In many organizations, 60% to 70% of the projects finish late, over budget and/or fail to deliver much value. Not using a Statement of Work – SOW during the project initiation is a major cause of project failure. Project Phases Main Page
The project sponsor or customer issues the Statement of Work. It is their first communication to the project manager about what the project should deliver. It also describes what resources the project can consume to deliver it. The Statement of Work – SOW defines the deliverables. The sponsor should define the scope with the acceptance criteria that measures the project’s success. A Statement of Work can include the following (as well as other items):
- Business Purpose: This includes a link to the company strategy
- Scope of work: A short narrative definition and the quantified acceptance criteria
- Location of Work: Describes where the project manager and team will do the work
- Period of Performance: Specifies the start and finish time frame
- Deliverables Schedule: Lists and describes what is due and when
- Budget – The largest amount the project manager can spend to produce the required deliverables
- Type of Contract/Payment Schedule: The project acceptance will depend on whether the budget available will be enough to cover the work required.
A New Project Without a Statement of Work – SOW
People get excited about implementing a new idea or about solving a new problem. All of the discussion is about the project finish date and all the things they must do. Particular attention is paid to the tasks they must do first. Everyone wants to talk about what to do first because they can immediately start work on them. They don’t take the time to decide what business outcome the project must deliver. They also don’t define the specific acceptance criteria they’ll use for the project’s deliverables. In other words, they don’t prepare a Statement of Work – SOW.
In many organizations, there is no thorough decision-making process. No one makes any decisions or commitments before people start work on the first few tasks. The project has little chance for success if the project starts without the sponsor specifying exactly what he/she wants. They must also specify what is “good enough.” “Good enough” defines how the sponsor will measure the project’s success. Here is an example. A goal of 100% accuracy on billing statements is a difficult and expensive achievement. But the goal of 90% accuracy is “good enough” because it is a 15% improvement over the current accuracy rate. Without the specifics of what the sponsor wants and how he/she will measure success, senior management can’t decide if they should approve the project’s initiation. Additionally, no one is committed to the project’s success. That’s because they don’t know exactly what the project must deliver to be considered a success.
Statement of Work – SOW Solution
The organization can fix this problem by requiring that the project sponsor complete a Statement of Work – SOW for every project before work can begin. The Statement of Work is the sponsor’s (not the project manager’s) commitment to the organization about what he/she will deliver for the resources they will spend. The Statement of Work supports senior management’s control over the initiation of projects. It ensures there are resources available to work on the organization’s major strategic initiatives. When project sponsors use the Statement of Work – SOW properly, they set measurable goals and decide what to include and, as importantly, what to exclude from the project.
To learn more about how to work with the project sponsor or customer to create the Statement of Work – SOW, consider our online project management courses. You work privately with an expert project manager who is your coach and instructor. You may begin a course when you wish and work on it at your pace and as your schedule allows. You and your instructor have as many phone calls and live video conferences as you wish. Take a look at the courses in your specialty.IT Projects Business Construction Healthcare Consulting Projects