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The Statement of Work (SOW): Saves You and Your Project
On a fine blue Monday morning, the customer sent you an email for urgent video call. You, being a good Project Manager, the project’s progress status and all other details you always kept at your bay. So, without any second thought, you jumped to the video call and start discussing with your client.
After your initial exchange of pleasantries, suddenly the client complained that you are going in a wrong direction. He has gone through the application you have released yesterday at the end of first phase and he is totally disappointed that the requirements he has mentioned initially are different than you have made. Also, he raised questions about budget and delivery timing of the project deliverable.
You are in ‘hot’ soup now, it is a case of typical catch-22 situation. You know that the project is heading as per the requirements noted from the partners at the initial discussions. All the requirements are well documented and preserved in the project repository.
As, you have all the requirement documents with you, without any hesitation, you claimed that the project is heading in a right direction and shows the documents to the clients. But to your surprise, he bluntly refused that the requirements are given by him. What!!! How can he refuse? You know that he gave these requirements and your business analyst noted them very well.
What you will do now? Anything can happen from here. You cannot make the Partner believe on your word. Maybe he will believe you, or you need to change the application by applying the changes he is suggesting which will scrape the work done till this phase, which can derail/delay your project. And, if you are not agreeing with him, your project may be scrapped.
So, why this situation happened? Where is the problem? You have all the documents to proof, but he is not ready to believe you. Why? It’s because, the partner has not signed the documents when he gave the requirements. It was not officially signed by him. Here, the importance of SOW (Statement of Work) comes into the picture, which can avoid this type of situation to happen in the first place.
The Statement of Work (SOW) is a formal document which describes the scope of the work to do in the project. This is an official document which states the requirements, acceptable deliverable which is mutually agreed upon by all parties. The most important part is, this document is formally signed by designated representative of both the sides.
The Statement of Work includes –
- Scope of the work
- The deliverable and their delivery dates
- Agreed acceptance criteria
- Project cost and payment schedules
As we discussed, the importance and purpose of the Statement Of Work, Let’s see the template, how it looks like:
The Statement of Work (SOW) Template
Provide a general information on the project’s background. The purpose of the project and the ultimate gain from the project.
For Example –
ABC Mobile group is planning to build a new application around its successful “GoGO” application. A new level of gaming platform need to be upgraded from the present state. It would be more user-friendly and rich graphics to enhance user experience. The ABC mobile group seeks to outsource the complete development, testing and implementation of the new level. They are expecting the added level which will increase their market share, as well as the company’s revenue earning.
In this section of Statement of Work, you need to provide the scope of the project. Detailed requirements can be mentioned under Requirement section, here we need to mention what is in scope and what is not in scope.
For Example –
- Included in Scope −
- The designing works which needs to be done
- Development and testing of the application
- Implementation on pre-production environment
- Implementation on Production environment
- Not In Scope −
- Post production, the ABC mobile group internal team will take care of future maintenance activity
Location of Work
Here, you should mention the location of the work to be performed. In some cases, the client may insist to perform the testing phase at their location on real-time environment. So, you need to specify those details as agreed by both the parties.
For Example –
- Design and development phase will be held at XYZ software company premises at Hyderabad, India.
- Testing phase should be performed by the test engineer of XYZ software company but at ABC Mobile group’s office at VA, USA.
In this section of Statement of Work, we need to mention the detail description of the actual work, which will require for the successful completion of the project. This section required every effort to include as much detail as possible.
For Example –
- Project Kick-off
- Formal review and walk through process should be performed
- Planning Phase
- Project Plan, testing plan and other documents should be prepared by the vendor, and get that reviewed from the buyer. And, finally the approval on that.
- Design Phase
- The Design of the new level should be reviewed and approved from the Partner
- Development Phase
- The Coding should be done as per the approved design architechture
Here, we need to provide the phase-wise schedules of each deliverable and important milestones.The dates should be mentioned upon agreement of all the parties and all the stakeholders should be abide on those dates.
For Example –
- SOW sign off : 25th August, 2016
- Project Kick-off: 10th September, 2016
- Design phase review: 1st October,2016
- Development work starts om: 15th October, 2016
In this section of Statement of Work, we need to provide the state of the deliverable which is acceptable by the partner. It should include the descriptions of the phase/work when it is acceptable and the details of the authorized person who will authorize and accept the work on behalf of the company.
For Example –
- The design phase will be reviewed and accepted by the Director, Architect of ABC mobile group
- A prototype should be delivered before starting the actual development work
- The release of phase-1 should be included release checklist and all the relevant documents
There are different modes of contract executes between the vendor and the buyer. Some are fixed bid projects where the cost is fixed, while some are time and material contracts where the cost is paid on hourly basis or per unit basis. Upon agreed by all the parties, the mode of contract should be mentioned clearly.
For Example –
It is a Time and Material contract, the cost should be charged as per the rate of engineers involved in the project, and the number of hours they work in the project.
Payment to Milestones
This section includes the details of payment schedule, if it is phase wise or milestone wise pay mode project. The mode of payment, invoice dates and frequency also be mentioned here.
A Statement of Work should be always clear and concise and understood by all the parties involved. It is treated as a formal agreement between the service buyer and service provider, and can be used to resolve disputes. if any , in the lifetime of the project. So, give special attention while preparing it, by carefully mentioning the details in each of the section we have discussed so far in this article.
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