Scope of work and statement of work are both abbreviated as SOW. But while a statement and a scope of work have similar elements — both providing essential frameworks for project success — they’re two distinct documents. 

A statement of work is created between a client and vendor. It describes the project you’re collaborating on and its terms and conditions. This protects everybody and holds all parties accountable as you work together to get the job done.

A statement of work and scope of work complement each other. One is not better than the other. You need both in different scenarios to help your projects succeed. Here, we’re breaking down what these two documents look like, how to write them, and how each can benefit your business and lead to project success. 

What is a statement of work?

A statement of work is a comprehensive, formal document that outlines project details, terms, and conditions. It is legally binding and protects both parties’ interests in disputes. The statement of work provides a clear reference for project execution and evaluation.

Within a statement of work, you’ll also find information about project deliverables, timelines, payment terms, and anything relevant to completing the project successfully. Think of this document as a roadmap that shows the way to project completion and success. 

For some projects, a scope of work is sufficient on its own. But larger projects may need a statement of work, too. 

Parts of a statement of work

A statement of work should include:

  • A concise overview of the project or project summary that includes contact information, an executive summary, and a solution description. Each element provides information that people need to help complete the project. 
  • The project’s purpose and objectives, explaining what you’re trying to accomplish and why you’re doing it. It’s essential to include the project purpose to increase motivation, engagement, and unity among those involved. 
  • An in-depth explanation of project tasks, deliverables, and timelines. This is also a good place to discuss the scope of work, touching on in-scope and out-of-scope services, client responsibilities, and key assumptions.
  • Project costs and budget allocation include a breakdown of the estimated project cost, showing where the money is going and how your resources can be most efficiently allocated.
  • Payment schedule and invoicing procedures, including fixed fee pricing, payment methods, payment schedule and terms, and price and term validity. Having any information regarding payment in writing is crucial so everyone gets paid the correct amount on time.
  • Standards for project deliverables. Define what the desired deliverables are. Then, detail the expectations for each one, explaining what it should include. Adding project standards ensures that the work you’ll receive is what you need.
  • Procedures for handling changes if they should arise. While it’s nice to think that a project will run smoothly from start to finish, sometimes issues come up that you can’t avoid, such as employees being out sick or a software program running into glitches. Anticipating potential obstacles and including solutions in your statement of work will save you time and headaches later.
  • Conditions for project termination should you need to terminate the project. For example, you might need to end the project because of a lack of resources or failure to meet deadlines.
  • Finally, add signatures to designate the document as an official, formalized agreement between parties.

Benefits of a statement of work

A statement of work is a valuable way to set the foundation for a successful project. The information outlined in this document protects everyone involved and keeps you accountable as you work toward a common goal. Here are the primary benefits of using a statement of work. 

Lays the foundation for a strong business partnership

A statement of work is not a purely internal document. It’s between a client and a third-party vendor. It serves as a formal way to connect you both to begin collaborating. 

Protects both your company and any external vendors or partners 

A statement of work is similar to a contract (with additional details involved). It is a legally binding document that will protect you from disputes or negotiations that could have ramifications such as losing money or a breach of trade secrets. 

Sets you up for professionalism

By approaching the other party with a formal document outlining project specifications, you’ll appear highly professional, reassuring them that you’re taking the project seriously.  

Outlines all of the details needed for a successful project

Finally, a statement of work includes the information everybody needs to know as they work through each project stage. 

Considerations for a statement of work

You’ll only reap the benefits of a statement of work if you do it correctly. Here are a few common mistakes made with statements of work and how to avoid them.

Make sure the language is specific so you can avoid misunderstandings or disputes

A common mistake in statements of work is using vague or ambiguous language. Your goal with this document is for everyone to be on the same page clearly understanding how the project will work. You must be specific and comprehensive as you describe the project’s terms to accomplish this goal. 

Write the document toward external partners rather than internal stakeholders

Remember, a statement of work is not only for internal use — it’s typically used with some type of third-party vendor, whether that’s another business or a contractor. Make sure the language of the document reflects this audience.

