A SOW will be a crucial document that is part of any project management process. In this article, you will discover why you should use a SOW, the purpose, the common types of SOW documents and how a SOW can ensure that your project does run smoothly.
Purpose Of The Statement Of Work
An SOW or a statement of work is not a doc that’s just relevant to big businesses. Instead, this doc can be useful for any business that is completing a project for a client. The purpose of a SOW is to clearly detail the how, when, what, why and who of the work that will be completed for a client.
While commonly used by consulting disciplines as well as management, they can be beneficial to a wide range of different services in various industries.
It is worth noting that a statement of work will typically include work activities, deliverables, and timelines for a specific type of project. The SOW should also include the purpose as well as the scope of the work.
The purpose is particularly important as these are basically the objectives of a project, what you want to achieve and how the level of achievement will be assessed. The main purpose is to ensure that responsibilities, liabilities and work agreements for two parties are clearly defined.
Why Should You Use A Sow And How Can It Keep Things Running Smoothly
There are many reasons why you should use a SOW for your project management. As noted, it will set clear expectations for a particular client. It will ensure that everyone knows who is responsible for what and keep people on the same page.
You will also be aware of what a client will determine to be ‘good work.’ The benefit here is similar to a personal guarantee on a loan. It is a legally binding document and you are expected to meet any of the requirements written in the SOW.
One of the other benefits of a SOW is that you will be able to state how you will communicate with a client and when. This will provide information on when they will be able to complete revisions. So, you’ll be keeping them as accountable to a particular project as you.
Another great reason to use a SOW is to ensure that you can avoid the issue of scope creep. With scope creep, a client will request more services while failing to increase the timeline or establish a greater budget.
With a SOW you will be able to request a greater level of finance for any additional work that is completed on a project. It can also include any work that you are not going to agree to later on.
Another issue that can plague projects is invoices being unpaid. This is becoming a serious issue for businesses. With A SOW, you can make sure that you do keep clients accountable for payments and specifically for paying on time.
The client will be required to sign the SOW, ensuring that it is effectively a contract. So, you’ll be provided with the client’s written agreement to pay for services on time. For this reason, you should make sure that the SOW does include both the payment schedule and specific charges.
Difference Between Scope Of Work And Statement Of Work
Project managers can be confused about the difference between the scope of work and the statement. After all, they are often both referred to as SOW. However, there are notable differences.
The statement of work will include the purpose of the project and the description. This is often the document a client will sign to start work for a professional service firm.
A typical comprehensive statement of work will usually include a scope of work. The scope of work is more detailed with organisational charts for the different individuals that are part of the project. It will also include any further resources and equipment or tools that will be required on the project as well.
Common Types Of Sow Documents
Finally, it is worth noting that there are a few different types of SOW and these mainly fall into three different categories. These are:
- Design/Detail Statement of Work
- Level of Effort or Time & Materials or Unite Rate
- Performance-Based Statement Of Work
Each type includes different information. For instance, the Design/detail statement of work provides the supplier information on how to complete the work and provides a definition of buyer requirements.
The second type is useful for virtually any service and the deliverable will typically be an hour of work as well as the materials necessary to complete the service.
The Performance-based statement of work will include all aspects for acquisition based on the purpose of work that will be performed as well as equipment supplied. It does not, however, state how work will be fulfilled.
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