The IT sales world is full of acronyms ranging from AES to CAC to DPA, but if you’re prepping for an upcoming project, SOW is one of the most important. A statement of work (SOW) is a contractual document in project management. Your SOW sets clear expectations about the project details and serves as a blueprint for your collaboration with a client.

In this article, you’ll learn what a statement of work should include and how it can benefit you. You’ll also find a step-by-step guide on how to write a strong statement of work that will set you up for success with your next IT project.

What is a statement of work?

A statement of work is a detailed contract that outlines the details of your service engagement with a client and the information needed to start a project. The SOW describes the project and documents the understanding between you and the client of the work to be completed before you begin the project. All aspects of the project are clarified in the SOW to prevent misunderstandings and safeguard both parties.

Within a statement of work, you’ll find information such as:

  • Deliverables
  • Timeline
  • Budget
  • Roles and responsibilities
  • Payment terms
  • Acceptance criteria

A statement of work is one of the most crucial project documents. The information contained in this legal document helps you achieve high-quality work while maintaining clear communication among all parties. 

Statement of work vs. scope of work

A statement of work and a scope of work are both abbreviated SOW but are separate documents.  Typically, a scope of work is a smaller section within an overall statement of work document. The scope of work is:

  • Short
  • Detailed
  • Actionable
  • For internal use
  • Good for projects with clear objectives

A statement of work is:

  • Longer
  • An overview
  • Goal-oriented
  • For external partners
  • Good for complex or high-risk projects

Learn how to keep projects from creeping out of scope.

Benefits of a statement of work

If you’re planning an upcoming IT project, creating a statement of work is essential before you begin. A comprehensive, well-written SOW will benefit your project by:

Improving collaboration

A project work statement is the starting point for a successful partnership with a client. Remember, a SOW is not for internal use only. You’ll share your finished statement of work with your client (and any relevant third-party vendors). The project description the SOW contains is your starting point for successful collaboration.

Boosting your reputation

Introducing a project with a SOW in hand demonstrates professionalism to clients. A detailed SOW shows that you’re serious about getting the project done right and will encourage your clients to respond similarly.

Protecting your company

Finally, remember that a statement of work is a legally binding contract. With information such as payment terms and acceptance criteria, a SOW is an important method of keeping your company safe from any disputes that could result in money lost. 

What should a statement of work include?

Most statements of work include the following components:

  • An overview of the project
  • The project’s purpose and objectives
  • A description of project tasks, deliverables, and timelines (including scope of work)
  • Project costs and budget allocation
  • Payment schedule and invoicing terms
  • Acceptance criteria for deliverables 
  • Procedures for handling any changes that come up
  • Conditions for project termination
  • Signatures

Each element creates an exhaustive statement of work that provides all relevant parties with the necessary information. 

How long should a statement of work be?

The length of your statement of work document will depend on the project’s complexity and the client’s preferences. For simple projects, a five- to ten-page document might suffice. Larger projects, however, often call for a more detailed document — one between ten and twenty pages, or in some cases, even longer than twenty.

Bottom line: Your statement of work should be as long as you need to include all of the necessary information for the project.

How long does it take to write a statement of work?

The time it takes to create your SOW can vary depending on factors such as:

  • Project size and duration
  • Project complexity
  • Stakeholder involvement
  • Familiarity with the project
  • Client review and approval

Allocate ample time to create your statement of work. It might seem like the process drags on, especially as you wait for client approval. However, investing time in a well-crafted SOW upfront can save you significant time and headaches.

Streamline the process of writing your next SOW using ScopStack’s free templates and CPQ software. ScopeStack’s extensive library of SOW templates has something for every project, offering a wide range of customizable templates you can download for free. 

Browse template library

Who is responsible for writing statements of work?

Usually, project managers shoulder the responsibility of writing the statement of work. However, you will often also need to involve relevant stakeholders, such as legal counsel, technical experts, or the client.

