3 Statement of Work Best Practices for MSPs and VARs

A statement of work is critical to ensure that everyone involved in a project is satisfied with the outcome. It can be tempting to rely on a general document that outlines the basics of a project, but that can lead to miscommunication and, ultimately, unmet expectations. This article will cover statement of work best practices to help you avoid that problem.

3 Essential Statement of Work Best Practices

A comprehensive document written in a good statement of work format sets the right expectations, so each side comes away happy. Everyone will know what will be done, who will do it, how they'll do it, when they'll complete it, and how much it will cost.

1. Start with a Work Breakdown Structure

A work breakdown structure (WBS) is the most important statement of work best practice because the WBS is an essential component of a good statement of work. It guarantees that the SOW includes all of the work necessary to complete a project successfully.

A WBS breaks the project down into levels of increasing complexity. You begin with the desired outcome. Then, you detail the services that will achieve that outcome. Next, you break each service out into tasks and each task into subtasks.

In the end, the WBS will include every step necessary to complete the project and meet the objective. It is beneficial to customers because it provides transparency into the project. It benefits your engineers because they can use it as a blueprint for scoping and pricing the project.

And, by ensuring that you include every step in the statement of work, you will avoid going over budget due to scope creep or inaccurate pricing.

2. Key Characteristics of a Good SOW

Once you have your WBS, the next best practice is to ensure that your team writes good SOWs. A good statement of work will be:

1. Clear. Clarity should take precedence over style and any other concerns. Your statement of work needs to make each element of the project crystal clear. That way, your customers know what to expect, and your team knows what is expected.
2. Comprehensive. Don't make any assumptions. You're the expert, so you may take things for granted that your customer won't. Your statement of work should detail each critical element of the project.
3. Accurate. As part of your contract with your customer, the statement of work is governed by contract law, so it must be accurate. If it isn't, you may end up doing work you hadn't planned on or providing services at a price that isn't profitable.
4. Professional. Statements of work influence how customers think of your company. SOWs that are professionally formatted, well written, and consistent from one project to the next demonstrate that you know what you're doing.

1. Write Clear SOWs

Experts often suffer from the curse of knowledge. When you know something, it's easy to assume that other people know it as well as you do. Most experts don't even realize they're leaving out important information.

Avoid the curse of knowledge by:

• Using concrete language
• Simplifying where possible
• Providing definitions when necessary
• Minimizing the use of industry terms and jargon

2. Write Comprehensive SOWs

Overcoming the curse of knowledge will lead to more comprehensive SOWs because you will include all relevant information. To take it a step further, create an IT service catalog that describes each service you offer along with all tasks and subtasks required to deliver it.

This process takes some time, but it will increase your efficiency, accuracy, and customer satisfaction in the long run. That's because:

• You only have to do it once, and then your engineers will know what language to include in future SOWs.
• You'll have one source for service language, so each SOW will be consistent.
• Your customers will know what to expect, and you can increase the project's scope before kickoff if necessary.

3. Ensure SOW Accuracy

As mentioned above, a service catalog will also improve accuracy. You can further enhance the accuracy of your SOWs by aligning level of effort to service language. That way, your engineers will consistently price each service, so your projects don't go over budget. CPQ for services can help with that.

4. Write Professional SOWs

In addition to being clear, comprehensive, and accurate, a professional SOW should:

• Use consistent terminology
• Consistently number and name tasks
• Use active voice

3. Vital Elements of a Statement of Work

The final SOW best practice is to make sure you include all of the necessary information in each SOW. Each statement of work should consist of:

• Project Description. What services are included, who is involved, and what is the desired outcome?
• Requirements. What standards, regulations, and conditions must you meet?
• Deliverables. What services will you provide, and how will they help achieve the desired outcome? What is the acceptance process?
• Tasks. What tasks must you complete to deliver the services? What tasks must your team complete that do not align with a specific deliverable (e.g., PM-related tasks)? When will each task begin and end? Who is responsible for each task? What resources will be required?
• Schedule. What will be done? When will it be done? What milestones must you meet and when?

Follow These Statement of Work Best Practices to Increase Profitability

These SOW best practices will lead to increased profitability, reduced risk, and higher customer satisfaction. Whether you use services CPQ software or an in-house solution, your team will be better equipped to set customer expectations, accurately price services, and ensure project success.