine now what quantity of the product is expected at final delivery.
These details will ensure that your client isn't expecting an entire shipment of hundreds of products they can ship immediately to their customers. Whereas you thought you were only delivering a prototype of one product that the client will then have manufactured off-site.
These kinds of miscommunications happen too often, and you want to ensure that everyone agrees before the project starts what is expected at delivery.
9. Standards of acceptance
In addition to detail about what you're delivering at the end of the project, map out how the client will communicate their acceptance of the final product. Don't deliver the product and expect them to accept it immediately. Many will want to take it back to their stakeholders for final assessment.
How will success be measured? Again, these are quantifiable numbers that you can analyze at the end. You and the client will need to measure and validate whether you've delivered the expected final product.
Refer back to the requirements that were outlined earlier in the SOW. Be sure that each requirement can be tested and approved by the client before they accept delivery.
Be sure to outline how long they have to analyze the final delivery and make the final payment. Don't risk them coming back in six months asking for a revision. Clearly delineate within the agreement how many days they will have to either accept or ask for revision.
Additionally, be clear how many revisions the client will have before you begin to charge more for the project. This kind of scope creep is what sends many projects into the red and ruins your budget.
Before you can begin any project, you must know what resources will be required to complete it. This can not only include financial capital but human capital as well. Ensure that you have the right people on your team from the beginning to ensure that you can complete your project on time and under budget.
When it comes to your team members, many factors are often never considered. These factors can include skill level as well as general availability. Have you reached out to your marketing and design team to ensure that the graphic designer you need has the availability to work on this project in the coming weeks?
If you don't outline the exact costs and resources needed now, you risk needing to bring in outside experts who could blow your budget. Or, you risk needing to wait for the right person to have the capacity in their schedule to perform the work, which will delay delivery and cause your project to go over the projected timeline.
These oversights are why most project managers admit their projects rarely finish on time and within the allocated resources allotted at the start. Have the materials, budget, and people in place before you start your project, and you'll find that you never need to ask for more time or money again.
11. Payment schedule
As with any exchange of goods or services, the payment must be outlined and clear for all parties involved. Clearly specify when you will reach each milestone and when each payment is expected. Include the terms for how you'll be compensated from the beginning, and don't move on to the next milestone until the previous one has been closed and paid for.
As mentioned earlier, this will vary depending on the type of work done and how you bill for your work. If you're billing hourly, clearly define the due dates each month. Include when you will deliver the invoice and when the payment is expected.
If you're billing based on performance, outline when that performance is evaluated. And then clearly define the amount of time the client is given to provide feedback or make payment. If you have a fixed bid, you might have scheduled due dates for the deposit and the following payments necessary to keep the project on track.
As you can see, it's vital to determine these details now so that everyone understands what is expected. Outline in full detail, and you'll never again have to worry about missed payments or miscommunication again.
12. Closure and signatures
What will success look like in the end? How will the client accept the final deliverables and sign off on the project? Answer these questions now, so there aren't any surprises at the end of the project.
Determine now how you will deliver the final product. Define who has the authority to accept the final product if you find yourself working with different team members at the client company. Outline the acceptance criteria now, so there isn't any confusion at the end of a long project.
Finally, get the necessary signatures you need to file away and archive this project at the close.
Statement of work template
As with any document you will create regularly, the easiest way to write an SOW is to use a statement of work template. This way, you don't have to reinvent the wheel each time you create a new SOW for each new project.
Below we've created a template you can copy and paste into your favorite document editor and fill in the brackets with the correct information for your next project. Follow this template, and you'll never again miss a crucial section or step within your project.
This Statement of Work is between [company name] and [client name]. It will detail the project to be delivered on [final delivery date as agreed upon with the client] to [client name] at [location of agreed-upon delivery]. The stakeholders in the project will include [list everyone who will be included in the project].
The objective of this project is to [online the main agenda or goal of the project]. When this project is completed, the final delivery will benefit [client name]. It will [outline how the project will help them whether it will speed up a workflow process for the client or improve the conversion on their website is the final benefit?].
The project's scope will include [outline precisely what will be included in the final delivery]. The scope will not have [be sure to outline any side projects or possible upgrades the client could ask for during the project].
The work will be completed in [X] facility, where the infrastructure is already in place to complete the necessary tasks. The following materials will need to be sourced from a supplier or current inventory [list materials needed to complete tasks]. The following tools are necessary for the team to do their job adequately [list tools required].
Our in-house team has the necessary skills and specialization to complete the project at hand, not to require outsourcing any tasks. [Name] will complete [X] step and [continue to list the tasks that will require specific skills to complete and who will do that task].
This project will kick off on [date]. It will run through completion on [final delivery date].
The following tasks will be completed when working towards the final delivery of the project. [This list will be long but be sure to list all the steps necessary to complete the project.]
Milestone 1 [name] will be completed on [date]. It will be presented by [team member name] and approved by [client name or approved proxy]. Approval will need to be received by [date agreed upon with client before starting the project, ideally within a certain time frame such as 72 hours, five business days, etc.].
Milestone 2 [name] will be completed on [date]. It will be presented by [team member name] and approved by [client name or approved proxy]. Approval will need to be received by [date].
Milestone 3 [name] will be completed on [date]. It will be presented by [team member name] and approved by [client name or approved proxy]. Approval will need to be received by [date].