Types of statements of work 

 

1. Fixed-price SOW

Your team delivers a specific set of deliverables for a predefined price. 

Fixed-price statement of work example

Project: Upgrade a retail chain’s network infrastructure and migrate its ERP system to a cloud platform.

Scope: 

  • Installation of new switches, routers, and firewalls
  • Configuration of network security and access controls
  • Data migration from existing servers to the new cloud platform
  • Customization and installation of the ERP system on the cloud
  • User training and system testing

Deliverables:

  • Fully functional and secure network infrastructure
  • Migrated ERP system configured according to the client’s specific needs
  • Trained users and a comprehensive system knowledge base
  • One month of post-migration support

Estimated price: $125,000

Payment terms: 30% upfront, 30% upon network completion, 30% upon the ERP system going live, and 10% after the post-migration support period.

2. Time and materials SOW

The client(s) pays for your team’s time and resources throughout the project. 

Time and materials statement of work example

Project: Migrating a large company’s legacy ERP system to a modern cloud-based solution.

Scope:

  • Assessment of existing ERP system and data structure
  • Development of a customized migration plan and data cleansing procedures
  • System configuration and integration with other enterprise applications
  • User training and ongoing support

Hourly rate: $175 for senior IT consultants; $125 for junior consultants.

Additional expenses: Cloud service costs, data transfer fees, migration software licenses.

Payment terms: Biweekly invoices based on time and materials used.

3. Performance-based SOW

Payment is tied to achieving specific project milestones or outcomes.

Performance-based statement of work example

Project: Implementing a new network security solution for a financial institution.

Scope:

  • Network vulnerability assessment and risk analysis
  • Design and implementation of a multi-layered security architecture
  • Continuous monitoring and threat detection
  • Regular security reports and incident response training

Acceptance and success criteria:

  • Reduce network security incidents by 50% within six months
  • Achieve SOC 2 compliance within 12 months
  • Maintain a 99.9% network uptime throughout the project

Payment terms: 20% upfront, 40% upon achieving each success criteria milestone, 40% upon project completion.

How to write a statement of work

Your statement of work contract should include all of the elements mentioned above. To avoid miscommunication, use clear, straightforward language that everyone can understand. You’ll want to be clear about the project objectives and the steps it will take to get there. Here’s how to begin writing a statement of work.

1. Gather project information

Understand the client’s needs, objectives, and expectations clearly. You may want to meet with the client and any relevant stakeholders to ensure you understand what they’re looking for. You can’t write an accurate SOW unless you know the project’s primary objective, so this is an essential first step. 

2. Draft the SOW

Once you know the basics, you can define deliverables, tasks, and key milestones. Think of these elements as the foundation of your project. More minor details build on top of these key cornerstones. 

3. Flesh out the details

Next, get more granular by considering timelines, budget, roles, communication plans, and other relevant clauses. These details are important to include because they set expectations for everyone involved. Knowing information such as desired timelines and communication methods upfront will smooth out the project once you begin. 

4. Refine and review

After you have a draft of your statement of work, get some fresh eyes on the document before moving forward. Collaborate with stakeholders to refine the SOW and ensure clarity and completeness. 

5. Negotiate and finalize

Let the client see the final draft of the statement of work so they can provide feedback and input. After they’ve done so, you can finalize the SOW and begin work on the project.

Use ScopeStack’s SOW templates for your next IT project

A strong statement of work lays the foundation for a successful project. Using a statement of work ensures that everyone involved in the project is clear on the deliverables, timeline, and payment terms. This transparency and the SOW’s legal protection will help the project run smoothly. 

Write better statements of work using our library of SOW templates. These free, customizable templates are easy to modify and personalize for your upcoming project — creating a comprehensive SOW that gets everyone on the same page before beginning work. Contact us to learn how our SOW templates and ScopeStack’s CPQ software can streamline your IT projects.

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