When negotiating and working on a project for a client, it's good form to prepare documents laying out what you plan to do, how you will do it and the time frame for completing it. A scope of work and a statement of work are two vital parts of a project plan, and completing them before the work commences will make things easier and clearer for both you and your client.
TL;DR (Too Long; Didn't Read)
A project scope lays out what the work will include and also what it won't include. A statement of work is a more detailed document that includes the scope of work as well as other specifics regarding how and when the work will be completed.
Scope of Work vs. Statement of Work
A scope of work is an opportunity to clearly articulate expectations for the purpose of agreeing on terms and avoiding misunderstandings down the line. For a simple project such as a one-off consulting gig, a scope of work need not be longer than a couple of sentences. For an extended and expensive project, it should also include deliverables and deadlines so the contractor has an overview of expectations and can provide a fair quote, and the client can rest easy that specific needs have been taken into account.
A statement of work includes a much higher level of specifics than the scope of work. It doesn't just describe what will be done, it also includes any other information such as overall objectives and payment terms that should be explicitly stated and confirmed between the two parties. A statement of work can be prepared by the client to outline needs and expectations or it can be prepared by the contractor to clarify and develop a work plan. Ideally, it should be the product of a collaboration between the two parties.
Statement of Work Elements
- Scope of work. This section lays out the major parts of a project, such as when the work will be completed, where it will be done, how it will be executed, the purpose of the project and who will perform the stated tasks. It is a clear and thoughtful overview aimed at making sure that both parties are on the same page.
- Project objectives. This section lays out the "why," or the bigger-picture goals behind the tasks being completed. It's important to state these broad objectives explicitly so that specific tasks can be undertaken with an eye toward aligning short-term goals with an overall direction or theme.
- Tasks. This section breaks down the scope of work into manageable chunks. It is important for defining what needs to be done and also laying out a to-do list that can be followed item by item. This will allow the client to see measurable progress and will give the contractor milestones to demonstrate completed work.
- Schedule. For complex projects, it's especially important to lay out a timeline specifying when each part of the process should be completed. The schedule is also an opportunity to show which parts of the process depend on other parts, so work can proceed according to a logical flow.
- Deliverables and outcomes. This section spells out what needs to be done for the client and the contractor to reach an agreement about the project being complete. These expected results are somewhat more general than the list of tasks but somewhat more specific than the project objectives.
- Payment terms. It is in the interests of both the contractor and the client to define how and when payment will be made. There may be an advance deposit and scheduled payments tied to completion of different tasks along the line or a contractor may ask for complete payment up front, especially if the project includes considerable outlay for custom materials. There is a wide range of options but these terms must be acceptable to both parties or there will inevitably be conflict.
Advantages of a Statement of Work
A statement of work offers the advantage of clarity. A client can refer back to the document if there is any doubt about a project having been done right and a contractor can similarly refer back to it if the client's expectations are unreasonable or if they are a moving target. Conflicts around expectations can be resolved by referring to a carefully negotiated agreement that both parties have had a hand in creating.
The process of creating a statement of work helps both parties to better understand their objectives, and whether these objectives are realistic considering the time frame and the budget. In the course of negotiations to create this document, it may even become clear that the expectations on both sides are so dramatically divergent that there is little hope of reaching a mutually satisfactory arrangement. Although this realization will no doubt be frustrating, it will be considerably less so than entering into a working relationship that has no hope of succeeding.
A statement of work also provides a level of direction that will set you on a path toward getting things done rather than rethinking decisions that have already been made and reevaluating the direction every time a new consideration appears. Signing off on a statement of work sets a project in motion and forces you to take the first steps in a process that has been clearly thought through and delineated in detail.
Disadvantages of a Statement of Work
It's a lot of work to create a statement of work. You can use a scope of work or statement of work template, but these time-saving tools can be expensive and may not be a good fit for your specific project or industry. Every job is unique and it's important to make sure that your statement of work captures the idiosyncrasies of the arrangement you're hammering out with your client.
If you're sloppy about your statement of work or if you fail to anticipate some wrinkle that occurs as the project unfolds, you may find yourself committed to deliverables that are unsustainably difficult or unsustainably expensive. As a client, you may fail to sufficiently protect yourself from uncertainties and additional costs that were difficult to predict when you set your project in motion.
It can also be difficult to determine the ideal level of detail for your statement of work. Going into a lot of detail is time-consuming and it may limit your choices in situations where it's better to have options. Conversely, if you don't provide enough detail you may set yourself up for misunderstandings that can be time-consuming, expensive and rife with bad feeling.
Best Practices for Documents
The success or failure of your scope of work or statement of work will likely depend on the level of attention and detail that you devote to the process of creating it. Communication is key, and it's important to work closely with your client throughout the process to ensure that both parties are clear and transparent about the assumptions they are making and the expectations they have.
Review your scope of work and statement of work documents carefully, and then review them again and again. Have multiple stakeholders in both the client's and the contractor's company look over drafts in case there are holes or difficulties that are more apparent to a second set of eyes. Build some flexibility into your agreement, but do so with clear guidelines about what will be involved in making changes and adjustments once the project is underway.