This article is based on information from one of my favorite PM books - Eric Verzuh’s book entitled “The Portable MBA in Project Management.”
The statement of work (SOW) basically kicks off the project management process and is meant to document the goals and constraints of a project. However, it cannot and certainly should not attempt to document every agreement about the project. There are other project and project management documents for this purpose – requirements, specifications, customer acceptance tests, and also you basic output of agreements and notes from kicking off the project with the customer. The SOW should record the goals and constraints for managing the project. While that can contain a wide range of information, the minimum content listed here gives you an idea of what makes up a good, useable SOW:
Purpose statement
A clear description of why we are doing this project.
Scope statement
A description of the major activities of the project in such a way that it will be absolutely clear if extra work is added later on.
Deliverables
A list of outputs the project will produce, including intermediate deliverables, end deliverables, and deliverables related to project management.
Cost and schedule estimates
In addition to a budget and a deadline, a description of how flexible the budget is and the rationale behind the deadline.
Project objectives
The specific, measurable goals of the project.
Chain of command
An organization chart that spells out who makes decisions and to which superior problems will be reported. It is often a good idea to include the organization chart of the customer, as well.
SOW is a tool for managing expectations and dealing with change. When disagreements arise after the project has started, they can sometimes be solved by simply reviewing the original SOW. However, it is also true that the original agreements and assumptions may change during the course of a project. In this case, all stakeholders must understand and agree to these changes, and the project manager must write them into the SOW or track them through other project management processes such as change orders.
The SOW that remains at the end of the project may be very different from the original document. The amount of this difference is not important; what is important is that everyone has been kept up to date and has agreed to the changes.