Project Management

How to Create a Statement of Work

October 31, 2020
  •  
7 mins read
Ben Willmott
Founder

What is a statement of Work?

Alongside the contract, a statement of work describes the work required by your client and agreed by you. It lays out the services you'll provide, timelines, deliverables, assumptions and the costs.  

Think of an SOW as the framework of what you need to do. It gives you the structure, the alignment and the rules you and your client need to work within during the agreed term.  

You should only create an SOW when both parties have a shared high-level agreement on what's needed for any given project. If you're unclear on what's required and what the main objective for your project is, then you’re not to create an SOW.  

Whether you’re planning a small project or a portfolio of projects, Creating an SOW in some cases isn't easy, it can take a lot of back and forth, and you often get stuck in too much of the detail.  

Keep the focus on what you're all trying to achieve and make sure the SOW gives both parties enough flexibility to deliver the highest value.

What is in a Statement of Work?

What is in an SOW.png

Why do you need a Statement of Work?

No matter how great your relationship is with your client or how clear you’re on what you need to do, not having an agreed SOW puts you at risk.  

Don’t think an SOW will impact your creative license, or you don’t need one because you’ve worked with this client before and never had any problems.

An SOW provides both parties  the minimum agreement before beginning work together.  

For example.  

When you start, how will much you’ll charge, and what do both parties need to do to be able to deliver the project successfully?  

You’ll discuss all of this information anyway, maybe you usually share it on email so you should create a formal agreement in the form of an SOW to cover yourself.  

An SOW isn’t just to protect the company who is doing the work, but the client as well. It’s just as crucial for them to know what they’re getting into.

How to write a Statement of Work?

So we’ve covered what an SOW is and why you should create one, next is how do you create one.

Follow these steps to build out the structure and pay special attention to why you need to create each section. If you’re ready to start creating an SOW, get access to a template below to get you started.

STEP 1: Create a clear and direct overview

This is the first thing your client will read when opening the SOW. This is the statement or paragraph that brings the SOW together.  

Focus on reasons why you’ve been asked to create this SOW, what do you hope to achieve from it and a high-level view on how you’ll approach it.  

Additional Tip: Make sure the requester has provided clarity on why they’re undertaking this project and the real value it will bring their company. Take this and adapt it to the language they understand and is meaningful for them.

STEP 2: Define the SOW’s term.  

The term is when the project starts and when the project ends. The term for the SOW might not necessarily be the same duration of the project, as it could be for a single-phase to get the project started.  

Additional Tip: Don’t be too confident by adding an aggressive start date. Break down what needs to happen on the client-side and yours before the project can kick-off. Use this information when agreeing on a realistic start date.

Step 3: What skills are you providing, where will they based, and who will deliver them?  

Services is the first section of the SOW where you start to share what you’ll provide to deliver against the ask. The services themselves are the capabilities you’ll be supplying like Project Management, Design, Development etc.…  

You need to specify where the team will be based and the team members who’ll be part of the project team.  

Additional Tip: Don’t make assumptions with teams location as for the benefit of the project it may be better for a location split or the team are permanently based at the client’s office.  

If possible, discuss this before the SOW is shared as this could be a last-minute blocker.

Step 4: What are you going to deliver?

What you agree to as a deliverable can make or break a project in the long run. Agree to deliver too much may make your life more comfortable in the short term, but in the long run, it will have a negative impact not just on your project team, but the client as well.  

Be specific, but also realistic in what is achievable. Also, give yourself the flexibility to add higher value than what you first defined.  

Additional Tip: Don't share the deliverables in written format only, discuss them face to face with the client as well.  

One person's interpretation of a deliverable and its description can differ from the next, so talk it through and ideally show real-life examples to support the conversation.  

An example of the Deliverables section from the free TBW SOW Template
An example of the Deliverables section from the free PPM SOW template

Step 5: Creating the project timeline  

It's very likely when writing the SOW they'll be a lot of unknowns that you'll need to cover in your assumptions and client responsibilities. The timeline allows you to start thinking about what needs to happen, by when and by whom.  

Start by adding the end date, then break the timeline down into critical milestones and phases. The more detail you add here including essential tasks, the better as it removes assumptions and highlights what's needed to be able to deliver the services required in the SOW.  

Additional Tip: Once completed, think about what you could stop you from delivering the project. Turn these insights into actions, whether that's new tasks or discussions points with your client.

Step 6: Defining your client's responsibilities  

Based on what you've proposed, what will you need from the client to deliver this?  This can be access to certain teams members in the clients company, time, knowledge resources and decisions, to name a few.

Run through your timeline and deliverables and start to map these out.    

Additional Tip: Discuss these face to face with your client before signing the SOW. They may have made some assumptions on what they can deliver, so discuss this early.

Step 7: List out your assumptions.  

Ideally, you don't want any assumptions before you start a project, but in reality, there will be some, so make sure you add them all here no matter how obvious they feel.  

Be specific with your assumptions, so clearly articulate them and link them back to the deliverables and the timelines of the project.    

Additional Tip: Host a meeting with your team focused only assumptions before sharing the SOW.   You'll be able to remove some and potentially create new ones too.

An example of the Assumptions section from the free TBW SOW Template
An example of the assumptions section from the free PPM SOW template

Step 8: Specifying the fees and expenses

This is where you document precisely how much the project will cost for the term specified. It's also common to breakdown the costs of the phases or for the individual team members provided.

Depending on what type of service you're offering, how much detail will vary.  

Separate the costs into phases so the client can see the value they're getting over time rather than just at the end of the project. If you're adding roles to this section, add a summary of what each role will provide.    

Additional Tip: Add a billing schedule that links back to the phases listed. This makes invoicing much simpler for you and your client.

Step 9: The approvals  

The final stage but not section of an SOW is the signature section. This is where you request the appropriate senior manager from your company and your clients to put pen to paper. You only do this when both parties are in agreement with the content of the SOW.

This section includes the signature, name and date of signature.    

Additional Tip: Ask the question early, who can be the final signee for both parties. The last thing you need is everything is ready to go, but the senior manager is away on holiday.

An example of a Signatures section from the free TBW SOW Template
An example of the Signatures section from the free PPM SOW template

Step 10: The complicated stuff  

The final section of an SOW is the terms and conditions. If the SOW template is your clients, then you'll need your legal team to review these terms. If it's the other way around, then expect changes to be requested by your client.  

These terms and conditions are vital for making this not only a legally binding agreement but also cover the general legal aspects of the service you're providing.  

Additional Tip: Connect the two legal teams early in the process. The discussions between legal teams can often be protracted and take longer than the SOW creation itself.

The SOW Checklist


SOW Checklist.png

Ben Willmott
Founder
Ben is Head of Agile Practices at the London based creative agency Karmarama where he creates bespoke ways or working for his clients and teams. Ben is also the founder of The PPM Academy specializing in coaching Project Management, Agile Delivery and how to be more productive at home and work.

More Blog Posts

Project Management

Dealing With Change as a Project Manager

Change is going to happen whether you’re working with the Waterfall approach, Agile or any other delivery methodology. It just comes in different forms. But change shouldn’t be seen as a negative; change is about improvements, doing what’s right and what’s needed for the business and its users.

Read Article
Agile Delivery

An Introduction into Story Points

Story Points are often misunderstood and misused by teams and in some cases render them useless. In this post, we look at how you can educate the team on what Story Points are and how to use them.

Read Article
Agile Delivery

Waterfall vs Agile: What to Choose?

The Waterfall methodology or model is the traditional approach to project management. It breaks down the stages of a project into sequential phases.

Read Article

Register your interest in the PPM Course for early offers and updates