Scope of work vs statement of work: When to use each

Sometimes you need external help on a project because your resources exceed your internal capacity. When hiring outside contractors, agencies, or vendors, a scope of work or statement of work can help ensure a successful project, effective communication, and timely delivery.

But what exactly is the difference between a scope of work and a statement of work, and what goes into these documents? In this article, we'll explain how to tell these two documents apart, when to use each one, and why they're valuable project management tools.

Note this is not intended to be legal advice, and you should consult with your own internal legal team to determine the approach that works best for your situation.

Scope of work vs. statement of work

While both the scope of work and the statement of work are often abbreviated as SoW, they're not the same thing.

A scope of work defines the specific tasks, deliverables, and timeline for a project, while a statement of work is a comprehensive agreement that includes the scope of work, as well as legal terms, payment schedules, and requirements. The scope of work answers "what will be done," while the statement of work answers "how we'll work together to do it."

Depending on your project's needs, you may just need a standalone scope of work. If your team is working with an external client or agency, you may then decide to create a statement of work that encompasses the scope of work within a formal contract.

Let's take a more in-depth look at both documents, starting with the scope of work.

What is a scope of work?

A scope of work helps your team understand what a project does and doesn't cover. It typically includes:

• Project needs: An explanation of how project goals will be met

• Deliverables: The specific outputs the project will produce

• Timeline: Key dates and duration for project phases

• Milestones: Checkpoints to measure progress

• Reports: Documentation requirements throughout the project

A scope of work can stand alone if your project doesn't require a statement of work. Work with your internal legal team to decide if you need to expand your scope of work into a statement of work.

When can a scope of work be helpful?

A scope of work is the foundation of a well-planned project and can help it run smoothly. This document can help your team and project stakeholders agree on project requirements and identify potential risks that could prevent successful, timely completion.

For example, while drafting the scope of work, your team may notice that the scheduled delivery of a task conflicts with an ongoing separate task. You can then update the timeline and adjust the scope of work accordingly.

A scope of work can help align your team on project deliverables to hit deadlines, avoid backlogs, and avoid incurring additional expenses.

What is a statement of work (SoW)?

A statement of work (SoW) is a formal agreement between two parties that aligns everyone on project objectives. It builds on your scope of work by adding legal terms, costs, schedules, and requirements into a comprehensive contract.

Statements of work are most often used for external projects and act as a contract between your organization and the party you've hired. Common scenarios include:

• Collaborating with an external design agency

• Working with a contractor on a large-scale building project

• Engaging vendors for specialized services

Some of the most complex statements of work documents are written for government contracts and are typically part of the RFP (request for proposal) or RFQ (request for quotation).

You can also use a statement of work for internal projects when two different departments collaborate.

The following parties generally receive a SoW:

• Project manager or lead

• Contractors and collaborators

• Everyone involved in the contract

Check with your internal legal team to decide if or when a project can benefit from a statement of work.

When can a statement of work be helpful?

A well-written SoW combined with an effective project management tool sets you up for success. This document helps your team and the party you hired manage expectations and avoid disputes.

At the end of the project, the SoW serves as the benchmark for performance verification. Depending on your contract, this can affect payments, bonuses, or penalties.

Key differences between scope of work and statement of work

Understanding the distinctions between these two documents helps you choose the right one for your project needs.

In short:

• Scope of work: Answers "what will be delivered?", a focused description of tasks and deliverables.

• Statement of work: Answers "how will we work together?", a contractual approach governing the entire relationship.

When to use a scope of work vs. a statement of work

Choosing between a scope of work and a statement of work depends on three factors: project complexity, the parties involved, and the level of formality required.

Use a scope of work when:

• You're managing an internal project within your organization

• You need to define project boundaries and deliverables for your team

• The project is relatively straightforward and doesn't require formal contractual terms

• You want to align stakeholders on what the project will and won't include

Use a statement of work when:

• You're hiring external contractors, agencies, or vendors

• The project involves payment terms and legal accountability

• You need a comprehensive document that protects both parties

• You're working on government contracts or formal RFPs

• Multiple departments or organizations need to collaborate under clear terms

In many cases, you'll create both documents. The scope of work becomes a section within the broader statement of work, providing the detailed task breakdown, while the statement of work handles the contractual and administrative elements.

