Comprehensive Project Statement of Work (SoW) Guide

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Key takeaways
  • A project statement of work details the tasks and deliverables to be completed for a project to be deemed successful.
  • The statement of work should be written as early on in the project lifecycle as possible, as it serves as the project’s foundation and source of truth.
  • There are four types of statement of work: performance-based, design, level of effort, and functional.

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The statement of work or SoW in project management is among the first documents created for any given project. A well-written SoW establishes a strong project foundation, as it lays down individual responsibilities, timelines, and expectations—making it essential for the project’s success. Read on to learn how to write a good problem statement of work.

What Is a Statement of Work in Project Management?

The statement of work in project management describes and defines the various tasks and deliverables of the project at hand. It also outlines the various terms and conditions that all parties must agree to. The SoW is a legally binding document that goes into specifics about all the activities that need to be completed and the milestones to be reached for the project to be deemed a success.

The length of the statement of work depends on the scale and scope of your project. Most SoWs contain numerous different sections that serve to break the document down into more manageable, easily digestible chunks.

Similarities and differences between statement of work and scope of work

Although the two project management terms are sometimes used interchangeably, statement of work in project management is not the same as the scope of work. Whereas the former serves as a complete project outline or overview, the latter describes individual tasks, tools, and plans that are needed to achieve the goals established in it. As such, the project scope typically exists as a subsection of the overall statement of work.

In most cases, the scope of work is considered one of the most important parts of the project statement of work. The scope of work describes project deliverables, creates the project timeline, establishes project milestones, and controls project reporting. Managing the project scope is an essential part of project management, and if necessary, elements can be added or subtracted from the scope of work to meet the needs of project stakeholders.

4 Types of Statements of Work

Now that we know what statement of work in project management is, let’s discuss its various types. There are multiple different formats one can use when creating a SoW, so it’s useful to know the difference between the various types and when to use them.

Performance-based

The performance-based SoW project management focuses on the performance of individual team members and the project as a whole. It determines project success by establishing a minimum threshold for performance expectations. As long as performance is within the projected range, then the project can be considered a success.

In this case, most of the “how” is left up to the individual team members. They decide exactly how their performance—and the project itself—will meet the standards of acceptability. Performance-based SoWs empower team members more than any of the other approaches.

Design

As its name implies, the design SoW project management is meant for teams that are focused on the overall design of the project at hand. This is one of the most technically detailed SoWs in use today, as it establishes materials, day-to-day processes, and other technical specifications. Many design SoWs also describe the various requirements for quality assurance, final inspection, and even product packaging. The design SoW is commonly seen in manufacturing and construction, but it has pertinent applications in nearly every industry.

Level of effort

Instead of focusing on performance or technical design, the level of effort SoW is concerned with workload and resource management. As a result, the primary deliverable in a level of effort SoW is the actual number of labor hours. Most level of effort SoWs include information such as:

  • Material costs
  • Forecasted labor hours
  • Workforce costs

The level of effort SoW works with nearly any project in any industry, but it’s best used for long-term projects that require specific materials and those that require significant labor hours.

Functional

The functional SoW emphasizes the end result of project requirements. As long as the desired results are achieved, the project team members are free to use their own approach. This format offers a great deal of flexibility and is generally open to the suggestions and recommendations of experienced team members.

How to Write a Statement of Work (SoW) Document

Ideally, the SoW should be created as soon as a new project has been decided. This could be the result of a quick “elevator” pitch from a client, or it could stem from a brainstorming session with key stakeholders. Either way, the SoW should be established as early on in the project lifecycle as possible.

1. Introduce the project

Start by introducing your project, including any key stakeholders that are related to the project at hand. Once all of the stakeholders have been named, use the rest of this section to briefly describe your project. This section should be kept as concise as possible, ideally no more than one or two paragraphs in length, as you’ll go into greater detail in the subsequent sections.

2. Explain the purpose

Use the second section to clearly explain the purpose, goal, or vision of your new project. If you’re not sure where to begin, try asking yourself these questions:

  • What specific problem does this project address?
  • Who are the end-users of this product or service?
  • Why are we moving forward with this project in the first place?

As you can see, these questions are primarily focused on the “what,” “who,” and “why” of the project. Don’t worry too much about the “when”—we’ll address that in the project scheduling section.