Be clear about acceptance criteria

The acceptance criteria in a statement of work outlines what conditions need to be met before the project is considered done. This provides a clear set of expectations for everyone involved. 

Statement of work example

Imagine you’re writing a statement of work for an upcoming software development project. Here’s what that statement of work might look like:

  • Introduce the project and its purpose. 
  • Describe in detail the project’s tasks, deliverables, and timelines, including defining the scope of work.
  • Outline financial considerations such as project cost, budget allocation, payment methods, and schedule.
  • Explain acceptance criteria and project standards.

What is a scope of work?

A scope of work is a detailed outline of the project tasks, deliverables, and timelines. It establishes and describes project boundaries and expectations. A scope of work can be a smaller section in a complete statement of work document (which is most common) or stand independently. Typically, this document is 1-2 pages long.

The purpose of a scope of work is to explain exactly how the project deliverables will get done. It defines what’s in and out of scope for the project. Sometimes, it might include images, graphs, or charts to help visualize or conceptualize the work needed.

The purpose of a scope of work is to ensure project stakeholders are aligned on the objective and process of the project. Your scope of work also helps guide the project execution and resource allocation because it details exactly what needs to be done and how to do it. It also serves as a reference for performance evaluation, as you can compare the final project with the project outline on the statement of work.

Parts of a scope of work

Elements of a scope of work include:

  • Project objectives and deliverables
  • Task breakdown and timelines
  • Resource requirements and responsibilities
  • Milestones and acceptance criteria 

Benefits of a scope of work

By using a scope of work, you can enjoy benefits such as simpler task allocation and less scope creep. Here are the most significant advantages of a scope of work:

Enhance project clarity and alignment

A scope of work clearly explains each step of the project. Using a scope of work, you can ensure that everyone involved is on the same page about what needs completing. 

Improve project planning and execution

When you have a scope of work, you know exactly what needs to happen, making it easier to create a plan and assign tasks where needed. 

Minimize scope creep and change management issues

Large and small projects can suffer from scope creep or change management issues, making it more difficult and time-consuming to complete the project. With a scope of work, the project scope is clearly defined from the outset. You can also avoid problems like lack of support or communication because the scope of work names all parties involved. 

Facilitate performance evaluation

Using a scope of work makes evaluating the performance of employees and vendors easier. 

Considerations for a scope of work

Writing a scope of work correctly will take some effort and time — and you need to make sure a scope of work is the right choice for your project.

Requires upfront effort and time investment

A scope of work isn’t something you can rush through. Your project will only succeed if you take the time to write a comprehensive scope of work. Be willing to put in the effort necessary.

May not be suitable for all types of projects

You likely don’t need a scope of work on its own. Usually, a scope of work is included in a complete statement of work. The only situation where you might benefit from an isolated scope of work is if you have a small, internal project with clear objectives. 

Scope of work example

Maybe you’re preparing to develop a new software. You might create a scope of work for the project that lists:

  • Project phases: When developing software, typical project phases could include planning, designing, development, testing, deployment, and maintenance.
  • Deliverables: Goals may include a completed software application.
  • Timelines: List the dates by which each phase of the project should be done.

Since a scope of work is more granular — getting into the specifics of what needs to be done — you can also break out each project phase into a list of more specific tasks:

  • Planning phase
    • Brainstorming
    • Defining needs
    • Analyzing data
  • Designing phase
    • Plan the design for the front and back end of software
  • Development phase
    • Begin coding and creating infrastructure
    • Collaborate with developers and designers 
  • Testing phase
    • Complete unit testing based on documentation, happy paths, and against paths
    • Document and fix bugs 
  • Deployment phase
    • Make the system public
    • Integrate with legacy systems where needed
  • Maintenance phase
    • Maintain software over time

Outlining the project’s phases in a scope of work allows everyone to see the exact tasks needed for project completion. 

