In legal terms, a Statement of Work (SOW) is an agreed-upon contract that outlines the details of a given project that covers timeline, cost, scope, and deliverables, with IT talent being included in the overall plan. Typically formulated for a service-client relationship, an SOW is helpful for businesses to define expectations, responsibilities, and roles surrounding a specific project that often has a longer life span. SOWs are becoming increasingly popular as an option for IT staffing firms to offer an additional flexible talent model for clients.
Learn how SOW in IT staffing can help businesses increase project management efficiencies and reap other benefits.
What is the purpose of an SOW?
An SOW is a powerful tool for many businesses that helps bring clarity and understanding to large and complex projects, especially as many organizations undergo robust digital transformations. The major purpose of an SOW includes identifying the work required for a project, defining milestones and desired outcomes, and building that all into a framework that all contributors and stakeholders can follow. An SOW can vary in length and complexity, usually aligning with the size of the project. SOWs are important for ensuring everyone is informed and comfortable with all aspects of the project before work begins.
What are the benefits of an SOW in IT staffing?
A thorough SOW provides many benefits to successfully completing a complex IT project and supports the professionals involved. Here are some primary advantages of an SOW:
- Risk mitigation
- The SOW framework outlines the scope of the project to help identify any potential pitfalls or obstacles that can delay processes and throw a project off track. This allows stakeholders to adjust and pivot and put support measures in place to refocus the work towards successful delivery.
- Project management efficiency
- An SOW is a valuable tool in project planning as it can serve as a foundational blueprint with schedules, milestones, responsibilities, and more. It also helps to spell out the skill sets and specializations required for project completion.
- Improved communication and collaboration
- The project’s IT talent and stakeholders have a shared resource in the SOW that outlines responsibilities, resources needed, and expectations to help everyone work towards the same end goal. This helps minimize misunderstandings between parties, allowing the project to be completed with minimal disruptions.
- Budget Control
- A well–drafted SOW includes a section regarding payment and cost structure that both parties ultimately agree on, which helps prevent cost overruns from revisions in plans or the scope of work.
SOW Demand in IT Staffing
Staffing Industry Analysts say IT staffing firms are seeing significant interest in SOW services. Research shows that 63% of large staffing client firms’ contingent workforce programs now oversee some SOW spend, an increase of 42% since 2011.
Staffing firms utilizing SOWs bill clients on a fixed price basis for specific work, projects, milestones, or on an ongoing basis, such as an IT help desk for example. The process of acquiring and contracting SOWs at an IT staffing firm can be more involved than standard staff augmentation for hours worked. Still, it offers a “big picture” mindset to a project deliverable that attracts knowledgeable tech professionals and can be more fluid in scaling a team up or down to complete a project. Plus, as the SIA article suggests, SOW in IT staffingcan be an attractive benefit for highly specialized contingent workers looking for more stable assignments.
SOWs are becoming an appealing and valuable tool for IT staffing firms, contingent workers, and businesses looking for talent or project work. While firms must be mindful of spending concerns and worker classification rules, if the contract structures and the process are carefully designed, SOW models open up new avenues to help maintain an effective and efficient collaboration flow.
