Statement of Work (SOW)

The statement of work (SOW) is a legally binding document that captures and defines all the work management aspects of your project. You’ll note the activities, deliverables and timetable for the project. It’s an extremely detailed work contract that defines the terms and conditions agreed upon between parties and lays the groundwork for the project plan.

The statement of work (SOW) is one of the first documents you’ll create to lay out the entire landscape of the project before you create a project plan and execute it. Because of the great amount of detail required, the prospect of writing one can be daunting. Let’s break it down into more digestible parts. Your statement of work will be much more detailed than your job estimate, which is a simpler document that outlines the work that’ll be performed and the costs associated with it.

When you’re writing a statement of work, it can help to use a statement of work template because of the various aspects of the project that it must capture. Most statement-of-work templates include things such as a glossary of terms defining what you’re referencing in the SOW. There will be a place for you to write the statement of purpose as well as administrative information. If you like our statement of work template, you can also try our free project management templates to manage your projects.

Statement of Work vs. Scope of Work

While they sound the same, a statement of work isn’t a scope of work. The statement of work, as we’ve shown, is a formal document that details the goals of the project.

The scope of work is part of the larger statement of work. In it, the way the project team will deliver the outcomes laid out in the SOW is described, so the scope of work is a much shorter project document.

What Does SOW Stand for In Business and Project Management?

Now that we’ve cleared the difference between a statement of work and scope of work, it’s important to note that the SOW acronym stands for statement of work, and not scope of work, which is a component of the SOW. Similarly, the terms SOW contract, SOW document and SOW agreement also refer to statements of work in project management and business.

What Is the Purpose of a Statement of Work (SOW)?

As noted, the statement of work is a detailed overview of the project scope. It’s also a way to share the project requirements, acceptance criteria and payment terms with those who are working on the project, whether they’re collaborating or are contracted to work on the project. This includes stakeholders like vendors and contractors who are bidding to work on the project.

An SOW contract is also helpful to project managers as it provides a structure on which the project plan can be built. The statement of work helps to avoid conflicts in the project. With detail and clarity, the SOW helps keep everyone that’s involved in the project on the same page and works to leave confusion to a minimum.

When building your schedule, it helps to use project management software. It can be immensely helpful for organizing your tasks and resources, as it’s critical to make an accurate schedule at this stage in the project. Project management software can also help you to create a work breakdown structure (WBS) to zoom into your project scope and identify your project’s activities, deliverables and milestones.

Statement of Work Template

Templates make everything a little bit easier. Jump start your statement of work document with our free SOW template for Word. It helps you outline your project background, schedule, deliverables, communication plan and more.

Types of Statement of Work

An SOW can be broken down into three main categories which can be defined as follows.

• Design/detail SOW:?When you’re writing this SOW, you’re conveying to the supplier how you want the work done. What are the buyer requirements that’ll control the supplier’s process? You can use a requirement gathering template to ensure you gather them all. These project requirements can run the gamut from quality acceptance criteria and payment terms to the measurement of materials. In this SOW, it’s the buyer who’s being held responsible for the performance as he’s the one directing the project course.
• Level of effort/time and materials/unit rate SOW: This SOW agreement is an almost universal version and it can apply to most projects. It defines the level of effort as well as the materials and cost per unit. It tends to find use in short-term contracts.
• Performance-based SOW: This is the preferred SOW of project managers as it focuses on the purpose of the project, the resources and the quality level expected of the deliverables. It does not, however, explain how the work is supposed to get done. This allows a great deal of autonomy on how to get to an outcome without requiring a specific process.