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The Ultimate Guide to Software Development Statement of Work (SOW) + Templates

Every Chief Technology Officer (CTO), or founder of a company/startup, may face a challenge of finding the right software development vendor. Especially when you have to complete a line of routine paperwork.

One of the documents to prepare is the software development statement of work (SoW). At its essence, it should contain a description of the work to be performed. The aim is to make the agreement valid and legally protected.

But it is not just a set of dry project requirements. A correctly written SoW can serve as a reliable blueprint and confirmation that you and your vendor share the same vision. Thus, more chances that collaboration will end up successfully.

How to make the right software statement of work contract? If you have small or zero experience, in this article, I will share simple explanations of what is SoW, and how it differs from other documents. Besides, I provide writing advice and templates to use as a reference.

SoW document, what is SoW and what is not?

Right from the start, let’s clear all definitions up. There are other similar documents to SoW. Let’s try to translate everything into simple language, so you can easily understand what is SoW and what is not.

Definition of SoW

Software development statement of work, or SoW in short (you can also find synonymous like Scope of Work, or Deliverables), is a document mainly related to project management. It is conducted between a vendor and client prior to software development.

This document covers all details and expectations of collaboration. More specifically, it determines the conditions and Key Performance Indicators (KPIs) for the agreement. Depending on the project, SoW document may include different elements, but for the greatest extent it is possible to pick out three things:

Anyone related to a project can be responsible for writing SoW. Ordinarily, it is a project manager, Chief Information Officer, or sometimes even a third-party contractor.

What does SoW document do

Statement of work document serves as a means of understanding, so everyone involved is aware of what's precisely agreed upon. Even in the case when a vendor fails to perform the work, you will be legally protected and will have all the rights to demand penalties.

SoW is like a key for security and guarantees that the product will be realized precisely as you wanted it to be. Therefore, you can be more assured that your technology-related decisions will align with the objectives of the project.

What a SoW is NOT

Project charter, contract, scope of work, and more - you may realize there are other types of documents similar to SoW. What is the difference? Let’s compare and contrast these terms.

Statement of Work vs Project Charter

Both documents are conducted prior to software development and share the same goal, that is, to describe what needs to be done. Nevertheless, there is a very thin line between them.

Accordingly, Project Charter is a shorter, high-level, and non-legal overview of SoW.

Statement of Work vs Contract

Another possible confusion is the contrasting software statement of work and contract. SoW remains a document within the contract, so it is a part of it.

Statement of Work vs Scope of Work

One more frequent mistake is to equal these documents. The thing is, Scope of Work is only a certain part of Statement of Work. It focuses on how all the goals mentioned on other parts of SoW will be met.

The key elements of a SoW

Everything may depend on the project itself, and there is no single recipe for all cases. That’s why styles and formats of statement of work document may vary. However, here are some of the advice that will work for everyone.

SOW should include:

  1. Project background

To help a vendor understand your needs, define what you already have. Provide related background, reference information, documentation and specifications. Mention what was already being done. State all the parties already involved in a project. This may be an excellent starting point for an optimistic statement of work software implementation.

  1. Purpose

What is the reason for the project? This is something your vendor should understand in the first place. Take some time to answer the question of why you actually need the help of a vendor. This will help anyone involved in the project focus on key objectives right from the start.

  1. Scope of technical tasks

The further we move during writing SoW contract, the more details we should outline. This one is precisely about what needs to be done. Here, it is critical not only to describe the scope of the work, but also to break down each of the tasks into smaller steps (or even technical tasks). The point is to highlight what technical amount of work you expect to be performed by a vendor.

  1. Who will do the tasks?

What developers, QA, designers, and other specialists are necessary for performing your scope of tasks? This information is needed not only to legally state the other side, but to inform any other party involved in the project about its contributors.

  1. Where?

The team you employ will have to work somewhere, so the next important thing to include is the location of where the work will be performed, where the project may take place (on site, remotely, in office, etc.).

  1. Resources

What may be used during the performance? Mansion all the necessary resources for the project including facilities, equipment, hardware, and software.

  1. When?

After you agree upon the time of execution, it is critical to include these details into SoW document as well. Note all the timelines like start and finish time, the number of hours that can be billed per week/month, and other details that relate to scheduling.

  1. Acceptance criteria

Define the performance requirements and quality standards. The more accurately you conduct the goals and objectives, the greater the chance of successful software development.

  1. Payments

Don't overlook the importance of such details like how pay will be delivered and on what schedule. State the pricing structure and payment schedule. For both sides, such details will provide security and make your collaboration clear.

10. Any other information

Keep in mind that the software development statement of work should outline the project in all its dimensions. This means you shouldn’t limit yourself to the list mentioned above. You can additionally include some other items you want.

How to write a good statement of work?

Before plan and execute SoW contract, use these advices:

  1. Negotiations

The secret of good SoW lies in what precedes, that is in negotiations / communication with your vendor. The secret of good SoW document lies in what precedes. Focus vendor’s attention on the main objectives right from the start and be sure you can move to the next step.

  1. Focus on your unique case

All projects are different, and there is no single statement of work template. It is a bad idea to blindly copy other project's descriptions. Analyze your project thoroughly, count all important details and delete unnecessary ones. Try to catch the main benchmark, then formulate the clearest possible structure.

  1. Make it simple

Make SoW contract digestible and understandable for everyone. Be specific with terms, so everyone has a clear understanding. Clearly define success criteria. Be specific with defining who does what and when. To avoid any confusion and miscommunication, avoid unnecessary complications.

  1. Include valuables

One picture is worth a thousand words. Just like any other document, the software development statement of work includes a sufficient amount of text. Diagrams, flowcharts, or simple schemes have all chances not only to make it visually appealing but help your vendor to understand your project faster.

  1. Be aware of possible misinterpretations

Misinterpretations are something that may happen with SoW. Keep in mind possible blockers:

Prior to the finalization of a software development statement of work, be sure both parties are satisfied with its content.

  1. Don’t forget about the legal part

Obvious but no less important point. Make sure everyone adds sighs off, and everyone is satisfied with the document to avoid disputes. The right decision will be to enlist the help of lawyers to protect you from all possible negative cases.

Templates and examples of SoW

A correctly written SoW contract will boost confidence in the cooperation. But even if you know how to write one, there will still be a need to spend some more time and attention up front. An accurate statement of work example can be the right solution to speed this process up.

View and select the most appropriate software development statement of work template and adapt it for your needs. Here are good examples attached below:

As an alternative, you can use a software statement of work template with autocomplete form.

Summary

Writing a good SoW isn't magic or something you can achieve after countless hours of research. Focus on key components that should definitely be explored. Most importantly, take into account all dimensions of your project, which will increase the effectiveness of a document. Also, don’t hesitate to use the templates that we’ve prepared for you.

As far as Altigee hires and manages teams with developers for companies of all ranges, we know how to document collaboration with SoW contracts well. Feel free to contact us to ask any desired questions.


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Altigee is a software development company fueled by ridiculously competent software development pros who are crazy about their job and hungry for challenges.

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