3. Create parameters

The third section is where you’ll define project requirements and parameters. In most cases, these parameters are detailed, for now, in a basic list format. They’ll be extrapolated further in the next step.

4. Establish project scope

Use your list of parameters and requirements to establish the overall project scope. For even better results, try to address specific scenarios that fall outside of the project scope as well. It is important that the scope is properly established so as to avoid scope creep. Milestones and benchmarks can also be discussed in this section, but exact timelines and schedules will be established later on in the SoW.

5. Allocate resources

This section describes, in detail, the required resources to complete the project successfully, including the amount of each resource needed. While some projects require more resources than others, it’s always a good idea to include this section, even if your required resources are minimal.

6. Schedule the project

Now it’s time to schedule the project. This includes any benchmarks, milestones, and deliverables that have been established in the previous steps. In the case of long-term or ongoing projects, rough estimates are fine, as they can always be dialed in at a later date. For deadline-oriented projects, however, this section is essential.

7. Determine payment arrangements

Use the last section of your SoW to clarify payment arrangements between any clients and contractors. Not only does this include exact payment amounts, but it includes due dates, potential penalties for late payments, and any other applicable terms or conditions.

6 Things to Include in a Statement of Work (SoW) Document

While SoWs need to be versatile in order to accommodate as many different projects as possible, there are some elements that are considered standard amongst modern SoWs. Regardless of the size or scale of your project, it should always contain the following sections.

Introduction and purpose

These sections are covered in the first two steps of writing an SoW, and for good reason—they’re among the most important elements of a project. Not only do you need to establish your key stakeholders before beginning a new project, but you need to have a good idea of the project’s general purpose too. As such, these sections are pretty much considered mandatory in today’s SoWs.

Project parameters

Project parameters and requirements are essential to any project. If you need help determining specific project parameters, remember the 6 S’s:

  • Scope
  • Success
  • Stakeholders
  • Selves
  • Strategy
  • Structure

While the overall project scope is usually described in a separate section of its own, the 6 S’s will guide you through the process of defining project parameters clearly and concisely.

Success indicators

This section is necessary to clarify and define metrics for success. In some cases, this might be as simple as providing all project deliverables before a certain date. Other times, it involves numerous benchmarks, goals, or achievements. Either way, it’s important to establish your indicators for success at the beginning of your project—how else will you gauge performance?

Timelines

Any timelines or schedules that are relevant to the project are to be mentioned in this section. This gives the key stakeholders an idea of when they can expect to see results. In the case of long-term projects, this section can also be used to establish individual deadlines for the various tasks and activities that comprise the project.

Necessary resources

You’ll also want to reserve a section in your SoW for all the resources that are critical to the project’s success. Generally speaking, project resources can be grouped into one of four different categories:

  • Human: This includes the project manager, project team members, subcontractors, external partners, and any other key project stakeholders.
  • Financial: The project budget, financing, and project grants are all considered financial resources.
  • Time: This refers to the amount of time needed to complete the project, including labor hours for individual team members.
  • Materials: These resources include any and all hardware, software, and office space. In industries such as manufacturing, this also includes the raw materials needed to produce a finished project.

Payment information

It’s critical to establish payment details at the start of any new project. Not only does this section cover any payments you’ll be making to third-party service providers and contractors, but it also covers any potential late charges, project kill fees, and other types of payment arrangements that need to be made within the means defined in the project service-level agreement.

Free Project Statement of Work Templates

Some project management tools offer templates you can use when writing your own project statement of work. Here are some examples. 

Project statement of work template

Smartsheet offers a project statement of work template that is easy to fill out, as every cell is properly labeled without missing any important information.


IC Project Management Statement of Work Template scaled

Simple statement of work template

ClickUp’s ready-to-use statement of work template has all the main elements of a typical SoW and is simple enough for novice and experienced project managers alike.

ClickUp template

Customizable statement of work template

monday.com’s statement of work template has both a document and board view. The template can also be customized according to your project’s specific needs and level of complexity.

Customizable statement of work template

Bottom Line

The ideal project statement of work serves as a single source of truth for your entire project. It not only outlines the individual activities that need to be accomplished, but it also establishes the key factors for project success. So if you want to start your next project off on the right foot and create a strong foundation to build it on, begin by writing a good statement of work.

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