Statement of Work (SOW) is usually created when Master Service Agreement (MSA) terms has been negotiated.
Its most important elements are:
- Objectives and scope of the project within consideration of what is and what is not included in the statement;
- Initial assumptions about project data and all the factors that may result directly on the final effect;
- Detailed description of the project management, as well as tasks and roles of the people working on the project;
- Defining project stages and checkpoints (milestones, tollgates, etc.) – it should include the dates and ways to verify the execution;
- Defining the way of risk managing and problem solving (it has to be accurate enough to include the escalation steps);
- And, of course, the final prize (it’s best if the payments are tied with accomplishment of subsequent steps).
Within big projects it’s a common practice to create the statement pattern that can be filled when a new order comes. It allows to include all the essential information and to decrease level of the project risk.