4 Steps to Improve Your Statements of Work

There are two terms that both clients and project managers hate: “scope creep” and “scope gap”. These happen when the scope of a project is not properly defined, documented, or controlled. An ill-defined project scope creates several problems that often result in a project team overrunning its original budget and schedule.

In project management and contract management, a Statement of Work (SOW) is formal document that defines the activities, deliverables, and milestones that a vendor has to meet to satisfy the requirements of a project for a client. In this article, we will take a look at 4 steps you can take to improve your SOW and avoid scope gap and scope creep.

1. Establish a SOW Checklist

A common source of scope creep and scope gap is the lack of a well-established list of items to be included in a SOW. A member of the IACCM, Jean Fine, provides a useful SOW checklist that can adapted to any project or company:

  • Table of Contents
  • Points of Contact: Technical, Contracts/Legal, Stakeholders, Approvers
  • Definition Section for Acronyms and Terms
  • Milestones
  • Evaluation & Acceptance Criteria
  • Deliverables & Format
  • Lead-times & Delivery Schedule
  • Tasks & Sub-tasks
  • Pricing
  • Specifications (developed by one party or joint development)
  • Responsibilities of Customer: What, When, How, Where
  • Change Order/Variation Order Form
  • Approved Products/vendors
  • Signature Block

Novice and experienced employees need to know every element of your company’s project scope checklist, so they don’t leave any essential terms outside of the contract. The list above will guide them in gathering the information they need to avoid scope creep and scope gap.

2. Draft Several Templates for SOW by Type of Contract

No two projects are going to be exactly alike, even those that are from the same company. There is always a little wrinkle here or there that is going to change the required SOW.

However, this doesn’t mean that your team should start from scratch every single time an SOW needs creating. Having a library of SOW templates in your contract management system is a great way to save time; it’s like a predetermined checklist for each type of contract. Be sure to keep in mind that some corporate clients, particularly those that represent a large share of your business, may require to have their own unique set of SOW templates.

3. Develop a Change Request Form for Each SOW Template

Changes happen. This is why the third-to-last item on the SOW checklist is “Change Order/Variation Order form.”  All stakeholders need to be 100% sure of:

  • the acceptable situations for a change order,
  • the requirements for the change order form, and
  • processes to evaluate a change order.

Fine recommends to plan ahead for changes such as constructive, directed, and those outside of the scope known as “cardinal changes.”  Fine adds, “The SOW may identify the type of change and structure the process for evaluation, pricing, and further planning as required.”

4. Have a Defined List of Stakeholders and Approvers

The second item in the SOW checklist above is to have a list of all points of contact for technical and legal issues, project updates, and approvals. Often this list is not static, which is why there needs to be somebody in charge of making sure that it’s updated on a regular basis. In addition to the main points of contact, the list must also include back-up contacts in case a main contact is unavailable.

Particularly with teams that only meet on a monthly or quarterly basis, this step is crucial to avoid any problems in scope, review deliverables with enough time, and process any revisions in a timely manner.

Takeaway

The  SOW is an essential part of any contract. To improve it, you need to establish a SOW checklist, draft several templates for SOW by type of contract, develop a change request form for the SOW of each project, and have a defined list of stakeholders and approvers. By taking these 4 steps, you are lessening the chances of scope creep and scope gap, and mitigating their effects if they do occur.