How to write a scope of work

A good scope of work helps you identify important business considerations and share your project objectives and details with project stakeholders.

Many people keep the following in mind when approaching a scope of work:

• Be specific. Use precise and clear language so everyone is on the same page about the project requirements and expected outcomes. Listing measurable deliverables, milestones, and tasks can help you avoid confusion later.

• Use visuals. Visuals like a work breakdown structure make information easier and quicker to digest for everyone involved. They also allow you and your team to detect risks, such as bottlenecks, that could put the successful, timely completion of your project at risk.

• Collaborate with stakeholders. We've already mentioned that you should seek advice from your legal team during this process. For this specific task, collaborating with stakeholders can save you time in the long run. This way, you can nip future misunderstandings in the bud by getting everyone involved from the start.

No two scope management plans look the same. What you should include and how in-depth this section should be will vary widely across industries and projects. When in doubt, check with your internal legal team for guidance.

The following sections generally make up a scope of work:

Deliverables

This section of the scope of work covers the product or service the project will deliver. This is where a work breakdown structure will come in handy.

Timeline

Include a timeline or Gantt chart that precisely describes the major phases of your project. This section serves as the visual project roadmap leading your team and everyone involved in the project from start to finish.

Milestones

Milestones help you break up your project into more digestible chunks. Write down all the milestones for your project to make monitoring progress and sticking to your timeline easier.

Reporting

A scope of work typically also includes any reports that you'll be generating throughout the project. Whether it's a status report to the client, a progress report you're inquiring about from the vendor, or a financial report to analyze the difference between budgets and performance, include details about all of these documents, who will create them, and when they're scheduled to be delivered.

These reports will serve as a means of communication throughout the project and provide all parties involved with the data and information they need to stay updated on the project's performance.

Some scope of work documents may include a glossary of terms, an overview of acronyms and abbreviations, or other sections further describing details associated with the successful completion of the project.

How to write a statement of work

You can leverage your scope of work into a statement of work for better accountability with external partners. A thorough, detailed, and accurate statement of work can align teams on all project details.

An unclear statement of work can lead to confusion between the two parties. That's why it's key to clearly outline all the tasks and details.

Below are some strategies to consider when preparing a statement of work:

1. Break the project up into phases. One long list of tasks can easily look overwhelming. By breaking the project up into individual phases, you can take some of the pressure off your team and the stakeholders.

2. Write in short and clear sentences. Writing in short, clear sentences will minimize the risk of misinterpretation. If you're planning to use acronyms or abbreviations, include a glossary so everyone understands what they stand for.

3. Explain the purpose of the project. The project objectives and project purpose help stakeholders understand why this project matters.

4. Define the project's goal and the steps to achieve it. A clearly defined goal will help you stay on track. This will also help you avoid potential misinterpretations of the final goal and the steps towards achieving it.

5. Define project milestones and success together. Including stakeholders and your team in the writing process can lay a foundation for a smooth, successful collaboration.

6. Set clear, simple, and measurable boundaries. Clearly defining boundaries, like the project scope, goals, and key phases, can help you avoid disputes down the line. Include quantifiable boundaries to eliminate any room for misinterpretation.

7. Always run your SoW by your legal team. This ensures that everything mentioned above was executed well and thoroughly. A third party, like your internal legal team, can uncover potentially risky sections and help you and your team revise accordingly.

8. Educate your team and check in regularly. Once the statement of work is complete and signed off, ensure your team and all stakeholders are educated on the details and stay up to date throughout the process. This allows you to monitor whether or not everyone is adhering to the agreed-upon details.

Your statement of work can cover the legal side of things, but a project management tool will allow you to keep track of processes and performances throughout the project. Once the statement of work is completed, transfer all important information, tasks, and deadlines into your project plan to connect and collaborate with your team and stakeholders in real time.

What makes up a SoW?

