Tips for Effective Statements of Work

The current economy is forcing vendors to re-organize, cut staff, and re-think their strategies and business models.  These changes often have the potential to impact the commitments they have already made to their clients and customers.

How will you make sure that your project is not affected by such changes?

In the case of a conflict or legal dispute, would your agreement with your vendor withstand serious legal scrutiny?

The Simple Truth: You Can’t Live Without Them

As the global economy continues to recover from the effects of the financial crisis and organizations look for any opportunity to cut cost, we as project managers are expected to do more with less under tight budgets and timelines.

To keep up, we will have to turn more and more to external vendors to expand our organizations capabilities to maintain a competitive advantage.

Vendor management is fast becoming a required skill that many organizations expect their Project Managers to acquire and continue to develop. In the future, we will only see this trend continue as globalization and competitive pressures increase.

The first step in developing a strong and successful partnership with your vendor is documenting your mutual expectations in a well-written project Statement of Work (SOW).

Elements of Effective Statements of Work

The SOW establishes a contractually binding legal agreement between your organization and a vendor.

They key words here are “contractually binding legal agreement”.

The SOW is usually an attachment to a vendor contract and should spell out:

  • what work will be done and by whom,
  • when it will be done,
  • how the quality of the end product or service will be measured, and
  • how much it will cost.

An initial investment of time and effort to develop a well-written SOW brings you the following benefits:

  • Allows your vendors to clearly understand what needs to be done on your project and to better estimate their costs. This way they don’t have to do short cuts or ask for more money during the project.
  • Provides you and your vendor with the information to better prepare your organizations for the project. In the absence of documented expectations, you and your vendors will rely on guesses and undocumented assumptions. Conflict becomes inevitable when these guesses and assumptions prove to be invalid later down the road.
  • Once the project starts, a well-written SOW eliminates or reduces the need for change orders, which can increase the cost of the project to your organization. When you feel your vendor is trying to nickel and dime you with change orders, a quick review of the SOW should end the debate when you and your vendor disagree on deliverables, roles, and responsibilities.

Consequences of a poorly written SOW

Unfortunately, writing SOWs does not receive the focus and attention that it deserves. As a result, resolving differences with your vendor, under a poorly written SOW, puts you in a very challenging and compromising position.

Once the project is underway and you reach an impasse with your vendor over an undocumented expectation, you are left in a weak position with zero leverage. You are often forced to either pay your vendor more than you originally budgeted for your project or to accept less than optimal performance.

Seeds of Conflict

Almost all conflicts with your vendor will revolve around promises that were made during the sales phase but that were never documented in the statement of work.

You see, most vendors have a sales team and a delivery team. These two groups are assessed and rewarded differently. The sales team is rewarded based on how much they sell. The delivery team is rewarded based on how much actual profits they earn.

These two teams often don’t talk to each other until the contract with you, the client, is already signed. Too often, that’s the first time the delivery team is engaged and learns about what the sales team promised the client.

Usually, contracts are negotiated by the sales team. During the sales phase, the sales team is motivated to close the deal and there is often the temptation during client visits, in phone calls, and in e-mails to make promises that are never listed in the SOW.

Never negotiate the SOW with only the vendor’s sales team. Insist that the vendor’s project manager, who is usually from the delivery team, be at the negotiation table. This way, the delivery team has a chance to provide their input before the contract is signed. While this may not eliminate all surprises down the road, it will at least prevent some of them.

If you don’t get your way, you still have one more opportunity. As soon as the vendor’s project manager is assigned, the first order of business is to sit down with them and review the SOW word for word and note any disagreement.

There is still a window of opportunity to make changes to the contact and bridge any gaps in understanding or expectations. This window of opportunity starts to close fast, as soon as the project gets underway and trust becomes fragile between you and your vendor.

Let’s agree that when you find yourself in conflict with your vendor, going to court is not always the best way to solve a dispute. A legal dispute can be very costly, time-consuming, and extremely stressful.

A clear and well-written SOW will help your organization and your vendors avoid much of the confusion and conflict that are an inherent part of all projects involving vendors.

See Seven Steps to Writing Effective Statements of Work – Intro for more information.

For more information on Statements of Work, sign up now to download our free ebook:

“Seven steps to writing effective Statements of Work”

Sign up and get your free report now

You may unsubscribe anytime

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Tips for Effective Statements of Work

The current economy is forcing vendors to re-organize, cut staff, and re-think their strategies and business models.  These changes often have the potential to impact the commitments they have already made to their clients and customers.

