Statement of Work or commonly abbreviated as SOW is an important part of the world of work.

 

SOW is used when you want to start a business or collaborate and will help you understand what you want to achieve in a project.

 

In addition to the business world, the term statement of work is also widely used in marketing, for example when you have to explain what needs to be done in a brand campaign.


 

What is the Meaning of Statement of Work?

 

A Statement of Work (SOW) is a document that defines all of the components of a project.

 

Statements of work tend to be very detailed and discuss tasks, deliverables, milestones, and timelines.

 

They also outline the goals of the project and indicators of success.

 

Statements of work generally fall into one of three main categories.

 

Depending on your industry and the nature of your project, you may rely more on one than the others:

 

• Level of effort or time and materials or unit rate: the most common type of SOW, this document describes the materials and amount of time required for the project.

 

• Design or detail: this type of SOW outlines the requirements for the work, including quality, measurements, or types of materials.

 

• Performance-based: a performance-based statement of work addresses the overall objectives of the project as well as the quality of resources and results required. Because it does not specify the process or method of work, a performance-based statement of work allows for a high degree of autonomy.

 

Although some people use the terms statement of work and scope of work interchangeably, the two documents serve different purposes.

 

In fact, the scope of work is a section of the SOW that typically details the work to be completed by the contractor or freelancer.

 

How is a Statement of Work Used?

 

You can write a statement of work for both internal and external projects, but the latter is more common.

 

Many project managers develop this document when working with external clients.

 

Here are some areas where SOWs are commonly used:

 

• Communicate all key project details to participants, including sponsors, team members, and contractors.

 

• Avoid confusion about goals, deliverables, and timelines. 

 

• Serve as a guideline for your team and clients.

 

What are the Components of a Statement of Work?

 

While you can follow any format you choose when writing a statement of work, you should include a few important components:

 

• Objective

 

Clearly state your goals. Think about why you are doing this project and what you want to achieve.

 

It is important to make goals measurable so that you know exactly when you have achieved them.

 

• Scope of Work

 

This is where you outline the work the vendor will do to achieve the project goals.

 

This section includes who will be working on the project, what they will do, and the processes they will use.

 

Details include the tools and resources you will use and how you will report results and updates.

 

• Achievement

 

Include milestones in your statement of work to indicate when you expect each deliverable.

 

This helps ensure understanding of when you expect tasks to be completed throughout the project lifecycle.

 

Often, these milestone deliverables correspond to payment for that phase of the project.

 

• Timeline

 

A timeline is an estimate of the duration of the project and when each milestone, deliverable, and payment is expected.

 

This is a flexible part of the document that can change if you include specific dates or can include a range of dates to allow for flexibility.

 

• Cost

 

The costs section outlines the overall cost of the project, with details for each phase, along with costs for equipment, staff, travel, and other expenses.

 

It also details how you will make payments and when.

 

• Signature

 

Both parties sign and date the statement of work document to signify agreement to the terms.

 

How to Write a Statement of Work?

 

Here are 12 steps to writing a SOW:

 

• Start with an Introduction

 

Start by writing an introduction to the project and the parties involved.

 

Clarify whether the project involves a service or a product.

 

Then identify the client or buyer and the contractor or supplier.

 

Determine whether the document is a fixed offer that will remain valid for a long period of time or a one-time contract.

 

• Set a Goal

 

Next, explain the rationale for the project, specify why it is being undertaken now, and state the projected completion date.

 

Discuss the goals of the project and explain why they are important.

 

• Clarify the Scope

 

Describe the work the provider or contractor will do and the processes they will use. Include some high-level tasks, but save the details for the to-do list.

 

• Breaking Down Tasks

 

Describe the scope of work in more detail, and outline all tasks that the contractor or supplier will perform.

 

To make things clearer, break the tasks down into phases and prioritize the order in which each phase should be completed.

 

• State the Location of the Job

 

Clarify where the supplier or contractor should perform the work and where project participants should meet, if applicable.

 

Options typically include the client’s location, the contractor’s location, or a remote location provided by the supplier.

 

• Create a Work Schedule Outline

 

Plan the project schedule. This schedule can include specific dates, specific time periods, or specific deadlines.

