Project Statement of Work & Scope or Work | Difference

Both of the terms are quite confusing sometimes, and let me clear this straightaway that;

Scope of Work is just a section in the Statement of Work.

Statement of Work is a well-detailed legal document of a project.

So, the Scope of Work is a subset of the Statement of Work.

Let see both in details;

Statement of Work – SOW

The project statement of work (SOW) is a formal statement of products, services, or results delivered by a project. Or in simple words, we can describe it as the statement which describes the project deliverables.

This can be an internal document to the organization or external to as well.

• For internal projects: within an organization, the project initiator or sponsor gives the statement of work keeping in view the business requirements, product, or service needs. The project sponsor could be the CEO of a company.
• For external projects: It should come from a client/customer in case of external projects. For example, it could be a contract, RFQ, or Frame agreement.

The SOW should always be made keeping in view the following references:

1. Business Need. The business need can be of any nature; for a company/organization, it can develop new products based on market trends, gain more market share, or be due to some legal/environmental requirements.
2. Product Scope Description. Product scope description defines the scope, or in other words, we can say defines the boundaries of the desired service/outcome. As stated above, we should determine what characteristics should be there in the new product. For example, developing a new product should be cheaper than the existing variant.
3. Strategic plan. Now comes the 3^rd part, which is a strategic plan. Every project is driven through the organizational strategic plan, and it is a must to align all projects with the organization’s strategic plan. As stated above, the development of the new cheap product should be finalized within a given year.

Components of SOW

An accurate statement of work is probation, an essential part of any project initiation process. By focusing on the below-mentioned aspects will help us in generating the precise and unambiguous statement of work.

Introduction of Project:  Start with a short explanation of the nature of the work and stakeholders involved in the project. Like when a formal quotation is requested from specific vendors for certain types of products or services.

Purpose of Project:  So, what’s the use of the project? The project is always initiated to achieve some specific target; it could be a new product or new service. To have the right question stating the project’s purpose will lead to other important aspects of the project statement of work.

Scope of work: The work scope generally includes all the information related to the project’s scope, like the specifics related to processes used, type of hardware used, and the desired outcome of the project.

Place of work: The place of work should also be mentioned in the statement of work. Like the place/site of project execution should be mentioned. In some cases, we may have project teams split into different locations/cities, especially for bigger projects.

Milestones: Clearly state the schedule required for project completion and no. of working days per week and no working hours per day.

Deliverables:  Probably one of the most important, if not the most important, part of the statement of work is to clearly state the deliverables in detail to avoid any confusion or misconception in later stages.

Schedule:  Clearly state the schedule of deliverables. The schedule for every milestone comes in the scheduling phase, but it must also have a clear definition of a complete project schedule. Like when to start and when to finish.

Project cost & Budget:  There must be a clear understanding of the budget allocation of the project. And it should be clearly referenced in the statement of work as it will form the project baseline, scope, and schedule.

Standards & Testing: Testing requirements, standards, and legal compliance should also be there. For example, it must have explicit knowledge of local bodies’ environmental regulations for a construction project.

Success/failure: This usually comes from all the points mentioned above. As the completion of all project deliverables within schedule and budget will result in project success. Otherwise, it will be termed as a project failure.

So, in the end, our primary goal is to have a clear and precise project statement of work so that we don’t have any confusion regarding any aspect of the project during the execution phase or at the closure of the project.

Scope of Work

Scope of Work is a kind of documented agreement stating the work. We, as a project managers, will be doing this during the life cycle of a project.

Usually, a Scope of Work contains objectives, milestones, deliverables, transitions, or end products expected to be provided by the performing party. It also included a timeline for the deliverables.

SOW is one of the most important documents on any project. It is a legal document. This helps to avoid any ambiguity that will arise later on.

A clear and concise SOW developed at initiation will clearly serve both parties.

This document contains:

• Objective: The objective states the kind of problem being faced for which solution is required.
• Schedule & Milestones: A clear definition of project start and finish schedule along with individual milestones. It is also important to clearly mention important phases of the project against which real-time performance will be measured.
• Deliverables: Deliverable is the desired outcome of a project. It could be any new product, or it could also be in the shape of some specific service. Deliverables are the reason for project initiation. It is recommended to have clearly enlisted all desired deliverables to avoid confusion and misunderstanding.
• Cost/Budget Information: Clear definition of the overall allocation of budget and how the payment to the project team and vendors will be made
• Expected Outcomes: here, you need to provide the solution to a problem mentioned in the objective by clearly stating the expected outcome
• Reports: Clear definition and expectation of the kind of documentation and reports required. These reports are formal records describing the progress along with the milestone status of a project. These reports are used as a channel to communicate with key stakeholders.

Example

Now let’s take an example to understand how the scope of work is defined for a project. The project is to develop an android phone with a 6’’ capacitive touch screen and 10 Megapixel rear/5 Megapixel front camera.  So now analyze the requirement and outline the deliverables, milestones, schedule, and reports for this project.

Deliverables

• 5’’ Inch capacitive touch screen
• 1020P retina display
• Compatible with the latest android
• 10 Megapixel rear/5 Megapixel front camera

Timeline

• January 1: Finalized Programming
• February 1: Procurement of hardware
• March 1: Final Prototype assembly
• April 1: Testing
• May 1: Market Launch
• June 1: Wedding

Milestones

• Selection of right vendors for hardware
• Finalization of programming
• Prototype cost calculation

Reports

• Cost comparison of hardware accessories from different vendors
• Simulation test
• Prototype functional test

Try to be specific, use visuals where possible, and get relevant documents signed by important stakeholders while writing your project’s scope of work. And it is always recommended to be clear and concise while stating the requirements and deliverables. A good SOW definition helps in avoiding.

• Confusion & misunderstandings
• Misconceptions of project and stakeholders requirements

Which ultimately results in productivity enhancement and successful project completion.

Also, make sure to include Glossary to jargon. Make sure to spell out the acronyms used in the SOW. Consider a person even enter in the middle of the project can understand this easily. Use smooth and clear words.

Wrap Up

A clear and concise statement of work is a must-have document on any project. As said, 95% of fights are due to lack of communication, and in the same way, most of the arguments on projects are because of inadequate Statement of Work on a project.

Frequently asked Questions

What is the scope of work mean?

The work scope is an agreement stating the job we as project managers will be doing during the life cycle. SOW contains milestones, reports, deliverables, and end product/service expected from the project.

What should be included in the scope of work?

The project scope of work shall include

• Project Objective
• Project scope
• Deliverables
• Activities
• Timelines
• Location/site of the project
• Payment terms

Why is the scope of work important?

The work scope is the most important part of the project management plan as it provides the necessary information and direction for the project.

What is the purpose of scope management?

The purpose of scope management is to ensure the project includes all required deliverables and cost and time baselines.

How do you define scope?

The work and stakeholders are the two main things that create the scope of work for a project. The project’s scope outlines the project’s objectives and the goals that need to be met to achieve a satisfactory result.

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