How will you make sure that your project is not affected by such changes?

In the case of a conflict or legal dispute, would your agreement with your vendor withstand serious legal scrutiny?

The Simple Truth: You Can’t Live Without Them

As the global economy continues to recover from the effects of the financial crisis and organizations look for any opportunity to cut cost, we as project managers are expected to do more with less under tight budgets and timelines.

To keep up, we will have to turn more and more to external vendors to expand our organizations capabilities to maintain a competitive advantage.

Vendor management is fast becoming a required skill that many organizations expect their Project Managers to acquire and continue to develop. In the future, we will only see this trend continue as globalization and competitive pressures increase.

The first step in developing a strong and successful partnership with your vendor is documenting your mutual expectations in a well-written project Statement of Work (SOW).

Elements of Effective Statements of Work

The SOW establishes a contractually binding legal agreement between your organization and a vendor.

They key words here are “contractually binding legal agreement”.

The SOW is usually an attachment to a vendor contract and should spell out:

  • what work will be done and by whom,
  • when it will be done,
  • how the quality of the end product or service will be measured, and
  • how much it will cost.

An initial investment of time and effort to develop a well-written SOW brings you the following benefits:

  • Allows your vendors to clearly understand what needs to be done on your project and to better estimate their costs. This way they don’t have to do short cuts or ask for more money during the project.
  • Provides you and your vendor with the information to better prepare your organizations for the project. In the absence of documented expectations, you and your vendors will rely on guesses and undocumented assumptions. Conflict becomes inevitable when these guesses and assumptions prove to be invalid later down the road.
  • Once the project starts, a well-written SOW eliminates or reduces the need for change orders, which can increase the cost of the project to your organization. When you feel your vendor is trying to nickel and dime you with change orders, a quick review of the SOW should end the debate when you and your vendor disagree on deliverables, roles, and responsibilities.

Consequences of a poorly written SOW

Unfortunately, writing SOWs does not receive the focus and attention that it deserves. As a result, resolving differences with your vendor, under a poorly written SOW, puts you in a very challenging and compromising position.

Once the project is underway and you reach an impasse with your vendor over an undocumented expectation, you are left in a weak position with zero leverage. You are often forced to either pay your vendor more than you originally budgeted for your project or to accept less than optimal performance.

Seeds of Conflict

Almost all conflicts with your vendor will revolve around promises that were made during the sales phase but that were never documented in the statement of work.

You see, most vendors have a sales team and a delivery team. These two groups are assessed and rewarded differently. The sales team is rewarded based on how much they sell. The delivery team is rewarded based on how much actual profits they earn.

These two teams often don’t talk to each other until the contract with you, the client, is already signed. Too often, that’s the first time the delivery team is engaged and learns about what the sales team promised the client.

Usually, contracts are negotiated by the sales team. During the sales phase, the sales team is motivated to close the deal and there is often the temptation during client visits, in phone calls, and in e-mails to make promises that are never listed in the SOW.

Never negotiate the SOW with only the vendor’s sales team. Insist that the vendor’s project manager, who is usually from the delivery team, be at the negotiation table. This way, the delivery team has a chance to provide their input before the contract is signed. While this may not eliminate all surprises down the road, it will at least prevent some of them.

If you don’t get your way, you still have one more opportunity. As soon as the vendor’s project manager is assigned, the first order of business is to sit down with them and review the SOW word for word and note any disagreement.

There is still a window of opportunity to make changes to the contact and bridge any gaps in understanding or expectations. This window of opportunity starts to close fast, as soon as the project gets underway and trust becomes fragile between you and your vendor.

Let’s agree that when you find yourself in conflict with your vendor, going to court is not always the best way to solve a dispute. A legal dispute can be very costly, time-consuming, and extremely stressful.

A clear and well-written SOW will help your organization and your vendors avoid much of the confusion and conflict that are an inherent part of all projects involving vendors.

See Seven Steps to Writing Effective Statements of Work – Intro for more information.

For more information on Statements of Work, sign up now to download our free ebook:

“Seven steps to writing effective Statements of Work”

Sign up and get your free report now

You may unsubscribe anytime

4 Responses to Tips for Effective Statements of Work
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  2. […] Tips for Effective Statements of Work […]

  3. […] Tips for Effective Statements of Work […]

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Tips for Effective Statements of Work

The current economy is forcing vendors to re-organize, cut staff, and re-think their strategies and business models.  These changes often have the potential to impact the commitments they have already made to their clients and customers.

