Statement of Work or SoW

07 December 2010

The statement of work is a document that is part of the communication plan for a project being developed. This is the formal document that is used for communication between a business and their third party vendors.

In purpose of a statement of work is to clearly define what is being requested from an external supplier in means of raw material, finished goods or services. The type of wording that is used is clear and to the point. No ambiguity is permitted so no mistakes are made. If the wrong item or items are shipped it will cost money, so vagueness should be avoided at all costs.

For those that already have a project management program being used by their company, they should already have a template for the creation of the statement of work. This template makes for the creation of such a document easier and faster. It also allows for a consistent pattern of documents that are being sent out addressing this type of issue.

By using the same statement of work with each order, not only will your end of the communications be more consistent but so will that of the other end.  This allows for the information to be placed in the same area of the document each time. Consistency brings order which leads to control. A business must have control over the items being shipped to them so actuate receiving of them along with payment can occur.

The content of a statement of work should include specifically what is being ordered. This should be done with the name of the item, the company item number and a brief description. There should also be a section about the delivery of the item. This should include the date and time if necessary along with the specific location the delivery should take place.

The last but for some the most important part of the statement of work is the payment procedure. This can easily be stated by using COD or cash on delivery, PO number or billing in 30 days. The exact form of payment is generally already agreed to by both parties before the delivery is made.