When managing a project, one of the terms that get frequently tossed around is a Scope of Work (SoW), also referred to as Statement of Work. A well-defined SoW is important as it reigns in the bounds of a project. Though SoW requirements vary by industry, you can use a scope of work example and pick out the common components to create your own custom document.
In this article, you can find out exactly what an SoW is, its core components, and some roadblocks you might face in writing one. You will also learn some general and industry-specific guidelines and some SoW examples that will help you craft a solid SoW.
One of the top drivers of project success is the ability to control the project scope. According to the Project Management Institute (2018), managing the project scope well allows organizations to save money, drive customer satisfaction, and improve project benefits. By using iterative approaches and getting customer feedback, they can adjust to changes in the midst of a project and still achieve their objectives.
However, organizations also have to be wary about the increasingly common phenomenon of scope creep. In 2018, 52% of organizations surveyed by the Project Management Institute (PMI) report experiencing scope creep or uncontrolled project changes in the past 12 months. Five years ago, only 43% of companies agreed with this statement, which makes it a significant increase (PMI, 2018). One of the ways to improve this is by having a clear-cut scope of work.
Source: Project Management Institute
The Guide to the Project Management Body of Knowledge (PMBOK Guide) originally defines a Statement of Work as “a narrative description of products or services to be supplied under contract.” However, this definition only looks at the SoW from the side of the client and disregards what the contractor is required to do to deliver its products or services. Thus, Martin (1998) proposed an expanded definition: “a narrative description of the products and services to be supplied to a client, as well as a description of the contractor’s needs and requirements to properly perform the delivery of such products and services under contract.”
A statement of work is created after a contractor closes a sale but before he starts work for the client (TemplateLab, n.d.). The SoW is like a map that guides both parties of what is included and not included in a project (Aston, 2020). A well-written SoW helps you avoid confusion and miscommunication with clients over project deliverables. It also helps you avoid scope creep, or when there are additional requests for work outside the project scope (MacKay, 2018).
Though they may vary by industry, a good scope of work template will have the following key elements:
Source: Project Management Institute
Though a Scope of Work has recurring sections, one might have to tweak the document a bit to fit the needs of clients based on their industry.
Service providers can either use a performance-based SoW or one that sets rates based on effort or time or materials or units. When making service-oriented SoWs, make sure to specify the performance design and requirements and the work product the client is expected to receive from the provider (Luther, n.d.). For example, if you provide graphic design services, it should state the format and how it is to be delivered to the client. On the other hand, if you provide training, the SoW should discuss total training hours, frequency, assessment methods, and results.
Project management is a dynamic field. Hence, the SoW for this industry should provide good enough structure to get work done while also establishing controls on how to manage changes along the way (Smartsheet, n.d.). In addition, you can include a reporting section, which details how you will communicate updates with stakeholders and how frequently this will be done (Bridges, 2019).
IT and Software Development
Since IT touches many aspects of the organization, managing IT projects is particularly difficult. For these projects, failure comes at a high price. Based on a survey of 1,471 IT change initiatives, the Harvard Business Review found that one in six IT projects had a cost overrun of 200%, and a schedule overrun of around 70% (Flyvbjerg & Budzier, 2011). Considering that the average cost of a project is $167 million, one can only imagine the huge financial losses of a project gone awry.
To manage complex IT projects, you might have to divide the acceptance criteria for IT and software development projects into functional and non-functional requirements. The former identifies the technical details of how the software, hardware, and system should function. On the other hand, non-functional requirements include other aspects such as performance, security, maintenance, and configuration (Smartsheet, n.d.).
Like with other SoW types, you need to clearly spell out what is included and not included in the project. For example, if you will provide front-end and back-end software development, the SoW must clearly state that you will be working as a full-stack developer (Bonsai, n.d.). In this regard, Pratt (2006) points out that collaborating with internal and external stakeholders is crucial. Drafting the SoW should involve the client and vendor working together to ensure that project deliverables and goals are well understood and expressed.
The U.S. government frequently requires a statement of work instead of a scope of work. Though both are referred to as the SoW, they have distinct meanings.
A scope of work is part of a request for proposal where a government agency describes their needs and desired outcomes for a particular procurement. On the other hand, a statement of work describes the obligations of the parties as they have agreed to in the contract (State of Oregon, 2018).
The level of detail in a Statement of Work will depend on what SoW type is being used. For example, functional or performance-based SoWs allow contractors to have flexibility in their approach to accomplishing tasks. In contrast, design-based SoWs are more stringent as it prescribes both the results and the method contractors must use to accomplish said results (State of Oregon, 2018). In addition, contractors might also be required to provide a Work Breakdown Structure and extra SoW sections that deal with privacy and security, quality assurance, Federal Acquisition Regulation solicitation provisions, and more (Smartsheet, n.d.).
Aside from the usual SoW components, one might also want to include visual models in an SoW for a construction project. This way, all subcontractors involved know what the project will look like at every milestone (Maczko, 2019).
Since construction projects can take months to complete, it will also help to break down the scope of work in smaller chunks. Begin in general terms, then create sections for each level of work (LetsBuild, n.d.). In addition, have each subcontractor sign off on the SoW every time you reach a milestone or objective. This ensures they understand their obligations, and, thus prevents disputes from happening (Benarroche, 2020).
Before writing the SoW, conduct research about your client. Learn about the client’s market, target audience, and competitors. Find out what they want to accomplish and the challenges they are facing. This will help you formulate the overall strategy for the marketing project (Christensen, 2017).
As with any SoW, having measurable goals in terms of key performance indicators (KPIs) provide clarity on what the parties want to achieve. Common marketing KPIs include conversion rates, return on investment (ROI), and customer value. If standard KPIs are not applicable, you can always tailor specific metrics to the SoW (Skipor 2018). Marketing campaigns tend to be time-sensitive, so it will also be helpful to establish service level agreements (SLAs) and the associated penalties if those SLAs are not met (Baston, 2014).
No matter the industry or the project type, a well-written SoW helps steer the project on the path to success. Make sure to cover all your bases and include important details around deliverables, schedules, project scope, objectives, payment, price, and acceptance. While drafting the SoW, follow basic business writing guidelines like writing clear, simple, and concise statements. In addition, include specific terms and measurable goals. By following these, you can overcome common SoW obstacles like scope creep and project risks.