After a short-listed vendor is chosen, the next step in the selection process is contract negotiation. Within these negotiations is when the Statement of Work (SOW) is developed. A well designed SOW is absolutely essential to ensure a successful solution implementation, and will make it clear to everyone the work that is to be completed.
At a high level, an Implementation Statement of Work defines the following:
- What work will be done
- What work is to be specifically excluded
- Who is performing the work
- How much it will cost
- Project timelines
- Change control procedures
Remember that vendors write contracts, including SOW’s, to protect their interests – not yours. While it is important to have the agreement reviewed by your attorneys, you should also have selection project team members go through the SOW line by line to look for any red flags. When we are reviewing SOW’s, we typically find around 50 changes that need to be made on behalf of the client. It is also not unusual to find errors, as vendors will use “boiler plate” agreements that may have been changed many times by various clients over the years. Lastly, the SOW should always be negotiated and agreed to BEFORE the final contract is signed, in order to maintain leverage.
A well thought out and negotiated Statement of Work will protect your interests, clearly communicate expectations from both client and vendor perspectives, and minimize conflicts that may arise during a complex implementation.