Episode 275: Your Project Statement of Work is Missing a Comma! (Free)
This episode is sponsored by The Agile PrepCast for The PMI-ACP Exam:
Prior to signing any project statement of work (SOW) it should be reviewed by your legal team. However, while legal experts understand legalities that will help you out in court, they are not project experts who can determine if a particular SOW will provide you with the product that you anticipate, need, or desire.
Todd C. Williams (http://ecaminc.com/) on the other hand is such an expert. He has reviewed dozens of statements of work for his clients. He analyzes the methodology, scope, deliverables and proposed cost, and finds areas that point to weaknesses in the ability to deliver or misalignment in intentions.
In our discussion we look at the main reasons behind doing a formal SOW review, at the factors that show whether a formal review makes sense or not, identify some of areas of concern during a review, and learn why a comma can make all the difference in the world.
Below are the first few pages of the transcript. The complete transcript is available to Premium subscribers only.
Cornelius Fichtner: Hello and welcome to Episode # 275. This is the Project Management Podcast™ at www.pm-podcast.com and I am Cornelius Fichtner. Thanks for joining us.
Prior to signing any project statement of work, it should be reviewed by your legal team. However while legal experts understand legalities that will help you out in court, they are not project experts who can determine if a particular SOW will provide you with the product that you anticipate, that you need or desire.
Todd C. Williams on the other hand is such an expert. He has reviewed dozens of statements of work for his clients. He analyzes the methodology, scope, deliverables and proposed cost and finds areas that point to weaknesses in the ability to deliver or misalignment in intentions.
In our discussion, we look at the main reasons behind doing a formal SOW review for your project at the factors that show whether a formal review actually makes sense or not, some areas of concern during a review, and why a comma can make all the difference in the world.
And now "comma", enjoy the interview "period".
Female voice: The Project Management Podcast’s feature Interview: Today with Todd Williams, expert witness, executive consultant and President of eCameron.
Cornelius Fichtner:Hello, Todd and welcome back to The Project Management Podcast™!
Todd C. Williams: Thank you very much, Cornelius. It’s a joy being back.
Cornelius Fichtner: Yeah! So this is not the first time this week that you and I speak here over Skype. In fact, you and I, we meet regularly and we talk about how each others' businesses are doing. During one of those discussions, you told me: "Hey! We as a company, we're now doing reviews of SOWs for our clients!" and I'm like: "You're doing what?" that led to a very long discussion and it ended with me inviting you here on the program to talk about what it is you are doing. But let's begin with the problem here. What do you see as the issue with project SOWs, with statements of work?
Todd C. Williams: Well, people think that they are just boring. They think they're part of a contract. They are just part of this standard pack of stuff that we put in an envelope. We put on an email. We send it off and get it done. And they're not.
These are really critical parts. They are not part of the contract. They are an addendum to the contract. They are a separate thing that actually says: What is it that I told you and you told me that we're going to do and we agree you can do for some set price? And that is really critical. So it is the primary, the focal document for communication between you and whoever is doing work for you.
Cornelius Fichtner: Right and I think there's one word you took out of my mouth here --- boring. Many people think of this: "This is boring. This is contractual. I'm not interested in this" and that's exactly why it is important that project managers hear this conversation and understand how important an SOW really is, right?
Todd C. Williams: Yes because now, I may be a little bit geeky and of course because we talk, you exactly know how geeky I am with my business but I think they're actually fairly exciting. They tell you a story about what's going on and how people are working together and there's a lot of culture embedded in these things. But now, they have to be extracted or inserted depending on what end of it you're looking at.
So yeah, a number of people think they're boring and they just scan through and oh yeah, another boring little plain SOW. And boilerplates are great. Having that starting point is great but you can't rely on a boilerplate. They just start to add things or leave things out and you perpetuate the stakes. So people kind of look at this, ah yeah, it's standard, just throwing across old wall and that is death. That is just sheer death.
Cornelius Fichtner: And we're talking about SOW, statements of work, what angle are we looking at here? Are we focused on SOW's that I'm sending out to a vendor and it becomes his project or are we talking about SOW that a customer gives to me so that I can do a project estimate? Which directionality here are we focused on?
Todd C. Williams: Where I think most people have the least attention span around the SOW is the people who are receiving it. So if I am a company and I'm subcontracting to somebody that SOW that comes back to me that says here's what I'm going to do the work. I think that there's less attention given to it at that point because there's a lot of distraction. That's only a small part, 5, 3% of my entire project so I kind of go through it really fast, yup, that looks good and send it on.
Where on supplier side, that's not 3% of the contract. That is the contract. And so they're usually spending a significant amount more time looking at that SOW. Can we really make it happen? And if we can't, what kind of strange words do we put in here to waffle around this? Do we want to say, I had a discussion not too long ago with somebody about the word "Are we managing or are we running this?" and what did those two, what's the difference between those two words with respect to what actually gets done inside there?
And so the people who are generally giving the SOW to somebody, they have coned it better and they've manicured the words. Somebody on the receiving end may not notice all the nuisances that are inside there. And so in general where this has to be done is on that receiving side, receiving the SOW. It's not going to hurt for somebody on the sending side you do this either but the real cost savings, the real business driver is for the people who are receiving the SOW.
Cornelius Fichtner: And why should the project SOW undergo a review just because they are legally-binding documents?
Todd C. Williams: No. It is definitely, they are legally-binding documents. There's no question about that but that's not the sole reason. Any document be it SOW or be it a functional specification or anything like that, needs to be clear. It's really defining where you're going and what you're doing. Let the contract and SOW apart and people will give me a lot of flack on this one.
The contract is a piece of paper that tells you how I'm going to get in to this contract, how am I going to get in this agreement with you and how I'm going to get out of it. It has terms in general about 'we're going to assign this and we're going to go and do this and what invoice you want this day and you're going to pay on that day and we're all mad and tired at one another. We'll exit the contract this way or at some point in time, we're done and that's how we're going to exit. So it's all about payments and entrance and exit out of that contract.
The SOW is a separate document. It's usually an appendix and it should have in it what is being done and the rates that are being charged. Sometimes the rates are in the contract and I strongly, strongly recommend that not happen, that the rates are tried to the work that's being done and the rate structure is actually in the SOW itself. And that tells you what you're doing, how you're doing it, where you're going. It is that communication document that says: 'Here's what I'm building. Not how I'm going to get married with you and get a divorce with you. It is what we are going to be actually doing in its marriage and what is it we're trying to achieve.'
So it's a very, very different document. It is a legally-binding document yes, but truly the most important part is it tells me what you're doing. It drives any work, your charter, your work breakdown structures of your project and how it's going to come out in the end. So that's very, very critical. That's really the most important part.
Cornelius Fichtner: And since the SOW is a legally-binding product part of the contract, who should review your project SOW, just the legal department, is that enough?
Above are the first few pages of the transcript. The complete transcript is available to Premium subscribers only. Please subscribe to our Premium Podcast to receive a PDF transcript.