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SoWing a seed for successful vendor management

30 Oct 2015

 

The preferred Systems Integrator or IT vendor has been selected and their proposal agreed, do we really need a statement of work (SoW)?

 

I have worked for both vendor and customer organisations. My experience with SoWs is that they can become a tedious exercise to write and agree but are absolutely essential for both the winning vendor and the awarding organisation. Here’s why.

 

Misunderstandings of responsibilities and scope are followed by the inevitable need for changes. Scope creep is a bad thing and will cause ill feeling on both sides.

 

What is a Statement of Work and how does it help avoid ill will and potential project failure?

 

The SoW is the agreement that's signed between the tendering or awarding organisation and the winning bidder, taking into account the final, negotiated parts of the Request for Proposal (RFP) plus any afterthoughts. I will talk about the afterthoughts in a latter blog – particularly related to price/effort adjustments.

 

Essentially, a Statement of Work is a very powerful vendor management tool. Putting a bit of time into creating a detailed SoW will help to ensure that work is being performed according to your specifications and expectations. By clearly defining the work to be done it is more likely that the work is completed according to the project plan and there are no nasty surprises once the work is started.

 

A Statement of Work (SoW) typically sits under an agreement for services from the supplier. The services agreement contains all the terms and conditions whereas the SoW captures and defines the services, deliverables and timeline that a vendor must execute in performance of the specified work for the customer. The content should align with the winning vendor’s proposal. The important sections are:

  • Context

  • Scope of Work

  • Location of Work

  • Plan

  • Deliverables and Services

  • Customer’s Responsibilities

  • Key Personnel

  • Governance

  • Acceptance Criteria

  • Charges/Payment Schedule

  • Signatures

 

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