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10 Steps to Make a Complete Statement of Work

Statement of Work (SOW) is probably the most important document throughout the lifetime of a project. SOW defines so much of the project, including the mission, the scope, basic requirements, a thorough outline of tasks to be completed, start and end dates, critical resources needed, milestones and timeline, terms, and most importantly, a signature from both parties. 

Having a well-defined SOW in place is the first stepping stone to running, executing, and delivering a successful project on time, in scope, and within budget. The SOW works as reference material during the project, since it lists the central purpose of the project. All the work that needs to be complete and delivered by the end of the project is agreed upon in the SOW.

Creating a good SOW is and should always be in the interest of both the agency and client- or any internal and external teams partaking in the project. For the agency, the SOW helps to avoid the risk of potential scope creep, while for the client, it provides comfort in knowing what's going to be handed over to them at the end, not to mention the price of completing the project.

Setting up the Statement of Work should be a collaborative effort. For fullest transparency with your client The agency, the executing team, and the client should all know what's precisely agreed. SOW is a means of understanding.

What should a good Statement of Work include?

1. Introduction

You always begin the SOW with an introduction. This chapter introduces each key stakeholder in this project, i.e., the client, the agency, and third-party stakeholders if any. The introduction is also where you briefly define the project and the work that needs to be completed. Addition to thins, as this is a formal agreement, both parties should know what they agree to by signing the SOW.

2. Mission

A SOW should always include a mission or purpose of the project. The mission is a great way to create goals and is an opportunity to set achievable expectations. The mission can touch on what is expected to be delivered? What is the goal of the end product? Who is the end-user, and how do they want to use it? What problem should the project solve?

3. Project Requirements

What are the main foundational requirements of the project? Referring back to the mission, what problem should the deliverable solve for the end-user? And, how? Make sure you understand each other, and make a list of each requirement. This list is used later in the process to setup the actual tasks, i.e., the Scoping process.

4. Define the Scope

After defining the SOW and project requirements the next priority is defining the scope. What is within the scope? What is outside of the scope? These two questions are vital points to agree upon, define, and setup for the project. This is the foundation for the rest of the planning process. It's essentially where the project managers get cracking on the project and make sure goals and expectations are aligned between the agency and the client.

5. Initiation and Deadline of the Project

When should the project be initiated, and when should it be delivered to the client. This one sounds simple, but estimating time, available resources, and budget ahead of time happens to be a really difficult task. You almost always need a tool to assist you in making these estimations. At least, for it to be somewhat reliable and accurate. A tool that not only takes all facets of this project into account but one that can accommodate all projects across your company, while connecting them with the resources available to you.

6. Key Resources

Often, resources like role, skill set, and time are overlooked. It's important to assess which resources are needed for a given project so that you can have a high utilization for your company. Utilizing your team to the fullest capacity can be a driving factor for clients to book your company for their next project. If you don't have the right resources, you might not be able to finish the project within the agreed upon SOW. Something to consider, which types of resources do you need for this project? How many hours are required by role, and are the resources available? 

7. Manage the Roadmap  

When you have defined the scope, start and end dates, agreed upon the available resources, you can begin to set up the milestones and a timeline for the project. It's always a good idea to discuss the milestones and timeline with your client while you create the SOW. You don't want to end up running outside the perimeters upon which you agreed. With the timeline you will know what milestones should be delivered when and in which order?

8. Terms of Payment and Due Dates

Like any other agreement involving an exchange of money or things, you need to include the terms of how you're going to be compensated for the work you're delivering, i.e., the terms and dates.

9. Special Requirements

Lastly, are there any special requirements needed to be taken into account? This could be special security measures, for example, who has access to the project or who can access databases of trade secret information, etc.

10. Accept & Sign

When all of these 9 points have been thoroughly defined, read, and understood by everybody, the document must be accepted and signed by both parties.

The signed SOW works as both the formal document and the practical action plan when initiating and implementing a project. It ensures that both of you have a common ground, understanding, and reference throughout the full lifecycle of the project.

If you want to do this a little bit smarter, you can also read our article on The Old vs. the Smart Way of Making Statement of Work. Here, we'll give you some tips on how you can plan, implement, and evaluate your project more easily in collaboration with your client.

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Kasper Nymand
ABOUT THE AUTHOR | Kasper Nymand
Yello! I'm Kasper, and I'm doing Marketing at Forecast. Apart from that, I enjoy experimenting with various projects to see where my imagination brings me.
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