A statement of work generally consists of 13 sections. Each section covers a specific aspect of the project and addresses the stakeholders involved. Depending on your industry and the scope of your project, the statement of work can have more or fewer sections.

Consult with your internal legal team when drafting a statement of work to align with the standards and special requirements of your industry, organization, client, contractor, or other stakeholders.

For example, a statement of work might include the following sections:

1. Introduction

At the beginning of a statement of work, there's generally a brief introduction so anyone reading the document knows what the project is about and who's involved.

2. Project purpose

The second section explains the project's rationale. This section typically outlines the project objectives and its purpose, giving the reader a better understanding of why this project matters.

3. Scope of work

The scope of work is likely going to be the most detailed section in the statement of work. This section covers how you plan to accomplish the project goals.

4. Location of work

In the fourth section, you typically define the project's location. For example, will the project be conducted in a remote environment, or do you need to meet on-site so your team members can complete it?

5. Detailed tasks

Then, the SoW will break the project scope into smaller tasks to be completed. This section includes information to help all involved parties understand the specific steps they need to take to successfully complete the project. Depending on the scope of work, this section may include a work breakdown structure (WBS) to visualize individual tasks and make it easier for the reader to digest.

6. Milestones

In addition to including task details, the statement of work may include a section to define any measurable project milestones. This section can help further break down the project into more manageable chunks and also give all parties involved the chance to reach their goals on time.

7. Deliverables

This section lists all expected deliverables, including their due dates. Typically, this section will include specific, quantifiable deliverables that don't leave any room for misinterpretation.

8. Schedule

Here, the schedule may include the deliverable due dates, the time to be spent on each task, and any billable hours. This section typically also includes relevant timelines, including the start and end dates for every task.

9. Standards and testing

Any industry-specific standards that apply to the project will be explained and listed here. The SoW will cover all testing stages required to complete the project successfully. Each testing stage should include information about who is involved in the project, the required resources and equipment, and the stage at which testing will take place.

10. Success definition

This section includes information that clearly defines what the stakeholders deem a successful project, typically through measurable success metrics. Typically, project stakeholders are involved in crafting this section to ensure that all parties agree on the project's goal.

11. Requirements

At this point, the statement of work may list any special or specific project and work requirements. This can include equipment needed for the projects, certifications your team must obtain, or security clearances contractors must pass.

12. Payments

This section can include any project-related costs. Anything from outside expenses that accrue throughout the project stages to labor costs is typically listed here.

The payment schedule and the method of payment can also be explained in this section. You can state whether you plan to pay up front, after each milestone, or upon successful delivery. Generally speaking, payment terms are either set up by schedule or by milestone of deliverables. Coordinate with your legal and finance teams to decide what's best for your specific situation.

13. Other

Anything relevant to the project that hasn't been listed yet should be included in this section. This will vary based on industry, but it can include travel pay or requirements, security concerns, software or hardware restrictions, and post-project support and testing.

Check with your internal legal team to ensure they can help you cover everything relevant to the project in this section.

Use a scope of work to avoid scope creep

Whether you're using a statement of work or a scope of work to define your project goals, these documents will be crucial in keeping your team and any stakeholders involved accountable for their work and performance.

Adhere to your scope of work document as closely as possible to avoid scope creep. This will ensure that your project is delivered on time and meets your expectations. Aligning your scope of work with project management software will keep your team on track and help you reach your goals.

Manage projects with clarity using Asana

Whether you're working with a scope of work or a statement of work, the right project management tool helps you turn documentation into action. Once your documents are finalized, transfer all tasks, milestones, and deadlines into Asana to keep everyone aligned.

With Asana, your team can:

• Track deliverables and monitor progress in real time

• Visualize timelines to stay on schedule

• Manage workloads to prevent scope creep

• Collaborate seamlessly with internal teams and external partners

Get started with Asana today to bring clarity to your projects from planning to completion.

This article contains suggestions and considerations to help your team learn more about SoWs and scopes of work. This is not intended to be legal advice. Consult your internal legal team to determine the approach that works best for your situation.

Frequently asked questions about scope of work and statement of work