 

Here, you can also clarify constraints related to the schedule, such as maximum hours or a project end date.

 

• Explain the results of the work

 

Clearly state the deliverables, or products or services that will result from the project.

 

Then describe key milestones, such as project start, results review, and testing.

 

• Create Payment Terms

 

Discuss payment for the work outlined in the scope.

 

Most statements of work provide for payment based on a set schedule or completed milestones.

 

• Define Success

 

Clarify how you will know when the work is completed. Many statements of work require specific deliverables or accomplishments.

 

• Setting Testing Standards

 

If the product or service requires testing or verification, describe the standards for doing so.

 

List the systems or processes that will be used and the people involved.

 

• Describe in Detail Any Special Requirements.

 

Describe whether the contractor or provider must use any specific software or processes to complete the work.

 

This section should also describe whether the provider requires any specific certifications or permits to perform the work.

 

• Obtain All Required Signatures

 

Finally, submit a statement of completed work to the client.

Execute the agreement by obtaining all required signatures

 

What Things Should be Considered When Making a Statement of Work?

 

To create a proper SOW, there are several things you should pay attention to, what are they?

 

• Accuracy

 

In making SOW, you must pay attention to the accuracy in it.

 

This is because SOW must be precise, clear, and free from the use of ambiguous language so that there is no misunderstanding of interpretation that can harm many parties.

 

• Level of Consistency

 

In addition to being precise, SOW must also pay attention to the level of consistency in it.

 

So, in making SOW, make sure the SOW is consistent between the main contract and the cooperation agreement.

 

• Documentation

 

Don't forget to document all parties involved in the project and also every moment of the event held.

 

• Common Understanding

 

Fourth, make sure all parties involved have a common understanding.

Make sure they have read, understood, and agreed to every part written in the SOW.

 

• Evaluation and Monitoring

 

Ensure that the project described in the SOW can be monitored and evaluated with SOW data and that the achievements obtained are in accordance with what is stated in the SOW.

 

What is a Statement of Work Template?

 

You can use this template to create your own statement of work:

 

Project Summary: [Start by writing an introduction about the project and the parties. Explain whether the project involves a service or a product. Then identify the client or buyer and the contractor or supplier. Determine whether the document is a fixed bid that remains valid for an extended period of time or a one-time contract].

 

Project Objectives: [Explain the rationale for the project, explain why it is being undertaken now, and state the projected completion date. Discuss the project objectives and explain why they are important].

 

Scope of Work: [Describe the work that the provider or contractor will perform and the processes they will use. Include some high-level tasks but save the details for the task list].

 

Project Tasks: [Describe the scope of work at each phase where you outline all the tasks the contractor or supplier will perform. Prioritize the order in which each phase should be completed].

 

Phase 1: [List tasks]

Phase 2: [List tasks]

Phase 3: [List tasks]

 

Work Location: [Clarify where the supplier or contractor is to perform the work and where project participants are to meet, if applicable. Locations typically include the client’s location, the contractor’s location, or a remote location provided by the provider].

 

Project Schedule: [Plan the project schedule. This schedule can include specific dates, specific time periods, or specific deadlines. Here, you can also clarify constraints related to the schedule, such as a maximum number of hours or a project end date].

 

Deliverables: [Clearly state the deliverables, or products or services that will result from the project. Then describe key milestones, such as project start, review of deliverables, and testing].

 

Payment Terms: [Discuss payment for the work outlined in the scope. Most statements of work provide for payment based on a set schedule or milestones that have been completed].

 

Project Completion: [Describe how the work will be known when it is complete. Many statements of work require specific deliverables or milestones. If the product or service requires testing or verification, describe the standards for doing so. List the systems or processes that will be used and the people involved].

 

Project Requirements: [Describe whether the contractor or provider must use any particular software or processes to complete the work. This section should also describe whether the provider requires any particular certifications or permits to perform the work].


 

Conclusion

 

That was the explanation of the statement of work that can be a reference for you.

 

From the explanation of the article above, it can be seen that the statement of work is a document that contains each component in the project.

 

This SOW can be used in business projects, conducting business cooperation, and for business marketing purposes. 

 

Like the importance of SOW for product marketing, it is very important for a business to manage employees well.