What Is a Statement of Work in Project Management?
A statement of work (SOW) is a formal document that specifies a project’s scope, including key requirements, deliverables, deadlines, and payment terms. It provides a clear framework for both parties, ensuring mutual understanding of the project’s objectives.
The PMBOK Guide describes the SOW as a “narrative description of products or services to be supplied under contract,” outlining all necessary details to ensure clear expectations.
When is a statement of work used? It’s needed when a project involves vendors and external contributors in addition to the internal project team. You usually create a SOW as part of a bid document or part of a contract. It’s vital that the SOW is clear to all stakeholders in order to clarify the metrics for success and avoid disputes involving deliverables, budgets, or timelines.
In this guide, you’ll learn how to use a statement of work to set clear agreements and expectations. We will also show you what a statement of work looks like and how you can build one in Wrike.
Components of a statement of work
The statement of work should include:
- All project deliverables and due dates (including milestones tied to key phases or deliverables within the project)
- The individual tasks that lead to the deliverables, and who these tasks are assigned to
- The resources needed for the project, including facilities, equipment, and QA procedures
- The governance process for the project
- Costs and deadlines for payment terms
- A clear outline of how the deliverables will be accepted, including any final admin duties for project closure
Other terms related to statement of work are project charter and project objectives.
Why write a statement of work?
A work statement helps you:
- Define what the project will deliver and what is required
- Specify any special requirements or constraints involved in the project
- Identify who is responsible for each aspect of the project
- Track progress and monitor project phases
- Handle adjustments smoothly with defined procedures
- Break down the project phases to provide a clear project roadmap
- Clarify payment terms during negotiation before work begins
Types of statement of work
What type of statement of work is best suited for your project? Choosing the right one can make all the difference in ensuring a successful project. Here are five common types:
Performance-based SOW
Need flexibility in how your project gets done? A performance-based SOW focuses on the desired outcomes rather than the specific tasks. It outlines the criteria that must be met to complete the project. This type of SOW in project management is common in industries that allow the vendor or contractor to decide the best way to achieve the goals.
Design SOW
In a design SOW, the client defines the project requirements and the specific steps or milestones needed to achieve those requirements. Typically used in industries such as manufacturing or construction, it helps prevent scope creep by providing a rigid, step-by-step plan to follow.
Level of effort SOW
Not sure how long your project will take? A level of effort (LOE) SOW is used when the exact scope and timeline of a project are uncertain. It’s ideal for projects where the scope might change over time. The level of effort is measured by time spent rather than specific results.
Master service agreement SOW
A master service agreement (MSA) SOW is used when a long-term relationship is anticipated between the two parties. It provides a legally binding framework for ongoing work and is often used in consulting or service-based industries.
Service-level agreement SOW
A service-level agreement (SLA) SOW outlines specific service commitments, quality standards, and performance metrics that a vendor must meet during the project. This type of SOW is commonly used in projects involving ongoing services, such as IT support, maintenance, or other service-oriented deliverables.
Statement of work example
It’s probably clear from the components that a SOW usually requires a substantial amount of work once properly created. One thing that can help you get started in creating your own statement of work is to view a sample statement of work or start with a statement of work template.
While different industries will have specific requirements for a statement of work, each project management statement of work example will typically start with a summary of the SOW and a table of contents directing stakeholders to each section.
A sample statement of work document is shown below, with clearly defined sections for scope of work, team members, deliverables, and payment schedules.
How to write a project statement of work
In this basic sample of a SOW, you can see that it’s best to begin by summarizing the scope of work for the project before outlining the panel of team members with responsibility for the project’s outcome. Then you’ll list important actions and associated deadlines and accountability for each of these actions.
The statement of work should also include the timeline for the project, the budget and payments anticipated, and the standards expected for each item budgeted. The statement of work will also likely include internal and external standards for this type of work and the criteria by which the deliverables will be accepted.
Best practices for writing a statement of work
As we’ve discussed, creating a solid statement of work is important for seamless project execution. Here are some best practices to ensure your project management SOW is clear, practical, and effective:
Be specific
Ambiguity can lead to costly misunderstandings. Break down the steps outlined in the scope into specific tasks and deliverables. For instance, if the project involves delivering products or services, specify what must be provided, including quality standards, timelines, and acceptance criteria. Detail the parts of the project each team member is responsible for.
Use visuals
Sometimes, words are not enough. Did you know people retain 95% of the information when they watch it in a video, compared to just 10% when reading in text? Visual aids like flowcharts and Gantt charts can simplify complex processes by illustrating each phase of the project. For example, a Gantt chart can display the project budget, task dependencies, and overall timeline in a high-level view that’s easy for stakeholders to understand.
Plan for change
Projects evolve, so the SOW must be flexible enough to accommodate changes. Consider including a change management section detailing how changes outside the original scope will be handled. Define a formal process where both parties must review and sign off on adjustments to the scope, timelines, or costs.
Regularly review and update
An outdated SOW can lead to confusion. Schedule periodic reviews to ensure that the SOW remains relevant and aligned with the agreement between a client and vendor. Using version control for SOW documents helps to ensure everyone is working from the latest plan.
Engage stakeholders early
Involve all stakeholders in the drafting phase of the SOW. This collaboration ensures the preferred SOW captures all necessary details and everyone understands their roles. Conduct workshops or feedback sessions to gather input from project managers, suppliers, and team members.
Build your statement of work in Wrike
Ready to put your statement of work into action? Wrike makes building and managing your SOW easy with powerful tools that streamline every step of the process.
With Wrike, you can:
- Gather requirements with dynamic request forms to define the project scope and deliverables
- Visualize the project timeline using Gantt charts to map out tasks, milestones, and dependencies
- Keep track of document versions to ensure all team members work from the most up-to-date SOW
- Collaborate with stakeholders in real time to comment on, edit, and refine the SOW
- Set up custom approval workflows to ensure every section of the SOW is reviewed and signed off
Ready to start building your SOW in Wrike today? Sign up for your free two-week trial.
Artem Gurnov
Artem is a Director of Account Development at Wrike. He previously held the role of Project Manager, overseeing a team of customer success managers (CSMs). Over the years of building teams and scaling business processes, he has successfully deployed multiple projects, from automating client outreach to setting up work prioritization tools for sales reps and CSMs.