The final deliverable will be presented to [client name] on [date]. It will include [list all relevant features and descriptions necessary to eliminate any confusion or miscommunication such as quantity, color, size, etc.].
9. Standard of acceptance
The final deliverable will be judge based on the following criteria [list criteria as agreed up with client before starting project]. The [deliverable product or service] will be subject to scrutiny, inspection, and testing by the following authority [list who will test the product and what tests will be run].
The total project costs will not exceed $[X.xx]. Fees will be covered by [company name, or the client if that is applicable].
11. Payments schedule
[Client name] is responsible for the following payment schedule to keep the project on time [or flat fee due before the project starts if that is financially feasible by the client].
1. $[X.xx] deposit is required by [date before project kickoff].
2. $[X.xx] after milestone X and due by [date].
3. $[X.xx] final payment due before final deliverable is presented on [date].
12. Closure and signatures
The CEO at [client company name] will have final authority over the final deliverable's approval. The final product will be delivered to [CEO name] at [specified location]. The client will have seven business days to analyze and test the final product and determine that it meets the specified criteria outlined above.
All parties agree that the final product was delivered on time and to the required specifications agreed upon by signing below.
[Client signature] [Date]
[Program manager signature] [Date]
Who needs an SOW?
Any business that works with clients should use SOWs to delineate all their large projects. Additionally, any business, large or small, can benefit from creating SOWs for internal projects. The value of a well-written statement of work shows why anyone completing a large project should complete this document before they start.
Clarity leads to success, and when you start a large project with many phases and subtasks. You can't afford to begin without a clear outline that's written and transparent for everyone to reference throughout the project. So, whether you're a small business creating a prototype for a client or a large agency building websites for dozens of clients, you need to start with a plan.
And the best way to track that plan is through a centralized database that everyone can access. From your team to your clients and any outsourced talent you're utilizing, everyone needs to see what is happening and when. And a quality program does just that for every project you tackle.
So, if you work with clients, whether external or internal, you need a work statement. And you need to track that statement in a PM software such as TrueNxus. This will give your team a centralized location to track their tasks and communicate with each other and with your client.
As you run each report, you can see any possible bottlenecks or budget overages; then, you can also respond quickly enough to ensure that the project ends on time and under budget. The right tools allow your team to quickly and efficiently get their work done. It also allows you to have a comprehensive view of the project so you can ensure everything is completed on time.
What an SOW is not
It can be confusing to know what a statement of work is and what should be included. Sometimes, it's easier to understand what an SOW isn't.
An SOW is not a project scope
While including the project scope within the SOW is essential, they're not the same. The scope is a section within the statement, as you saw in the example.
It's crucial as it defines details about the constraints and deliverables for the project. However, it isn't the complete map of the project, as the SOW is.
An SOW is not a project charter
A project charter is usually a much shorter document that outlines the objectives of the project. It also includes who the stakeholders are and what the overall budget is going to be.
The statement of work, by comparison, will be much more in-depth and go further on these topics as well as include much more information and details.
An SOW is not a Request for Proposal (RPF)
The request for proposal is a preliminary outline of the project, usually written up before the contract is drawn up. The RFP is often used when contractors collect multiple bids and need to be able to compare everyone's offer side by side.
The RFP Is preliminary and subject to change once the project is accepted. You will take the time to work with the client as you draw up your statement of work. Partnering with your client to write the SOW prevents any misconceptions from causing your project to go out of scope or end up rejected at the end for not being what they expected.
An SOW is not a Master Services Agreement (MSA)
A master services agreement is usually used with ongoing projects and long-term relationships with clients. It offers a more flexible contract that you can change along the way.
In some long-term arrangements, clients and agencies, or consulting firms, could have several statements of work attached to several different projects, all under the umbrella of one MSA.
The MSA provides a foundation for future engagements and defines as many generic terms as possible to not be renegotiated.
An MSA will commonly address high-level topics such as:
- General Services: The type of work you're going to do for the client (strategy, performance improvement, project management, etc.).
- Payment Terms: How you'll get paid, when you'll get paid, the rate you'll be paid at, what expenses are covered and which aren't.
- Audits: How the client can ask you to prove you're doing your job, such as reviewing timesheet reports.
- Confidentiality: What you can and can't say about the work you're doing, to whom, and the implications if you say something you shouldn't.
- Proprietary Rights: Who owns what when the job's done (usually the sticking point is who owns the layered design files and code).
- Term and Termination: How long the agreement lasts, who can end the deal, for what reasons, and what the implications or costs are.
- Representations: Ensures you can do the work and that you're not in conflict with other agreements.
- Warranties: What you'll fix if whatever you make is broken and your fault.
- Indemnification: Guarantees against loss which another might suffer.
- Insurance: The types and amount of insurance coverage you have to carry out the work.
- Project Management: What the roles for project managers on both sides will be.
- Support/Deployment: Assistance will be provided to the client during implementation, and any additional support will be provided post-implementation.
While a master services agreement is a governing document for the entire relationship, the SOW deals with a single project's specifics. If you don't have an MSA in place, you'll want to include the kind of details outlined above in your statement of work.
Get your project right from the start
By creating a detailed SOW and recording the project's details in advance, you save yourself a ton of time and headaches throughout the entire process. Use the templates and examples given in this guide. Start every project off on the right foot by starting with a quality statement of work document.
This is a monster guide that you'll want to refer to again. So, bookmark this article and come back time and time again as you create a statement of work for each new project and client you sign.