How will you make sure that your project is not affected by such changes?

In the case of a conflict or legal dispute, would your agreement with your vendor withstand serious legal scrutiny?

The Simple Truth: You Can’t Live Without Them

As the global economy continues to recover from the effects of the financial crisis and organizations look for any opportunity to cut cost, we as project managers are expected to do more with less under tight budgets and timelines.

To keep up, we will have to turn more and more to external vendors to expand our organizations capabilities to maintain a competitive advantage.

Vendor management is fast becoming a required skill that many organizations expect their Project Managers to acquire and continue to develop. In the future, we will only see this trend continue as globalization and competitive pressures increase.

The first step in developing a strong and successful partnership with your vendor is documenting your mutual expectations in a well-written project Statement of Work (SOW).

Elements of Effective Statements of Work

The SOW establishes a contractually binding legal agreement between your organization and a vendor.

They key words here are “contractually binding legal agreement”.

The SOW is usually an attachment to a vendor contract and should spell out:

  • what work will be done and by whom,
  • when it will be done,
  • how the quality of the end product or service will be measured, and
  • how much it will cost.

An initial investment of time and effort to develop a well-written SOW brings you the following benefits:

  • Allows your vendors to clearly understand what needs to be done on your project and to better estimate their costs. This way they don’t have to do short cuts or ask for more money during the project.
  • Provides you and your vendor with the information to better prepare your organizations for the project. In the absence of documented expectations, you and your vendors will rely on guesses and undocumented assumptions. Conflict becomes inevitable when these guesses and assumptions prove to be invalid later down the road.
  • Once the project starts, a well-written SOW eliminates or reduces the need for change orders, which can increase the cost of the project to your organization. When you feel your vendor is trying to nickel and dime you with change orders, a quick review of the SOW should end the debate when you and your vendor disagree on deliverables, roles, and responsibilities.

Consequences of a poorly written SOW

Unfortunately, writing SOWs does not receive the focus and attention that it deserves. As a result, resolving differences with your vendor, under a poorly written SOW, puts you in a very challenging and compromising position.

Once the project is underway and you reach an impasse with your vendor over an undocumented expectation, you are left in a weak position with zero leverage. You are often forced to either pay your vendor more than you originally budgeted for your project or to accept less than optimal performance.

Seeds of Conflict

Almost all conflicts with your vendor will revolve around promises that were made during the sales phase but that were never documented in the statement of work.

You see, most vendors have a sales team and a delivery team. These two groups are assessed and rewarded differently. The sales team is rewarded based on how much they sell. The delivery team is rewarded based on how much actual profits they earn.

These two teams often don’t talk to each other until the contract with you, the client, is already signed. Too often, that’s the first time the delivery team is engaged and learns about what the sales team promised the client.

Usually, contracts are negotiated by the sales team. During the sales phase, the sales team is motivated to close the deal and there is often the temptation during client visits, in phone calls, and in e-mails to make promises that are never listed in the SOW.

Never negotiate the SOW with only the vendor’s sales team. Insist that the vendor’s project manager, who is usually from the delivery team, be at the negotiation table. This way, the delivery team has a chance to provide their input before the contract is signed. While this may not eliminate all surprises down the road, it will at least prevent some of them.

If you don’t get your way, you still have one more opportunity. As soon as the vendor’s project manager is assigned, the first order of business is to sit down with them and review the SOW word for word and note any disagreement.

There is still a window of opportunity to make changes to the contact and bridge any gaps in understanding or expectations. This window of opportunity starts to close fast, as soon as the project gets underway and trust becomes fragile between you and your vendor.

Let’s agree that when you find yourself in conflict with your vendor, going to court is not always the best way to solve a dispute. A legal dispute can be very costly, time-consuming, and extremely stressful.

A clear and well-written SOW will help your organization and your vendors avoid much of the confusion and conflict that are an inherent part of all projects involving vendors.

See Seven Steps to Writing Effective Statements of Work – Intro for more information.

For more information on Statements of Work, sign up now to download our free ebook:

“Seven steps to writing effective Statements of Work”

Sign up and get your free report now

You may unsubscribe anytime

4 Responses to Tips for Effective Statements of Work
  1. […] Tips for Effective Statements of Work for more […]

  2. […] Tips for Effective Statements of Work […]

  3. […] Tips for Effective Statements of Work […]

  4. […] Tips for Effective Statements of Work […]

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