Statement of work vs. scope of work

A statement and scope of work have several similarities. They’re both part of the same document. But if you isolate the scope of work, which is short and actionable, you’ll notice that it does have several differences when compared with the full statement of work.

The most significant differences between a statement of work vs. scope of work include:

  • A scope of work is shorter and more detailed. A statement of work is longer and provides a bird’s-eye view.
  • A scope of work is for internal use. A statement of work is for external partners.
  • A scope of work is more actionable (how you’ll complete the project). A statement of work is more goal-oriented (what you’re doing and why).
  • A scope of work is best for well-defined projects with clear objectives. A statement of work is best for a more complex or high-risk project.

Can a scope of work be part of a statement of work?

Yes. A scope of work can be a section in a broader statement of work document. The statement of work covers the overall project framework and contractual terms. The scope of work narrows the focus to provide more detailed project tasks and deliverables. 

When should you use a scope of work vs. a statement of work? 

Scopes and statements of work generally go together. You write a statement of work (a larger document) that encompasses a scope of work (a shorter section within that longer document). However, there are occasionally times when you’d want to use just one or the other.

A scope of work is best for well-defined projects with clear objectives. If you’re launching a project with manageable complexity, a scope of work will be a better fit. Scopes of work are also typically used internally. 

A statement of work is the right choice for a more complex project with multiple stakeholders or external parties (like an agency or contractor). Any project with high financial value or a high level of risk should use a statement of work. And if a project has a potential for scope creep — when a project’s scope changes beyond what was initially required — you should opt for a statement of work here, too.

How to write a statement of work

Once you know the general structure, writing a statement of work is fairly straightforward. Remember not to rush the process but to ensure you include all the information stakeholders need. Follow these tips to get started.

1. Use clear language 

Instead of packing your statement of work with industry jargon, use clear, plain language so everybody will understand.

2. Define project objective

One of the most important steps in a statement of work is defining the project’s overall objective. Be clear about the project goal and its purpose. This helps get all stakeholders on board.

3. Add milestones and boundaries

After defining the project goal, you’ll want to explain how that goal should be reached. Outline a list of milestones that should be hit along the way. For example, these milestones might sound like “complete pre-development planning” or “run user acceptance testing.” You can also list boundaries — what’s not needed — to avoid scope creep. This section will likely be the longest in the statement of work.

4. Get legal review

Before adding signatures to the finished document, ask your legal team to review it. They can offer guidance on whether there’s anything you should add, reword, or change.

Need an SOW template? Use the ScopeStack SOW templates as a starting point for your business and easily modify the standard templates to make them your own.

How to write a scope of work

Typically, your scope of work will be a smaller section within the broader statement of work. A scope of work is 1-2 pages long. Here’s what it needs to include.

1. Divide the project into tasks

Split the project into manageable tasks and deliverables. It’s often most efficient to categorize these tasks according to time or project phases, but you could also order them by theme or difficulty. Some tasks might be higher priority than others. 

2. Set realistic deadlines

Each task needs its deadline as a milestone to complete. This will help you stay on track throughout the entire project. Make sure the deadline lengths are doable for your team.

3. Define roles and responsibilities

Be clear about who is responsible for what. Defining project roles will make delegation, organization, and project performance run more smoothly. Identify the roles you need, the people you have, and their skills and availability. Then, match up responsibilities accordingly.

4. Establish standards for project deliverables

Finally, ensure your scope of work includes details and expectations on what the project deliverables should look like. For example, the final deliverable might be fully developed and operable software. 

Generate better statements of work with ScopeStack

Both a statement of work and scope of work are valuable project management tools that protect all parties, outline deliverables and expectations, and help ensure the work gets done on time and gets done well. But writing these documents from scratch can take some serious time and elbow grease. 

Reduce SOW turnaround time by 90% by using software like ScopeStack. Our SOW template library has over 55 templates that help you quickly deliver excellent statements of work. Plus, our CPQ software enables you to generate accurate, personalized quotes for each client. Contact us to learn more about how ScopeStack can benefit you.

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