What is statement of work?

A statement of work (SOW) is a document used to define and manage project tasks and activities, and to control a project’s deliverables, milestones, and deadlines. An SOW says what will be done, who will do it, and how and when they will be paid. This has become the go-to way to resource projects that have a clear beginning, middle, and end.

3 Types of statement of work

The phrase ‘statement of work’ is also used more generally to describe this outcome-based approach to services procurement. There are three main types of statement of work, with each providing a different level of detail about how the work should be completed.

Basic

States the amount of time that should be spent on the project and the costs that will be expected to deliver the required outcome. It does not specify how individual tasks should be completed.

Detailed

Defines a specific outcome for completing each task. The organisation that is buying the service prescribes project outcomes, which are measured and controlled by both time and cost.

Performance-based

Specifies detailed project outcomes. This is the most commonly used type of statement of work since it defines project objectives and milestone goals based on time, cost and quality.

Statement of work benefits

Improved visibility

Increase transparency and visibility across the project for easy assessment and approval of the work that’s being delivered.

Better quality control

Achieve sharper focus on qualitative and measurable outputs with designated levels of approval and authorisation.

More timescale confidence

Give your contingent workforce and other service procurement suppliers clear objectives and milestones for project completion.

Enhanced category management

Easily classify all suppliers by category of supply, and compliment permanent skill sets and resources where possible.

Reduced risk and liability

Shore up your regulatory and compliance requirements and ensure these are understood by hiring managers and external suppliers alike.

How to write a statement of work

Getting organisation-wide consistency into your statement of work approach is key if you want to enjoy the transformative benefits of procuring services this way. Whichever type of statement of work you use, you should always include the following:

Purpose and definition

What will the project achieve, and why are you doing it? Write this down as one or two simple sentences so that everybody involved in the project can refer back to it at any time, to get a clear idea of whether they’re on track.

Scope of project

List the expected tasks and responsibilities, as well as what isn’t expected. This is often done in a separate document. Setting clear expectations up front avoids additional unnecessary work being done (known as project ‘scope creep’).

Location of work

Where will the work be done? At multiple sites, or just one? Discussing and detailing this information early on means that travel, access, health and safety considerations can be handled before work is due to begin - avoiding any potential delays.

Tasks and responsibilities

What will each task involve and how will the supplier carry these out to achieve the desired outcomes? This information is often recorded as a spreadsheet, with task descriptions matched to the supplier’s responsibilities.

Deadlines and payment

What are the project’s key milestones? When are they to be reached? Will payment be made as a lump sum at the end of the project, or incrementally as key milestones are met? Set this out clearly here to avoid any misunderstandings during the course of the project.

Managing statement of work in c.net

c.net is our purpose-built vendor management system. The statement of work module in c.net allows you to manage every aspect of statement of work in one place, bringing you lower costs, greater control, and increased efficiency at every step.

Statement of work in c.net