While every client and engagement is different, there are some statement of work (SOW) best practices that apply across the board. Taking the time to enlist these steps in your next SOW can save you time, resources, and maybe even your sanity.
1. Start the Paperwork ASAP
After winning an account with a new client, the first step you should take is to start the new vendor paperwork. Based on our experience, the Master Service Agreement (MSA) can take 2+ weeks to review, with all of the back and forth, changes, and approvals. Once you know you have secured the engagement, the procurement team should begin to get that information in place.
This step is important for repeat clients as well, as there will be additional paperwork for a continued engagement.
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2. Clearly Define Scope
Take extra time in the beginning to clearly define what is both in and out of scope. Discuss these items in detail with your client, openly and frankly. This is not the time to make assumptions or allow your client to do so. When you specifically define what you will and will not deliver, it allows your client total clarity on the final outcome. It’s the best way to avoid the ever lurking ‘scope creep’. In a case where a project is under-scoped, it inevitably creates a snowball effect negatively impacting timelines, resource allocation, cost and most importantly the quality of the overall project.
3. Identify Change Control
There is often a reason that more hours need to be added to a project. Sometimes tasks take longer than expected, or your client may decide that something out of scope actually needs to be in scope. In your SOW, present the change control procedure and identify one point of contact. This is typically your Project Manager (PM) who can address the effort and cost for the additional request. It’s helpful to put your change control procedure in the SOW appendix, so it’s familiar and agreed upon by your client. This can alleviate any back and forth when changes need to be made and make sure unnecessary delays don’t impact the project.
4. Agree on Client Responsibilities
The client is an active participant in any project. While they hire you to deliver the final outcome, there is always interaction and information needed from the client at various steps along the way. In the SOW, specify exactly what these are and when they need to happen. Without a clarified list, you risk unnecessary stress on your PM and a potential division between your team and the client. Whether it’s keeping any hosting or licenses active, giving your team access to certain systems, or responding to questions, set a designated point of contact on both sides, and make the client aware of consequences.
5. Line Item the Financials
In the SOW, you want to identify the total cost of the engagement. Within that cost, list out specific milestones and the amount the client will be invoiced, along with a target date. Both accounting departments are clear on when invoices are coming and need to be paid, and specifically what work has been completed to generate an invoice.
6. Streamline the Process
With an SOW, you can never be too thorough or have too much documentation, which makes starting from scratch time consuming. The best way to save yourself some time and work more effectively, is to create a unified template for all SOWs your company creates. That includes any forms or references that accompany the process (ie Change Forms). This provides a starting point that you can then use to tailor to the specific client’s needs. Teach your team how to implement and complete the templates. Not only does this save some time, but should a project get passed from one person to another, all the pieces are the same and the learning curve is shortened because information doesn’t need to be searched for or reinvented, it’s all right there.
Every contract is different because every client and engagement is different. But you can save yourself some headaches if you define your contract process with a standard template. Think ahead and use your experience to spell out roles and needs. The more you can clearly define the project from the beginning, the less back and forth you will have along the way, helping you to deliver milestones on target and on budget.
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