Let's face it, we all live and die by the statement of Work (SOW). Estimates are the lifeblood of how any firm operates. How you decipher them puts you in the driver's seat, so long as you know what to look for and how to make sure you get what you need. In order to work with external providers, understanding the SOW means having clarity on deliverables. As with any legally binding document, a contractor should carefully review each SOW before signing.
However proper scrutiny is oftentimes not implemented - for a variety of reasons - and expectations may be missed or fall through the cracks into the land of "Never Delivered". Modern executives live busy lives and may feel stressed to move projects forward but don't have the time to go over the details of every document that passes across their desk. While Providers may have existing relationships with Contractors, "trust" in what's been submitted is no reason to sign. This is especially true, and scary, when considering virtually all SOW's today have significant 'terms and conditions' that can affect delivery. When it comes to partnering with or hiring an outside Provider, time to review the SOW submitted is more important than a lot of other things.
Wasted time, money and even legal battles can stem from misunderstandings of a SOW's content. We take this very seriously at Venuiti. We've seen a lot of what we call "Provider abuses" in our day, in many cases stepping in to solve a situation that resulted from poor documentation. But, we're also a Contractor too, and as such, we apply our own expectations to the SOW's we write to support our partners, they deserve no less than what we demand. So, we thought it would be good to share our checklist for how we evaluate SOW before we sign on the dotted line:
What exactly are we getting?
Confrontation can often result when the Provider and the Contractor have different interpretations of deliverables. Usually, this is the direct result of a poorly prepared SOW. While tedious, the best Providers understand that SOW's should break down, line by line, exact deliverables a Contractor will be getting from a project. While a lot of languages can often cause complaints from the Contractor, in the end, the benefits outweigh the time it takes to read through it all (quick tip, use pictures/graphics to break up the volume, but make sure they make sense to what is being described).
Often, Providers will list vague terms - example "social media integration". This could mean anything from adding social media buttons to posting on social media, to reviewing social media content or simply just providing a social strategy. In addition, to further this example, social media could refer to one social media platform or many of them. Now, one side may believe that social media integration means only one of these tasks whereas the other thinks it means all of them. Companies will sometimes sign such SOW's assuming the correct deliverable - we all know what happens when one Ass-U-Me's... A Contractor must always set strict standards on what is expected from SOW's (we even recommend forwarding an in-house template as a way to ensure proper delivery of information) and to not sign anything until such standards are met. It will take a little more work up-front, but will alleviate major headaches in the future;
What are the deadlines?
There needs to be a clear set of deadlines in every SOW that is written. Many times, SOW's are drafted ahead of knowing the actual planned start-date of a project. A Provider should still implement a "High-Level" timetable that could look something like this. Without these, projects can drag on with a Provider ending up taking much longer than expected, often times because the Contractor has no frame of reference for dates of approval or closure dates - which can often end up with Providers demanding change requests costing Contractors more money. Having clear deadlines also keeps the Contractor's employees accountable to ensure that things are done at the right time. Interestingly, as an example, Coke-Cola's scoping process is designed this way. It goes a very long way to ensuring that the detail signed for is EXACTLY what the project requires. Like Coke-Cola plans for, this tactic is crucial when rates are paid hourly.
What are the support costs?
If things go wrong or if you have questions, how much will it cost to deal with it? Is support part of the contract? What level of support? If not, is there a possible discounted support package. What package should you get and why, and are these options provided in the SOW, clearly dislodged from the main assignment? There are many questions about support which must be answered. If missed, a Contractor can find itself in a position where urgent support is needed and have no choice but to pay exorbitant fees. We really call that abuse.
Are there any hidden fees?
In our experience, we've found that some Providers are notorious for burying hidden costs within their SOW's. It is vital that a Contractor have clarity so making sure a detailed review of the cost analysis is completed - we always recommend a conference call - so there are no invoices for unexpected expenses in the future. Taxes and service fees need to be clarified up front if they apply for example. One Provider may be selected ahead of another because of competitive pricing, only to reveal their "abuse" later that the reason they seemed so much cheaper was that they include overtime requirements in the Terms & Conditions that were neglected in the review phase.
Not part of the checklist, but important to note, understand your currency and foreign tax issues too. It's truly vital to have absolute clarity on currency. What currency is the SOW written in? What conversion rate will be applied because it changes almost every day these days? Will it be static or determined by the market at the time of payment? What currency will the balance be paid in? If currency conversion is required, who will pay the cost of conversion? All of these need to be answered.
At Venuiti, we've learned to watch out for these little gems. But, more importantly, we believe in straightforward detail that clearly identifies what our Contractors/Partners will be getting. That's why when we develop SOW's we keep our checklist open in front of the writers. We hate abuse so we deliver clarity. No back and forth required.
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