A solid relationship between a service provider, implementation consultant, or agency is critical to the success of any implementation, integration, or execution of your marketing strategies. While the vendor has expertise in the products or services they’re providing, the institutional knowledge of the client is just as important.
While many companies work from a conversation to a proposal, to a handshake, there’s an enormous risk to both parties involved. It’s human nature for both sides of a transaction to be optimistic about the pace, process, deliverables, and timeline associated with any engagement. However, both parties come at the relationship with assumptions… many that aren’t disclosed in the negotiation process nor documented in the proposal.
Why Develop A Statement of Work (SOW)?
In a recent post, I had written about the steps you should take when launching your agency. Included were two critical contractual documents that I recommend:
- Master Service Agreement (MSA) – The general contract covering the relationship between our organization and the client’s organization. This document could encompass the entire relationship including the project deliverables, but we use it to govern the relationship and an SOW for the deliverables.
- Statement of work (SOW) – a document that specifically outlines the terms, deliverables, and resources required to complete a specific project or task.
If you’re doing ongoing work with a client, separating the two is ideal since you can simply propose each engagement with a new SOW but you don’t have to renegotiate the MSA that covers the overall relationship.
The SOW is a document that protects both the vendor and the supplier to ensure expectations are agreed upon. The process of developing the SOW is a collaborative one, where the supplier typically presents the SOW and then the vendor walks through changes in those deliverables and the associated budget.
What Sections Should Be In A Statement Of Work?
The specific sections included in a statement of work can vary depending on the nature and scope of the project, but generally, it should include the following:
- Introduction – This section provides an overview of the project and its purpose, as well as any relevant background information.
- Scope of work – This section outlines the specific tasks and deliverables that are included in the project, as well as any exclusions or limitations.
- Objectives and deliverables – This section outlines the specific goals and outcomes of the project, as well as the specific deliverables that will be provided upon completion.
- Requirements – This section outlines any specific requirements or constraints that must be met in order to complete the project, such as technical specifications or compliance requirements. It should cover both the vendor’s requirements as well as the client’s requirements.
- Schedule – This section outlines the timeline and milestones for the project, including any deadlines or milestones that must be met. If it’s an ongoing relationship, it should specify the deliverables and their periodicity of delivery. Be sure to include how often meetings will be held and who is expected to be present.
- Resources – This section outlines the resources that will be required to complete the project, including personnel, authorization, access to platforms, software, licenses, and other materials. Within this section, setting expectations on response times and the service level agreement is important. We often detail what our support and training responsibilities are versus the client’s responsibilities – especially as it pertains to third-party platforms.
- Budget – This section outlines the budget for the project, including any costs for materials, labor, and other expenses. It’s imperative that you document how your invoices will be paid, when they will be paid, who is your key billing contact, and what happens in the event of a dispute or unpaid invoice.
- Risk Management – This section outlines any potential risks or issues that may arise during the project and how they will be managed. This should include any remediation that may be necessary if unexpected issues arise… and they will!
- Quality control – This section outlines the quality control measures that will be put in place to ensure that the project meets the required standards. It typically goes through the acceptance procedures and specifies who will approve the overall deliverables.
- Change Requests – Details are always lost in this process and clients will typically request additional assistance or the vendor may have to work around issues that weren’t disclosed. It’s important to document what the change request process is so that those changes and any subsequent fees are disclosed and agreed upon.
- Termination – This section outlines the circumstances under which the project may be terminated, as well as any consequences or obligations that may result from termination.
- Appendices – This section may include any additional supporting information or documents that are relevant to the project, such as the MSA, other licensing details, contracts, or technical specifications.
And of course, the most important element:
- Signatures – The name, signature, and date of the parties that are authorized to enter the contract from your company and your client’s company.
Moving Forward With Your Signed SOW
When a client signs with us, our operations manager meets to review the SOW and then translates it into our project management platform… carefully documenting each deliverable, the timeline, and the responsible party. The SOW is carefully sectioned and numbered so that we can refer to it at any time when discussing it internally with our team or getting clarification from the client.
By ensuring your project management system is fully documented to your SOW, any new requests stand out from the deliverables you can decide whether or not they will require a change request.
Disclosure: Always have an attorney review your SOW and MSA before distributing them to a client to ensure you’re not putting your business at risk. While it’s imperative that your attorney reviews your MSA, a review of your SOW template may be fine.